87th Installment. Ohio bar: Collection agency for the banks—The Hassan Jonathan Griffin matter—Part 1. Business debts aren't moral obligations
The state-bar courts may be the only venue where Ohio courts pretend indebtedness creates an "obligation." Outside the bar courts, Ohio judges follow the contemporary attitude toward breach of contract. Like all U.S. jurisdictions but with more fanfare, the Ohio courts refuse to treat breach of contract as a morally offensive disregard for obligations: they refuse punitive damages to express moral opprobrium for contract breach. Ohio courts can be heard to quote Justice Oliver Wendell Holmes, Jr., that “[t]he duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it--and nothing else." (Holmes, The Path of the Law (1897) 10 Harv.L.Rev. 457, 462.) Non-performance of a business contract doesn't create a moral obligation, and repayment of debt is a contractual performance like any other. A loan is one variety of business deal, and like other varieties, it creates no moral obligation to perform.
Also, those rare jurists favoring punitive damages for bad-faith repudiation of a contract would refuse to create a moral obligation from Griffin’s indebtedness. (See for example, Seaman's Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 774 - 784 [Bird, J., dissenting and concurring].) These morally nuanced judges advocate evaluating the parties' expectations as influenced by the social mores governing the same and similar transactions, and the Ohio Supreme Court considered neither. It ignored the student loans burdening many young lawyers, who have no idea how to repay. It also ignored how the bank bailouts affected our ethical sensibilities. After banks incurred an unsustainable debt with no plan for repayment, no prosecutions or even ignominy followed. Not just the banks. American government indebtedness has shifted ethical sensibilities concerning repaying loans. Having a huge debt with no idea of how to repay it accurately describes today's U.S. government.
Even where the breach is in bad faith, Ohio law, like the laws of all U.S. jurisdictions, doesn't punish—only compensates—breach of contract. Like all U.S. states except a couple (including California), Ohio consistently took this stance long before the sea change in American ethical sensibilities. Griffin’s breach of his student loan agreement, an ordinary business contract, doesn't need sophisticated justification: Griffin was unable to pay his student loan for the best of reasons. A contract, as Justice Holmes held, is only a prediction; who can blame Griffin for failing to predict the near collapse of the U.S. economy, when few economists succeeded. Bad luck, not just for him but also his creditors, who gambled on a better business outlook.
Next Installment. Should all lawyers be narrow-minded moralists?