July 22, 2019

Archives for August 14, 2014

Third Annual Running Past Our Limits Update (Part Three): Mission Impossible

rhodesA friend who’d been involved with making a documentary film got interested in my running regime. We shot a video one fine day last October. It’s short: 7:15. Go ahead, we’ll wait while you watch it.

The video begins with me challenging our conventional notions of what’s possible and what’s not. “Impossible is just a label we put on things,” I say. “It’s state of mind. There are people doing impossible things everyday. I think it’s time we all stop believing in impossible.”

The idea that “impossible” might not be hack-proof was first embedded in me at a Cirque du Soleil show called Varekai, which premiered a year and a half after 9-11.The Varekai story is loosely based on the Icarus myth: the manmade wings and failed flight too close to the sun, the familiar parable of the human race outstripping its own aspirations and crashing down in its pride.

Yes, humans can’t fly like birds; we all know that. But Varekai went beyond the myth and ended in triumph. Pride was forgiven, love and courage restored the fallen, and the joy of aspiration and the magic of the dream were reclaimed. The impossible became possible.

Dominic Champagne, writer and director of Varekai, began his program notes with these words:

Puisque les temps sont fous Since these are crazy times
Et que nous avons le devoir And it is our duty
De ne pas abandonner le monde To not surrender the world
Aux main des nullités Into the hands of fools
Je fais le vœu que ce spectacle soit pour vous I wish that this show may be for you
Comme il a été pour moi As it has been for me
Une célébration A celebration
De la rencontre des fraternités Of the coming together of friends
Et de la joie des dépassements And of the joy of challenging limits
Pour dire au monde In order to tell the world
Que quelque chose d’autre est possible That something else is possible

 

I put those program notes in a frame that still hangs on my wall. I live them everyday. They inspire me, keep me centered, keep reminding me that something else is possible.

We want things that appear to be impossible. Maybe they aren’t. Maybe the only reason they’re impossible is because we haven’t done them yet. Okay, so we ran a search of our brain’s memory data base and it came up “no match found.” No big deal. That doesn’t mean what we want is impossible on some grand cosmic level; maybe it’s a possibility waiting for us to make it happen.

I feel that way about my personal impossible of overcoming MS with exercise. I’m sure the other people in the video felt that way about their impossibles, too. And yet they did them, just like I intend to do mine.

The video ends with a series of questions: How about you? What’s your impossible? What would you be like if you did it? What would our world be like?

If you haven’t done it yet, go ahead and watch the video now. You’ll be inspired, I promise.

To be continued.

Seven years ago, Kevin Rhodes left his law practice to start a creative venture. His reflections on what happened next appear in an article about law career exit strategies in the August issue of The Colorado Lawyer (here’s the introduction, and here’s the article). His new ebook, Life Beyond Reason: A Memoir of Mania, chronicles his misadventures and lessons learned, and is available as a FREE download at iTunes, Barnes & Noble, Scribd, or wherever else you normally get ebooks. Or follow this link to the distributor’s page, where it’s available as a FREE download in all formats — phone, Kindle, as a PDF, etc. You can email Kevin at kevin@rhodeslaw.com.

Tenth Circuit: Entrapment By Estoppel Instruction Inappropriate Where Defendant Unreasonably Concluded Government Consent

The Tenth Circuit Court of Appeals issued its opinion in United States v. Rampton on Friday, August 8, 2014.

April Rampton learned of a tax refund scheme involving filing 1099-OID forms claiming interest income on debts she owed others, such as her mortgage. She filed her 2007 tax return but subsequently amended it based on the 1099 scheme. She received a refund check from the IRS for $228,967.28 and took that to mean that the tax scheme was legitimate. Subsequently, she told several friends about the scheme and helped them file similar false returns. She charged for her help, even though she was not an accountant or tax professional. In January 2009, an IRS agent met with one of the people Rampton had assisted in the tax scheme. The agent informed Rampton’s friend that she could be fined or imprisoned for her false use of the forms. The friend called Rampton and reported what the agent had said. Rampton told the friend the agent was using a “scare tactic” and continued the scheme. She assisted nine other people in filing false tax returns using the 1099 scheme after the IRS agent visited the friend. Eventually, she was indicted by a grand jury of one count of using a false tax return for herself (Count 1) and 14 counts of helping others file false returns (Counts 2 through 15). She moved to dismiss Counts 2 through 15 before trial based on entrapment by estoppel, averring that the refund check issued by the IRS was an affirmative demonstration that her conduct was legal. The motion failed, but during trial she proposed a jury instruction on the defense of entrapment by estoppel, which was similarly rejected. The jury could not reach a verdict on the first six counts, but convicted her on the remaining nine counts relating to the nine people Rampton assisted after learning the scheme was fraudulent.

Rampton appealed, asserting she was deprived of a fair trial because the jury was not informed of her defense of entrapment by estoppel. The Tenth Circuit disagreed because she was not entitled to the instruction. The Tenth Circuit found no reasonable basis for Rampton to have believed the refund check was a symbol of her conduct’s legality. Rather, it was unreasonable for Rampton to believe the tax scheme was legal.

The Tenth Circuit affirmed Rampton’s convictions.

Tenth Circuit: Total Mix of Disclosures Adequately Advised Investors of Risks

The Tenth Circuit Court of Appeals issued its opinion in United Food & Commercial Workers Union Local 880 Pension Fund v. Chesapeake Energy Corp. on Friday, August 8, 2014.

Chesapeake Energy Corporation was one of the country’s largest producers of natural gas, and in July 2008, it sold 25 million shares of common stock in a public offering. Later in 2008, the financial crisis hit, and Chesapeake suffered badly. A group of investors led by United Food and Commercial Workers Union Local 880 Pension Fund filed suit against Chesapeake in the Southern District of New York, citing violations of §§ 11, 12(a)(2), and 15 of the Securities Act and alleging that the Registration Statement for the offering was materially false and misleading because Chesapeake should have disclosed that it had a risky gas price hedging strategy and that Chesapeake’s CEO, Aubrey McClendon, had pledged substantially all his stock as security for margin loans. On Chesapeake’s motion, the case was transferred to the Western District of Oklahoma. Chesapeake moved for summary judgment, which the district court granted, finding that (1) the Registration Statement disclosed the risks associated with Chesapeake’s hedging strategy; (2) Chesapeake had adequately disclosed that McClendon had pledged most of his shares for collateral; and (3) additional disclosures about McClendon’s financial resources would be unreasonable because they would require speculation. The plaintiffs appealed.

The Tenth Circuit examined Chesapeake’s disclosures prior to the stock offering and found they adequately conveyed that Chesapeake was engaging in risky hedging strategies. The Registration Statement included general information about Chesapeake’s hedging strategy and conveyed Chesapeake’s anticipated future losses due to the strategy. Additionally, SEC filings incorporated in the Registration Statement disclosed information about Chesapeake’s “knockout swaps,” which were their most risky hedge investment. Plaintiffs allege that because Chesapeake disclosed some information about its knockout swaps, it had a duty to update that information, but the Tenth Circuit disagreed. The Tenth Circuit found that the information was provided in several SEC filings, and the total mix of information available to a reasonable investor revealed sufficient information about Chesapeake’s knockout swaps.

Next, the Tenth Circuit looked at Chesapeake’s disclosures regarding McClendon’s pledging of stock for margin loans. Plaintiffs alleged that the Registration Statement did not adequately disclose McClendon’s investments. The Tenth Circuit disagreed, noting that the Registration Statement contained disclosures required by Item 403(b) and further disclosure was not required or reasonable.

The Tenth Circuit affirmed the district court’s grant of summary judgment.

Tenth Circuit: Unpublished Opinions, 8/13/2014

On Wednesday, August 13, 2014, the Tenth Circuit Court of Appeals issued no published opinion and seven unpublished opinions.

Pena v. Hartley

United States v. Posada-Cardenas

Sandoval v. State of New Mexico

Hendrix v. Trammell

United States v. Molina Varela

D.A. Osguthorpe Family Partnership v. ASC Utah, Inc.

United States v. Beamon

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.