Archive for March, 2007

FORMER OFFICIAL CLAIMS POLITICIZING OF JUSTICE DEPARTMENT

Saturday, March 31st, 2007

By Joseph D. Rich  - Salt Lake Tribune  

 

(JOSEPH D. RICH was chief of the voting section in the Justice Department’s civil right division from 1999 to 2005.)
 

The scandal unfolding around the firing of eight U.S. attorneys compels the conclusion that the Bush administration rewards loyalty over all else. A destructive pattern of partisan political actions at the Justice Department started long before this incident, as those of us who worked in its civil rights division can attest.
 

    I spent more than 35 years in the department enforcing federal civil rights laws – particularly voting rights. Before leaving in 2005, I worked for attorneys general with dramatically different political philosophies. Regardless of the administration, the political appointees had respect for the experience and judgment of longtime civil servants.
 

    Under the Bush administration all that changed. This Justice Department has ignored the advice of its staff and skewed aspects of law enforcement in ways that clearly were intended to influence the outcome of elections.
 

    It has notably shirked its legal responsibility to protect voting rights. From 2001 to 2006, no voting discrimination cases were brought on behalf of black or American Indian voters. U.S. attorneys were told instead to give priority to voter fraud cases, which, when coupled with the strong support for voter identification laws, indicated an intent to depress voter turnout in minority and poor communities.
 

  At least two of the recently fired U.S. attorneys, John McKay in Seattle and David C. Iglesias in New Mexico, were targeted largely because they refused to prosecute voting fraud cases that implicated Democrats or voters likely to vote for Democrats.
 

    This pattern also extended to hiring. In March 2006, Bradley Schlozman was appointed interim U.S. attorney in Kansas City, Mo. Two weeks earlier, the administration was granted the authority to make such indefinite appointments without Senate confirmation. Too bad. A Senate hearing might have uncovered Schlozman’s role in politicizing the civil rights division during his three-year tenure.
 

    Schlozman, for instance, was part of the team of political appointees that approved a plan to redraw congressional districts in Texas, which in 2004 increased the number of Republicans elected to the House. Similarly, Schlozman was acting assistant attorney general in charge of the division when the Justice Department approved a Georgia law requiring voters to show photo identification at the polls. Career staff asserted that such rulings discriminated against minority voters. The warnings were prescient: Both proposals were struck down by federal courts.
 

    Schlozman continued to influence elections as an interim U.S. attorney. Missouri had one of the closest Senate races in the country last November, and a week before the election, Schlozman brought four voter fraud indictments against members of an organization representing poor and minority people. This blatantly contradicted the department’s long-standing policy to wait until after an election to bring such indictments because a federal criminal investigation might affect the outcome of the vote. The timing of the indictments made the administration’s aims transparent.
 

    This administration is also politicizing the career staff of the Justice Department. Outright hostility to career employees who disagreed with the political appointees was evident early on. Seven career managers were removed in the civil rights division. I personally was ordered to change performance evaluations of several attorneys under my supervision. I was told to include critical comments about those whose recommendations ran counter to the political will of the administration and to improve evaluations of those who were politically favored.
 

    Morale plummeted, resulting in an alarming exodus of career attorneys. In the last two years, 55 percent to 60 percent of attorneys in the voting section have transferred to other departments or left the Justice Department entirely.
 

    At the same time, control of hiring went to political appointees, so an applicant’s fidelity to GOP interests replaced civil rights experience as the most important factor in hiring decisions.
 

    For decades prior to this administration, the Justice Department had kept politics out of its law enforcement decisions. Hopefully, the spotlight on this misconduct will begin the process of restoring dignity and nonpartisanship.
    —
    * JOSEPH D. RICH was chief of the voting section in the Justice Department’s civil right division from 1999 to 2005. He now works for the Lawyers’ Committee for Civil Rights Under Law.

Saturday, March 31st, 2007

 

MAY STATE COURTS RULE ON ANTICOMPETITIVE ACTS OCCURING OUT OF STATE?

Saturday, March 31st, 2007

FEDERALIST OUTLOOK March 30, 2007
 
By Michael S. Greve
 

May Texas courts decide antitrust cases over allegedly anticompetitive conduct that occurred wholly outside of Texas? The intuitive and correct answer is no. In the way, unfortunately, lay confounding factors: the liability explosion, needlessly vexing questions of antitrust jurisdiction, and above all the wretched condition of the constitutional and common law rules that govern state-to-state relations in our federal order. In an exceedingly important antitrust decision in October 2006, however, the Texas Supreme Court reached the correct decision. Along the way it articulated sound federalism principles that should resonate broadly beyond Texas and beyond antitrust. Although the court has been asked to reconsider its decision, it should stick to its guns.

Coca-Cola Company, et al. v. Harmar Bottling Company, et al.[1] has been rattling around Texas courts for more than thirteen years. At issue are so-called calendar marketing agreements (CMAs)–vertical agreements between soft drink bottlers and retailers–which govern the advertising, display, and sale of the products. The general structure of CMAs dictates that retailers obtain price discounts in return for compliance with the contractual marketing terms. For example, a CMA may specify that a retailer cannot conduct a marketing campaign for a rival product during a specified period. Economists believe CMAs may have potent pro-competitive effects, as they tend to prevent “free riding” by retailers and reduce prices to consumers. CMAs nearly identical to those at issue in Harmar are lawful everywhere in the country, including, after the Texas Supreme Court’s decision, in Texas.[2]

Naturally, bottlers often take a dim view of their competitors’ CMAs. (Producers often take a dim view of competition that impedes their success in any fashion.) In Harmar, some Royal Crown soda bottlers filed an antitrust suit against Coca-Cola and Pepsi bottlers in the so-called Ark-La-Tex market–in reality, not a single geographic market, but rather a collection of counties in Arkansas, Louisiana, Texas, and a stretch of Oklahoma. The suit was filed and litigated for many long years in Morris County, Texas, a place where, prior to the instigation of the case, some plaintiffs had never set foot. The plaintiffs sued in that county, abutting the Arkansas border, and obtained representation from Harold Nix, Morris County’s uncrowned king and, consequently, one of the most famous and richest trial lawyers in Texas. Nix owes his fame and fortune principally to a mass products liability case he filed in Morris County, which produced lucrative settlements in a case involving some “three thousand plaintiffs, five hundred defendants, three hundred lawyers, and no evidence.”[3]

In Harmar, a local jury returned a verdict on the antitrust counts. The trial court then rendered judgment against Coca-Cola (the Pepsi defendants having settled out of court) in the amount of $15.6 million, plus $500,000 in attorneys’ fees. The court also enjoined a wide variety of common business practices, ranging from exclusive advertising commitments to suggestions as to how retailers might organize their cold drink storage space. While technically confined to forty counties in Texas, Oklahoma, Arkansas, and Louisiana, the injunction effectively regulated competition much more widely, since supermarkets that operate in those and neighboring states are likely to want to operate under a single set of rules for the entire region. Moreover, Harmar was only the first of a raft of similar state court cases, all filed in Morris County or equally plaintiff-friendly Texas jurisdictions, involving competition from Kansas to Missouri to Louisiana.[4]

After an appellate court sustained the trial court’s ruling, the Texas Supreme Court granted certiorari. In October 2006, nearly two years after the case was argued, the court rendered its decision. In an opinion authored by Justice Nathan L. Hecht, it held that Texas courts may not apply Texas antitrust law to wholly out-of-state conduct. It further held that interstate comity barred Texas courts from entertaining the complaints under sister states’ antitrust laws. With respect to the alleged in-state violations, the court held that the plaintiffs had shown no facts upon which a reasonable jury could find defendants guilty of antitrust violations. The court was closely divided. A sternly worded dissent by Justice Scott A. Brister, joined by three other justices, rejected most of the majority’s conclusions.

A few weeks later, the plaintiffs and several amici asked for a rehearing and reconsideration. The Texas Supreme Court ordered briefing on that question and, as this goes to press, is considering the submissions.

Why It Matters

A $16 million verdict is hardly news. The injunctive relief at issue in Harmar is more consequential: it would block widely accepted, essential, and intensely competitive practices. But the true significance of Harmar lays elsewhere.

Federalism poses difficult issues of jurisdiction in both a vertical, state-to-nation dimension and in a horizontal, state-to-state dimension. Our country’s public and legal debates focus on the vertical aspect: should Washington or Sacramento regulate drug use in Santa Clara County? Horizontal federalism, in contrast, rests on an unarticulated and virtually uncontested premise: of course plaintiffs should be able to drag defendants into any forum they like. And of course that forum should then apply its own law if it sees fit to do so.

The trial bar as well as some judges and scholars defend this shopping spree as the very essence of federalism. Other judges and scholars–modern-day disciples of Felix Frankfurter–acknowledge horizontal federalism’s practical difficulties but deny that they have a constitutional dimension. A third group parks its discontents with our federalism’s unbearable results in odd places. In February 2007, for example, the U.S. Supreme Court determined that state juries may take defendants’ out-of-state conduct into consideration in determining punitive damages, but may not punish them explicitly for that conduct.[5] Behind that exquisite distinction lies a sound concern over extraterritoriality–that is, the danger that one state might punish defendants for conduct that may have been entirely lawful in other states. Because the constitutional norms and common law rules that would avert that danger are in disrepair, the Court rested its ruling on the all-purpose due process clause.

The Harmar majority, by virtue of its decision and opinion, has joined a fourth, still-tiny group. Members of this cadre of the wise insist that relations among states implicate serious constitutional concerns. They further contend that constitutionally acceptable relations among states cannot be maintained by force of the federal government– least of all if every jurisdiction insists on pushing its presumed authority to the outer limits or, more likely, accedes to being pushed to those limits by self-seeking private litigants. The system is in need of some restraint.

The Harmar majority showed sympathy and courtesy and taste in dealing with those problems in the distinctly difficult antitrust context. That is why its ruling has drawn considerable attention and organized opposition, and why it merits a defense.

Antitrust Jurisdiction: First Principles[6]

The Harmar Court started with the right premise: “No State can legislate except with reference to its own jurisdiction.”[7] American federalism rests on a principle of equal, territorial states.[8] That arrangement, in turn, requires a principle of nonaggression. One could grant states an equal right to tread on one another, but that would not be a net gain in states’ rights–just as my right to stick a fist in your face is not a net gain in individual rights.

Aggression, Alexander Hamilton explained in Federalist 7, encompasses not only physical assault, but also–and emphatically–the unwarranted extension and application of one state’s laws to another state’s citizens. The Constitution teems with provisions to guard against that menace: the Contracts Clause, for example, which sought to bar states from enacting debtor relief laws that would favor in-state debtors over out-of-state creditors; and the Privileges and Immunities Clause, which compels states to treat their own and other states’ citizens on equal terms.[9]

The principle, then, is clear enough, but it does not explain its own reach and application. What, precisely, does it entail and require in a world in which economic actors and transactions routinely cross state borders, and in which disputes over whose law governs are therefore bound to arise with great frequency? These questions are particularly difficult and pressing in the antitrust context for two reasons: the peculiar structure of our antitrust laws, and the presence of pervasive externalities.

Antitrust. The major federal antitrust statutes–the Sherman Act and the Clayton Act–were originally enacted long before the New Deal. They were intended to supplement, but not supplant, state jurisdiction: the federal statutes would operate on conspiracies against trade in interstate commerce, which states were then deemed unable to regulate. Conversely, the national government was thought to be constitutionally barred from reaching anticompetitive conspiracies contained within a state. The distinction between in-state and interstate commerce, however, vanished in the New Deal. In its wake, the notion that federal antitrust statutes “supplement” state law took on a very different meaning: state and federal laws henceforth governed private conduct alongside and on top of each other. The Sherman Act reaches purely local events with no cross-border effects–although, as Supreme Court Justice Antonin Scalia has observed, the statute by its terms applies only to interstate commerce.[10] At the same time, however, the Sherman Act does not preempt any state’s law.

To appreciate the salience of this point, consider this: in areas from airline regulation to telecommunications to financial services, pro-competitive federal statutes have freed industries and their consumers from hostile or parochial state and local regulations. Those salutary effects depend entirely on the preemptive force of federal legislation.[11] Our competition laws, incongruously, lack that force. One must look elsewhere for restraints.

Externalities. When more than one state’s law can apply to a given set of transactions, which state’s law should govern? In situations in which private contracts work well, the rules are conceptually straightforward: apply the forum and the law that the parties chose. If the parties made no explicit choice, go to the venue and the law that the parties most likely would have chosen. Those rules work well–or rather would work well, if we had them–for questions of jurisdiction (that is, questions of where a given defendant may be sued and a case may be heard) and for the choice of law.[12]

In the antitrust context, unfortunately, contractual rules fail for the obvious reason that the contracts themselves are suspect and, in some instances, criminal. For example, we cannot permit two Texas firms to fix prices in Arkansas and then defend the agreement on the grounds that it was made in Texas. No real significance attaches to the parties’ choice of law when the burdens fall on strangers to the transaction. The jurisdictional test has to go to the effects of anticompetitive practices, regardless of where they may originate. In that sense, state antitrust law has to be “extraterritorial.”

The corollary, however, is that states must not have jurisdiction over anticompetitive effects in other states–even if those effects should originate within the state’s own boundaries. The appellate court in Harmar mangled that issue and held that the defendants’ conduct outside Texas was subject to Texas law because some of the contracts had been drawn up in that state. But while that may be a reason to give the Texas courts personal jurisdiction over the defendants, it provides no reason for exercising prescriptive jurisdiction over events in other states.

The Texas Supreme Court got it right. “Why,” it asked, “should Texas law supplant Arkansas, Louisiana, or Oklahoma law about how best to protect consumers from anti-competitive conduct and injury in those states? . . . There is no good answer.”[13] There is a very good answer why Texas law should not have that effect. We do not like it one bit when the European Union “protects” us from Microsoft. Why, then, should consumers in Alabama be grateful for the Texas courts’ “protection” against lawful, procompetitive practices?

Admittedly, some messy antitrust cases threaten to confound the basic rules. Patents, for example, are good everywhere or nowhere. If one jurisdiction decides that a particular patent application violates competition law, the protection is lost around the world. There is no easy fix for that unfortunate result of an unadulterated effects test. Another problem arises when activities that are illegal in one state but are perhaps lawful in the foreign jurisdictions where they are conducted have price effects in the original state.[14] No such complications, however, were remotely present in Harmar. Some of the parties had not and could not enter Texas. (Bottling operations are exclusive territorial franchises.) At a bare minimum, those parties should have been dismissed at the outset of the litigation. The trial court itself managed to separate activities and effects on each side of the line, albeit belatedly: it awarded separate damages to the individual plaintiffs, including those operating wholly out-of-state.

The Principles Applied

The Harmar majority understood that the central issue in the case was jurisdiction. It started its analysis on that leg and it construed the Texas Free Enterprise and Antitrust Act (TFEAA)–the state’s basic antitrust statute–in that light. The ease and elegance of the court’s conclusions tend to cloud its considerable accomplishment: in an area in which issues of extraterritoriality, jurisdiction, and choice of law intersect, even sophisticated judges may lose track. Of that, the Harmar dissent provides an illustration.

Extraterritoriality. Remarkably, all nine members of the Texas Supreme Court agreed that Texas law could not apply extraterritorially. The justices differed, however, in their analyses.

The TFEAA provides that lawsuits shall not “be barred on the grounds that the activity or conduct complained of in any way affects or involves interstate or foreign commerce.”[15] The statute also says that its purpose is “to maintain and promote economic competition in trade and commerce occurring wholly or partly within the State of Texas and to provide the benefits of that competition to consumers in the state.”[16] But while the plaintiffs and the dissent made much of the “partly” language, it is best read as a sensible recognition of the already-observed fact that at some level, antitrust litigation must be “extraterritorial.” The mere fact that anticompetitive conduct has effects in other states cannot shield anticompetitive practices against Texas consumers. Conversely, however, the mere fact that such conduct extends into Texas cannot create a cause of action to demand relief on a global basis. As Justice Scalia put it in a strikingly similar (albeit international) context, the extraterritorial reach of the Sherman Act “has nothing to do with the jurisdiction of the [U.S.] courts.”[17] The same holds for the TFEAA.

Jurisdiction. The analysis becomes a lot more straightforward when one follows the Harmar majority in starting with the jurisdictional questions. The necessary corollary of federalism’s nonaggression principle is a principle of statutory interpretation: do not give a state statute extraterritorial effect unless the legislature clearly intended that result. On that basis, the Harmar majority recognized that the TFEAA’s language means to bar defenses that might block the full enforcement of the act within Texas. It does not invite a kind of antitrust imperialism, to be exercised even at some foreign plaintiff’s instigation, whenever the complained-of conduct touches Texas. As the court recognized, the TFEAA’s plain intent was to protect Texas consumers.

Read for all it is worth, the majority opinion says the legislative jurisdiction of the state of Texas, at least as exhibited in the TFEAA, extends no farther than the states’ boundaries. And since the Texas courts’ subject-matter jurisdiction extends no farther than the legislature’s, the courts lack such jurisdiction over events that have no anticompetitive effects in Texas or, for that matter, over the segregable out-of-state effects of conduct that affect some Texas consumers.

Choice of Law. Granted that Texas law does not apply to out-of-state conduct, should Texas courts have applied laws of other states to that conduct? The Harmar majority said no on the grounds that state courts should not readily volunteer to determine a sister state’s public policies.

The dissent observed that the defendants had never asked the trial court to apply foreign rather than Texas law–presumably, it surmised, because the antitrust laws of Oklahoma, Arkansas, and Louisiana look very similar to the Texas statute. That conclusion cannot be defended. State antitrust law, like federal law, is worded in broad generalities; almost all antitrust law is common law.[18] No state court can assume that sister-state policy is identical based solely on the statutory language; it would have to know in some detail what the sister states’ courts, and perhaps their enforcement agencies, think and have said about vertical restraints of the sort here at issue. If that policy is one of toleration, there may be no explicit policy or judicial precedent at all. In that event, asking the defendants to show that sister-state law is materially different is to confront them with an impossible task. That appeared to be the situation in Harmar. What evidence there was actually ran the other way: at least in Louisiana, CMAs appear entirely lawful.[19]

Surely, “hands off” is the proper rule. The plaintiffs’ rights remain unaffected: they can litigate their complaints and obtain their remedy in the appropriate state court, or else sue in federal court under federal antitrust law (and litigate the pendent state claims in that forum).

The Harmar majority characterized its holding not merely as a matter of comity but as abstention–probably, the dissent surmised, in analogy to the abstention doctrines that federal courts employ to avoid unnecessary interference with state courts and their proceedings. If this was the case, more power to the Texas Supreme Court: much can be said for horizontal abstention doctrines, and I have suggested elsewhere that such doctrines are required as a matter of federal constitutional law.[20] Our federal courts are light years from that recognition.[21] It is all the more encouraging that a state court seems to have adopted it unilaterally.

With Amici Like These, Who Needs Inimici?

The Harmar plaintiffs’ motion for a rehearing argues that the Texas Supreme Court failed to properly heed the jury’s findings and the voluminous record. That position is supported by a number of Texas law professors and civil procedure experts. The amici volunteer, however, that they are unfamiliar with both the record and with antitrust law. Why, then, should anyone listen? Antitrust experts disagree vociferously about the sorts of vertical restraints at issue in Harmar, but they all agree that it is extremely hard in this area to separate competitive from anticompetitive arrangements. They all agree, moreover, that the determination will at all events hang on a sophisticated assessment of complicated empirical facts and their fit with legal standards and economic theory. In that context, the amici’s prompting to trust the Morris County jurors’ intuitions is little more than a misplaced protest against the Lone Star State’s arduous tort reform efforts.

More incongruous still is the amicus support plaintiffs have procured from the attorneys general of two of the affected states, Arkansas and Oklahoma. One would think that an attorney general, charged with enforcing competition law within his state, would resist another state’s interference. One would further think that an attorney general, charged with protecting all citizens within his jurisdiction, would oppose any effort to have a home-state company conducting lawful business in the state dragooned into some faraway court and have its business practices declared unlawful in that forum.

One state, Alabama, articulated those positions in the Harmar litigation, in powerful amicus briefs to the Texas Supreme Court that lay out the relevant federalism considerations. (Among those considerations is the fact that Alabama, which does not apply its antitrust laws extraterritorially, should be entitled to equal respect from its sister states.[22])That intervention was initiated by former Alabama attorney general (and now Judge) Bill Pryor, who comprehends American federalism at an uncommonly deep level. Pryor’s exceptionally able staff has sustained Alabama’s Harmar intervention during the tenure of Alabama attorney general Troy King, who on this occasion and others has done his immediate predecessor proud.

The position of the not-so-exceptional officials in Arkansas and Oklahoma is that the Texas courts should determine competition law in those states. Comity concerns, they admit, are important, but they can be accommodated by certifying the Texas questions to the Oklahoma and Arkansas Supreme Courts, or perhaps by “domesticating” a Texas verdict in an Arkansas court.

Ignore the practical difficulties of that suggestion. (Harmar involves questions of law and fact. Are the courts in three or four different states supposed to review the full record and hear oral arguments? Suppose they then disagree: what happens next?) Ignore, too, that the attorneys general purport to speak for an independent branch of government. (Paraphrasing a famous quip of Judge Henry Friendly’s, the attorneys general are asking the Texas courts to act on what the attorneys general think about what Oklahoma and Arkansas courts might think about the referral of a question about which none of them have thought.[23]) Focus, for purposes at hand, on the intriguing question of why state attorneys general support the adjudication of their own laws in another state’s courts.

The Limits of Efficient Adjudication. It would be inefficient, Arkansas and Oklahoma say, to have the Harmar facts adjudicated yet again in an Oklahoma or Arkansas forum. That position, though, rests on a wholesale confusion between ex ante and ex post incentives. The non-Texas plaintiffs joined the Harmar parade in light of Morris County’s pro-plaintiff attractions and, moreover, to produce evidence by anecdote. (Take one CMA provision from Arkansas, another from a different time period from Louisiana, and a third from yet a different time in Texas, and in the words of Louis Armstrong and Bing Crosby, “Now You Has Jazz.”[24]) The attorneys general amici would countenance those maneuvers–and then plead for supposedly “efficient” litigation management. In that world, you wind up with Oklahoma’s wild proposition: we Sooners have an interest in having our own law determined in forums beyond our borders. But the problems would never arise if opportunistic forum shopping were blocked at the front end. The sane and efficient rule is that of the Harmar Court.

Cartel Federalism. For the entire half-generation that the Arkansas and Oklahoma bottlers’ complaints have been litigated in Texas, the attorneys general antitrust enforcers of those states have sat on the sidelines. Only now, after the complaints have been dismissed, has it occurred to them that the matter deserves a second look. It is hard to believe that their entreaties have to do with a desire for competition.

Long ago, Judge Frank Easterbrook suggested that it might be in every state government’s interest (though obviously not the citizens’ interest) to permit and indeed encourage export cartels–state-sponsored producer cartels that can extract surplus profits from the rest of the country.[25] The beneficiaries of those schemes are highly concentrated and in-state, whereas the losers are dispersed and mostly out-of-state. What public official would not ride that wagon? The odds of encountering opposition from sister-state officials are nil: they all have their own cartels to defend.

The state amici’s position in Harmar is consistent with that pattern. To be sure, the attorneys general do not explicitly endorse anticompetitive conduct or intergovernmental conspiracies. Still, when (as in Harmar) competitors rather than consumers or government enforcers complain about antitrust violations, the suspicion arises that they are attempting to serve their own interests rather than those of competition.[26] And when those competitors abscond to a foreign jurisdiction instead of filing a case in their own state or complaining to state officials, the suspicion hardens into a near certainty. The only conceivable point of the attorneys general amici’s submissions is to give the plaintiffs yet another bite at the apple. To what end?

Our Federalism

Under the Constitution, sound rules to govern state-to-state relations are every bit as crucial as state-to-federal relations. If anything, the Constitution is far clearer and more insistent on the former than the latter, and for good reason. Because the Founding Fathers expected the worst of the states, their Constitution economizes on state virtue–for example, by blocking egregious affronts to interstate comity in the Constitution itself.

As the Founders knew full well, however, that strategy has its limits. In the end, the system supposes some awareness within the states of unspecified but nonetheless vital federalism rules. The Harmar Court’s opinion is an all-too-rare signal of that awareness. Let it stand and let it thrive.

Michael S. Greve (mgreve@aei.org) is AEI’s John G. Searle Scholar and director of its Federalism Project (www.federalismproject.org). On account of his earlier work on federalism and antitrust issues (cited in this publication), the Coca-Cola Bottlers’ Association (CCBA), an amicus in the Harmar case, has retained Mr. Greve as an advisor on federalism issues of interest to the association. No fee or other compensation, however, was received by AEI or Mr. Greve in connection with this publication. The views expressed herein may or may not reflect the views of the CCBA or the Harmar litigants. They are, unmistakably, Mr. Greve’s. A version of this article also appeared on the Federalist Society’s website (www.fed-soc.org).

AEI research assistant Harriet McConnell and editorial associate Nicole Passan worked with Mr. Greve to edit and produce this Federalism Outlook.

 
 

EXXON, PUNITIVE DAMAGES, AND JUDICIAL JUNKETS

Saturday, March 31st, 2007

March 31, 2007

 

Community Rights Counsel Press Release – For more than a decade, Exxon Corporation (now ExxonMobil) has waged a comprehensive campaign against punitive damages awards, triggered by the decision of a jury in Alaska to impose a $5 billion penalty on the company for the misdeeds that led to the Valdez oil spill, the worst in the nation’s history. This campaign paid off handsomely in December 2006, when a federal appeals court reduced Exxon’s punitive damages liability for the Valdez spill by $2 billion.
 

 
An important part of Exxon’s punitive damages campaign has been to fund organizations such as the Law and Economics Center (LEC), which hosts junkets for federal judges that focus on topics including punitive damages. Exxon donated $215,000 to LEC in recent years, and, perhaps not coincidentally, LEC trips have featured a number of prominent, Exxon-funded experts.
 

The judge who wrote the opinion in favor of Exxon in December, Judge Andrew Kleinfeld of the Ninth Circuit Court of Appeals, serves on LEC’s Board of Judicial Advisors and reports taking at least three LEC-funded trips in recent years. In August, Judge Kleinfeld told a reporter for the Los Angeles Daily Journal that he had no idea about the connections between Exxon and LEC. But even after the Daily Journal documented these connections in great detail, Judge Kleinfeld remained on LEC’s Board while ruling for Exxon.
 

These facts illustrate that new reporting rules implemented by the federal judiciary in September, while commendable, are not sufficient. Judge Kleinfeld told the Daily Journal that Exxon’s six figure contributions to LEC were “small potatoes” to a company Exxon’s size. While he should know – after all, his ruling just saved the company $2 billion – it probably won’t look that way to the litigants harmed by Exxon’s misconduct. As Bill Webber, a fisherman whose livelihood was damaged by the Valdez spill, told the Anchorage Daily News after Kleinfeld’s ruling, Exxon is “just bullying their way through the legal system just because they can.” The cornerstone of the federal judiciary is the public’s faith in its ability to provide “equal justice under law.” With the Exxon Valdez case likely to come back before him on a currently pending motion for “en banc” review, Judge Kleinfeld should immediately resign from the LEC Board of Advisors. Chief Justice Roberts needs to carefully monitor the implementation of the judiciary’s new reporting rules to ensure that these rules change judicial behavior – that the new sunlight actually disinfects the judiciary against the stain of corporate judicial lobbying.
 

Exxon’s Campaign Against Punitive Damages

 

In the past 12 years, Exxon has supported at least 19 economists, psychologists, and business and law school professors in producing a seemingly endless stream of books, articles, and studies designed to support the proposition that the punitive damages system is flawed and leads to “inefficient” results. The published articles challenge damage awards on seemingly every level, including: the validity of the economic models used, the competence of the juries, and the destructiveness of punitive damages to society. Although this research has been discounted as biased and inaccurate by many legal academics and scientists, an Exxon-side amicus brief cited the research as fact in the Exxon Valdez case.
 

Titles of the articles included Why there is No Defense of Punitive Damages and Shared Outrage, Erratic Awards: The Psychology of Punitive Damages. There is evidence that Exxon promptly discontinued research that yielded results even remotely detrimental to Exxon’s objectives. While Exxon has refused to disclose the cost of this “research,” the jury studies alone included more than 8,000 participants and have been estimated to cost upward of $1 million.
 

As Richard Lempert, a law professor at the University of Michigan, told the Los Angeles Times, “It is very troublesome that work published as scholarship … is being vetted by lawyers” for Exxon. “It was designed to serve Exxon. It was not done because they wanted to know how juries behaved.”
 

Exxon also spent hundreds of thousands of dollars in recent years funding groups such as Washington Legal Foundation, Pacific Legal Foundation, and American Tort Reform Association to file briefs using Exxon’s research and arguing Exxon’s position on punitive damages to courts across the country, including prominently the United States Supreme Court.
 

The final piece of Exxon’s judicial lobbying puzzle is its funding for George Mason’s Law and Economics Center (LEC). Exxon has contributed $215,000 to LEC since 1998. LEC junkets often focus on issues, including punitive damages, of intense interest to the corporation. These junkets often feature lectures on punitive damages and related topics by academics — such as George Priest, Steven Shavell, and W. Kip Viscusi — who have been paid by Exxon to conduct research or to serve as an expert witness for the corporation. On some occasions, judges at LEC junkets have been asked to read Exxon-funded research in preparation for lectures from an Exxon-funded academic.
 

Exxon, LEC, and Judge Kleinfeld
In 1994, a jury in Anchorage, Alaska ruled that Exxon had knowingly put Joseph Hazelton, a relapsed alcoholic, in control of a massive oil tanker navigating the treacherous waters of Alaska’s Prince William Sound. The jury decided that Exxon bore responsibility for the oil spill that resulted and awarded a group of 33,000 fishers, property owners, and Alaska Natives harmed by the spill $287 million in compensatory damages and $5 billion in punitive damages. To date, Exxon has not paid anything to the victims of one of the biggest environmental disasters in U.S. history.
 

Exxon has used the research it sponsored on punitive damages, and the groups it has funded, as part of a protracted and successful pressure campaign to have these damages reduced on appeal. Exxon’s research was featured both in Exxon’s own brief and a brief filed by a group Exxon has funded, the American Tort Reform Association, which filed a brief in 2001.
 

In 2001, Judge Kleinfeld wrote an opinion on behalf of a panel of Ninth Circuit judges remanding the $5.3 billion verdict back to the district court with instructions that the damages figure be reduced.
 

The district court reduced the damages award to $4.5 billion and Exxon again appealed. On December 22, 2006, Judge Kleinfeld again wrote an opinion reducing Exxon’s damages, this time cutting the damages nearly in half, to $2.5 billion. This opinion drew a vigorous dissent from Judge Browning, who accused Judge Kleinfeld of misreading recent Supreme Court punitive damages cases.
 

Between these two rulings, Judge Kleinfeld became affiliated with LEC, joining their Judicial Advisory Board, reporting a trip to the Washington, DC area for an advisory board meeting in October 2004, and taking two of their junkets for federal judges. He remains listed as a member of LEC’s advisory board.
 

Despite his involvement with LEC, and his obligation under the long-standing Advisory Opinion 67 to investigate “sources of funding” for private travel, Judge Kleinfeld told the Daily Journal in August 2006 “I don’t have the faintest idea who contributes to George Mason, nor do I want to know.” When informed that Exxon had contributed more than $200,000 to LEC in recent years, he commented that this was “small potatoes” for a company Exxon’s size.
 

In September 2006, the federal judiciary implemented a new policy that will prevent judges from using the “ignorance is bliss” defense, relied on by Judge Kleinfeld this summer. But the judiciary did nothing to address the “small potatoes” defense – the argument that a five or even a six-figure contribution from Exxon to LEC is insufficient to cause a conflict or even the appearance of impropriety for judges taking LEC trips and ruling in favor of Exxon. The reporting rules leave it up to judges to decide whether taking junkets and affiliating with groups like LEC creates an “appearance of impropriety.” For the rules to work, judges like Judge Kleinfeld must do the right thing.
 

We are not questioning Judge Kleinfeld’s integrity. We are not alleging that Exxon’s contributions to LEC, or Judge Kleinfeld’s participation in LEC trips, affected his judgment in the Exxon Valdes cases. But given the totality of the circumstances — the importance of the Exxon Valdez case to the company and the country, the remarkable efforts of ExxonMobil to shape academic and legal debate on the topic of punitive damages, the links (in terms of faculty, topics and material presented) between these efforts and the LEC programs, and the ExxonMobil funding for LEC – we believe that Judge Kleinfeld should resign from LEC’s Board of Advisors immediately, before ruling on pending matters in the case.
 

© AlaskaReport News

COMMON QUESTIONS ANSWERED ABOUT JURY SELECTION PROCEDURE

Friday, March 30th, 2007

Below are answers to questions commonly asked about jury duty. 

How are jury lists compiled?
The AOC, which is the administrative arm of the Kentucky Court of Justice, compiles a master list of prospective jurors for each of the 120 counties. Juror names are drawn from all people filing a Kentucky resident individual tax return, registered voters and licensed drivers over age 18. The AOC removes the names of deceased individuals by cross-referencing a list from the Kentucky Office of Vital Statistics. To qualify for jury duty, a person must: 

- Be 18 years of age or older.
- Be a United States citizen.
- Be a resident of the county in which the case is to be tried.
- Be able to speak and understand English.
- Not have been convicted of a felony, unless pardoned or had his or her civil rights restored by the governor or other authorized person of the jurisdiction in which he or she was convicted.
- Not be currently under indictment.
- Not have served on a jury within the past 24 months. 

Because juveniles under age 18 must occasionally file a tax return, their names may be included on a jury list even though they are too young to serve. When that happens, all they must do is return their juror qualification form after marking the box that states “I am under 18 years of age.” They will then be disqualified for jury duty. 

How does the jury summons process work?
District and circuit judges who need jurors for a trial notify the chief circuit judge or his or her designee. This jury administrator then requests a list of prospective jurors from the master list maintained by the AOC. The prospective jurors on the list are mailed a summons requiring them to report for jury service at a specified time and place. State law requires that the summons be issued at least 30 days before they are to report for service. Prospective jurors must fill out the juror qualification form enclosed with the summons and return it to the circuit court clerk’s office within five days of receipt. The information provided on the form determines whether an individual is qualified for jury duty. 

How long do jurors serve?
By law a person summonsed to jury duty is required to be available for 30 court days. However, once a jury begins hearing a case, the jury will remain seated for the duration of that case. In some urban areas a person may be required to serve as few as 14 days, while in some rural areas a person may be asked to serve as many as 150 days. The judge will determine the exact length of jury service. 

How often do jurors serve?
Jurors cannot serve more often than every 24 months. 

POLICE GET FREER REIN IN SEARCHES. OHIO JUSTICES ALLOW LOOKING FOR DRUGS, GUNS ON TRAFFIC STOPS ON BASIS OF SUSPICION.

Thursday, March 29th, 2007

March 29, 2007  By James Nash  The Columbus Dispatch

 

Justice Paul E. Pfeifer,”… this court would have the state treat forgetful people as hardened criminals.”
 

Police in Ohio can search vehicles for guns and drugs if a person stopped for a routine traffic violation is behaving suspiciously, the state Supreme Court ruled yesterday.
 

In a 4-3 decision, the court said a suburban Cincinnati police department did not violate a man’s rights when it had a dog sniff his car as an officer wrote him a ticket for having an expired license and registration.
 

The dog detected marijuana residue and, during a search of the man’s car, police found a gun.
 

Attorneys for the man, 36-year-old William Kavanagh, said the search violated his Fourth Amendment protection against unlawful search and seizure because Blue Ash police had no valid reason to suspect he was intoxicated or armed.
 

The court’s decision yesterday opens the door for police throughout Ohio to detain drivers and impound vehicles for routine traffic violations, said one of Kavanagh’s attorneys, Paul M. Laufman.
 

“Essentially, the decision stands for the proposition that any citizen who’s stopped for anything other than a minor moving violation can now be detained and have their vehicle impounded and searched,” Laufman said. “That’s scary.”
 

The ruling is in line with other state courts’ decisions to grant police broader authority to search for criminal violations when they stop someone for a traffic violation, said Ric Simmons, an Ohio State University law professor and former assistant prosecutor in New York. Simmons said yesterday’s decision does not represent a major change in Ohio.
 

“I think the potential for abuse has always been there,” he said. “In this case you could make the argument that (police) took the powers they had and maybe used them too much.”
 

Blue Ash’s attorney, David P. Fornshell, said police did not overstep their bounds in searching and impounding Kavanagh’s car. The man’s nervous behavior and long-expired driver’s license heightened suspicions that he might have criminal violations, Fornshell said.
 

“I think this decision affirms that police departments have the discretion to do their jobs, but it’s not an unfettered discretion,” Fornshell said. “This is a job, and police departments need the discretion every day to do their jobs.”
 

The State Highway Patrol uses drug-sniffing dogs around the periphery of vehicles when there is reason to suspect drug use, said Lt. Tony Bradshaw, patrol spokesman.
 

Bradshaw said that after the Oklahoma City bombing and Sept. 11 terrorist attack, the patrol has stressed using routine traffic stops to uncover criminal activity.
 

“Those little indicators can lead to something more,” he said.
 

An appeals court had ruled that Blue Ash police illegally searched and seized Kavanagh’s car because they had no grounds to detain him after issuing tickets for the expired license and registration.
 

Ohio Supreme Court Justice Evelyn Lundberg Stratton, writing for the majority, said police acted properly in examining the car because they had planned to tow it and needed to inventory its contents.
 

“This decision was based on the fact that defendant could not lawfully operate any vehicle because his driver’s license had been expired for nearly three months, and the vehicle itself could not be legally driven by any driver because the license plates had been expired for nearly three months,” she wrote.
 

Chief Justice Thomas J. Moyer, Justice Maureen O’Connor and appeals Judge Donna J. Carr, who sat in for retired Justice Alice Robie Resnick, agreed with Stratton. Justices Terrence O’Donnell and Judith Lanzinger said the court should not have accepted the case.
 

Justice Paul E. Pfeifer, who also said the court should have rejected the appeal, argued that police overreacted to a minor violation.
 

“In a simpler time, a person who forgot to renew his license or registration was given a warning and expected to renew the license or registration as soon as possible,” he wrote. “But now, this court would have the state treat forgetful people as hardened criminals.”
 

jnash@dispatch.com

FEDERAL LAWSUIT ALLEGES NEW KENTON COUNTY CLERK FIRED SEVEN CLERKS FOR POLITICAL REASONS thus violating the Constitution.

Thursday, March 29th, 2007

  Florence, Ky. attorney Gail Langendorf has filed a federal lawsuit on behalf of seven Kenton County Deputy Clerks alleging that they were fired by the new County Clerk, Rodney Eldridge because they didn’t support him in his election bid. This practice, if true as alleged, appears to be in violation of the U.S. Constitution as interpreted by the U.S. Supreme Court in Elrod v. Burns, 427 U.S. 347 (1976).  See LawReader comment below, on the law supporting the workers claims.

See the full article at: Seven sue over clerk’s firings BY CINDY SCHROEDER  Ky. com
Excerpt:

Kenton County Judge-executive Ralph Drees and the three other fiscal court members also were sued, partly because that body “assisted Eldridge in determining how to allocate funds available to him in his capacity as county clerk, which included salaries for newly hired deputy clerks and raises for deputy clerks who (allegedly) supported Eldridge,” the suits alleged.

Kenton County Attorney Garry Edmondson, denied the women were wrongfully terminated.  He was quoted in a Ky.com article by Cindy Schroeder as saying:

“The fiscal court has nothing to do with the hirings and the firings of the county clerk,” Edmondson said. “He can do as he chooses because he’s a constitutionally elected officer.”

Edmondson said “it’s entirely within the discretion of the county clerk to do as he chooses” when it comes to hiring and firing employees.

“The only thing that the fiscal court can approve is the budget,” Edmondson said. “The line items of who the money goes to is entirely the clerk’s prerogative. (Eldridge) is confident in my conversations with him that the people who were not re-hired were people who were underperforming.”

Two deputy clerks who were identified as Eldridge supporters got 20 percent and 28 percent raises from their new boss.

The suits were filed on behalf of Lois Davis of Lakeside Park; Cynthia Sue Johnson of Ludlow; Donna Jean Wood of Taylor Mill; and Ricole Neal, Ruth Thornsburg, Virginia Wafford and Aline Summe, all of Covington. An eight worker who was also fired did not join in the lawsuit.

They seek back pay and benefits lost “because of defendants’ unlawful acts,” unspecified damages for humiliation, embarrassment, emotional suffering and “the defendants’ improper and illegal acts,” and a jury trial, their suits say. They also are asking the court to prevent the defendants from firing anyone in the future for political reasons, Langendorf said.
LAWREADER COMMENT:


  The Sixth Circuit Court of Appeals has previously considered the firing of a Ky. Deputy Clerk for political reasons and they held that a dismissal for failure to support a particular party or candidate is unconstitutional. They cited  the U.S. Supreme Court ruling in
Elrod v. Burns, 427 U.S. 347 (1976): .
  See:  Caudill v. Hollan, No. 04-6017 (Fed. 6th Cir. 12/14/2005) (Fed. 6th Cir., 2005) 431 Fed3d 900   which held:

See:  431 Fed3d 900   which held:“Plaintiffs appeal from the district court’s dismissal of their claims against Defendant Doris Hollan, County Clerk for Boyd County, Kentucky. Plaintiffs allege that because they supported Defendant’s opponent in her election, Defendant failed to reappoint them to positions as deputy county clerks in violation of their First Amendment rights of free speech and free association and in violation of their Fourteenth Amendment rights.

Finding that the district court improperly granted Defendant Hollan qualified immunity with respect to certain Plaintiffs’ claims against Defendant Hollan, we AFFIRM the judgment of the district court in part, and REVERSE it in part.

Since the Supreme Court issued its opinion Elrod v. Burns, 427 U.S. 347 (1976), patronage dismissals (i.e., dismissals for failure to support a particular party or candidate) have been, in general, unconstitutional.  (Page 6)..?

KRS 121.310 says no person shall coerce or direct any employee to vote for any political party or candidate for nomination or election to any office in this state, or threaten to discharge any employee if he votes for any candidate, or discharge any employee on account of his exercise of suffrage… but Kentucky does not have a great deal of case law on this subject.  Violation of KRS 121.310 is a Class D felony offense.

KRS 121.990 Penalties.
(1) Any corporation or any officer, agent, attorney, or employee of a corporation, who knowingly violates any of the provisions of KRS 121.025, shall be fined not more than ten thousand dollars ($10,000), and, in the case of individuals, be guilty of a Class D felony.

(2) Any corporation that knowingly violates any of the provisions of KRS 121.035(1) or KRS 121.310(2) shall be fined not more than ten thousand dollars ($10,000) for each offense, and upon conviction its charter shall be forfeited or its authority to do business revoked.

(3) Any person who knowingly violates any of the provisions of KRS 121.035(2),

121.045, 121.055, 121.150 to 121.230, 121.310(1), or 121.320 shall, for each

offense, be guilty of a Class D felony. 


  If an employee is a “classified employee? of state government than they are protected from being fired for political activity under the merit system.  The issue then remains: is a Deputy Clerk a “classified employee??

The case Com., Office of Jefferson County Clerk v. Gordon, 892 S.W.2d 565 (Ky., 1994) involved a Deputy Clerk who filed a worker’s comp. claim for an injury sustained while campaigning at the direction of the County Clerk.  That decision said that while the County Clerk was under the State Office of Local Government, it was not clear if this worked to make the Deputy Clerk a “classified employee? …and the court did not answer the question. 

CLASSIFIED EMPLOYEES PROTECTED:KRS 18A.140 Prohibition against discrimination and political activities.
(1) No person shall be appointed or promoted to, or demoted or dismissed from, any
position in the
classified service, or in any way favored or discriminated against
with respect to employment in the classified services because of his political or
religious opinions or affiliations or ethnic origin or sex or disability.
KRS 18A.005 Definitions for chapter.

(1) No person shall be appointed or promoted to, or demoted or dismissed from, anyposition in the service, or in any way favored or discriminated againstwith respect to employment in the classified services because of his political orreligious opinions or affiliations or ethnic origin or sex or disability.(6) “Class” means a group of positions sufficiently similar as to duties performed, scope
of discretion and responsibility, minimum requirements of training, experience, or
skill, and such other characteristics that the same title, the same tests of fitness, and
the same schedule of compensation have been or may be applied to each position in
the group;
(7) “Classified employee” means an employee appointed to a position in the classified
service whose appointment and continued employment are subject to the classified
service provisions of this chapter;
(8) “Classified position” means a position in the executive branch of state government
that is not exempt from the classified service under KRS Chapter 16, KRS 18A.115,
KRS Chapter 151B, or any other provision of law;
(9) “Classified service” includes all the employment subject to the terms of this chapter
except for those positions expressly cited in KRS 18A.115; a “classified position” is
a position in the classified service;

   A case involving a Superintendent of a School Board discussed the difficulties faced by any employee even if protected:

 Bell v. Board of Ed. of McCreary County, 450 S.W.2d 229 (Ky., 1970)

“So, if he remains within the confines of propriety, neither neglecting his duties nor using his powers to coerce those who are subject to his official influence, he is free to engage in political activity, whether it concerns school elections or otherwise. But it is an equally harsh fact of life that if he loses, his record of performance in office had better be above reproach, because the winners also are human, and will scrutinize his armor for an Achilles heel.?

    The Kenton County case brought by Gail Langendorf is seeking relief from Federal Court on the basis that the worker’s basic constitutional right to political expression when off duty was violated.  

If the clerks were “classified employees? then the merit system would not protect them for actively campaigning for a candidate. But if they are not “classified employees? then such activity would not be forbidden by the merit system.  So Langendorf’s approach to assert constitutional protection, particularly in light of the Caudill v. Hollan case from the 6th. Circuit seems compelling.

If anyone has a Kentucky citation to a case on this subject please forward it to LawReader.  E-mail to Firstjudge@aol.com .

 

OHIO AND FLORIDA RULE THAT SEX CHANGE DOES NOT TERMINATE ALIMONY OBLIGATION

Thursday, March 29th, 2007

• Florida & Ohio men can’t stop maintenance payments to ex-wife after operation
• Lawyer argued if men can’t marry men, men shouldn’t pay alimony to men
• Judge says change no reason to stop $1,250-a-month payments
*CLEARWATER, Florida* (AP) — A woman’s sex change operation does not
free her ex-husband from his alimony obligation, a judge said Wednesday.
Attorneys for Lawrence Roach, 48, had argued his 55-year-old ex-wife’s
decision to switch genders and change her name from Julia to Julio
Roberto Silverwolf voided their 2004 divorce agreement.
“It’s illegal for a man to marry a man and it should likewise be illegal
for a man to pay alimony to a man,” said John McGuire, one of Roach’s
attorneys.
Circuit Judge Jack R. St. Arnold, however, ruled that in the eyes of the
law, nothing changed significantly enough to free Roach from his
$1,250-a-month obligation.
The judge said since Florida courts have ruled sex-change surgery cannot
legally change a person’s birth gender, Roach technically is not paying
alimony to a man.
Gender definitions are “a question that raises issues of public policy
that should be addressed by the Legislature, not the Florida courts,”
St. Arnold wrote.
Silverwolf’s lawyer, Gregory Nevins, said the language of the divorce
decree is clear — Roach agreed to pay alimony until his ex-wife dies or
remarries.
Nevins said he and his client were pleased with the ruling, although
they disagree with Florida’s refusal to legally recognize gender
reassignment surgery.
Roach, a utility worker who has since remarried, said he will press his
fight to end the payments.
“We’re going to try everything we can,” he said. “I can’t rest until I
get satisfaction.”
The case is the second transsexual rights showdown in Pinellas County in
less than a week. On Friday, city commissioners voted 5-2 to fire
Largo’s city manager, Steve Stanton, after he announced he was a
transsexual.
An Ohio appeals court ruled in September 2004 that a Montgomery County
man must continue to pay alimony to his transsexual ex-wife because her
sex change wasn’t reason enough to violate the agreement.
March 29,  2007 The Associated Press

Chief Justice Lambert wins on Double Dipping issue with unlikely help of Sen. Willliams

Wednesday, March 28th, 2007

    On the last day of the 2007 session of the General Assembly the Senate chose not to approve the appointment of Retired Court of Appeals Judge Robbie Dyche to the Ky. Worker’s Compensation Board. Dyche was nominated to the position by Governor Ernie Fletcher in January.Last week LawReader reported:

“While they have two more legislative days (March  26-27) to give their consent, the story goes that Sen. David Williams is not favorable to the appointment and will issue a statement condemning the appointment as service on the Board would allow Judge Dyche to “double dip? by drawing a salary as a member of the Worker’s Compensation Board and as a retired judge.  The combined salary for which he would be eligible is approximately $220,000 a year.

 Former Court of Appeals Robbie Dyche was nominated by Gov. Ernie Fletcher for appointment to the Worker’s Compensation Board under authority granted to him by KRS 342.215.   KRS 342.213 requires that such appointment obtain the consent of the Senate?.

  Indeed Senator Williams issued a statement on the last day of the legislative session in which he recognized that Judge Dyche was qualified for the position on the Worker’s Compensation Board, but he felt the fact that Dyche would have been eligible to double dip would have been a bad precedent.  Therefore, the position remains vacant and the Governor must now submit another nominee.

   In 2005 Chief Justice Joseph Lambert became the first official in State Government to do something to prohibit retired judges being able to double-dip by receiving their judicial retirement benefits, and then being eligible to earn a full salary by getting elected to another judicial position.

The Chief Justice lobbied the General Assembly to get language included in the Judicial Budget bill to forestall Dyche or any other judges who had retired and then ran again for their same office or another judicial office to double dip. The legislation Lambert succeeded in obtaining would allow a judge to retire and take another judicial office, but he would only receive one salary..

In January of 2006, Judge Dyche filed for re-election to the Court of Appeals. He then retired in June but did not withdraw his re-election petition and remained unopposed on the ballot for re-election to his same office.  If the Chief Justice had not obtained the judicial double-dip legislation, Dyche would have been able to draw a full retirement benefit and a full Judicial salary for assuming the office from which he had just retired.

Dyche, being unopposed was elected to his old Court of Appeals seat in November of 2006.  He kept his intentions to himself about his intentions of assuming the office to which he had been elected until January 2007.

 It was however speculated by many in Frankfort that Dyche, having been denied a chance to draw two judicial paychecks, was seeking appointment to the Worker’s Compensation Board.  The position on the Board allowed a salary equal to the Court of Appeals salary.  That appointment was indeed made by Governor Fletcher in January of 2007, but it required consent of the Senate in the 2007 session of the General Assembly.

   As predicted by LawReader, Senator Williams did kill the Dyche plan to double dip. The result is that the Senate President, who has been critical of the Chief Justice, in the end followed the example set by Lambert and took a strong position against double dipping by retired judges.

    Judge Dyche was a highly regarded member of the Court of Appeals, and everything he did was entirely within the law. 

The legislature has not adopted legislation to deal with this issue. If the Governor appoints Dyche to another position that does not require Senate consent, he would be able to draw his full judicial retirement and the full salary in the executive branch position to which he might be appointed.  But the Chief Justice has blocked this happening in the Judiciary, and he did so quickly and without hesitation.

One can only imagine the negative reaction of the General Assembly and the public if Lambert had not skillfully maneuvered to prevent this problem before it occurred

Supreme Court Justices Consider Limiting Shareholder Suits Against Investment Bankers

Tuesday, March 27th, 2007

 The Associated Press Published: March 28, 2007 
WASHINGTON: Echoes of the 2002 business scandals reverberate through a case before the Supreme Court that could make it tougher for shareholders to win lawsuits against public companies.
 

It also pits the Bush administration and corporate America against public pension funds, investor advocates and 32 U.S. states and territories.
 

At stake: untold billions of dollars in shareholders’ suits against corporations, executives and directors for alleged fraud.
 

“It would put a padlock on the courthouse doors for shareholders,” said Chris Mather, a spokeswoman for the American Association of Justice, a group representing trial lawyers.
 

The Securities and Exchange Commission has come into the case on the side of the Bush Justice Department and business interests, a move that prompted criticism from shareholder advocates who questioned the market watchdog agency’s commitment to investor protection. SEC Chairman Christopher Cox has insisted that the agency’s stance is in the best interest of investors because it seeks to restrict what he calls “fraudulent lawsuits.”
 

 Worthy suits against companies by investors “are an essential supplement” to the government’s prosecutions, the Justice Department and the SEC say in their brief filed in the case.
 

At the same time, they say, “Congress has recognized a potential for such actions to be abused in ways that impose substantial costs on companies that have fully complied with the applicable laws. The United States has a strong interest in seeing that the principles applied in private actions promote the purposes of the securities laws.”
 

The opposing sides were making their case before the high court Wednesday, at a time when business interests are pushing for restraints on class-action suits against companies and executives. They contend that laws and rules that came in response to the wave of corporate scandals nearly five years ago — Enron Corp., WorldCom Inc. and the rest — are onerous and costly and hurt the competitiveness of U.S. financial markets.
 

Shareholders have received billions of dollars in suits against those companies and others, which also have been sued by the SEC.
 

The court will decide the case, Tellabs Inc. v. Makor Issues & Rights Ltd., later this year. It sits atop a pyramid of other closely watched cases involving class-action securities litigation by shareholders seeking damages.
 

On Monday, for example, the Supreme Court agreed to consider whether shareholders of companies that commit securities fraud should be able to sue Wall Street investment banks, lawyers, auditors and others that allegedly participated in the fraud.
 

And Tuesday, the court heard arguments in a case stemming from a suit by a group of shareholders seeking damages from 16 investment banks. The shareholders charged that the banks violated antitrust laws in the late 1990s by conspiring to artificially inflate the prices of newly issued shares in nearly 900 companies that went public.
 

The Tellabs case calls on the Supreme Court to resolve a split among federal appeals courts over how stringent a legal standard shareholders must meet in showing an intent to deceive on the part of companies or executives.
 

The Justice Department and the SEC say their brief supports the stricter standard upheld by the greatest number of appeals courts, and that a 1995 law governing securities litigation requires shareholders to demonstrate “a high likelihood” of intent to deceive.
 

Tellabs, a manufacturer of fiber optic equipment, was sued by shareholders over statements made in 2001 by its then-chief executive about its sales that turned out to be false. Shareholders lost millions when the stock price dropped after Tellabs corrected the CEO’s statements.
 

A number of public employee pension funds from several states, with an estimated $1 trillion in assets, intervened in the case in support of the Tellabs shareholders, as did the 32 states and territories and state securities regulators.
 

On the other side, with the government, are the U.S. Chamber of Commerce and Wall Street’s biggest lobbying group.
 

The 32 states and territories are Alaska, American Samoa, Arkansas, California, Connecticut, Delaware, Idaho, Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Dakota, Tennessee, Utah, Vermont and West Virginia.
 

__

 

By CHRISTOPHER S. RUGABER
  

 Several Supreme Court justices expressed skepticism Tuesday about eliminating the immunity from U.S. antitrust laws Wall Street investment banks generally enjoy.
  The court heard oral arguments in a case stemming from a class-action lawsuit by a group of investors seeking damages from 16 securities firms and institutional investors. The investors charged that the banks violated antitrust laws in the late 1990s by conspiring to artificially increase the prices of newly issued shares in almost 900 initial public offerings.
 The case has attracted significant attention from Wall Street and corporate America. Allowing such suits would “increase … the cost of capital for companies offering shares to the public,” the Chamber of Commerce and other groups said in a court filing, and could “damage … the competitiveness of the United States’ capital markets.”
 The investment banks, including Credit Suisse Group and Merrill Lynch & Co. Inc., argue that their IPO methods – including banding together to spread the risk of underwriting share offerings and discussing potential prices for the shares with interested investors – are already regulated by the Securities and Exchange Commission.
 Applying antitrust laws on top of SEC rules would lead to a “danger of inconsistencies and conflicts,” argued Stephen Shapiro, a lawyer representing the banks.
  But investors alleged that banks violate antitrust law in a practice known as “tie-ins,” in which customers have to buy shares in an unpopular IPO in return for being able to buy shares of sought-after IPOs.
 The investors also complained that the banks engage in “laddering,” or requiring customers to purchase newly issued shares at escalating prices after an IPO begins trading to help boost the stock’s price.
 Both practices are violations of securities laws. As a result, the investors’ group claimed they paid “inflated prices” for shares in tech-bubble companies, such as Amazon.com Inc., eBay Inc., and Priceline.com Inc.
 Christopher Lovell, representing the investors, argued that the Wall Street firms should not receive antitrust immunity for illegal activity.
  However, Chief Justice John Roberts and several other justices noted that complex securities laws make it difficult to distinguish between legal and illegal conduct. They questioned whether an antitrust trial would be the best venue for making such distinctions.
 Justice David Souter asked whether a jury trial would be the best process for determining the difference between the legal price-setting of an IPO by investment banks and the illegal price manipulation of new shares once they begin trading.
 “The problem is that … (the banks) are to some extent … in the business of fixing prices,” Roberts said. “If you didn’t understand the context, it would look an awful lot like an antitrust violation.”
 Besides Credit Suisse, the suit names Bear Stearns Cos. Inc., Citigroup Inc., the Goldman Sachs Group Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and Morgan Stanley, among others., among others.
  A federal district court had dismissed the suit, ruling that illegal practices are immune from antitrust liability because of the SEC’s “broad general authority to regulate IPO allocation and underwriter commission practices.”
 But the New York-based 2nd Circuit Court of Appeals said the suit could proceed because Congress didn’t provide antitrust immunity for tie-ins, laddering or other practices.
 The Bush administration, meanwhile, staked out a position between the two courts. The Solicitor General, the government’s lawyer, said in court briefs that conduct by the investment banks can be protected from antitrust lawsuits if it is legal or “inextricably intertwined” with legal activity.
 During consideration of the case in lower courts, the administration was split. According to a court filing by the banks, a letter from the SEC “advocated immunity from these antitrust actions in the most emphatic terms,” while the Justice Department said it opposed immunity.
  The case is Credit Suisse Securities v. Billing, 05-1157. Justice Anthony Kennedy recused himself from the case.
 
 
 

Tuesday, March 27th, 2007

Tuesday, March 27th, 2007

FEDERAL COURTS SEE SLIGHT EASING OF NEW CASELOADS

Tuesday, March 27th, 2007

Judiciary to ask Congress for 67 more judgeships
 

Pamela A. MacLean The National Law Journal March 27, 2007
 
Federal caseloads have risen 27 percent in the last decade and the judiciary will ask Congress for 67 new judgeships. But at least in the short term, the pressure appears to have eased in the last year, with court statistics showing a drop in new appeals, bankruptcy filings and new criminal cases.

 

More than 66,600 federal appeals and 1.1 million bankruptcy cases were filed in fiscal year 2006. District courts nationally saw 259,500 civil and 66,800 criminal cases filed, according to the Administrative Office of the U.S. Courts.

 

Despite the impressive numbers, bankruptcy filings were off 38 percent from a year earlier, appeals court filings dropped 3 percent and new criminal cases were off 4 percent. Only new civil filings were up 3 percent nationally, according to the court’s records, and nearly all of that was attributable to the addition of 14,000 asbestos cases in the Eastern District of Pennsylvania.

 

The drop in federal appeals was attributed to fewer immigration appeals and a decline in criminal appeals as the courts resolved a crush of resentencing requests in the wake of the U.S. Supreme Court’s decision in U.S. v. Booker, 543 U.S. 220 (2005), according to the administrative office.

 

Chief Judge Mary Schroeder of the 9th U.S. Circuit Court of Appeals said the national numbers do not reflect the situation in her circuit, the nation’s largest, where immigration appeals continue to flood the court. “Our filings are way up as a result of immigration cases and we haven’t added a judge since 1984,” she said.

 

MORE JUDGES SOUGHT

 

Last week, the Judicial Conference of the United States, the policymaking body of the federal judiciary, voted to ask Congress to create 67 new judgeships — 15 appeals judges and 52 district judges.

 

In announcing the decision, the panel noted that Congress has not added to the 179 appeals judges in 17 years, even though filings have jumped 55 percent since 1990.
Yet winning new judges won’t be easy.

 

“More than even that data is politics right now,” said Carl Tobias, a professor at the University of Richmond School of Law in Virginia. “The president has only nominated four new people to fill judicial vacancies since the election, and Congress has not moved on judges,” he said.

 

In addition, Congress is distracted with the U.S. Department of Justice’s firing of eight U.S. Attorneys. He said there is only a slim chance of new judgeships passing. “Democrats will not want to give President Bush the opportunity to fill 67 judgeships,” Tobias said.

 

Among the appeals courts, the 9th Circuit would receive the most: seven of the 15 additional appeals seats, five permanent and two temporary judgeships.

 

The recommendation for new judges would bolster the states that border Mexico with large immigration caseloads. The largest gainers would be Arizona, the Los Angeles-based Central District of California, the Middle District of Florida and the Central Valley area of California, each of which would receive an additional four permanent judgeships.
Schroeder said the Central Valley of California has one of the highest caseloads per judge of any in the United States due to prisoner habeas, death penalty and immigration cases.

 

The judgeship request comes at a time when the number of immigration-related criminal prosecutions nationally has declined: down by 18 percent from a year ago, according to Transactional Records Access Clearinghouse at Syracuse University in New York.

Although the TRAC analysis was quick to point out that prosecutions over the past year were still much higher than five years ago. Overall, prosecutions of immigration-related crimes are up 123 percent since 2001, according to TRAC.
 

 

Legislature changes Presidential filing date in 2008

Monday, March 26th, 2007

(Frankfort, KY)  The Kentucky State Senate today concurred with changes made in Senate Bill 14 which would slightly delay the nomination filing deadline for candidates for President of the United States.   The original provisions of SB 14, sponsored by Senator Dick Roeding (R-Lakeside Park), addressed the allotted time voters with disabilities have to vote and remained in the final version passed by the Senate today.

 ”We appreciate leaders of the House and Senate putting public policy above what could have been a partisan issue,? remarked Secretary of State Trey Grayson.  “Their actions will allow Presidential candidates from all parties to have access to the ballot so that Kentuckians will have a full range of options of candidates from which to choose the next leader of our nation.”

 The change in the deadline for filing presidential nominations was sought by Secretary Grayson after his office began reviewing filing procedures for the 2008 U.S. Presidential race.  At that time, it became apparent that the Republican National Convention would occur after the filing deadline had passed and would thus need to be extended in order for a Republican nominee for President of the United State to have his or her name placed on the ballot.  A similar change was made to the filing deadline for the 1996 presidential race in order to allow the Democratic Convention to conclude and the Democratic nominee to file for the race.

The current deadline for filing for President of the United States in order to appear on the 2008 General Election ballot is September 2, 2008 and under the change would be moved to September 5, 2008.  The Republican National Convention is scheduled to take place on September 1-4, 2008.

 “I want to personally thank Chairman Damon Thayer (R-Georgetown) and Chairman Darryl Owens (D-Louisville) who worked diligently to address this issue as soon as we brought it to their attention.?

 The bill now heads to the Governor’s desk for his consideration.

HOW MUCH SENTENCING DISCRETION ALLOWED U.S. DISTRICT JUDGES?

Monday, March 26th, 2007

Vet’s case highlights sentencing debate. U.S. judges confront limits of discretion

By Matthew Dolan  Baltimore Sun  March 26, 2007
After Jose Medina Jr. served 18 years in the Army, a federal judge in Baltimore wanted to honor his patriotism even after the war veteran committed a crime.
Medina, a federal civil employee from Aberdeen, was caught with child pornography on his work computer in 2004 and later pleaded guilty to a single charge of possessing 10 images. At his sentencing, the judge credited Medina substantially for his military service and imposed prison time well below recommended guidelines.
“I start with the understanding that vets should get a break,” U.S. District Judge William D. Quarles Jr. said before sentencing Medina to one year plus a day behind bars.
Last week, an appeals court disagreed.
The 4th Circuit Court of Appeals in Richmond, Va., sided with prosecutors in ruling that Quarles had been too lenient when the judge gave too much weight to one factor — Medina’s military record. The judge, the panel decided, violated the principle of a “reasonable” sentencing and ordered the case back for re-sentencing using the recommended guidelines of about 3 1/2 to less than five years in prison.
The case illustrates a still-simmering, two-year-old debate in the federal judiciary over how much discretion individual judges should have in crafting sentences.
In January 2005, the Supreme Court ruled that the complicated calculus that has determined criminal sentences for nearly two decades in federal court must be considered advisory instead of mandatory.
As a result of the so-called “Booker decision,” federal judges have found themselves with greater freedom in sentencing criminals — and a flood of difficult new questions.
“The Supreme Court’s 2005 decision making the federal sentencing guidelines advisory has generally allowed for greater flexibility and a more rational sentencing process,” Baltimore defense attorney Larry A. Nathans, who has studied federal sentencing issues, said in an e-mail. “However, because the decision is relatively new, case law is evolving as to what appellate courts deem to be reasonable.”
Hundreds of long-closed cases have been sent back for re-sentencing. But as the Medina case shows, judges sometimes have a tough time knowing what constitutes a reasonable deviation from the recommended guidelines.
Last week, Quarles said he understood and accepted the ruling vacating his sentence. But the judge in Baltimore also lamented the fact that a defendant’s military service could not serve as a greater benefit.
“It appeared to be an appropriate case for mercy,” the judge said.
U.S. Attorney General Alberto R. Gonzales told Congress in January that the advisory guidelines system must be improved.
He singled out federal statistics showing that in more than 20 percent of cases involving possession of child pornography, defendants are being sentenced below the guideline range.
“Sentences should be fair, determinate and tough. I call upon this body to enact legislation to restore the mandatory nature of the guidelines to ensure that our criminal justice system is both fair and tough,” Gonzales told the Senate Judiciary Committee.
A closer look at those numbers collected from the U.S. Sentencing Commission shows a more nuanced picture.
In the last fiscal year, federal judges imposed sentences within the recommended guidelines slightly more than 60 percent of the time. But federal prosecutors asked for — and judges adopted — those reduced sentences in almost one of every four cases.
While there is little likelihood in the near future for the kind of new mandatory-minimum sentencing law endorsed by Gonzales, the nation’s appeals courts continue to wrestle with the individuals cases to decide the fate of men like Medina.
The father of two had been married for 25 years at the time of his sentencing, court papers show. Medina enlisted in the Army in 1980 and received an honorable discharge after 18 years, including a deployment for the first Persian Gulf War.
Before his arrest, court papers show he worked in the computer field at the Department of Defense and Office of Personnel Management, according to documents filed by his attorneys.
The doctors who examined him did not find him to be a pedophile.
“Mr. Medina has insisted that he did not purposely download graphic child images, yet the FBI reports recover[ed] 1,000 such images and it is difficult to understand how this accumulation could proceed without Medina being somehow aware of his action,” Dr. John R. Lion wrote in one report.
Another doctor concluded that Medina posed no danger to the community and presented little risk of committing more crime. Medina’s attorney, Paul James Krawczyk Jr., did not return a message seeking comment Friday.
Court records also show Medina was diagnosed with post-traumatic stress disorder after the death of a fellow soldier during a training accident in which he participated. Advocates for veterans have long stressed that more treatment must be available for former soldiers.
“I don’t know that [vets] deserve special treatment under the law, but I think they deserve special treatment for any mental health issues discovered, especially for those returning from combat,” said Paul Rieckhoff, the executive director of Iraq and Afghanistan Veterans of America.
Prosecutors in Baltimore said they received personal approval from the solicitor general at the Justice Department to appeal Quarles’ sentence in the child-pornography case — a crime now among the top priorities of the Justice Department.
In his ruling, Quarles inappropriately created an “overarching sentencing benefit for all veterans, regardless of the individual, the crime, and the nature of the military service,” assistant U.S. Attorney Bonnie S. Greenberg wrote in her brief to the appeals court, She added that the judge did not fully appreciate the seriousness of Medina’s crime because he imposed such a light prison term.
There were images of underage children engaging in sexually explicit conduct, including children younger than 12, and images involving children in bondage, Greenberg wrote.
For Medina, the appeals court decision could be especially difficult. Prosecutors confirmed Friday that Medina has already been released from prison after serving an undisclosed term — meaning he’d likely have to go back behind bars after the judge sentences him again.
No new sentencing date has been set.

OHIO CASE ASKS, Is the goal of prison to punish, to rehabilitate or to find some balance of both?

Monday, March 26th, 2007

Parolee’s better life ignored.  Man sent back to prison after 13 months free.

BY DAN HORN  Cincinnati Enquirer

 Michael Straughn got a chance in 2005 to prove he could put his criminal past behind him when an appeals court cut his four-year prison sentence in half.
 

He returned to Cincinnati, got jobs at McDonald’s and a telemarketing firm, applied to college, got visitation rights with his 3-year-old daughter and stayed out of serious trouble.
 

His parole officer was so impressed he recommended ending Straughn’s parole a year early.
 

Instead, he went back to prison.
 

I was devastated,” Straughn said. “I made such an effort to stay out.”
 

Straughn, 22, is caught in the middle of a complex fight about how Ohio’s courts sentence criminals to prison.
 

The dispute involves hundreds of prisoners whose sentences were reduced by an appeals court in 2005 and reinstated last year by the Ohio Supreme Court. The battle, which isn’t over, has left the inmates, their families and victims in limbo.
 

Straughn was one of the few inmates freed while awaiting the Supreme Court’s decision.
 

He’s now the focus of a new appeals court case that asks a question lawyers, judges, prison officials and others have debated for years: Is the goal of prison to punish, to rehabilitate or to find some balance of both?
 

Straughn’s attorneys say he proved during 13 months of freedom he could follow the rules, and that his conviction on kidnapping and robbery charges was an aberration he would not repeat.
 

“He was on the road to success,” said Wendy Calaway, Straughn’s attorney. “I’m not in any way trying to demean the seriousness of his offense. But if we believe the purpose of rehabilitation is to integrate people back into society, we accomplished that.”

Straughn made that argument to Common Pleas Judge Steven Martin last year when he returned for re-sentencing following the Supreme Court decision, which allowed, but did not require, imposing the original four-year sentence.
 

Prosecutors argued that Straughn’s crime – not his life since release – should be the main concern.
 

They said he still owed a debt to society for abducting and robbing a Cincinnati woman in 2003.
 

Calaway said Straughn lied about having a gun and forced the woman to withdraw $100 from an ATM.
 

Prosecutors also noted that, while on parole, Straughn was ticketed for driving without a license and possession of an open flask.
 

Straughn claimed he didn’t know his license was suspended while on parole, but prosecutors say it proves he still has trouble following rules.
 

“Those crimes … show that while Straughn may have gotten a job at McDonald’s, he has still failed to figure out how to lead a law-abiding life,” assistant prosecutor Scott Heenan wrote in an appeals court brief.
 

Martin didn’t dwell on the tickets in court, but he imposed the original four-year sentence.
 

“I thought the sentence was fair when I first gave it to him, and I thought it was fair when I gave it to him again,” Martin said. “He committed a very serious offense, and I gave him the sentence I thought he deserved.”
 

Anna Schmalz, who represented Straughn when he was sentenced, said Martin’s decision was a shock because he had indicated Straughn would likely remain free if he got a better job and stayed out of trouble.
 

“He was doing everything right and he got slapped in the face,” Schmalz said. “He is the poster child for someone who has been rehabilitated.”
 

Prosecutors, though, say it shouldn’t be a shock that a judge imposed the original sentence. It might be unusual for an inmate to be out for 13 months in the middle of that sentence, they say, but that doesn’t mean the sentence should be abandoned.

 

 

“As much as people would like to believe jail is about rehabilitation, it’s about punishment,” said Hamilton County Prosecutor Joe Deters. 

 

Straughn’s unusual case was made possible by a series of federal and state court decisions that overturned the rules judges use when sentencing criminals. 

 

The shake-up began in 2004 when the U.S. Supreme Court declared sentencing guidelines in the state of Washington unconstitutional because they allowed judges to impose sentences based on evidence that might not have been presented to a jury. 

 

That decision raised questions about similar guidelines in a dozen states, including Ohio. 

 

Straughn and other inmates challenged their sentences and an appeals court concluded first-time offenders like Straughn should get minimum sentences. 

 

The Ohio Supreme Court overturned that ruling and said judges could, in most cases, impose any sentence within the guidelines. 

 

Most inmates ended up getting their original sentences, but a few got slightly less or more time. Straughn appears to be the only one in Hamilton County who was released and forced to return to prison. 

 

His latest appeal argues that sending him back “violates the notions of fundamental fairness and justice.” He now is in the Noble Correctional Institution in Caldwell, serving a sentence that will end in November 2008. 

 

“I feel like a lost cause now,” he said. “I’m ready to get back out, to get my life back together.” 

 

THE U.S. SUPREME COURT AND THE USE AND MEANING OF PARDONS

Monday, March 26th, 2007

By GEORGE LARDNER Jr.  Published: March 26, 2007

 

George Lardner Jr., an associate at the Center for the Study of the Presidency and a former reporter for The Washington Post, is writing a history of presidential pardons.
 

ALL the talk about a potential presidential pardon for I. Lewis Libby Jr. has infuriated critics of the Bush administration; many feel that a Libby pardon would amount to a whitewashing of the White House’s actions relating to Valerie Plame’s identity.

 

Perhaps they should take heart: Mr. Libby may escape prison time, but if he accepted a pardon, he (and Mr. Bush) would have a hard time continuing to insist that he was an innocent victim of a vengeful prosecutor. It would also undermine the claim that the Plame investigation was a partisan ploy to discredit the White House, and leave another stain on Mr. Bush’s legacy.

 

Here’s why: If Mr. Libby were to accept a traditional presidential pardon — a “full and unconditional? grant of clemency — he would be admitting that he was guilty of the crimes of which he was convicted: obstructing justice, perjury and lying to the F.B.I. Perhaps it shouldn’t be that way, but it is — no ifs, ands or buts about it. So, while many who have been pardoned like to claim they have been “exonerated,? that simply isn’t so.
The Supreme Court laid down the law in 1915 in a case that, paradoxically, grew out of a debate over the sanctity of a newspaperman’s sources. Six decades later, President Gerald Ford relied heavily on the court’s decision — in his own mind, though not publicly — in justifying his pardon of Richard Nixon. Ford would have preferred an open confession of guilt by Nixon instead of the grudging statement that confessed nothing, but Ford consoled himself with the doctrine that acceptance of a pardon is, legally and ethically, an admission of guilt.

 

The story behind the 1915 case is little known but very relevant today. It involved the city editor of The New York Tribune, George Burdick, who, unlike journalists in the Libby case, flatly refused to testify before a federal grand jury about his sources for an article on fraud in the United States Custom House in New York. He said he might incriminate himself in his testimony. The federal prosecutor saw a quick pardon as the answer to this problem, and President Woodrow Wilson agreed.

 

Wilson gave Burdick “a full and unconditional pardon for all offenses against the United States? he might have committed in connection with the article and for any other matter the grand jury might ask him about. That would seem to have let Burdick off the hook, but he still didn’t want to testify. He refused to accept the pardon, and was locked up for contempt.

 

The case went to the Supreme Court, which held that Burdick was within his rights and ordered him discharged. In doing so, the court embraced Chief Justice John Marshall’s 1833 definition of a pardon as “a private, though official? act of grace whose validity depended on its acceptance: “It may then be rejected by the person to whom it is tendered; and if it be rejected, we have discovered no power in a court to force it on him.?
Marshall’s pronouncements, in United States v. Wilson, were pure dicta — nonbinding observations — but the courts treated them as gospel. In the Burdick case, the court likewise held that “a pardon, to be effective, must be accepted? because it “carries an imputation of guilt; acceptance a confession of it.? This made Marshall’s view the law of the land.

 

The problem is that both Marshall’s definition and the court’s 1915 reinforcement of it were bad history and tortured logic. Acceptance of a pardon should not be a confession of guilt, especially if there is documentation of innocence. The “imputation of guilt? would disappear if acceptance of a pardon were not required. If one has no choice but to take a pardon, it would become like a grant of immunity, and thus would be noncommittal.

 

There is nothing in the Constitution that gives a person the prerogative to turn down a pardon, and strong support in the Constitutional debates for the president’s having an unfettered power to grant one. “The benign prerogative of pardoning should be as little as possible fettered or embarrassed,? Alexander Hamilton wrote in The Federalist No. 74. Even more to the point, the framers turned down an effort to limit the power to pardons “after conviction? because they wanted to make it useful for law enforcement. That is, of course, exactly what President Wilson tried, and was told he couldn’t do, in the Burdick case.

 

That Marshall, the supreme judicial activist, wanted to fetter this presidential power makes his 1833 decision all the more questionable. It is worth noting that, years earlier in the Aaron Burr treason trial, Marshall had been left tongue-tied over the question of pardon acceptance after President Thomas Jefferson vainly tried to stuff one down the throat of an unwilling witness. Perhaps in the 1833 case, with Jefferson now dead, the chief justice was having the last word, even if it was at the expense of the Constitution.

 

Some jurists have pointed out the weakness of his logic, not to mention his history. In 1927, a Supreme Court ruling by Oliver Wendell Holmes Jr. in a case involving a prisoner whose death sentence was commuted to life in prison noted that “a pardon in our days is not a private act of grace from an individual happening to possess power.?

 

“When granted it is the determination of the ultimate authority that the public welfare will be better served by inflicting less than what the judgment fixed,? he continued. “Just as the original punishment would be imposed without regard to the prisoner’s consent, and in the teeth of his will, whether he liked it or not, the public welfare, not his consent, determines what shall be done.?

 

This repudiation of Marshall did not, unfortunately, overturn the Burdick decision. At the urging of the Justice Department, Holmes limited the decision to apply only to commutations of sentences, not to pardons.

 

What all this means for Mr. Bush is that he can’t win. If he gives Mr. Libby a traditional pardon, one of his administration’s most powerful officials has to admit to wrongdoing — a remarkable event for an administration that seems pathologically averse to apologizing or even admitting mistakes.

 

The alternative is for Mr. Bush to not only pardon Mr. Libby but also officially proclaim his innocence. This, however, has not been done in decades: despite bold rhetoric, not even Ronald Reagan went that far in his pardon of W. Mark Felt, the man who turned out to have been Deep Throat, in a case involving illegal F.B.I. searches; nor did President Bush’s father in forgiving Caspar Weinberger or other Iran-contra defendants. Were Mr. Bush to declare Mr. Libby’s innocence, it would seem not only the height of hypocrisy, but also to back up the claim of Mr. Libby’s lawyers that he was a “fall guy? for other officials, just as his lawyers claimed.

 

No matter what one thinks of the folks in the White House, it seems clear that they have been put in a bind by the Supreme Court’s bad precedents. Still, there does appear to be some justice in the fact that, while Mr. Libby may not spend a day behind bars, the Bush administration is hardly going to get off scot-free.
 

 

LAWREADER USER BRENDA POPPLEWELL DOES IT AGAIN.

Sunday, March 25th, 2007

Forgive us if we shamelessly note that Brenda Popplewell is a LawReader user of long standing and has been kind enough to thank us for providing that margin of excellence that allows her to win big cases time and time again.
Brenda says: “I love Lawreader! You guys do such a great job with the Kentucky materials it streamlines my research in all my state cases. When I begin my research, you guys have already completed several steps for me, especially with the case law annotations to statutes and rules.?

This news story tells of her latest courtroom victory.

By Dean Manning  Sentinel Echo, London, Ky.

A nearly yearlong ordeal came to an end Wednesday for William Ray Taylor, when a jury found him not guilty of statutory rape.

“It is just a huge weight lifted off of me,” Taylor said.

Testimony in the case began Tuesday in Laurel Circuit Court where Taylor was facing one count of third-degree rape for allegedly having sexual relations with a female who was under the age of 16 at the time. The jury returned the verdict about noon Wednesday to the relief of Taylor, his family and his attorney Brenda Popplewell.

“We are just so grateful to the jury,” Popplewell said. “They were very smart and attentive. We are very thankful we have the system we do.”

Taylor gave the credit to Popplewell for her efforts on his behalf.

“I owe this woman my life,” Taylor said.

Taylor was indicted by the Laurel County Grand Jury in August 2006 on one count of third-degree rape. According the indictment, on June 16, 2006 Taylor engaged in sexual intercourse with B.L.B, a child under the age of 16 years old at the time.

Assistant Commonwealth Attorney Harold Dyche said under Kentucky law a person under 16 cannot consent to sex with a person over 21 years old.

“I’m disappointed,” Dyche said of the verdict. “I know the jury had a difficult job sorting through all of the evidence.”

Taylor said this case shows just how easy it is to bring rape charges. However, he is going to try to put this behind him.

“This is a big weight lifted off of me,” Taylor said. “I’m going to go home with my wife and kids.”
 

Special Health Court for Medical Malpractice cases?

Sunday, March 25th, 2007

Proposal to remove medical malpractice cases to special Health Court blasted.

Cyrus Dugger

Proposals for so-called “health courts,” which would remove medical malpractices cases from the court system, are all burdened with the same inherent problems.

* Replaces right to jury trial with a system that is biased against the patients.
o Unlike other administrative compensation schemes, such as workers’ compensation, health “courts” are not “no-fault” models. Health courts are based on an “avoidability” standard, which is similar to negligence. In other words, in a health court, a patient would still have a high burden to prove, but would have none of the protections the legal system provides. And patients will find it harder to get an attorney.
o o While proposals vary, in every health “court” scheme, the decision-making authority is put in the hands of either the hospital or insurer involved, or “experts” appointed and commissioned by a panel heavily weighted toward health industry representatives.1
o o These proposals take critical decisions away from unbiased judges and juries, despite consistent empirical studies showing juries to be competent, effective, fair decision makers able to handle complex cases,2 and supported by the public as the best arbiter of disputes.

* Benefits slashed.
o o Compensation for injuries under health “courts” will be determined by a “schedule” developed by political appointees (e.g., a certain amount for a lost eye or severed limb) instead of decided on a case-by-case basis by a jury. There is no room for consideration of circumstances for these types of injuries. As pointed out in recent congressional testimony by Duke Law professor Neil Vidmar, who has extensively studied medical malpractice, “Even when some leeway is built into compensation schedules, they cannot take into account the number of factors and extreme variability of pain and suffering, physical impairment, mental anguish, loss of society and companionship, and other elements of damages that fall under the rubric of non-economic damages. That is why these matters have been entrusted to juries. They provide justice on an individualized basis.”3
o Like other administrative schemes, benefits will inevitably be reduced in future years as politicians try to appease insurers and hospitals, which in the case of workers’ compensation has left many permanently injured individuals barely able to survive.4

* Health Courts are unconstitutional. Almost every state constitution guarantees the right to trial by jury in civil cases and the right to access the court system for redress.5 Health courts require that patients give up these rights without any reasonable substitute.
o Courts have held that it is only a fair trade for claimants to give up their right to jury if in turn they no longer have to prove fault, unlike the health “court” model.6
o At least 11 states have found other, less radical medical liability tort restrictions violate their state constitution’s right to jury.7 At least 12 more states that have upheld less egregious tort restrictions have indicated in their court precedent that removing a medical claim entirely from jury deliberation would be unconstitutional.8 Even more states have found less radical medical liability tort restrictions unconstitutional under due process review.9

(more after the break)
* Health courts are both costly and inefficient, even for smaller claims.
o o Medical malpractice cases currently constitute only about four percent of all tort cases in state civil courts (in thirteen states reporting),10 so removing them would provide only minuscule savings. At the same time, these cases would need to be resolved in a separate taxpayer-funded administrative system that must be built and maintained. Such a system would be similar to the workers’ compensation system, which is extremely costly and the costs have not been relieved by the recent reductions in benefits.11
o o Duke Law professor Neil Vidmar recently testified that no matter the size of the claim, “medical malpractice cases involve complex issues that can only be sorted out after considerable investigation and discovery. When patients make claims of negligence the process of discovering whether negligence occurred requires investigating medical records, interviewing the involved parties (through sworn depositions), finding experts, sorting out conflicts between the opinions of experts, reinvestigating the records and testimony as new insights are uncovered and then reaching some kind of consensus, if possible, about what actually occurred and whether those facts meet the definition of legal negligence. This process takes considerable time as well as money. For complex cases the process of finding competent experts and getting them to review cases under their busy, over-booked schedules means that cases cannot be resolved in weeks, indeed even in months. Sometimes it takes years. Any competent defense or plaintiff lawyer who works in this area will confirm my assertions. To be fair to both sides, health courts will have to do the same thing. Health courts will also have to bear these transaction costs.”12

* Health courts would disrupt careful and balanced negotiation that takes place outside the courtroom to successfully resolve the vast majority of legitimate medical malpractice claims today.
o More than 90 percent of cases are settled without jury trial, with some estimates indicating that the figure is as high as 97 percent.13
o As Professor Neil Vidmar recently testified in the U.S. Senate, “Research on why insurers actually settle cases indicates that the driving force in most instances is whether the insurance company and their lawyers conclude, on the basis of their own internal review, that the medical provider was negligent.….An earlier study by Rosenblatt and Hurst examined 54 obstetric malpractice claims for negligence. For cases in which settlement payments were made there was general consensus among insurance company staff, medical experts and defense attorneys that some lapse in the standard of care had occurred. No payments were made in the cases in which these various reviewers decided there was no lapse in the standard of care.”14
o Vidmar testified, “In interviews with liability insurers that I undertook in North Carolina and other states, the most consistent theme from them was: ‘We do not settle frivolous cases!’ The insurers indicated that there are minor exceptions, but their policy on frivolous cases was based on the belief that if they ever begin to settle cases just to make them go away, their credibility will be destroyed and this will encourage more litigation.15
o Vidmar further testified, “Without question the threat of a jury trial is what forces parties to settle cases. The presence of the jury as an ultimate arbiter provides the incentive to settle but the effects are more subtle than just negotiating around a figure. The threat causes defense lawyers and the liability insurers to focus on the acts that led to the claims of negligencee.16

* Far from being “broken,” the current medical malpractice system works well. This is true even according to the Harvard School of Public Health, which advocates Health Courts. They recently found that despite its costs, the current system works: legitimate claims are being paid, non-legitimate claims are generally not being paid, and “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”17 The authors found:
o Sixty-three percent of the injuries were judged to be the result of error and most of those claims received compensation; on the other hand, most individuals whose claims did not involve errors or injuries received nothing.
o Eighty percent of claims involved injuries that caused significant or major disability or death.
o “The profile of non-error claims we observed does not square with the notion of opportunistic trial lawyers pursuing questionable lawsuits in circumstances in which their chances of winning are reasonable and prospective returns in the event of a win are high. Rather, our findings underscore how difficult it may be for plaintiffs and their attorneys to discern what has happened before the initiation of a claim and the acquisition of knowledge that comes from the investigations, consultation with experts, and sharing of information that litigation triggers.”
o “Disputing and paying for errors account for the lion’s share of malpractice costs.”
o “Previous research has established that the great majority of patients who sustain a medical injury as a result of negligence do not sue. … [F]ailure to pay claims involving error adds to a larger phenomenon of underpayment generated by the vast number of negligent injuries that never surface as claims.”
o Patients “rarely won damages at trial, prevailing in only 21 percent of verdicts as compared with 61 percent of claims resolved out of court.”

* Rather than demonstrating a “broken” legal system, there are many reasons why some medical malpractice victims do not currently sue, and health courts will not change that. As Professor Neil Vidmar has indicated, these reasons include:
o Patients may be unaware that their injury is a result of negligence since most injuries occur in hospital settings and it is difficult for the patients to determine if the injury or illness they experience following negligent medical treatment is the result of the condition for which they sought treatment or negligence
o Even when they learn that malpractice has occurred, they are willing to accept that any negligence was not malicious on the part of the health care provider.
o Some injured patients have alternative sources of support, like private health insurance or Medicare/Medicaid or income support from employers or welfare, and the same would be true under a health court system. (link)

 
1 See, e.g., Peters Jr., Philip G., “Doctors & Juries,” U of Missouri-Columbia School of Law Legal Studies Research Paper No. 2006-33 Available at SSRN: http://ssrn.com/abstract=929474 at 44 (“[T]he public setting in which these experts will render their opinions could place considerable pressure on them to demonstrate their loyalty to the profession. As a consequence, these ‘neutral’ experts may show the same reluctance to label another physician’s care as negligent that physicians have exhibited in other settings. …[R]esearchers have found that physicians are so unwilling to label another physician’s care as negligent that they refuse to do so even when the treatment given to the patient was ‘clearly erroneous.’)(citations omitted).

2 For an extensive list of studies demonstrating the competence of juries, see, e.g., Testimony of Neil Vidmar, Russell M. Robinson, II Professor of Law, Duke Law School before The Senate Committee on Health, Education, Labor and Pensions, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 10 (“The overwhelming number of the judges gave the civil jury high marks for competence, diligence, and seriousness, even in complex cases …Systematic studies of jury responses to experts lead to the conclusion that jurors do not automatically defer to experts and that jurors have a basic understanding of the evidence in malpractice and other cases. Jurors understand that the adversary system produces experts espousing opinions consistent with the side that called them to testify. Moreover, jurors carefully scrutinize and compare the testimony of opposing experts. They make their decisions through collective discussions about the evidence.… We also found that jury awards of prevailing plaintiffs in malpractice cases were correlated with the severity of the injury.”)(citations omitted); Peters Jr., Philip G., “Doctors & Juries,” U of Missouri-Columbia School of Law Legal Studies Research Paper No. 2006-33 Available at SSRN: http://ssrn.com/abstract=929474 (“Four important findings emerge from the data. First, negligence matters. Plaintiffs rarely win weak cases. They have more success in toss-up cases, and fare best in cases with strong evidence of medical negligence. Second, jury verdicts are most likely to square with the opinions of experts hired to evaluate the jury’s performance when the evidence of provider negligence is weak. This is the very set of cases that most worries critics of malpractice litigation. Juries agree with expert reviewers in 80 to 90 percent of these cases – a better agreement rate than physicians typically have with each other. Third, jury verdicts are much more likely to deviate from the opinion of an expert reviewer when there is strong evidence of negligence. Doctors consistently win about 50 percent of the cases which experts believe the plaintiffs should win. Fourth, the poor success of malpractice plaintiffs in these cases strongly suggests the presence of factors that systematically favor medical defendants in the courtroom. The most promising explanations for that advantage are the defendant’s superior resources, the social standing of physicians, social norms against ‘profiting’ from an injury, and the jury’s willingness to give physicians the “benefit of the doubt” when the evidence of negligence is conflicting.”)

3 Testimony of Neil Vidmar, Russell M. Robinson, II Professor of Law, Duke Law School before The Senate Committee on Health, Education, Labor and Pensions, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 18 (citations omitted).

4 See., e.g., Center for Justice & Democracy, Workers Compensation – A Cautionary Tale (September 20, 2006) http://centerjd.org/Workers’Comp(National).pdf

5 Colorado and Louisiana do not have such provisions in their constitutions, but have statutory provisions.

6 New York Central Railroad Co. v. White, 37 S. Ct. 247 (1917)(“The statute under consideration sets aside one body of rules only to establish another system in its place. If the employee is no longer able to recover as much as before in case of being injured through the employer’s negligence, he is entitled to moderate compensation in all cases of injury, and has a certain and speedy remedy without the difficulty and expense of establishing negligence or proving the amount of damages.”); Arizona Copper Co. v. Hammer et al, 250 U.S. 400, 432 (1918).

7 Kansas Malpractice Victims Coalition v. Bell, 757 P.2d 251 (Kan. 1988)(damage caps); Smith v. Dep’t of Ins., 507 So.2d 1080 (Fl. 1987)(damage caps); Lucas v. U.S., 757 S.W. 2d 687 (Texas 1988)(damage caps); Knowles v. U.S., 544 N.W.2d 183 (S.D. 1995)(damage caps); Lakin v. Senco Products, 987 P.2d 463 (Ore. 1999)(damage caps); Moore v. Mobile Infirmary Assoc., 592 So.2d 156 (Ala. 1992)(damage caps); Sofie v. Fibreboard Corp., 771 P.2d 711 (Wash. 1989)(damage caps); Lloyd Noland Hosp. v. Durham, 2005 WL 32404 (Ala. 2005)(periodic payment schedules); Condemarin v. University Hosp., 775 P.2d 348, 357-60 (Utah 1989) (liability limit for state hospitals); Wright v. Central DuPage Hospital Assoc., 347 N.E. 2d 736 (Ill. 1976)(medical review panels); Boucher v. Sayeed, 459 A.2d 87, (R.I. 1983)(striking down Reform Act under EPC, but in dicta doubting it would pass muster under jury trial challenge); Duren v. Suburban Comm. Hosp., 495 N.E.2d 51 (Ohio 1985)(damage caps).

8 Etheridge v. Medical Center Hospitals, 376 S.E.2d 525 (Va. 1989); see also Pulliam v. Coastal Emergency Services of Richmond, Inc., 509 S.E.2d 307 (Va. 1999); Lacy v. Green, 428 A.2d 1171 (Del. 1981)(“The parties remain free to call, examine and cross-examine witnesses as if the pretrial panel opinion had not been made . . . [the statute in question] cuts off no defenses, interposes no obstacle to full consideration of all the issues, and takes no question of fact from the jury.”); Adams v. Children’s Mercy Hospital, 832 S.W.2d 898 (Mo. 1992); Kirkland v. Blaine Cty. Med. Ctr.,134 Idaho 464 (2000); Murphy v. Edmonds, 325 Md. 342 (1992); Peters v. Saft, 597 A.2d 50 (Me. 1991)(noting that even some damage caps may go to far by eliminating the remedy altogether); English v. New. England Med. Ctr., 405 Mass. 423 (1989); Wright v. Colleton Cty. Sch. Dist., 301 S.C. 282 (1990); Robinson v. Charleston Area Med. Ctr., Inc., 186 W.Va. 720 (1991); Evans ex. Rel. Kutch v. State, 56 P.3d 1046 (2002); Barret v. Baird, 908 P.2d 689 (Nev. 1995); Wiley v. Henry Ford Cottage Hosp., 668 N.W.2d 402 (Mich. 2003).

9 Arneson v. Olson, 270 N.W.2d 125 (N.D. 1978); Carson et al v. Hitchcock Clinic, Inc., 424 A.2d 825 (N.H. 1980); Kenyon v. Hammer, 688 P.2d 961, 975 (Ariz. 1984)(finding right to access the court for a negligence claim is a fundamental right and therefore three-year statute of limitations was unconstitutional)

10 Examining the Work of State Courts, 2005, A National Perspective from the Court Statistics Project (2006) at 29.

11 See, for example, John M. Ostrowski, Testimony by Kansas AFL-CIO in opposition to SB 181, February 12, 2003.

12 Testimony of Neil Vidmar, Russell M. Robinson, II Professor of Law, Duke Law School before The Senate Committee on Health, Education, Labor and Pensions, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 27 (citations omitted).

13 Ibid. at 17 (citations omitted).

14 Ibid. at 17-18, 22.

15 Ibid. at 23.

16 Ibid. at 21.

17 David M. Studdert, Michelle Mello, et al., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” New England Journal of Medicine, May 11, 2006.

Posted by Cyrus Dugger at March 23, 2007 04:13 PM

 

 

Pike Countys Red Dog is back on the job

Sunday, March 25th, 2007

LawReader user Bill Adkins of Williamstown sent us a column by Pikeville attorney Larry Webster. Webster’s journalists nom de plume is “Red Dog”.

For years he wrote a provocative political column for a Pike County newspaper that was widely read. (I remember one column about a gubernatorial candidate who appeared at a church in Pikeville and was “saved” at the ministers call. “Red Dog” Webster, as he was known in his column, wrote that this was the l6th. time that the candidate had been saved since the campaign started. Great stuff!)

Red Dog once ran for Attorney General or Lt. Governor on the Republican ticket. We believe the Commonwealth lost a potentially great public servant when someone else was elected. Webster, was originally from Owen County in Northern Kentucky. We never knew how he got to Pike County but he has been there many years and has done well for himself.

Recently he has become a contributing columnist to Kentucky.com hosted by the Lexington Herald-Leader. In a recent column he did what he does best, tweaked the nose of conventionaly wisdom.

Here are a few of his missives fired in the old Red Dog tradition with mountain candor in his new column:

1. As advisers to the legislature, criminals are probably to be preferred to victims.

When Buford Johnson was police judge in Pikeville, he sometimes let drunks sentence themselves and they were remarkably fair. They usually gave themselves 30 days, probated.

Our current laws on crime and punishment are an abject failure. We are treating people like murderers and sending them to prison for causing car wrecks. We are using most of the state treasury to house convicts, while our crime rate goes up and up.

All this is due in part to the fact that most modern criminal laws were drawn up by victims or prosecutors, with almost zero participation from the criminal element or their lawyers, who are not hard to find but are far more honest than prosecutors or cops.

2. With regard to social workers, the public is in far greater need of laws protecting them from social workers than social workers are in need of protection from the public. The overreaching of social workers to take children away from the poor and ragged is a scandal.

Across the state, children of the lowly are being snatched from their families and put on a fast adoption train so that somebody who will make them wear a bike helmet can raise them as proper yuppies.

No disrespect to Boni Frederick, but the social worker was apparently murdered by a woman whose child was about to be taken away permanently by the state. Taking children away from their parents ought to be dangerous.

3.The coal industry had blamed a recent underground mine disaster on lightning, a theory that narrowly beat out black magic and mass suicide.

4.All in all the legislature didn’t do much, which is a relief. As of this writing, no agreement has been made to restore state government retirement systems to financial soundness, which may mean that some of those state workers may have to go out and get a job and work until they are old like the rest of us.

Red Dog, as you can see, has no trouble in saying what’s really on his mind. We are glad to see that his thoughts are now being brought to a wider publication. But we warn you that you had better buckle your seat belt before reading one of his columns, because whoever you are, you are probably going to be next on his list, as no one escapes his witty observations.