Archive for March, 2013

JUDICIAL BRANCH READY TO OVERHAUL OBSOLETE CASE MANAGEMENT SYSTEM WITH PASSAGE OF HOUSE BILL 238 – plans include E-filing

Thursday, March 28th, 2013

March 28, 2013
FRANKFORT, Ky. — The Judicial Branch has cleared a major hurdle in its plans to develop a sophisticated court case management system and bring eFiling to Kentucky with the signing of House Bill 238. The bill authorizes the Judicial Branch to issue $28.1 million in bonds to replace Kentucky’s aging court case management system. The General Assembly passed HB 238 on March 12 and Gov. Steve Beshear signed it into law on March 22.

“A new case management system will transform the way Kentucky courts do business,” Chief Justice of Kentucky John D. Minton Jr. said. “With our courtrooms handling nearly 1 million cases each year, almost every citizen is affected by the work of the Judicial Branch. I can’t think of any other capital technology project that will have such a positive impact on so many people statewide.

“I commend the General Assembly for rallying around the Judicial Branch to pass this legislation and the governor for signing it. The House graciously held several hearings before passing the bill unanimously and the Senate saved the bill at the last minute before we ran out of time. Thanks to their diligence and support, the legislation passed both chambers unanimously.”

The Judicial Branch’s current case management system is running on 25-year-old technology and 10-year-old programming and is at risk for failure. The current system maintains separate databases for the trial courts in 120 counties and both appellate courts.

“The system is functionally and technically obsolete,” Chief Justice Minton said. “The tools used to maintain it became unsupported in 2008, leaving the entire state court database in a precarious situation. Replacing the system becomes even more urgent when you consider that our current technology cannot accommodate electronic filing and electronic records. That leaves Kentucky falling further and further behind the mainstream of court technology.”

The new system will consolidate databases and give them the ability to interact with each other. This will reduce errors, eliminate manual and redundant processes, and provide the ability to track a person through the court system. The Judicial Branch will be better able to secure current and historical court data and provide information that the Executive and Legislative branches, state agencies and justice partners rely on to carry out their daily business. The new system will also make it possible for Kentucky to institute eFiling.

“Kentucky is ready to join other state courts and the federal courts in adopting eFiling,” Chief Justice Minton said. “We’ve been laying the groundwork for this project for months and are ready to move quickly now that bonding has been approved. Our goal is to begin testing eFiling in several parts of the state before the end of the year.”
The Judicial Branch will use $3.23 million annually in agency funds to pay the 10-year debt service on the new case management system.

“Under the HB 238 plan, payment on the debt service will not require any new tax dollars or a direct appropriation,” Chief Justice Minton said. “Issuing bonds will let the Judicial Branch replace its case management system in a way that will have the least negative impact on the state budget.”

The Kentucky Bar Association was an important supporter of HB 238, he said.

“We want to give attorneys and justice partners better access to court case information,” Chief Justice Minton said. “The Administrative Office of the Courts recently began offering a new application called CourtNet 2.0 to KBA members. It provides online access to Kentucky civil and criminal cases and is a huge improvement from what we provided before. CourtNet 2.0 is a technological milestone for the practice of law in Kentucky and one of the first of many advances we’ll be making in court technology.”

The chief justice of Kentucky is the administrative head of the Judicial Branch and responsible for its operation. The AOC provides administrative support to the state court system, which includes nearly 3,300 employees and 403 elected justices, judges and circuit court clerks. The AOC also executes the Judicial Branch budget.

Governor Steve Beshear vetoed House Bill 279 – BILL WOULD HAVE PLACED RELIGIOUS BELIEF OVER ENFORCEMENT OF SOME LAWS

Sunday, March 24th, 2013

FRANKFORT, Ky. — Governor Steve Beshear vetoed House Bill 279 today, noting its well-placed intentions but possible significant unintended consequences.

“Religious freedom is a cornerstone of this great nation, and a right enshrined in both the United States Constitution and the Kentucky Constitution,” said Gov. Beshear. “I value and cherish our rights to religious freedom and I appreciate the good intentions of House Bill 279 and the members of the General Assembly who supported this bill to protect our constitutional rights to practice our religion. However, I have significant concerns that this bill will cause serious unintentional consequences that could threaten public safety, health care, and individuals’ civil rights. As written, the bill will undoubtedly lead to costly litigation. I have heard from many organizations and government entities that share those same concerns. Therefore, after giving this measure thoughtful analysis and consideration, today I vetoed the bill.”

HB279, sent to the Governor on March 11, would allow an individual to disregard any state or local law that places a substantial burden on his or her sincerely held religious belief. As written, the government would have to show by “clear and convincing evidence” that the state has a compelling interest in requiring the person to follow the established law, and that there is no less restrictive means to accomplish the government’s objective.

Federal law and HB279 are fundamentally different

Supporters have referenced the federal Religious Freedom Restoration Act (RFRA) and similar state RFRA laws as the template for this legislation. However, Gov. Beshear noted that House Bill 279 is fundamentally different than those laws – mostly because the vague language of HB279 lends itself to overly broad applications.

As written, HB279 imposes a heightened standard of “clear and convincing proof” to evaluate compliance with a law that contains an unclear definition of “burden,” which invites costly and possibly lengthy legal challenges. The bill offers no exceptions for certain state agencies or civil rights laws. There are no exceptions for the protection and safety of the general public, such as public health standards.

“Imprecise legal standards lead to unforeseen consequences,” said Gov. Beshear. “Citizens and governmental entities are entitled to a clear understanding of the boundaries of permissible conduct. This bill, as written, while well intended, is undermined by precarious legal wording,” said Gov. Beshear.

Possible Unintended Consequences

Groups as varied as the Kentucky Association of Sexual Assault Programs, Inc. to the National Association of Social Workers-Kentucky Chapter to the Center for Accessible Living have called on the Governor to veto the bill, citing concerns including:

•Weakening of local civil rights laws;
•Impact on implementation of the new Common Core Standards in our schools;
•Negative impact to economic development efforts;
•Adverse impact on enforcement of drug laws;
•Additional financial burdens on local governments; and
•Possible withholding of needed medical care or use of religion as a justification for abuse.

State government agencies also expressed concerns to the Governor that this bill could:

•Increase litigation costs;
•Decrease federal funding; and
•Threaten public health, including refusal to provide needed medication or services.

Despite his veto, Gov. Beshear expressed a willingness to work with supporters to develop a bill that might mitigate these unintended consequences. “I urge supporters and opponents of this legislation to come together before next session and find compromise legislation that protects religious freedom, while avoiding the possible unintended consequences of House Bill 279, and I pledge to work with them to find that compromise,” he said.

The following groups and elected officials urged the Governor to veto the measure, or expressed their concerns about the bill to the Governor:
Kentucky Association of Counties
Kentucky County Judge/Executive Association
Kentucky League of Cities
Kentucky Magistrates & Commissioners Association
Kentucky Association of Sexual Assault Programs, Inc.
Kentucky Commission on Human Rights
Kentucky Education Association
Jefferson County Teachers Association (JCTA)
Center for Accessible Living, Inc.
Hispanic-Latino Coalition
Lexington-Fayette Urban County Human Rights Commission
Louisville Metro Human Relations Commission
National Assoc. for the Advancement of Colored People (NAACP)—Louisville Branch
National Association of Social Workers-Kentucky Chapter
United Food and Commercial Workers Local 227
1st District Councilwoman Attica Scott—Louisville Metro
21st District Councilman Dan Johnson—Louisville Metro
26th District Councilman Brent Ackerson-Louisville Metro
3rd District Councilwoman Mary C. Woolridge—Louisville Metro
6th District Councilman David James—Louisville Metro
9th District Councilwoman Tina Ward‐Pugh—Louisville
AIDS Volunteers of Lexington
American Civil Liberties Union of Kentucky
Americans United for the Separation of Church and State
Bereans for Fairness
Bluegrass United Church of Christ
Catholics for Fairness
Central Presbyterian Church, Louisville
Children’s Healthcare is a Legal Duty
The Church of Christ, Union (Union Church, Berea)
Douglass Boulevard Christian Church
Episcopal Church of the Advent, Louisville
Fairness Campaign
Faith Leaders for Fairness
Franklin/Simpson Human Rights Commission
Gay and Lesbian Services Organization (GLSO)
Jewish Community Relations Council of Louisville
Journey Fellowship, Owensboro
The Harvey Milk Society of Berea College
Kentuckians For The Commonwealth (KFTC)
Kentucky Alliance Against Racist and Political Repression
Kentucky Equality Federation
Kentucky Fairness Alliance
Kentucky Feminists United
Kentucky Jobs With Justice
Kentucky Religious Coalition for Reproductive Choice
Kentucky Secular Society
Kentucky Special Parent Involvement Network (KY–‐SPIN)
Kentucky Young Democrats
Lambda Legal Defense and Education Fund
Lexington Fair Housing Council
Lexington Fairness
Louisville Atheists and Freethinkers
Louisville Metro Council President Jim King
Louisville Metro Human Relations Commission Advocacy Board
Louisville Metro Human Relations Commission Enforcement Board
Louisville Showing Up for Racial Justice (LSURJ)
Mayor Greg Fischer, Louisville Metro Government
Mayor Sherry Carran, City of Covington
Metro Louisville Women’s Political Caucus (MLWPC)
Northern Kentucky Democratic League
Parents and Friends of Lesbians and Gays (PFLAG)—Lexington Chapter
People Associating Together In Owensboro (PATIO)
Planned Parenthood Federation of America
Planned Parenthood of Kentucky
Quaker Committee for Kentucky Legislation
Richard Meadows, Fayette County Commissioner
Shevawn Akers, LFUCG Council Member
SteinGroup LLC
The Women’s Network
Unitarian Universalist Church of Lexington
Women In Transition (WIT)
Women’s Leadership Conference for Religious Freedom (WLCRF)

CHIEF JUSTICE ANNOUNCES NEW COURTNET 2.0….AOC WILL BEGIN CHARGING FOR THIS SERVICE.

Saturday, March 23rd, 2013

MARCH 23, 2013

KBA members invited to subscribe to CourtNet 2.0, a new application for accessing court cases
For the first time in a decade, the Administrative Office of the Courts is offering a completely overhauled application to replace the existing CourtNet KBA. CourtNet 2.0 provides real-time, online access to Kentucky civil and criminal cases and is a huge leap from what CourtNet KBA offers now.

When CourtNet KBA rolled out in 2002, attorneys no longer had to make a trip to the courthouse to access pending court cases state¬wide. While remote access was a breakthrough at that time, the information was limited and confined to active cases only. CourtNet 2.0 has none of these limitations. In addition to being intuitive and easy to use, it offers:

• Consolidated, detailed case information
• Active and closed cases
• Citation images
• Visual flags for warrants, summonses and failure to appear
• Search results grouping for quick reference
• Case cart
• Ability to re-execute last 10 searches

To make sure we could meet your needs, we based many of these improvements on feedback from attorneys who tested CourtNet 2.0 during a KBA pilot project. We believe longtime users of CourtNet KBA will benefit from the application’s features and new users will find CourtNet 2.0 to be an indispensable tool. A training manual and videos will help users get off to a fast start. To learn more, take a few minutes to watch the CourtNet 2.0 Overview at http://kycourtnet2.blogspot.com/search/label/Training-Videos. Subscription Fee. While CourtNet KBA has been provided free for the last decade, the AOC will charge a nominal monthly subscrip¬tion fee for access to CourtNet 2.0. The subscription fee will support ongoing product development so that attorneys can continue to benefit from upgrades in court technology.

Subscribers can choose from five payment plans, starting at only $15 a month. Each plan offers a specific number of cases for a monthly fee. Attorneys can subscribe to the plan that best meets their needs, whether it’s the Personal Plan for basic users or the Enterprise Plan for high-volume users. Watch CourtNet 2.0 Service Plans at

http://kycourtnet2.blogspot.com/search/label/Training-Videos for more information. Please note that the existing CourtNet KBA application will no longer be available as of midnight EST on Dec. 31, 2013. Attorneys who have not subscribed to CourtNet 2.0 by Dec. 31 will have access only to the public version of CourtNet.

How to Subscribe. To become a user of CourtNet 2.0, attorneys must submit a request to subscribe at https://kcoj.kycourts.net/CourtNet/User/Invitation. The AOC will process subscriptions based on the order in which requests are received. Please keep in mind that CourtNet 2.0 subscriptions are being offered to all 17,000 KBA members and the time it takes to process subscriptions may vary depending on the volume of requests at any given time. KBA members who request an invitation to CourtNet 2.0 by May 31, 2013, can use the application free for 30 days (excluding images). You will be notified by email when your subscription has been activated. You must sign a user agreement and select a plan before using the application. For more information, contact the AOC Service Desk at 800-860-4262 or CourtNetHelp@kycourts.net.

We are proud of CourtNet 2.0 and believe it represents a technological milestone for the practice of law in Kentucky. I hope you will take advantage of its many benefits.

John D. Minton, Jr., Chief Justice of Kentucky
231 Capitol Building, 700 Capitol AvenueFrankfort, Kentucky 40601

QUESTIONS REMAIN AFTER CHESLEY’S DISBARMENT- KBA’S LACK OF TRANSPARENCY ABOUT GOSNELLS FIRING, AND THE MONEY TRAIL FROM ANGELA FORD TO OTHER ATTORNEYS ARE UNANSWERED DISCOVERY ISSUES PENDING BEFORE THE COURT.

Friday, March 22nd, 2013

On March 22, 2013, the Lexington Herlad-Leader reported:

“Chesley and his attorneys have raised questions in court proceedings about the settlement of a civil lawsuit brought against attorneys in the fen-phen case by their 440 former clients. In particular, Chesley has questioned whether lawyers involved in his disbarment proceedings received part of the $42 million civil judgement awarded to the 440 former clients.
Chesley’s lawyers also have questioned why Linda Gosnell, who was chief bar counsel during Chesley’s disciplinary proceedings, was later terminated. The Kentucky Bar Association has never explained Gosnell’s departure.”

Judicial Nominating Commission announces nominees for vacant Supreme Court seat – Michele Keller, Joseph E. Conley Jr. and Allison Emerson Jones

Thursday, March 21st, 2013

Judicial Nominating Commission announces nominees for vacant Supreme Court seat

FRANKFORT, Ky., March 21, 2013 – The Judicial Nominating Commission, led by Chief Justice of Kentucky John D. Minton Jr., today announced nominees to fill the vacant Supreme Court seat in the 6th Supreme Court District. The district is composed of 21 counties in the Northern Kentucky area. The vacancy was created by the retirement of Justice Wil Schroder effective Jan. 17, 2013.

The three attorneys named as nominees to fill the vacancy are Joseph E. Conley Jr. of Villa Hills, Michelle M. Keller of Fort Mitchell and Allison Emerson Jones of Prospect.

Conley is a partner with the law firm of Raines, Buechel, Conley & Dusing in Florence, of which he is a founder. He is also an adjunct law professor at the University of Cincinnati College of Law. He received his juris doctor from the University of Kentucky College of Law.

Keller is a Kentucky Court of Appeals judge. She previously served as a nurse and is an adjunct professor at the Xavier University School of Nursing. She received her juris doctor from Northern Kentucky University Salmon P. Chase College of Law.

Jones is an administrative law judge for the Kentucky Department of Workers’ Claims. She received her juris doctor from the University of Kentucky College of Law.

The counties in the 6th Supreme Court District are Bath, Boone, Bracken, Campbell, Carroll, Fleming, Gallatin, Grant, Harrison, Henry, Kenton, Lewis, Mason, Nicholas, Oldham, Owen, Pendleton, Robertson, Shelby, Spencer and Trimble.

SUPREME COURT PERMANENTLY DISBARS ATTN. STAN CHESLEY

Thursday, March 21st, 2013

This ruling was released by the Ky. Sup. Ct. at 10 am March 21, 2013

2011-SC-000382-KB
KENTUCKY BAR ASSOCIATION MOVANT
V. IN SUPREME COURT
STANLEY M. CHESLEY RESPONDENT
OPINION AND ORDER
The Board of Governors of the Kentucky Bar Association has
recommended to this Court that Respondent, Stanley M. Chesley, KBA Number
11810, be permanently disbarred for committing eight counts of professional
misconduct as charged in KBA File 13785. Chesley was admitted to the
practice of law in Kentucky on November 29, 1978, and maintains a bar roster
address of Fourth and Vine Tower, Suite 1513, Cincinnati, Ohio 45202.

The Board found that Respondent had violated the following provisions of
SCR 3.130, the Kentucky Rules of Pi1ofessional Conduct:
a) SCR 3.130-1.5(a) – a lawyer’s fee shall be reasonable. Attorney’s fee of
over 820 million exceeded amount established by client contract and
contract with co-counsel, and was otherwise unreasonable;
b) SCR 3.130-1.5(c) – contingent fee agreement. Attorney and co-counsel
failed to provide clients with a written statement stating the outcome of
the matter and showing the remittance to the client and method of its
determination;
c) SCR 3.130-1.5(e)(2) – division of fees among lawyers of different firms.
Attorneys dividing fees without the consent of clients confirmed in
writing;
d) SCR 3.130-5.1(c)(1) – responsibility for partners. Attorney knowingly
ratified specific misconduct of other lawyers.
e) SCR 3.130-1.8(g) – conflict of interest. Attorney representing two or more
clients participated in making an aggregate settlement of the claims of
the clients . . . without consent of clients and without disclosure of the
existence and nature of all the claims … and of the participation of
each person included in the settlement;
f) SCR 3.130-3.3(a) – candor to the tribunal. Attorney knowingly made a
false statement of material fact or law to a tribunal; Attorney failed to
disclose a material fact to the tribunal to avoid a fraud upon the
tribunal;
g) SCR 3.130-8.1(a) – disciplinary matters. Attorney made a false
statement of a material fact in connection with a disciplinary matter;
and
h) SCR 3.130-8.3(c) [now codified as SCR 3.130-8.4(c)] – Attorney engaged
in conduct involving dishonesty, fraud, deceit, or misrepresentation
following the initial distribution of client funds and concealed unethical
handling of client funds by others.
2
The Board recommended the permanent disbarment of Respondent and
further requests an order of this Court awarding restitution to the affected
former clients in the amount of 7,555,000.00. Pursuant to SCR 3.370(8),
Respondent filed with this Court a notice to review the Board’s
recommendation. Upon review, we find that Respondent is guilty of eight of the
alleged violations, specifically those charged under SCR 3.130-1.5(a), SCR
3.130-1.5(c), SCR 3.130-1.5(e), SCR 3.130-1.8(g), SCR 3.130-3.3(a), SCR
3.130-8.3(c), SCR 3.130-8.3(c) [now codified as SCR 3.130-8.4(c)], and SCR
3.130-5.1(c)(1). We permanently disbar him from the practice of law in the
Commonwealth of Kentucky. We decline to order restitution, as that remedy is
not appropriate in a case of permanent disbarment, and the claims are being
litigated in separate, civil litigation.

I. FACTUAL AND PROCEDURAL BACKGROUND
The following facts and procedural history are taken from the record of
the trial commissioner hearings, and report of the trial commissioner,
Honorable William L. Graham, which was presented to the Board of Governors.
In March 2006, the Inquiry Commission, acting under rules established
by this Court for the adjudication of attorney disciplinary actions, formally
began an investigation of Respondent, Stanley Chesley, for his conduct in the
settlement of the case of Darla Guard, et al., v. A.H. Robins Company, et al, (the
Guard case) 1 in the Boone Circuit Court, Boone County, Kentucky, including
1 Boone Circuit Court, Civil Action. Number 98-CI-795. The case is sometimes
referred to as Jonetta Moore, et al. v. A.H. Robins Company, et al., or “the Moore case.”
3
his conduct in the disbursement of funds generated by the settlement of that
case. The Inquiry Commission had already been investigating the conduct of
other lawyers in connection with that case, namely William Gallion, Shirley
Cunningham, Melbourne Mills, and David Helmers, an employee of the Gallion
firm. 2 In December 2006, the Inquiry Commission issued formal charges
against Respondent.
The Guard case began in 1998. Gallion, Cunningham, and Mills had
contingent fee contracts with some 431 3 persons who claimed to have been
injured by the diet drug commonly known as “fen-phen.” Mills, because of his
aggressive advertising, had secured the great majority of those clients and his
contingent fee contracts provided for an attorney’s fee of 30% of the sum
recovered for the client; Cunningham’s contracts provided a 33% fee, and the
Gallion/Helmers contracts provided for a contingent fee of 33 1/3%. The
Boone Circuit Court certified the case as a class action on behalf of the 431
individually-named Kentucky residents and others similarly situated who had
been injured by fen-phen. The manufacturer of fen-phen, American Home
Products, was the principal defendant in the action.
2 All four of those attorneys have been disbarred by this Court for misconduct
committed in connection with the Guard case. Kentucky Bar Association v. Mills, 318
S.W.3d 89 (Ky. 2010); Cunningham v. Kentucky Bar Association, 266 S.W.3d 808 (Ky.
2008); Gallion v. Kentucky Bar Association, 266 S.W.3d 802 (Ky. 2008); Kentucky Bar
Association v. Helmers, 353 S.W.3d 599 (Ky. 2011). The trial judge in the case, Joseph
Bamberger, was also disbarred for his related misconduct in the case. Kentucky Bar
Association v. Bamberger, 354 S.W.3d 576 (Ky. 2011).
3 There is conflicting information about the actual number of clients that
directly retained one of the attorneys. The Trial Commissioner refers to 431; other
parts of the record say 440. In a court hearing, the number 441 is mentioned. We
will refer to 431 clients but the precise number is immaterial to the issues presented
in this matter.
4
When the Guard case was filed, other similar claims against American
Home Products were being pursued in other jurisdictions. A vast number of
such claims were consolidated into a single “national” class action pending in a
Pennsylvania federal district court. Respondent served as a member of the
management committee in the Pennsylvania litigation and participated in the
negotiations that reached a settlement of that case. As a result of his
involvement in that case, Respondent became familiar with American Home’s
settlement policies and he became acquainted with its settlement personnel.
All of the Guard case plaintiffs opted-out of the national settlement with the
hope of achieving a more favorable settlement in the Kentucky litigation.
Independently of his involvement in the national case, Respondent
initiated a fen-phen lawsuit on behalf of his own clients in the Boone Circuit
Court, which he promptly attempted to have consolidated with the Guard case.
The Guard case plaintiffs’ counsel voiced strong objections to Respondent’s
effort to merge the cases. Eventually, however, they relented and accepted the
consolidation. Respondent’s national reputation and his experience in the
national fen-phen settlement was a factor that induced them to drop their
opposition to his intrusion into their case.

With the claims of their clients merged, Respondent, Gallion,
Cunningham, Mills, and Richard Lawrence, an attorney from Cincinnati who
also represented a few individual fen-phen claimants, entered into a
collaborative agreement outlining the role each attorney was to perform in the
litigation. They also agreed upon a method of dividing the attorneys’ fees
earned in the case. Gallion would serve as lead trial counsel in the event the
case was tried, and would prepare the case accordingly. Cunningham and
Mills would enroll clients and maintain client contact information. Respondent
would act as “lead negotiator” in the effort to secure a settlement of the claims.
Originally, the agreement provided that Respondent would take 27% of the
total attorney’s fee earned from any of the individual claims he might settle and
from an aggregate settlement that resolved all of the claims.

The fee-apportionment agreement was reduced to writing and it expressly
provided that “all parties to this agreement shall have the right to review all
contracts between themselves and any other parties that may affect the fees
earned and all clients shall be advised of this agreement.” (emphasis added).
The agreement also stated clearly that “all parties to this agreement shall be
identified as co-counsel in the class action styled Guard v. American Home
Products in Boone Circuit Court in Kentucky.” The agreement provided that it
could be terminated by any of the attorneys on December 31, 2000.

Respondent, Gallion, Cunningham, Mills, and Lawrence all signed the
agreement. Respondent did not inform any clients of the agreement and he
undertook no effort to determine whether any of his “co-counsel” informed the
clients of the division of effort and fee-sharing arrangements. None of the
clients were so informed. Respondent attempted to negotiate a collective
settlement of all the Guard claims before the December 31 termination date,
but he was not successful. He did, however, achieve individual settlements of
6

a few cases. In those cases, the attorney’s fees taken were based upon the
specific contingency fee agreement with that client.
In late 2000, Respondent corresponded with his co-counsel about
extending the arrangement. As a result, a new agreement was reached. The
new agreement was similar in all material aspects to the original agreement
except that it reduced Respondent’s fee for negotiating a settlement of the
claims to 21% of the total attorney fees earned. The new agreement contained
the same express provisions requiring that all clients receive notice of the fee
agreement and that all of the attorneys be “identified as co-counsel in the class
action styled Guard v. American Home Products in Boone Circuit Court in
Kentucky.”

The Guard case trial was scheduled to begin in the summer of 2001. A
pretrial mediation conference was scheduled. Respondent suggests that his
ongoing discussions with opposing counsel actually settled the case before the
mediation conference, and that the mediation itself was merely for show.
Regardless, a settlement agreement was announced on the second day of the
mediation.

The settlement agreement provided that plaintiffs’ counsel would obtain
the decertification of the Guard case as a class action and the dismissal of all
claims. American Home Products would pay an aggregate sum of 200 million
to be divided among the 431 individual clients who had fee contracts with
Mills, Cunningham, Gallion, and Lawrence. Those claims would be dismissed
with prejudice. The remaining members of the class who had joined the action,
7

approximately 143 individuals, were not included in the financial settlement.
Their claims would be dismissed without prejudice. The agreement was
reduced to writing and was signed by Gallion, Cunningham, Mills, and
Lawrence. 4 Respondent claims that he did not sign the agreement because, as
he contends, he did not represent any of the individual clients. In his view, he
had been employed by the attorneys and had no professional responsibility to
the individual clients.

American Home left it for the plaintiffs’ attorneys to determine how much
of the settlement fund to allocate to each of their clients. However, under the
terms of the agreement, plaintiffs’ counsel had to provide American Home with
a schedule listing each of the settling clients and how much of the settlement
money would be allocated to each client. A signed release from each client was
also required. The agreement also provided that the settlement would not take
effect unless plaintiffs’ counsel obtained a specific number of signed client
releases before a specified deadline. Two preconditions of the agreement
required approval of the Boone Circuit Court. First, the class action could be
decertified only by court order. Second, the claims of the individual Guard
clients could not be dismissed with prejudice without court approval.
The settlement agreement also incorporated a “side letter” which outlined
an agreement by which the plaintiffs’ attorneys agreed to indemnify American
Home up to a total of 7.5 million for any new fen-phen claims that might arise
4 Mills, who did not attend the mediation conference, and by his own admission
was drunk during much of the relevant time period, was told by his co-counsel that
the case settled for S 150 million, not $200 million.
8

from individuals who were eligible to be members of the decertified class. In
other words, 7.5 million of the aggregate settlement would have to be reserved
to cover potential claims, at least until the applicable statute of limitations
brought the subject to repose. Thereafter, any part of the reserve remaining
would be subject to disposition by order of the court.

On May 9, 2001, Respondent, along with Gallion, Helmers, Cunningham,
and David Schaefer, an attorney for American Home Products, appeared before
the presiding judge, Joseph Bamberger, and tendered for his consideration the
“Order Decertifying the Class and Dismissing Action” as required by the
settlement. Judge Bamberger expressed concern about decertifying the class
and dismissing the individual claims, especially when he realized that the
settling clients and the members of the class had not been given notice of the
settlement or of the impending dismissal of their claims. Respondent carefully
explained to the judge that the settlement resolved only the claims of the client
group (the 431); the claims of the members of the decertified class were
dismissed without prejudice and they would have other avenues for redress, if
they wanted to pursue them. Despite his misgivings, Judge Bamberger signed
the “Order Decertifying the Class and Dismissing Action” which was entered
into the record on May 16, 2001.

Respondent argues that the entry of that order terminated his
responsibility in the case. He had negotiated the settlement pursuant to his
agreement with Gallion, Cunningham, and Mills, and he had secured the entry
of an order putting the settlement into effect.
9
None of the clients were informed of the decertification of the class action
or the dismissal of their claims. At that point, none of the clients had even
agreed to a settlement of the claim against American Home Products. Gallion,
Cunningham, Mills, and Helmers then began the process of collecting the
necessary releases before the deadline. They promptly set up a meeting with
each client. At each meeting, the client was falsely informed that American
Home had offered a specific amount for his or her claim, which the attorneys
then encouraged the client to accept. Upon the acceptance of an “offer” and
the signing of a release, each client was informed that the amount of his
settlement must be kept secret and severe sanctions would follow any breach
of that confidentiality. In each case, the amount of the “offer” was
substantially less than the amount listed on the schedule provided to American
Home. The clients were not informed that American Home had agreed to an
aggregate settlement of 200 million. The clients were shown none of the
actual settlement documents, and they were not informed that the “offer” was
coming from their own attorneys, not American Home.
While we do not agree with Respondent’s position that his responsibility
to the clients ended with the entry of the settlement order, we note at this point
that he did not participate in the process of contacting clients to secure the
releases. He did not meet directly with any of the clients to effectuate the
settlement and it is not shown that he had specific knowledge of the deception
practiced upon each client to secure the signed release.
10

When the releases, sufficient in number to trigger the release of
settlement money, were obtained, Respondent advised Helmers on the most
effective way to get the releases to American Home and secure its payment of
the first installment of settlement money. 5 Upon receipt of the releases,
American Home made an initial payment of 150 million to a client trust
account in Cunningham’s name. Shortly thereafter, on June 19, 2001,
Respondent received a check from that trust account in the amount of
$12,372,534.37. He received additional checks on July 5, 2001 and August
14, 2001, which corresponded with the dates on which American Home paid
additional installments on the $200 million settlement. On November 5, 2001,
American Home paid the final installment on the settlement, bringing the total
amount paid to 200,450,000.00. Respondent had been paid 16,497,121.87,
and he would soon receive more. The payout to the clients totaled only S46
million.

In early 2002, questions about the Guard case settlement began to
surface. The fee distribution had attracted the attention of Michael Baker, a
law partner of Gallion, and of David Stuart, a law partner of Mills. Neither
Baker nor Stuart had been actively involved in the fen-phen case, but each one
became suspicious about the way the law firm income generated by that case
was being handled in his respective law firm. Each of them alerted the
Kentucky Bar Association of the potential misconduct in the handling the
5 American Home would pay out the settlement money, as releases were
obtained, in a series of five installments between June 2002 and November 2002.
11

settlement proceeds, and each filed suit against his respective partner for an
accounting of law firm funds.

On January 30, 2002, the Office of Bar Counsel served notice that it was
requesting subpoenas for Gallion, Mills, Cunningham, and Bank One relating
to the matter. At the same time, Stuart’s lawsuit led to Mills’ discovery that the
settlement amount was not the 150 million as he had been told, but was
instead 200 million. On February 6, 2002, Mills angrily confronted Gallion
about the deception and demanded that more money be distributed to the
clients. That evening, or shortly thereafter, Gallion, Cunningham, Respondent,
and Mark Modlin, a professional “jury consultant” and friend of the judge,
arranged for an off-the-record meeting with Judge Bamberger.

At the meeting with Judge Bamberger, Respondent used his expertise in
major class action lawsuits and mass tort settlements to persuade Judge
Bamberger that a charitable organization should be established, using the cy
pres doctrine, to administer the residual funds that might remain after all
known claims against the settlement money were paid. 6 Respondent also
persuaded the judge that he should award attorney’s fees in the decertified and
dismissed class action equal to 49% of the gross settlement, using the
“Grinnell” factors 7 for awarding attorneys’ fees in a successful class action. No
consideration was given to the fact that each of the settling clients had a
6 This was the genesis of The Kentucky Fund for Healthy Living, a “charitable
organization” used to harbor millions of dollars of the settlement money that was not
distributed to the clients.

7 City of Detroit v. Grinnell Corp., 495 F.2d 448, 475 (2d Cir. 1974), abrogated by
Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000).
12
contingency fee agreement setting the allowable fee at 30%, 33%, or 33 1/3% of
the amounts recovered.

Judge Bamberger approved the 49% attorney fee and authorized the use
of a charitable trust for any excess funds. He also agreed to counsel’s
suggestion that 50% of the then-remaining undistributed settlement money be
paid to the clients on a pro rata basis, and that 50% be retained by the
attorneys for “indemnification or contingent liabilities.” The judge was not
informed what dollar amounts were represented by those percentages. The
written order agreed upon at that meeting was signed a few days later, but it
was not entered in the case record until June 6, 2002, at which time Judge
Bamberger also ordered that the record of the case be sealed. It is worth
noting that the written order does not reveal the attorney fee percentage
allowed by the judge, nor does it disclose any absolute dollar amounts. By its
omission of the specific attorney fee percentages, and the absolute dollar
amounts, the written order preserves the secret of the fees claimed by the
attorneys. Judge Bamberger restricted the clerk’s certificate of service on that
order to only Mills, Gallion, Cunningham, Helmers, and Respondent. From
that point forward, all subsequent orders were sent to only those individuals.
Respondent received the order following its June 6, 2002 entry, and other
orders that followed, but denies that he read any of them.
Judge Bamberger’s February order in effect approved retroactively, or
ratified, the disbursement of millions of dollars in attorneys’ fees that had
already been taken by the attorneys. There is no doubt that the purpose of the
13

February meeting with the judge, when several investigations were beginning to
gather steam, was to cover the fee distribution with a thin veil of legitimacy,
and to create a legitimate-looking repository in the forM of a charitable trust in
which to place the undistributed money.

On February 11, 2002, the Inquiry Commission of the Kentucky Bar
Association issued the requested subpoenas for bank records and other
documents relating to the disbursement of the Guard case settlement money.
That same afternoon, five wire transfers totaling some 59 million were made
by Gallion and Cunningham from several personal accounts to an out-of-state
bank account owned jointly by Gallion, Cunningham, and Mills.

After the successful meeting with Judge Bamberger on or about February
6, Respondent and Gallion contacted Helmers 8 to enlist his help in making the
second round of disbursements to the clients that had been approved by the
judge. Respondent’s office provided Helmers with a document to present to
each client for his or her signature. In the spring of 2002, with the documents
signed, the Guard clients received a second distribution of settlement money.
The attorneys also received an additional distribution. On April 1, 2002,
Respondent received a check for $4 million, drawn on the same out-of-state
bank account of Gallion, Cunningham, and Mills, to which the remaining
settlement money had been moved. Respondent testified that he had no
expectation of receiving an additional $4 million fee. He testified that he did
8 In the fall of 2001, Helmers was paid $3 million for his work in the case. He
left Gallion’s firm to start his own law firm.
14

not know why the check was issued or how the amount was calculated. He
made no inquiry to determine the source of the payment or the reason for the
payment, or the manner in which the payment was calculated. His firm simply
deposited the check, and asked no questions.

That final distribution of attorneys’ fees brought Respondent’s total to
more than 20 million, which he argues is a reasonable fee for a case of such
magnitude. The total attorney’s fee payable, based upon the contingent fee
contracts in effect, using for illustrative purposes the contingent fee of 33
1/3%, or one-third, 9 and the 200,450,000.00 settlement, was
66,816,667.00. Respondents 21% share of that fee would equal
14,031,500.00.

Stuart, in his continuing effort to discover the extent of Mills’ wrongful
diversion of law firm funds, sought and obtained a commission from the
Fayette Circuit Court authorizing the out-of-state deposition of Respondent, an
Ohio resident. Before the deposition was taken, however, Stuart and Mills were
ordered to attempt to settle their dispute by mediation. Respondent sent word
through a Mills-employee attending the mediation conference that, if the
settlement talks stalled, he would be willing to contribute money to get the case
resolved. Initially, the mediation was unsuccessful because Stuart would not
accept the highest amount Mills would offer. Respondent, who was not a party
to the Stuart-Mills lawsuit, then agreed to sweeten the settlement pot by the
9 We decline to calculate the effective cumulative percentage derived from slight
variations in rates charged by the three attorneys: Mills at 30%, Cunningham at 33%,
and Gallion 33 1/3%.
15
sum of 500,000.00 to get the case settled and avoid his pending deposition.
With that inducement, Stuart settled. Later, Gallion and Cunningham
reimbursed Respondent $250,000.00, as their contribution to the Stuart-Mills
settlement.

As the Inquiry Commission’s investigation proceeded, Mills hired
attorney William E. Johnson to represent him. Gallion and Cunningham hired
Whitney Wallingford for the same purpose. Respondent, who at the time was
not subject to a Kentucky bar disciplinary inquiry, attended a meeting with
Mills, Gallion, and Cunningham, and their respective attorneys. At the
meeting, Respondent urged all of the attorneys then subject to the KBA
investigation to agree upon representation by the same counsel. As a result,
Wallingford agreed to withdraw as counsel for Gallion and Cunningham.
Before he did so, he submitted a set of doCuments in response to the Inquiry
Commission subpoenas. The response included a client payment spreadsheet
that grossly overstated the amounts of money that had been paid to the clients.
Before filing the response and the spreadsheet, Wallingford asked Respondent
to review the response and provide input. Respondent did so and voiced no
disapproval. Respondent claims he had no way to know that the spreadsheet
was inaccurate.

Respondent helped Judge Bamberger prepare for his 2005 appearance
before the Kentucky Judicial Conduct Commission that was examining the
judge’s misconduct in the Guard case, including his involvement in the
creations of the Kentucky Fund for Healthy Living, and his salary for serving as
16
a member of its governing board. Respondent also appeared at the Judicial
Conduct Commission meeting and spoke in support of the judge.
In 2005, problems for the Guard counsel developed on yet another front
when several of the Guard case clients filed suit against Respondent, Gallion,
Cunningham, Mills, and the Kentucky Fund for Healthy Living alleging
misconduct and misappropriation of the settlement funds. The case, styled
Abbott, et. al. v. Chesley, et. al., (the “Abbott case”), is currently pending review
before this Court. Respondent initially admitted to being part of the Guard
case class counsel in initial pleadings, but in subsequent pleadings denied he
acted in that capacity.

In preparing a defense for the Abbott case, Respondent hired Kenneth
Feinberg, a nationally-recognized specialist in handling large aggregate case
and class action settlements. At Respondent’s behest, and based largely upon
information provided by Gallion, Feinberg prepared an affidavit supporting the
actions of the Guard case counsel in the disbursement of the Guard case
money. In this disciplinary proceeding, however, and after learning more of the
details, Feinberg disavowed the opinion he expressed in the affidavit and
withdrew his approval.

After the formal KBA investigation of Respondent began in 2006,
Respondent asked Jack Vardaman, the attorney for American Home Products
who had negotiated the Guard case settlement with Respondent, to write a
letter based upon Respondent’s notes stating that the Guard case had been
“settled as a class action” and that “decertification was not relevant to the
17
collateral issues of attorneys’ fees or administration of the settlement proceeds
and process.” Vardaman refused to do so because the statements suggested in
Respondent’s notes were false.

On December 4, 2006, the Inquiry Commission issued its Complaint of
Misconduct against Respondent alleging violations of SCR 3.130-1.5(a); SCR
3.130-1.5(c); SCR 3.130-1.5(e); SCR 3.130-1.7; SCR 3.130-1.8(g); SCR 3.130-
3.3(a); SCR 3.130-8.1(a); SCR 3.130-8.3(c). On May 26, 2009, a charge
alleging a violation of SCR 3.130-5.1(c)(1) was added. After an extensive
hearing including the testimony of some forty-three witnesses and the review of
dozens of exhibits, the Trial Commissioner, Judge William Graham, issued a
report finding that Respondent had violated SCR 3.130-1.5(a); SCR 3.130-
1.5(c); SCR 3.130-1.5(e); SCR 3.130-1.7; SCR 3.130-1.8(g); SCR 3.130-3.3(a);
SCR 3.130-8.1(a); SCR 3.130-8.3(c); and SCR 3.130-5.1(c)(1).

In light of the number and severity of the violations, the Trial
Commissioner recommended Respondent be permanently disbarred from the
practice of law in Kentucky. In addition, the Trial Commissioner recommended
that Respondent pay 7,555,000.00 in restitution to the Guard case clients.

The Trial Commissioner calculated that amount based on the attorney fees
Respondent actually received minus the amount he was contractually allowed
to receive.

The matter was presented to Board of Governors at a hearing, with oral
arguments, on June 14, 2011. By a vote of eighteen to zero the Board adopted
18
the Trial Commissioner’s report and his recommendations. Respondent filed a
notice of review with this Court.

II. CHARGES AGAINST RESPONDENT
A. SCR 3.130-1.5(a)
SCR 3.130-1.5(a) states in pertinent part:
[allawyer's fee shall be reasonable. Some factors to be considered in
determining the reasonableness of a fee include the following: (1) The
time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly; (2)
The likelihood that the acceptance of the particular employment will
preclude other employment by the lawyer; (3) The fee customarily
charged in the locality for similar legal services; (4) The amount involved
and the results obtained; (5) The time limitations imposed by the
circumstances; (6) The nature and length of the professional relationship
with the client; (7) The experience, reputation and ability of the lawyer or
lawyers performing the services; (8) Whether the fee is fixed or
contingent.

The Respondent violated SCR 3.130-1.5(a) because the fee he accepted,
over $20 million, was unreasonable under the circumstances of this case, and
the factors cited in the rule above. Respondent argues that his fee was
reasonable because his personal take from the case was merely 10% of the
total amount recovered. He presents with his argument examples of other
class actions where greater percentages were approved. He cites, among
others, the expert opinion given by Professor Geoffrey C. Hazard:
When you are talking about this kind of money involved in the settlement
lawyer fees in the order of 18, up to 24, 25 percent are within what
courts have approved in class actions.

Professor Hazard is referring to the total attorney's fee to be allocated for
the case. Here, Respondent's request to Judge Bamberger for a total fee of 49%
19
well exceeds the nom-jai limit suggested by Professor Hazard. Respondent
argues that the reasonableness of his personal fee must be judged
independently of the total amount taken by all of the attorneys, lest we convict
him of guilt by association. However, we disagree. The lawyers agreed among
themselves to share the work, and to share the fee. Respondent cannot
disavow the excessiveness of the 49% fee 99,220,500.00) that he requested
simply because he did not personally receive all of it.
We also conclude that, given the factors cited in the rule, Respondent's
20,497,121.87 share of the fee was unreasonable, especially in light of his
professed ignorance and lack of responsibility for any aspect of the litigation
except showing up at the mediation and going through the motions of
announcing the agreement. The factors listed in the rule above do not weigh in
Respondent's favor. He has shown nothing to demonstrate that he expended a
great deal of time and labor on the case. The issues of liability were not
particularly difficult or novel, and even if they were, Respondent did not do the
heavy-lifting on that aspect of the case. Gallion and Helmers did most of that.
We do not see that Respondent forfeited other profitable employment because
of his involvement in the Guard case. In our view, 20 million does indeed
exceed "the fee customarily charged in the locality for similar legal services."
The only "time limitation" was to complete his , negotiation before the trial a few
months away. His "professional relationship" with the clients was by his own
admission extremely limited. The only factors that weigh favorably toward a
20
large fee are "skill requisite to perform the legal service properly" and the
"experience, reputation and ability of the lawyer."

The more critical factor here, however, is the existence of the contingent
fee agreement, the eighth factor listed in SCR 3.130-1.5(a). Respondent argues
that his right to a reasonable fee for settling the case was not subject to the
contingency fee contracts of his co-counsel because he was not party to those
contracts and because the case was settled as a class action. He reminds us
that attorney fees payable for the successful prosecution of a class action
lawsuit are determined by the trial court, and that his fee was consistent with
what was allowed by the trial court in this case. Aside from the fact that the
trial judge was disbarred for his collusion with the plaintiffs' attorneys, we
reject Respondent's argument that the contingent fee contracts were
immaterial to the determination of whether his fee was reasonable.
Respondent cannot claim that the reasonableness of his fee should be
based upon class action standards when he himself negotiated the agreement
that required the decertification of the class action and the dismissal without
any compensation of all pending claims; except those with fee contracts. The
fact is that Respondent did not obtain the settlement of a class action; he
secured the dismissal of the class action and the settlement of the some 431
individual claims that were subject to contingent fee contracts.
When Respondent sought the judge's approval for an attorney's fee, the
class action was long-since dismissed. All of the members of the plaintiff class,
21

except the 431 that had contingent fee contracts with Respondent's co-counsel,
were cut loose and left to fend for themselves.

As for the 431 with contracts, none .of the claimants had notice that his
claim was settled and his case was dismissed. None of them had forfeited his
rights under the contingent fee agreement. Each client was entitled to the full
measure of compensation allocated to him, less the contingent fee he had
agreed to pay.

Respondent argues that he had no duty to the individual clients, because
he was hired by none of them and had no knowledge of their fee agreements
with Mills, Gallion, and Cunningham. We do not accept that ignorance is an
excuse, nor do we find it credible that Respondent was unaware of the fee
arrangement. When he entered into his agreement with the other attorneys,
Respondent signed on as co-counsel with Mills, Cunningham, and Gallion, and
he was one of the lawyers "representing the plaintiffs in the litigation pending
or anticipated against [American Home Products] . . . .”, as stated in the feedivision
agreement. The plaintiffs in the case were his clients, and he assumed
the same ethical responsibilities that he would have with any other clients. He
had the duty to know his fee responsibilities to them. He had in the fall of
2000 successfully settled some of the individual cases and taken a fee based
upon the contingency fee agreement.

By his own testimony, he received the first installments of S 16 million in
fees without any idea of the authority under which those payments had been
made. If he was ignorant of the means by which his fee was being paid, he had
22
a duty to the clients to find out. His later effort to obtain the court’s retroactive
approval of his fees demonstrates his knowledge that the earlier payments were
improperly disbursed to him. The fee for Respondent’s work on behalf of the
Guard clients was governed by fee contracts, and the attorneys’ agreement. At
most he was entitled to 21% of one-third lo of the 200,450,000.00 recovered,
or $14,031,500.00.

An attorney’s fee in a contingency fee case that so grossly exceeds the fee
provided for in the fee agreement is unreasonable per se. Respondent’s fee was
subject to the limitations of the contingent fee agreements so we conclude that
he violated SCR 3.130-1.5(a). Moreover, even without the fee contracts with
the clients, as shown above, the 49% fee was unreasonable and Respondent’s
S20 million share of it taken without notice to the client was unreasonable, and
constitutes a violation of SCR 3.130-1.5(a).

B. SCR 3.130-1.5(c).
SCR 3.130-1.5(c) states in pertinent part:
[a] fee may be contingent on the outcome of the matter for which the
service is rendered, except in a matter in which a contingent fee is
prohibited by paragraph (d) or other law. Such a fee must meet the
requirements of Rule 1.5(a). A contingent fee agreement shall be in
writing and should state the method by which the fee is to be
determined, including the percentage or percentages that shall accrue to
the lawyer in the event of settlement, trial or appeal, litigation and other
expenses to be deducted from the recovery, and whether such expenses
are to be deducted before or after the contingent fee is calculated. Upon
recovery of any amount in a contingent fee matter, the lawyer shall
provide the client with a written statement stating the outcome of the
matter and showing the remittance to the client and the method of its
determination.
10 See footnote 9.
23
It was established in the preceding section the contingent fee agreements
governed the fees properly payable to the Guard case attorneys. It necessarily
follows from that ruling that SCR 3.130-1.5(c) is applicable. The 200 million
settlement fund was justified by the cumulative total of individual settlements
prepared by the Guard counsel and submitted to American Home Products.
The cumulative fee of 49% taken collectively by the attorneys obviously
exceeded the amount payable under the contingent fee contracts.
The evidence established that none of the clients were provided with an
honest “written statement stating the outcome of the matter and showing the
remittance to the client and the method of its determination.” Instead, the
clients were given a falsified statement showing, not the true amount
submitted to American Home for the settlement of that individual claim, but a
reduced amount, purportedly reduced by the contingent fee stated in the
contract.

Respondent argues that he had absolutely no responsibility to the
individual case clients because he was only hired by the Guard counsel to
negotiate the settlement. He contends he had no contractual obligation to the
members of the class and that he reasonably relied upon his co-counsel to
comply with this Rule.

However, Respondent was a signatory to a fee splitting agreement, which
stated that all clients were to receive notice of the fee splitting agreement and
that all of the attorneys are to be “identified as co-counsel in the class action
24

styled Guard v. American Home Products in Boone Circuit Court in Kentucky.”
The plain language of the agreement rebuts Respondent’s argument that he
assumed no responsibility to inform the clients he had undertaken to
represent We note that he does not rely upon express representation of his cocounsel
that they had undertaken to comply with SCR 3.130-1.5(c). Each
attorney had an independent duty to see that the clients received the required
notice. It is not enough to assume without inquiring that someone else did it.
Moreover, had Respondent chosen to exercise his responsibility and determine
if the clients were being properly notified, he may have been able to prevent the
violations that were later uncovered by Mills’ and Gallion’s law partners. We
agree with the Trial Commissioner and Board of Governors that Respondent
violated SCR 3.130-1.5(c).

C. SCR 3.130-1.5(e)
SCR 3.130-1.5(e) provides in pertinent part:
[a] division of a fee between lawyers who are not in the same firm may be
made only if: (1)(a) the division is in proportion to the services performed
by each lawyer or, (b) By written agreement with the client, each lawyer
assumes joint responsibility for the representation; and (2) The client is
advised of and does not object to the participation of all lawyers involved;
and (3) The total fee is reasonable.
SCR 3.1301.5(e)(2) clearly states that the clients must be advised of the
fee splitting agreement and given the opportunity to object to the participation
of any attorney. Respondent and the other lawyers joining the fee splitting
agreement failed to comply. No client was given notice of the agreement, and
no client was informed of Respondent’s participation as co-counsel and none
25
were given an opportunity to object. That failure casts doubt upon the validity
of the agreement from its inception. Respondent’s failure to comply includes
the facts that he failed to ascertain whether any of his co-counsel had provided
the required notice to clients.
Accordingly, we conclude that Respondent violated SCR 3.130-1.5(e).
D. SCR 3.130-1.8(g)
SCR 3.130-1.8(g) provides in pertinent part:
[a] lawyer who represents two or more clients shall not participate in
making an aggregate settlement of the claims of or against the clients .. .
unless each client consents after consultation, including disclosure of
the existence and nature of all the claims . . . and of the participation of
each person in the settlement.
The evidence established that none of the clients included in the Guard
case settlement were consulted about the aggregate settlement reached with
American Home before, during, or after the mediation, and none were notified
or consulted before the cases were dismissed by the Boone Circuit Court. No
notice of the decertification of the class action and the dismissal of the lawsuit
was given to the class and its potential members. Even though Respondent did
not sign the final settlement document with American Home, and thus was not
expressly identified as a “settling attorney,” he was co-counsel for the plaintiffs
and shared the responsibility of assuring that the rule was followed.
We agree that Respondent is guilty of violating SCR 3.130-1.8(g).
Respondent’s argument that he was hired solely to procure a negotiated
settlement of the case, and that his responsibility extended no further is simply
unavailing. The lawyers were free to divide among themselves the work
26
required to successfully prosecute the claims of their clients, but they may not
delegate their ethical responsibilities to another.
When Respondent signed on as co-counsel, he undertook the ethical
responsibilities attendant thereto. He was not, as he suggests, brought into the
case for the purpose of negotiating a settlement, although because that is his
forte, he may have taken on that role. We have not forgotten that he was the
lawyer for the plaintiffs in a separate case, and that upon his request over the
objection of the original Guard attorneys, his case was consolidated with the
Guard case. We do not accept his assertion that he did not represent the
Guard case clients. He had the same responsibility to the clients as his cocounsel
to comply with SCR 3.130-1.8(g). The failure of compliance with the
rule was his failure, as well as theirs.
Thus, we agree that Respondent violated SCR 3.130-1.8(g).
E. SCR 3.130-3.3(a)
SCR 3.130-3.3(a) provides in pertinent part:
{al lawyer shall not knowingly: (1) make a false statement of material fact
or law to a tribunal; (2) Fail to disclose a material fact to the tribunal
when disclosure is necessary to avoid a fraud being perpetrated upon the
tribunal . . .
The charge for Respondent’s violation of this rule is based upon his
appearances before Judge Bamberger in the Boone Circuit Court.
First, when Respondent argued to the court that the Grinnell factors
should be used to justify an attorneys’ fee of 49%, Respondent never disclosed
the existence of the contingent fee contracts that limited the total attorney fees
27
to only 33 1/3%, or less (30%). The Trial Commissioner found that
Respondent was aware of the contractual fee agreements with the Guard class
of the total settlement and thus purposefully withheld that important
information.
We understand Respondent’s legal position that such contracts are not
controlling when a case is settled as a class action. But we find it difficult to
believe that Respondent was unaware that the clients he was representing had
contingent fee contracts. When he first undertook the effort to negotiate a
“global” settlement, he successfully resolved a few of the cases individually and
took the contingent fee payable in them. He may have believed when the class
action was decertified that the fee agreements were not controlling, but he
could not have believed they did not exist.
As we said above in connection with the reasonableness of the attorney’s
fee, when Respondent began receiving large fee payments without an
accounting to explain them, he had a duty to the clients to determine how the
fee was being calculated. Had he exercised that duty to the client, he would
have learned of the fee agreements. His argument to the judge for an
attorney’s fee of 49%, without referencing the contingent fee contracts,
deprived the court of information material to the issue before the court. That
constitutes a violation of the rule.
Second, the Trial Commissioner found that Respondent deceived Judge
Bamberger about the use of the cy pres doctrine to create the Kentucky Fund
for Healthy Living. The Trial Commissioner found that Respondent knew the
28
cy pres doctrine could not be applied to the aggregate settlement reached in the
Guard action. Upon review of the matter, however, we conclude that
Respondent’s advocacy on that point falls into the realm of opinion, and it is far
from certain that the cy pres doctrine had no place here, especially with the
7.5 million indemnity provision required by the contract.
Finally, the Trial Commissioner found Respondent violated Rule 3.3(a) by
“misleading” Judge Bamberger with the argument that decertifying the class
and dismissing the case without notifying the Guard class members was
appropriate. The substantive question in this proceeding is not whether such
notice was, or was not, necessary; and we decline to resolve that issue. The
question is whether the attorney breached an ethical obligation by advocating a
position. In his report, the Trial Commissioner acknowledged some legal
disagreement on whether notice is required before decertification. We have not
established this rule to punish lawyers for advocating unsound or
unconventional legal positions. Its purpose is to deter dishonesty before the
courts. We may doubt Respondent’s motives for securing the order that
allowed for the creation of the charitable trust, but we do not find from the
evidence before us that his argument to the court, in that respect, was
dishonest or misleading.
We find Respondent guilty of violating SRC 3.130-3.3(a) for the reason
set forth above.
F. SCR 3.130-8.1(a)
SCR 3.130-8.1(a) provides in pertinent part:
29
. . . a lawyer . . . in connection with a disciplinary matter, shall not:
knowingly make a false statement of material fact.
The Trial Commissioner found that Respondent violated this rule by
providing incomplete, misleading, and false answers to the interrogatories
made by the Inquiry Commission. In particular, the Trial Commissioner found
Respondent guilty because he denied having communicated with Judge
Bamberger regarding the establishment of the charitable or non-profit entity to
disburse residual funds from the Guard case. We agree.
The Trial Commissioner also found that Respondent provided false
information to the Inquiry Commission by denying knowledge about the second
distribution to the Guard clients prior to his receipt of additional attorney fees,
and by denying he met with his co-counsel and Judge Bamberger to discuss
the distribution. From our review of the evidence, we conclude that
Respondent was not truthful in that regard.
Respondent is therefore guilty of violating SCR 3.130-8.1(a).
G. SCR 3.130-8.3(c), now codified as SCR 3.130-8.4(c)
SCR 3.130-8.4(c) 11 states that a lawyer may not “[e}ngage in conduct
involving dishonesty, fraud, deceit, or misrepresentation.” The Trial
Commissioner found Respondent guilty of violating this rule because
Respondent “must have been fully aware of the fraud perpetrated by his
accepting fees far in excess of what he was entitled to under his contractual
agreement,” that Respondent knew that the Guard class members did not
11 Formerly SCR 3.130-8.3(c).
30
receive an accurate accounting of the settlement proceeds, and that because of
this knowledge Respondent “acted with dishonesty, deceit, and
misrepresentation in assisting his co-counsel in their efforts to conceal what
had transpired.”
Respondent complains that this charge lacks specificity. Based upon our
review of the record, we agree with the Trial Commissioner’s assessment. The
vast amount of evidence compiled and presented in this matter demonstrates
convincingly that Respondent knowingly participated in a scheme to skim
millions of dollars in excess attorney’s fees from unknowing clients. He may
have kept himself at arm’s length from Mills, Cunningham, and Gallion; and,
he may not have known the details of the direct deception that, with Helmers’
assistance, they perpetrated upon the clients. But no reasonable person
familiar with the evidence could doubt that he received and retained fees that
he knew were improperly taken at the client’s expense. No reasonable person
familiar with the evidence could doubt that he purposefully attempted to avoid
conversation and correspondence that would expose his knowledge of the
nefarious schemes of his co-counsel. We conclude that Respondent violated
SCR 3.130-8.4(c), formerly codified as SCR 3.130-8.3(c).
H. SCR 3.130-5.1(c)(1)
SCR 3.130-5.1(c)(1) states in pertinent part:
[a} lawyer shall be responsible for another lawyer’s violation of the Rules
of Professional Conduct only if: The lawyer orders or, with knowledge of
specific conduct, ratifies the conduct involved . . . .
31
The Trial Commissioner found Respondent violated this rule by “orchestrating”
the attempt to cover up the unethical conduct of Cunningham, Gallion, and
Mills. To ratify another attorney’s conduct a person must have actual
knowledge of the conduct. However, SCR 3.130-1.0(f) states: “A person’s
knowledge may be inferred from circumstances.” In our review of Respondent’s
conduct, we have looked not only at direct evidence of his knowledge of his
peers’ unethical conduct, but also for circumstances that indicate he had such
knowledge.
We find several such circumstances, which when taken together,
convincingly establish that Respondent was aware of the misconduct of Mills,
Cunningham, and Gallion, and that he actively aided in its concealment to
prevent or delay discovery of the excessive funds he had enjoyed.
Those circumstances include the following:
a. He provided 250,000.00 of his own money to assure that David Stuart’s
suit against Mills would be settled, so that Respondent would not be deposed
in that action and Stuart’s effort to unravel the truth about the Guard case fees
would be halted. Respondent was not a party to the dispute between Stuart
and Mills. The evidence did not indicate he had a special relationship with
either Mills or Stuart that would explain his strong concern about their
disagreement, yet he met with Mills to encourage him to settle the lawsuit with
Stuart. He actively resisted the effort to depose him. He kept himself apprised
through one of Mills’ employees of the attempt to mediate a settlement;
32
b. He reviewed the deceptive documents that Gallion had given to Wallingford
to submit to the KBA investigators. One of those documents was the phony list
of Guard case clients that documents the greatly exaggerated amount of money
each one received from the settlement;
c. Although he claimed his responsibility in the case was over, he attended at
least two meetings before Judge Bamberger to obtain retroactive approval of
attorneys’ fees and to create the charitable trust that would hide a large part of
the purloined cash; and,
d. After Mills’s angry demands to distribute more of the lawsuit proceeds, he
recruited Helmers to meet with clients for the second round of payments, and
provided him with documents for the clients to sign.
While none of these facts alone is conclusive, all’of them together
complete the picture of Respondent’s effort .to conceal or hinder the disclosure
of the misdeeds of Cunningham, Mills, Gallion, and Helmers, and thereby
protect the improper payments he had accepted. We conclude that Respondent
violated SCR 3.130-5.1(c)(1).
I. SCR 3.130-1.7
Respondent was initially charged by the Inquiry Commission with
violating SCR 3.130-1.7 which in pertinent part provides that “a lawyer shall
not represent a client if the representation of that client will be directly adverse
to another client.” The Trial Commissioner could not find a clear violation of
SCR 3.130-1.7 and found Respondent not guilty of violating this rule. The
33
Board of Governors reached the same conclusion. We regard the matter of this
charge as resolved in Respondent’s favor and no further action is required.
J. Summary
In summary, based on the evidence and arguments presented to this
Court, we find Respondent guilty of violating SCR 3.130-1.5(a); SCR 3.130-
1.5(c); SCR 3.130-1.5(e); SCR 3.130-1.8(g); SCR 3.130-3.3(a); CR 3.130-8.1(a),
SCR 3.130-8.3(c), and SCR 3.130-5.1(c)(1). We find Respondent not guilty of
violating SCR 3.130-1.7. We now turn to what the appropriate punishment
should be for Respondent’s numerous ethical violations.
III. DISCIPLINE
Based on Respondent’s ethical violations, the Trial Commissioner and
Board of Governors recommended to this Court that he be permanently
disbarred from the practice of law in the Commonwealth and pay restitution in
the amount of 7,500,000.00. For the reasons discussed below, we agree with
the recommendation to permanently disbar Respondent, but do not order him
to pay restitution.
A. Disbarment
SCR 3.380 provides the following:
Upon finding of a violation of these rules, discipline may be administered
by way of a private reprimand, suspension from practice for a definite
time with or without conditions as the Court may impose, or permanent
disbarment.
Citing to the American Bar Association, Standards for Imposing Lawyer
Sanctions, Rule 9.2, the Trial Commissioner found that permanent disbarment
34
was the appropriate sanction for Respondent. See Anderson v. KBA, 262
S.W.3d 636 (Ky. 2008) (citing to the ABA Standards for Imposing Lawyer
Sanctions). ABA Standard 9.2 states:
9.2 Aggravation
9.21 Definition. Aggravation or aggravating circumstances are any
considerations, or factors that may justify an increase in the
degree of discipline to be imposed.
9.22 Factors which may be considered in aggravation.
Aggravating factors include:
(a) prior disciplinary offenses;
(b) dishonest or selfish motive;
(c) a pattern of misconduct;
(d) multiple offenses;
(e) bad faith obstruction of the disciplinary proceeding by
intentionally failing to comply with rules or orders of the
disciplinary agency;
(f) submission of-false evidence, false statements, or other
deceptive practices during the disciplinary process;
(g) refusal to acknowledge wrongful nature of conduct;
(h) vulnerability of victim;
(i) substantial experience in the practice of law;
(j) indifference to making restitution.
Based on the record and all of the violations Respondent committed, we
find that all of the factors apply except for (a), (e), and (f). We also find that
prior case law supports the sanction of a permanent disbarment in this case.
See KBA v. Matthews, 131 S.W.3d 744 (Ky. 2004) (disbarring attorney for
committing bank fraud which reflected on his honesty, trustworthiness, and
fitness to practice law); Poole v. KBA, 128 S.W.3d 833 (Ky. 2004) (disbarring
attorney for committing twenty-eight ethical violations, including the
misappropriation of client funds); KBA v. Johnson, 660 S.W.2d 671 (Ky. 1983)
(disbarment appropriate sanction for the misappropriation of client funds,
35
lending money to a client, making false representations, and possessing a
forged instrument).
Respondent presents evidence that is supportive of mitigation. His most
persuasive mitigation evidence is that he has never previously been disciplined
by the KBA. He also presented several character witnesses who testified about
his prominence in the Cincinnati legal community and his service to various
charitable organizations. We are aware of Respondent’s reputation and we do
not doubt the veracity of the witnesses that attested to his character. While,
the good reputation he has enjoyed and his generosity serves to exacerbate the
tragedy of his fall, they cannot atone for the serious misconduct he has
committed in connection with this matter. Therefore, we find that permanently
disbarring Respondent is an appropriate penalty for his ethical violations.
B. Payment of Restitution
The Trial Commissioner and the Board of Governors requested that we
order Respondent to pay over $7 million in restitution to the Guard case
clients. We decline to do so. We agree with Respondent’s argument that our
Supreme Court Rules do not allow for us to order restitution when a
disciplinary action leads to a permanent disbarment. SCR 3.380 in pertinent
part states: “discipline may be administered by way of a private reprimand,
suspension from practice for a definite time with or without conditions as the
Court may impose, or permanent disbarment.” The plain language of the rule
indicates that while this Court may order an attorney disciplined by either a
temporary suspension from the practice of law, public reprimand, or. private
36
reprimand to comply with any conditions imposed by the Court, a permanent
disbarment stands alone — separated from the language allowing us to impose
conditions by the word “or.”
A disbarred attorney is no longer a member of the Kentucky Bar
Association and no longer subject to our direct supervision. Moreover, the
affected clients have brought a civil action to recover any appropriate damages
they sustained, and the determination of their remedy is more appropriately
addressed in that forum.

Thus it is ORDERED that:
1) Respondent, Stanley M. Chesley, KBA Number 11810, whose bar
roster address is Fourth and Vine Tower, Suite 1513, Cincinnati, Ohio 45202,
is adjudged guilty of violating SCR 3.130-1.5(a); SCR 3.130-1.5(c); SCR 3.130-
1.5(e); SCR 3.130-1.8(g); SCR 3.130-3.3(a); CR 3.130-8.1(a), SCR 3.130-8.3(c),
and SCR 3.130-5.1(c)(1) and is hereby permanently disbarred from the practice
of law in Kentucky. Respondent thusly, may never apply for reinstatement to
the Bar under the current rules;
2) Respondent in accordance with SCR 3.390, shall notify all Courts in
the Commonwealth of Kentucky or other tribunals in which he has matters
pending, and all clients, of his inability to represent them and of the necessity
and urgency of promptly retaining new counsel. The Respondent shall
simultaneously provide a copy of all such letters of notification to the Office of
Bar Counsel;
37
3) Respondent shall immediately cancel and cease any advertising
activities in accordance with SCR 3.390; and
4) In accordance with SCR 3.450, Respondent has paid all costs
associated with these disciplinary proceedings in the amount of
88,579.62.00.
Minton, C.J., Abramson, Cunningham, Noble, Scott and Venters, JJ.,
sitting. All concur.
ENTERED: March 21, 2013.
38

Signed by Chief Justice

The Rule Against Splitting Causes of Action By Dave Kramer

Wednesday, March 20th, 2013

The Rule Against Splitting Causes of Action
By David Kramer | dkramer@dbllaw.com

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The rule against splitting causes of action requires litigants to bring all their claims arising out of the same transactional nucleus of facts in the same civil action. It is an equitable rule and a subsidiary of the doctrine of res judicata. Like res judicata, the rule against splitting causes of action rests upon the principles that cases should not be tried piecemeal and that litigation should end once the rights of the parties have been determined.

In essence, the rule bars repetitious suits involving the same cause of action. Plaintiffs must therefore bring all such related claims that have already accrued in the same pleading or lose them. For example, in a personal injury action arising from a motor vehicle collision, litigants must bring their claims for both bodily injury and property damage in the same action.

An instructive case on the rule against splitting causes of action is Coomer v. CSX Transportation, Inc., 319 S.W.3d 366, 371 (Ky. 2010). The plaintiff filed suit in Jefferson Circuit Court to recover for chronic wrist injuries that he claimed arose from his twenty-year employment in labor positions at CSX. Nearly two years later he brought a subsequent suit in Perry Circuit Court against CSX for additional injuries, which he also claimed arose from his years as a laborer for the company.

The Supreme Court in Coomer stated that the rule against splitting causes of action “applies not only to the points upon which the court was required by the parties to form an opinion and pronounce judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.” In this sense, the rule has broader application than res judicata.

On the other hand, the equitable nature of the rule subjects its general application to several exceptions. For example: (1) the rule does not necessarily bar a later suit on matters that were not relevant, or at least implicitly connected, to the issues of the original action; and (2) the rule does not apply to a cause of action before it accrues.

The Coomer Court ultimately addressed the novel issue of how the rule operates when a new claim, arising out of the same nucleus of facts, accrues during the pendency of the original civil action. In so doing the Court applied the principles of equity and extended the exception to the rule for causes of actions not yet accrued to include causes of action that accrue during the litigation. Thus, where a cause of action arising out of the same nucleus of facts as a cause of action in an existing suit accrues during the pendency of that litigation, the claimant has a procedural choice. The claimant may either bring a separate civil action or amend the complaint in the existing action (or supplement the complaint, if the facts giving rise to the newly accrued cause of action occurred after the time the original complaint was filed).

For the careful practitioner, however, seeking to rely on exceptions to the rule against splitting causes of action can be a risky and costly endeavor. The preferable course of action is to investigate fully one’s case before filing suit and plead related claims in the same cause of action, where possible. If circumstances give rise to a new cause of action of the same or similar type arising out of the same basic set of operative facts against the same defendant during the pendency of the original litigation, the plaintiff, for reasons of judicial economy and to avoid the risk of splitting causes of action, should strongly consider amending or supplementing the complaint to add the new claim.

Note: The foregoing post includes commentary reprinted from the forthcoming 2013 supplement to Rules of Civil Procedure Annotated, 6th ed. (Vols. 6 & 7, Kentucky Practice Series), by David V. Kramer, with permission of the author and publisher. Copyright (c) 2013 Thomson Reuters. For more information about this publication please visit http://store.westlaw.com/rules-of-civil-procedure-annotated-6th-vols-6-7-kentucky/130503/11774808/productdetail.

David Kramer is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.

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STAN CHESLEY HAS FILED MOTIONS TO ALLOW HIM TO SEEK DISCOVERY IN HIS DEFENSE – troubling questions about KBA prosecution raised.

Tuesday, March 19th, 2013

STAN CHESLEY HAS FILED MOTIONS TO ALLOW HIM TO SEEK DISCOVERY IN HIS DEFENSE – troubling questions about KBA prosecution raised.

By LawReader Senior Editor Stan Billingsley

LawReader has secured copies of numerous pleadings filed in the Abbott v. Chesley lawsuit from Boone County by Stanley Chesley. These records are public records.
Chesley is seeking additional discovery including a request for admissions, interrogatorys, and release of exculpatory evidence.
The case involving William Gallion, Melbourne Mills, and Cunningham, resulted in a summary judgment which is currently on Discretionary Review by the Ky. Supreme Court.
The Boone Circuit Court summary judgment did not apply to defendant Stanley Chesley.

The Boone Circuit Court issued a stay order prohibiting him from continuing his discovery.

The Chesley motion to drop the stay order against his discovery rights, was directed towards the special judge currently assigned to this case, the Hon. Geoffrey Morris of Louisville, Ky.
The original motion can be read at ABBOTT V CHESLEY. This link is also located in the left hand column of www.lawreader.com.

The Chesley pleading to the Boone Circuit Court asks:

“…Chesley respectfully moves the Court to life the discovery stay imposed by this court as to Mr. Chesley so that he may discover the facts related to Plaintiff’s counsel’s execution upon the $42 million judgment obtained against Defendants Gallion, Cunningham, and Milles (G-C-M).”

Chesley’s lawyer Sheryl Snyder of Frost, Brown and Todd in Louisville, argue that the Boone Circuit Court has jurisdiction to grant the Chesley motion,
“Because he has been ordered to pay restitution to Abbott by the KBA, information regarding Abbott’s counsel’s collection to date is highly relevant to Mr. Chesley.”
The summary judgment on appeal to the Supreme Court did not apply to Chesley and the Boone Circuit Court continues to retain jurisdiction over Chesely’s motions for relief.
“Abbott separately moved for partial summary judgment against Mr. Chesley. This Court denied the motion, stating that “(t)he rationale of the previously entered partial summary judgment (against G-C-M) does not apply to (Chesley) since the facts are in dispute.” See order of April 4, 2007., page 3.

“…this court therefore concluded that genuine issues of material fact remained as to whether Mr. Chesley has any liability to Abbott.”
“The order denying summary judgment as to Chesley was interlocutory and non-appealable.”

LawReader notes that a summary judgment was granted against Gallion, Cunningham and Mills and is on appeal. That would typically freeze discovery between those parries but no summary judgment included Chesley and he seeks to continue with his efforts to obtain discovery from Angela Ford and others.

The discovery Chesley seeks involves the reasons for Bar Counsel Linda Gosnell’s firing by the KBA Board of Governors in November of 2011. This discharge came about one week after Ford “rendered the accounting under seal to the United States Attorney…”

The U. S. Attorney’s office had long sought an accounting of Angela Ford’s handling of funds seized from G-C-M, and the names of the attorneys she hired to collect these funds and the distribution of the $42 million dollars collected.

Chesley justifies his attempt at discovery of Ford’s distribution as follows:

“The circumstances attendant to the termination (of Bar Counsel Linda Gosnell) have raised the question whether it was in any way related to the accounting rendered on November 9 (2011) such as disclosing a conflict of interest that would have required Bar Counsel to recuse in Mr. Chesley’s still pending disciplinary proceedings.”

“There is reason to believe that the accounting may disclose conflicts of interest germane to not only Mr. Chesley’s disciplinary proceedings but also the matter at hand. In fact, the website for the law firm of Linda Gosnell’s husband, R. Leslie Rosenbaum, lists “fen-phen” among its prior professional experience..”

U.S. District Judge Danny Reeves and Courier Journal columnist Andy Wolfson both confirm that Ford shared attorney fees with “attorneys” out of funds collected from the fen-phen defendants.
Chesley argues:

“…This information is clearly highly pertinent to Mr. Chesley, and the only avenue remaining to him to obtain this relevant information is this civil action. As a Defendant to this action, Mr. Chesley thus asks the Court to life the discovery stay so that he may initiate civil discovery in order to discover the facts related to Ford’s execution upon the judgment herein.”
“Determining the identity of the attorneys who have received money from Ford and whether the co-counsel arrangements in this matter created a conflict of interests that would have deprived Mr. Chesley of his due process rights in his disciplinary matter is vitally important and relevant.”

“ In this disciplinary matter, Mr. Chesley has been ordered to pay $7,555,,000 in restitution to the Plaintiffs herein, and Mr. Chesley should be allowed to ascertain both whether Ford’s execution on the judgment obtained against G-C-M created a conflict of interests that would have deprived Mr. Chesley of his due process rights in his disciplinary matter and whether that conflict is related to the order requiring him to pay $7,555,000 in restitution to Abbott, despite the fact that he has not been found liable to Abbott in this action.” (Emphasis added by LawReader.)
Attorney Snyder concludes the Chesley motion as follows:

“Mr. Chesley is entitled to discover whether the facts related to Ford’s execution on the judgment will show the Bar Counsel did indeed labor under a conflict of interest that prompted her to seek an order compelling Mr. Chesley to pay restitution specifically to Abbott. Mr. Chesley is also entitled to discover whether Ford’s execution on the judgment has affected or will affect his defense herein.” (Emphasis added by LawReader.)

SEVERAL SUPPLEMENTAL PLEADINGS WERE FILED:

Exhibit A. News article published in Courier-Journal where it is stated;

“The U.S. Attorney’s office in Lexington has won a court order requiring Ford to account for the money she’s collected and hasn’t passed on to clients—including $13.5 million she’s been paid in legal fees.”
Exhibit B. Copy of court order by Judge Reeves in the U.S. District Court. This order quotes Ford’s attorney as saying that “a portion of the funds paid to his client (Ford) by the Abbott plaintiffs have been paid to third parties (including but not limited to other attorneys) pursuant to fee agreements.”

(Also see Andrew Wolfson interview in The Louisville Courier-Journal July 15, 2011 regarding admission by Angela Ford that she “had distributed some of that $13 million to other attorneys, as legal fees to co-counsel.”)

Exhibit D. News Article: Bar Counsel Linda Gosnell fired Nov. 21, 2011 by KBA Board of Governors.

The exhibit states: “The bar counsel prosecutes disciplinary cases. Gosnell won the recommended disbarment of renowned Cincinnati lawyer Stan Chesley for his role in the fen-phen case.”
(LawReader note: Gosnell’s husband is R. Leslie Rosembaum who practices law in Lexington. The Chesley motion quotes Rosenbaum’s web site as saying his firm has experience in Fen Phen cases.)
Exhibit F. (Defendant Stanley M. Chesley’s first set of interrogatories and requests for admission to plaintiffs.)

In these interrogatories the dynamite question is found in Interrogatory No. 6 which asks:

“Identify the attorney fees paid to counsel other than Angela Ford by you or Angela Ford, either directly or indirectly through any third party, for work in this litigation.
(The second Request for admission invokes the name of former KBA President Barbara Bonar who was involved in a lawsuit over a fee dispute, and the Circuit Judge denied Bonar a legal fee.)

Request No. 2 asks:
“Admit or deny that a portion of the funds collected by your or your counsel, either directory or indirectly through any third party, in satisfaction of the judgment previously rendered I this litigation, was paid as a legal fee to the law firm B. Dahlenburg Bonar, or any law firm in which Barbara Bonar is a partner, member, principal, or otherwise associated.

Request No. 4. ( This request involves another former president of the Ky. Bar Association Jane Dyche.)
“Admit or deny that a portion of the fund collected by your or your counsel, either directly or indirectly through any third party, in satisfaction of the judgment previously rendered in this litigation was paid as a legal fee to the Dyche Law Office, or any law firm in which Jane Dyche is a partner, member, principal, or otherwise associated.

Request No. 6. (This request involves the husband of Linda Gosnell, the Bar Counsel. She prosecuted ethics charges against Stan Chesley.)
“Admit or deny that a portion of the funds collected by you or your counsel, either directly or indirectly through any third party, in satisfaction of the judgment previously rendered in this litigation was paid as a legal fee to the law firm Rosenbaum & Rosenbaum, or any law firm in which Leslie Rosenbaum is a partner, member, principal,. Or otherwise associated.”
***
Additional Pleadings:

KY. SUPREME COURT, KBA VS. CHESLEY, MOTION TO ABATE TO ALLOW LIMITED DISCOVERY ON DEPRIVATION OF DUE PROCESS.
Chesley argues:
“The unusual circumstances attendant to the abrupt termination (of Linda Gosnell) –coupled with the refusal of the KBA to make any public statement concerning the reasons for the termination – has resulted in the understandable inference that the termination was for cause, and the understandable concern that the cause could rise to the level of prosecutorial misconduct was for cause, and ….and the cause could rise to the level of prosecutorial misconduct in one or more pending discipline cases. This is not idle speculation, but a bona fide concern whether there are facts which should be disclosed to the Respondent in order for this proceeding to satisfy the constitutional requirements of due process of law.”

Page 2 of foregoing pleading:

“(Ford)… has been quoted by newspapers as saying that she has collected $41 million from Gallion, Cunningham and the Kentucky fund, that she has retained in excess of $13 million as legal fees; and that she has distributed some of that $13 million to other attorneys, as legal fees to co-counsel.”

Page 3 of the foregoing pleading:

“The circumstances attendant to the termination (of Gosnell) has raised questions whether it was in any way related to the accounting rendered on Nov. 9, (2011) –such as disclosing a conflict of interest that would have required Bar Counsel to recuse in this case. Even if the Board of governors considering these issues when making their decision, there is reason to believe that the accounting may disclose conflicts of interest germane to this case.” (Emphasis added by LawReader.)

Page 6 of foregoing pleading:

(In this section of the Chesley motion it is argued that the KBA has granted a stay of prosecution on ethics charges of Barbara Bonar. That is not an unusual decision when related civil cases are pending, as there is in the Bonar and in the Chesley case, but it is argued):
“…Bar Counsel strenuously resisted Mr. Chesley’s motions to hold this case in abeyance pending resolution of the closely related Abbott case. Despite the fact that Bar Counsel seeks restitution of $7.5 million using the Abbott case as the vehicle, this discipline case has not been stayed pending the outcome of the closely related civil litigation. This disparate treatment of Mr. Chesley and Ms. Bonar, his civil litigation adversary – effectuated by the special prosecutor in Ms. Bonar’s discipline case whose legal fee (In the prosecution of Gallion) are being charged to Mr. Chesley in this case- is troubling.”

Page 7 of foregoing pleading:

“Ms. (Jane) Graham’s dual role in these interrelated cases also forms the basis for one instance of Bar Counsel’s lack of candor to the tribunal. When Respondent first informed this court of Ms. Graham’s role in the abatement of the Bonar discipline case, counsel for Respondent incorrectly identified Ms. Graham as the Trial commissioner, rather than as the Special Bar Counsel, in the Bonar Case. Bar Counsel’s response evasively denied that Ms. Graham was the Trial Commissioner in the Bonar case, implying that Respondent was completely wrong, and that there was no conflict of interest. Bar Counsel’s failure to disclose that counsel has simply used the wrong title, and that Ms. Graham did indeed have a role in abating the Bonar discipline case in her capacity as Special Bar counsel, was a lack of candor to this tribunal.” Emphasis added by LawReader.)

“Respondent respectively suggests that the KBA should be required to provide counsel for Respondent with any and all exculpatory materials, including any and all materials that might tend to support a motion for a new trial on the basis of conflict of interest and/or prosecutorial misconduct. In order to achieve that objective with transparency and accountability, respondent respectfully moves the court to enter an order permitting Respondent to serve upon the KBA the Request for Production of Documents (filed separately under seal) and requiring the Kentucky Bar Association (including the Board of Governors, the Executive Director, the Acting Bar Counsel and their respective staffs) to produce – on an attorney’s eyes only basis – all non-privileged, responsive documents within thirty days ….”
*****
LawReader Note:

In the Gallion criminal trial, it has been alleged by the defendant that Ms. Jane Graham was seen entering the private chambers of U.S. District Judge Danny Reeves during the criminal trial. Gallion has sought financial records to determine if the KBA paid Graham for her billable time while she was in attendance at the Gallion trial, and during her alleged ex parte visit with Judge Reeves.
It is reported that when Judge Reeves was asked about the nature of the alleged ex parte meeting, that he responded, “You can ask (me) but I don’t have to answer.”
Chesley is apparently seeking to find out the correct relationship of Jane Graham to the KBA and the Bar Counsel. Was she a Deputy Prosecutor or a Trial commissioner, or both?

LAWREADER ANALYSIS
After LawReader has reviewed some 150 pages of legal pleadings in this action, we opine from the pleadings that Chesley is seeking answers and discovery regarding the following issues:
1. Was there a financial relationship between Angela Ford and Bonar. Did this deny Chesley Due Process of law?
2. Was there a financial relationship between Angela Ford and Jane Dyche. Did this deny Chesley Due Process of law?
3. Was there a financial relationship between Angela Ford and Linda Gosnell or Linda Gosnell’s husband Leslie Rosenbaum. Did this deny Chesley Due Process of law?

4. Has the Bar Counsel and the KBA wrongfully withheld exculpatory evidence from Stanley Chesley. Did this deny Chesley Due Process of law?
5. Why won’t the KBA and the Bar Counsel obtain and release an accounting of the fen-phen funds collected by Angela Ford and paid out by Angela Ford, including the names of all attorneys who financially benefited from these disbursements of legal fees paid out of the fen-phen seized funds.
6. Was there prejudicial favoritism shown by the KBA towards former presidents and officials of the KBA, particularly Barbara Bonar, when her ethics case was twice stayed, but the Chesley ethics case request for a stay was denied. Did this deny Chesley Due Process of law?
7. Other issues raised in the Chesley pleadings concern the Bar Counsel’s wrongful requirement that he pay $88,000 to the KBA prior to having the right to appeal his ethics complaint findings to the Ky. Supreme Court. Also the effect of excessive prosecution in the Chesley case suggest that the Court should review this alleged conduct and determine if Chesley was denied the due process of law. It is alleged to LawReader that the KBA paid Jane Graham about $15,000 for her to sit in on the Gallion criminal trial, and then the KBA billed Stan Chesley this attorney fee!!! Chesley was never charged with any criminal offense. Why couldn’t the KBA read the transcript and save the $15,000 in legal fees paid to Graham?

8. Another issue not raised by the Chesley pleadings, is the issue of the application of the Squeal Rule to the KBA officials who knew the reasons that Linda Gosnell was fired. Such firings occur at the discretion of the Board of Governors. Was there any ethical violations by Gosnell raised in the reasons for her firing? Did the Board have a duty under the Squeal Rule to disclose the reasons for Gosnell’s discharge to a new Bar Counsel? We note that to this date, the KBA has not revealed why the Chief Bar Counsel was fired on Nov. 21, 2011.

SOME PROBLEMS IN KENTUCKY APPELLATE PRACTICE – A PRIMER AND A PROPOSAL BY HON. SHERYL SNYDER

Monday, March 18th, 2013

SOME PROBLEMS IN KENTUCKY APPELLATE PRACTICE – A PRIMER AND A PROPOSAL March 16, 2013

Sheryl G. Snyder is a Fellow of the American Academy of Appellate Lawyers and co-author of 19 KENTUCKY PRACTICE, APPELLATE PRACTICE (Thomson/West) (2006) (hereinafter “KENTUCKY APPELLATE PRACTICE”). He is a Past President of the Kentucky Bar Association and was Editor-in-Chief of Vol. 59 KY. L. J. (1970-71).

He is a Member of Frost Brown Todd LLC. The author expresses appreciation to Griffin Terry Sumner and Jason P. Renzelmann of Frost Brown Todd LLC who worked with him on the appeals discussed herein and, more importantly, for their valuable comments on this article. The author also acknowledges the invaluable research assistance of Reed Ennis, an attorney who provides extraordinary service in the law firm’s library in Louisville. 1 and the advent of substantial compliance with the rules of appellate procedure.2

Such positive developments occur when appellate judges and practitioners discern the need for, and then advocate, further improvement of the judiciary. 3 Unfortunately, several idiosyncrasies and traps for the unwary remain. Accordingly, in an effort to continue contributing to the reform process, this article identifies five issues that merit consideration by the bench and bar for changes in Kentucky appellate rules and practice. 4 Neither do the rules of other states.5 6 After the passage of the Judicial Article in 1975, the Court amended the rules. New CR 73.03 provided that “[t]he notice of appeal shall specify all the appellants and all the appellees; ‘et al.’ and ‘etc.’ are not proper designations of parties.”7 We have been unable to find any contemporaneous explanation of the reason for the change in the rule. 8 Rule 1.090(a) prescribed the contents of the mandatory statement of appeal, and required “[t]he name of each appellant and each appellee (only parties named are before the Court – ‘et al.’ and ‘etc.’ are not proper designations of parties).”9 Apparently in that era of strict compliance with the rules, a decision was made to create this trap for the unwary by moving the informational requirement from the post-notice procedural rules into the requirements of a notice of appeal. In the era of substantial compliance, the pre-1976 wording of CR 73.03 should be restored. en banc in Yocom v. Franklin County Fiscal Court.10 The Court quoted both the old rule and new rule in their entirety11 and concluded that the amended rule “clearly requires that the notice of appeal specify the names of all of the appellees, as well as all of the appellants.”12 However, the Court decided it was sufficient that the caption of the notice identified the appellee. 13 14 But the Court of Appeals’ post hoc rationalization for the Supreme Court’s decision to revise the rule is clearly a makeweight argument because appellees make that decision in every other jurisdiction – and made that decision in Kentucky prior to 1976 – without the notice of appeal identifying the appellees against whom the appeal is taken. Like the rules in other jurisdictions,15 CR 73.03(2) requires the clerk to serve all parties, each of whom may decide for themselves whether to cross-appeal. dicta in Yocom resulted in the indispensible party exception to the doctrine of substance compliance announced in City of Devondale.16 In that case, the fifth class City of Devondale purported to annex by referendum certain previously unincorporated territory. Some residents of the annexed area filed suit, and the City of Louisville and Jefferson County intervened to contend that their City-County Compact rendered the annexation void. The Jefferson Circuit Court granted summary judgment invalidating the annexation and the City of Devondale appealed. Devondale’s notice of appeal failed to name the City of Louisville or Jefferson County as appellees, but the notice of appeal was timely filed and served upon their counsel of record. Over a dissent by Justice Leibson, the Supreme Court affirmed the dismissal of the appeal in an opinion written by Chief Justice Stephens. The majority reasoned that the City of Louisville and Jefferson County were indispensible parties to the relief sought by the 4 City of Devondale’s requirement of naming every appellee – on pain of dismissal of the entire appeal, for failure to name an indispensible party – is a trap for the unwary that has spawned needless satellite litigation and resulted in the dismissal of appeals in spite of the abrogation of the doctrine of strict compliance with appellate rules. That portion of CR 73.03(1) should be repealed, restoring the pre-1976 wording of the rule. Lassiter v. American Express,17 American Express sued the elected State Treasurer seeking a judgment declaring unconstitutional a provision in the biennial budget shortening the time period after which traveler’s checks are presumed abandoned. The elected State Treasurer, who soon thereafter became a candidate for Governor, was a Democrat who had no stake in defending the controversial use of “notwithstanding clauses” in the Republican Governor’s budget.18 The Treasurer therefore sought to implead both the Legislative Research Commission and Governor Fletcher’s Budget Director. The Franklin Circuit Court brought the Budget Director, but not LRC, into the case. Thereafter, the Budget Director defended the budget with the Treasurer filing “me too” briefs. City of Devondale19 – American Express moved to dismiss the Budget Director’s appeal. In a 2-1 decision, the Court of Appeals dismissed the appeal. Blackburn20 principle, the Department was properly named as an appellee to the appeal.”21 Lassiter implicitly reaffirmed the indispensible party doctrine announced in City of Devondale.

While the Supreme Court did not cite City of 6 , it reiterated that “tardy appeals and the naming of indispensible parties” continued to be exceptions to the rule of substantial compliance.22 Accordingly, while Lassiter was an important reaffirmation of the doctrine of substantial compliance with the rules of appellate procedure,23 it left the trap for the unwary that was created when CR 73.03 was amended to require the notice of appeal to name each and every appellee. Lassiter, both the Supreme Court and the Court of Appeals have continued to dismiss appeals for imperfections in the notice of appeal. For example, in A.M.W. v. Cabinet for Health and Family Services, Commonwealth of Kentucky,24 the Court of Appeals dismissed the appeal of a parent whose parental rights had been revoked, for failure to identify one of the parties as an appellee. In that case, the notice of appeal correctly stated that the “person or entity against whom this appeal is taken is the Petitioner, Cabinet for Health and Family Services, Commonwealth of Kentucky.” After all, it was the Cabinet that had filed the petition to revoke the appellant’s parental rights. But the notice of appeal failed to name or serve the child’s guardian ad litem, a nominal party. Rather than saving the parent’s appeal of a judgment terminating his parental rights by invoking the rule of substantial compliance, the Court of Appeals dismissed the appeal. Browning v. Preece,25 the Supreme Court affirmed the dismissal of a landowner’s appeal from a judgment granting an easement over his property because his notice of appeal named only the adverse party who obtained the easement and did not name the co-defendants whose property was also subject to the easement. The Court recited that the notice of appeal was served on the co-defendants’ attorney. The Court nevertheless held the co-defendants were indispensible parties to the appeal and that the failure to name them in the notice of appeal was “a jurisdictional defect that cannot be remedied . . . .”26 7 City of Devondale was wrongly decided to begin with. Devondale, the City’s notice of appeal stated that “[t]he name of the Appellees against whom this appeal is taken are” the individual residents who had filed the lawsuit. “Only the original plaintiffs were named as appellees. . . . [I]ntervenors Louisville and Jefferson County were not named as parties, but copies of the notice of appeal were served on their attorneys.”27 The City timely filed a prehearing statement which was also served upon counsel for the Louisville and Jefferson County, although they also were not named as parties in the statement of appeal, either. Shortly thereafter Devondale moved to amend its notice of appeal, but the Court of Appeals denied that motion. The Court of Appeals also initially denied the appellees’ motion to dismiss the appeal but, after oral argument, “the Court of Appeals changed its mind and did, in fact, dismiss the appeal.”28 The Supreme Court granted discretionary review, and affirmed the dismissal of the appeal. 29 30 He noted that Devondale’s notice of appeal had been timely filed. He then noted that “[t]he rest of CR 73.02(2) specifies that ‘failure of any party to comply with other rules relating to appeals . . . does not affect the validity of the appeal . . . but is ground only for such action as the appellate court deems appropriate’ . . .”.31 Because the City of Louisville and Jefferson County had been timely served with the notice of appeal, they were not prejudiced and prejudice to the opposing party is essential to the severe sanction of dismissal of the appeal. “Thus, contrary to the statement in the Majority Opinion that the ‘plain language of CR 73 supports this [the majority’s] view,’ the fact is that the ‘plain language of CR 73’ supports the opposite view.”32 City of Devondale “constitutes an aberration.”33 In an ensuing series of decisions – authored by Justice Leibson – he set about to prove that Devondale is an aberration. Johnson v. Smith,34 a notice of appeal is not “jurisdictional.” Appellate jurisdiction is vested by the Constitution, not by the parties’ filings. 9 create jurisdiction, but only prescribes “the method by which the jurisdiction of an appellate court is invoked.” . . . not jurisdictional. It is a procedural device prescribed by the rules of the court by which a litigant may invoke the exercise of the inherent jurisdiction of the court as constitutionally delegated.35 Johnson v. Smith, Justice Leibson narrowed City of Devondale to its facts. Unfortunately, however, City of Devondale was not overruled, but was expressly reaffirmed in Justice Leibson’s opinion: Excepting for tardy appeals and the naming of indispensible parties, we follow a rule of substantial compliance.36 37 Thus, under the doctrine of substantial compliance, “dismissal is a disfavored remedy for violation of the civil rules related to appellate procedure.”38 Instead, “the sanction imposed should bear some reasonable relationship to the seriousness of the defect.”39 AK Steel Corp. v. Carico,40 the notice of appeal was timely filed in Devondale. Accordingly, Justice Leibson’s dissent in Devondale was better reasoned than Chief Justice Stephens’s majority opinion. The notice of appeal having been 10 41 and the policy that “the sanction imposed should bear some reasonable relationship to the seriousness of the defect”42 required granting leave to amend the notice of appeal to identify the party rather than dismissal of the appeal. further illustrates the point. In that case, Preece sued Mr. and Mr. Horn, claiming an easement in a roadway that straddled the boundary between the Horns’ and Browning’s property. Upon the Horns’ motion, Browning was added as a defendant. The circuit court upheld the claimed easement and Browning appealed. Apparently the Horns did not appeal. The notice of appeal named Mr. Horn in the caption but did not name Mrs. Horn in either the caption or the body of the notice. The notice was served on the Horns’ counsel of record. In federal and other states’ courts, that would have been sufficient. But the Supreme Court held the notice was fatally defective under the Devondale precedent. Reasoning that the easement could be widened or narrowed by the appellate courts, the Supreme Court held that “[t]he necessity of joining parties whose interest may be affected is not eliminated simply because the effect upon that interest may be minimal, or even beneficial to them”43 With respect, counsel for the Horns was served with the notice of appeal and they therefore could decide for themselves whether to participate in the appeal. 44 and its analogue in most states,45 Kentucky does not have a separate rule prescribing the procedure for obtaining a stay pending appeal of a nonmonetary, noninjunctive judgment or order. CR 62.03(1) and CR 73.04 set forth the procedure for staying execution upon a money judgment by posting a supersedeas bond. Similarly, CR 62.02, CR 65.07 and CR 65.08 set forth the procedure for obtaining relief from the Court of Appeals from an interlocutory order or final judgment granting or denying temporary or permanent injunctive relief, respectively. CR 62.04 provides that when a trial court has entered judgment on some but not all of the claims in a multi-claim or multi-party case within the meaning of CR 54.02, “the court may stay enforcement of that judgment” until a final judgment has been entered as to the remainder of the case. However, “CR 62.04, which provides that a trial court may stay the effect of a partial judgment made final under CR 54.02, does not authorize an appellate court to do anything.”46 47 Compared to the federal rule, however, CR 76.33 inadequately describes the procedure for obtaining a stay pending appeal. And, in contrast to CR 65.09 and CR 76.36(7), CR 76.33 is silent on whether and how one may obtain Supreme Court review of a stay issued by the Court of Appeals under that rule. While the Supreme Court held in Green Valley48 that a stay issued by the Court of Appeals pursuant to CR 76.33 may be reviewed by the Supreme Court via an 12 dictum in Ephraim McDowell49 creates a question whether that holding in Green Valley remains viable. And CR 76.33 remains silent as to Supreme Court review. A new rule patterned after federal appellate Rule 8, and expressly providing for Supreme Court review as provided in CR 65.09 as to injunctive relief, should be considered by the committee presently drafting rules of appellate procedure for Kentucky. 50 It is equally fundamental that the mere filing of an appeal does not stay the judgment appealed from.51 Execution on a money judgment is stayed by posting a supersedeas bond pursuant to CR 62.03(1) and relief from an injunction is obtained pursuant to CR 65.07 and CR 65.08, as the Court explained in Bella Gardens. Bella Gardens, the circuit court had ordered a tenant to vacate certain premises, and made the order final and appealable under CR 54.02. The tenant “moved the Court of Appeals for a stay of the judgment pending appeal, purportedly under CR 62.04 . . . .”52 The Chief Judge of the Court of Appeals entered an ex parte emergency order staying the circuit court’s order and, pursuant to the order of the Chief Judge, a supersedeas bond was posted in circuit court. The Court of Appeals subsequently dissolved its order, but held that the injunction issued by the circuit court continued to be stayed by the supersedeas bond. The owner of the apartments filed both a matter-of-right appeal and a petition for writ a prohibition. 55, which simply required certain portions of the record be filed with any “motion for an intermediate order under CR 75.10 or RCr 12.62 . . . .”56 Perhaps it is therefore not surprising that CR 76.33 is so succinct in contrast to federal appellate Rule 8. Green Valley, the Supreme Court held that the procedure for obtaining review by the Supreme Court of a stay issued by the Court of Appeals pursuant to CR 76.33 is to file an original action pursuant to CR 76.36 in the Supreme Court. In that case, environmentalists succeeded in overturning an administrative order granting Green Valley permits to construct and operate a solid waste landfill. Green Valley appealed. The environmentalists sought a stay of further administrative proceedings by the Cabinet for the duration of the appeal, and the Court of Appeals granted the stay pursuant to CR 76.33. 57 58 Green Valley is called into question by the opinion in Ephraim McDowell.59 In that case, the circuit court had granted a restraining order requiring the lessee of a hospital to vacate the premises. The Court of Appeals denied relief pursuant to CR 65.07 because a restraining order is not appealable.60 But, the lessee had also filed an original action, and the Court of Appeals granted “intermediate relief under CR 76.36(4) in the form of a temporary stay of the circuit court order.”61 temporary stay granted by the Court of Appeals under CR 76.36(4).”62 ever appropriate before this Court.”63 The Court parsed the wording of CR 76.36(1) and held that an original action is the appropriate procedure to obtain review of an interlocutory order issued by the Court of Appeals in an original action pending in the Court of Appeals: original action in this Court.64 Green Valley for the proposition that the lessor was not irreparably harmed because the stay merely preserved the status quo pendent lite. But before reaching the merits of that motion, the Court offered a rationale for its decision that seems to undercut the holding in Green Valley that a stay issued by the Court of Appeals in an appeal may be reviewed via an original action in the Supreme Court, because the Court seemed to say that an original action could be venued in the Supreme Court only if the order being reviewed was issued by the Court of Appeals in an original action in the Court of Appeals: an appellate court,” but the Rule also places a limit on when such an action may be brought, namely, such an action may be “prosecuted only against a judge or agency whose decisions may be reviewed as a matter of right by that appellate court.” As such, original actions in this Court are limited in that they may be filed against the Court of Appeals only when the final action of the Court of Appeals may be appealed to this Court as a matter of right. Such occurrence is rare because most decisions of the Court of Appeals are subject only to discretionary review by this Court. But, as CR 76.36(7) makes clear, original actions in the Court of Appeals are appealed to this Court as a matter of right. Thus, we conclude that an original action in this Court seeking to prohibit the proceedings in an original action in the Court of Appeals is allowed under the Rules because the final ruling in an original action in the Court of Appeals would be appealed as a matter of right to this Court.65 Green Valley sub silentio because, in Green Valley, the Court of Appeals issued the stay pursuant to CR 76.33 in an ordinary appeal, not in an original action. And the Supreme Court permitted review of the Court of Appeals order only via an original action in the Supreme Court. If original actions in the Supreme Court may be filed “only when” the Court of Appeals issues interlocutory orders pursuant to CR 76.36(4) in 17 Green Valley held was the lone procedural vehicle for review of Court of Appeals order issued under CR 76.33. Ephraim McDowell seems nonessential to the holding, especially since the Court cited Green Valley with approval rather than overruling it. In its effort to explain that such cases would be rare, the Court in Ephraim McDowell parsed 76.36(1) too narrowly. CR 76.36(1) addresses the court in which the original action must be filed, not the kind of lower court actions that can become the subject matter of an original action in the higher court. The fact that an original action seeking relief against the Court of Appeals must be filed in the Supreme Court does not limit original actions in the Supreme Court to relief from interlocutory orders issued in original actions in the Court of Appeals. Technically, the obiter dictum in Ephraim McDowell did not overrule the actual holding in Green Valley, which continues to be the binding precedent. However, the apparent conflict between the subsequent decision in Ephraim McDowell and the previous decision in Green Valley leaves the practitioner at least somewhat uncertain as to the procedure available for obtaining review by the Supreme Court of a stay pending appeal issued by the Court of Appeals pursuant to CR 76.33. Any new rule dealing with stays pending appeal should resolve this issue by prescribing a procedure for review by the Supreme Court of stays issued by the Court of Appeals. ex hypothesi both wrong and irreparably damaging.66 67 with one important difference. A stay pending appeal enjoins a judgment entered after there has been a full adjudication of the parties’ rights, whereas a preliminary injunction is issued at the outset of the litigation, often to preserve the status quo pending adjudication of the parties’ rights. Consequently, the movant need only show a substantial question on the merits for a temporary injunction if the equities weigh sufficiently in favor of the movant, whereas an appellant seeking to stay a final judgment must show a “substantial likelihood of success” on the merits of the appeal.68 Green Valley decision. Granting the Supreme Court discretion whether to grant review in the first instance avoids any concern that the Supreme Court’s docket would be deluged with appeals of interlocutory Court of Appeals orders, while preserving the ability of the Court to intervene in those few cases where a interlocutory stay by the Court of Appeals does threaten immediate irreparable consequences. Goodenough69 that section 115 of the Constitution guarantees an appeal in such cases, that holding should be reconsidered when the Court promulgates the new rules of appellate procedure. 70 Francis v. Taylor71 the real party in interest contended that only the Supreme Court may issue writs because section 110(2)(a) of the Constitution vests the supervisory power over the Court of Justice solely in the Supreme Court. The Supreme Court rejected that contention and squarely held that – by vesting in the Court of Appeals “the power ‘to issue all writs necessary in aid of its appellate jurisdiction, . . .’ and to issue all writs necessary to aid ‘the complete determination of any cause. . .’” – section 111(2) empowered the Court of Appeals to decide petitions for writs of mandamus and prohibition.72 The Court rejected the argument “that the granting of a writ of mandamus is supervisory in nature and thus falls within the aegis of the exclusive authority of the Supreme Court as provided in Sec. 110(2)(a) of the Kentucky Constitution.”73 The Supreme Court held: have only appellate jurisdiction but have the power, through the issuance of writs, to implement that jurisdiction. The Supreme Court, in addition, has the control (or supervision) of the entire Court of Justice.74 Francis makes clear that deciding petitions for writs is the exercise of appellate jurisdiction. Accordingly, the Supreme Court could provide by rule that further review is within the Supreme Court’s discretion, as with injunctive relief under CR 65.09. Sweasy,75 the Supreme Court held that the trial judge is not an indispensable party to an original action in the Court of Appeals, and the Court therefore denied a motion to dismiss an appeal to the Supreme Court despite the fact that the notice of appeal failed to name the trial judge as an appellee. The Supreme Court held that the trial judge is merely a nominal party, recognizing that original actions are “appellate proceedings” seeking interlocutory appellate relief in the underlying case pending in circuit court. The Supreme Court held: in a pending action is different from other appellate proceedings. The trial judge is a party in name only. He has no interest in the outcome of the litigation, and no connection to it other than the obligation to abide by the Court of Appeals’ decision. . . . 76 77 In Kentucky, the trial judge rarely files a response, although that occasionally occurs.78 On at least one occasion, the Supreme Court has said that the Court of Appeals “acted as a trial court” in an original action79, and in Lexington Public Library80 the Supreme Court said that “[a] petition for an extraordinary writ is a separate civil action brought pursuant to CR 81, not an interlocutory appeal from the underlying action brought pursuant to CR 73.01(2).”81 However, that passing remark was made as part of the explanation that the Supreme Court did not have a full record on appeal to assist it in deciding the appeal from the decision of the Court of Appeals granting a writ of prohibition. The Supreme Court affirmed the Court of Appeals’ decision vacating a circuit court’s order compelling discovery of information that the Court of Appeals determined was protected by the attorney-client privilege. The Supreme Court described that writ as “interlocutory intervention” in the underlying case,82 a recognition that the decision granting the writ granted interlocutory appellate relief in the underlying case in circuit court. 83 The terminology in the rule is “[o]riginal proceedings in an appellate court . . .”84 and is derived from the fact that a petition for an extraordinary writ is often referred to as invoking the appellate court’s “original jurisdiction” pursuant to the All Writs Clause. For example, the analogous Ohio rule says it 23 85 In contrast, federal Rule 21 refers to “petitioning for a writ of mandamus or prohibition”86 and an “application for an extraordinary writ”87 – a much simpler, and accurate, description of the appellate proceeding by which a litigant seeks interlocutory relief in the nature of mandamus or prohibition. Goodenough and revise CR 76.36(7) to provide that it is in the Supreme Court’s discretion whether to review decisions of the Court of Appeals granting or denying petitions for writs of mandamus and prohibition.88 The Court could also reconsider the terminology “original proceedings” in favor of the simpler wording of federal Rule 21. 89 Previously in that same case, the lawyers had filed an original action in the Court of Appeals. The Court of Appeals dismissed the action, citing Delahanty v. Commonwealth ex rel. Maze90 for the proposition that original actions seeking relief against a district judge must be 24 91 92 holding that a timely-filed petition for rehearing did not toll the time for filing a notice of appeal. The Court held that a Rule 59 motion should have been filed rather than a petition for rehearing because the appeal was in circuit court. The Supreme Court denied discretionary review. Commonwealth ex rel. Mason v. Hughes,93 the party adversely affected by the appellate decision of a circuit court filed a Rule 59 motion. When it was denied, a motion for discretionary review was filed in the Court of Appeals. The respondent moved to dismiss the discretionary review motion, arguing that a Rule 59 motion may not be filed in a circuit court sitting as an appellate court because Rule 59 is a trial court rule. The Court of Appeals saw no reason why a Rule 59 motion could not be filed when circuit court is sitting as an appellate court; “however, the time for filing the motion for discretionary review is not affected by the CR 59 motion” because CR 76.20(2)(a) “do[es] not provide that the running of time for filing a motion for discretionary review in the Court of Appeals be terminated by a CR 59 motion.”94 Mason that the timely filed Rule 59 motion did not suspend the deadline for filing the motion for discretionary review, therefore the motion for discretionary review was dismissed as untimely. Bates v. Connelly,95 the Supreme Court overruled Mason, saying: “we find this holding to be inconsistent with other recognized appellate practice and uncalled for by the language of the rules.”96 The Supreme Court interpreted the word “judgment” in CR 76.20(2)(a) to mean a “final judgment.” Holding that “a judgment subject to a CR 59 motion cannot be final until the motion has been ruled on,” the Supreme Court held that a Rule 59 motion filed in circuit court sitting as an appellate court does suspend the running of time for filing a motion for discretionary review in the Court of Appeals. Unfortunately, however, in the 17 years since Bates was decided, CR 76.20(2)(a) has not been amended to inform the practitioner what procedural vehicle to utilize to toll the time for filing a motion for discretionary review by the Court of Appeals of a circuit court judgment in a case appealed from district court. The rule continues to be silent on whether there is a procedural vehicle which tolls the running of time. Bates does not hold that a party may not file a petition for rehearing in a circuit court sitting as an appellate court, nor that a timely filed petition for rehearing does not suspend the running of time for filing a motion for discretionary review. Instead, Bates applied the doctrine of substantial compliance with appellate rules of procedure to save that otherwise timely motion for discretionary review by permitting the timely Rule 59 motion to toll the running of time for filing the discretionary motion. 27 97 Conversely, CR 59 clearly speaks to trial court proceedings in circuit court, such as a motion for a new trial. Adams that the literal wording of the rule “must be intended to except appellate opinions of the circuit court from its purview. . . . [B]ecause the (sic) CR 76.32 by its own terms does not extend to appellate opinions of the circuit court, it cannot serve to stay the time for filing a CR 76.20(2) motion for discretionary review to this Court.”98 The Court of Appeals therefore reasoned that, under Bates, the time for filing a motion with the Court of Appeals for discretionary review of an appellate decision of a circuit court can be tolled only by a Rule 59 motion. Concluding that the petition for rehearing was therefore a nullity, the Court of Appeals said “it cannot serve to stay the time for filing a CR 76.20(2) motion for discretionary review . . . .”99 Adams, it illustrates the traps for the unwary that arise from gaps in the rules applicable to appeals to circuit court from district court. Those proceedings also cause one to question the wisdom of vesting in the circuit court jurisdiction of petitions for writs against district judges. 100 And such supervisory power should be exercised only by those appellate courts. In Indiana, for example, only the Supreme Court has jurisdiction to issue 28 101 In Ohio, only the Supreme Court or Court of Appeals may issue a writ of prohibition to an inferior court.102 103 While the Constitution provides that circuit courts “shall have such appellate jurisdiction as may be provided by law”104, it is the civil rules promulgated by the Supreme Court which vest this supervisory power in circuit courts.105 The Court of Appeals has extensive experience applying the well settled precedents governing relief in the nature of mandamus and prohibition. Most circuit judges have very little, if any, experience with such proceedings. Moreover, the judges of the Court of Appeals are further removed from the district judges than are circuit judges, both institutionally and geographically. Both judicial economy and consistent application of the law favor vesting jurisdiction over petitions for such writs against district judges in the Court of Appeals. The committee promulgating the new rules of appellate procedure should consider vesting jurisdiction over writs against district judges in the Court of Appeals. 106 it would seem that the relative importance of issues presented by a motion for discretionary review would be a situation in which amicus filings could be considerably helpful to the Court. For example, in a recent case the Court of Appeals issued a stay pending a landowner’s appeal of a utility’s right to take in an eminent domain action.107 The utility filed a motion for discretionary review of the stay.108 The potential for costly delay in projects approved by the Public Service Commission resulting from such stays made the order an issue of great significance to all major utilities doing business in Kentucky. Consequently, an amicus brief signed by counsel for ten regulated utilities was tendered to the Court with a motion for leave to file it.109 It was returned, unfiled, with a clerk’s notice stating that it was an “unauthorized” filing. 110 While the utility’s motion for discretionary review obviously made the point that the issue was of industry-wide importance, the credibility of that argument would clearly have been bolstered if the amicus curiae filing had been accepted. And one can easily envision other situations in which the significance of the issues presented for review could be emphasized for the Court by permitting an amicus filing in support of a motion for discretionary review. 112 an amicus curiae brief in support of, or in opposition to, a petition for a writ of certiorari. Likewise, Ohio rules specifically authorize the filing of amicus curiae memoranda in support of, or in opposition to the Ohio Supreme Court granting review of a lower court decision, and leave of court is not required.113 Indiana’s appellate rules combine amicus filings on jurisdiction and the merits into a single rule, which requires leave of court.114 See sections 110 and 111, KY. CONST., ratified on November 4, 1975, as part of what is popularly referred to as the Judicial Article of the Constitution of Kentucky (“Judicial Article”). CR 73.02(2) (effective January 1, 1985); see also Ready v. Jamison, 705 S.W.2d 479 (Ky. 1986). Fischer v. Fischer, 348 S.W.3d 582, 591-97 (Ky. 2011) (quoting KENTUCKY APPELLATE PRACTICE § 11:5 (2006)). See, e.g., OHIO R. APP. P. 3(D). Kentucky Rules of Court, 1974 Desk Copy, p. 142 (West Publ’g Co. 1974) (copy on file in Louisville library of Frost Brown Todd LLC). Kentucky Rules of Court, 1976 Desk Copy, p. 141 (West Publ’g. Co. 1976) (copy on file in Louisville library of Frost Brown Todd LLC). The new 1976 rules changed the nomenclature to Rules of Appellate Procedure. See Kentucky Rules of Court, 1976 Desk Copy, p. 333 (West Publ’g Co. 1976). The appellate rules were incorporated into CR 76 by rules changes effective January 1, 1978. See Kentucky Rules of Court, 1978 Desk Copy, p. 159 (West Publ’g Co. 1978) (copy on file in Louisville library of Frost Brown Todd LLC). A committee chaired by Justice Lisabeth Abramson is presently drafting a new set of rules of appellate procedure, continuing a project commenced by then-Chief Judge Sara Combs. Kentucky Rules of Court, 1976 Desk Copy, p. 344 (West Publ’g Co. 1976). The statement of appeal has been replaced by the prehearing statement. See CR 76.03(4). For the convenience of the clerks and staff attorneys, the statement must identify each party and its counsel. However, defects in the prehearing statement are not jurisdictional. Crossley v. Anheuser-Busch, Inc., 747 S.W.2d 600 (Ky. 1988). Id. at 297. Id. Id. at 299. Id. at 297. See, e.g., Fed. R. App. P. 3(d)(1). City of Devondale v. Stallings, 795 S.W.2d 954 (Ky. 1990). Lassiter v. Am. Express Travel Related Serv. Co., 308 S.W.3d 714 (Ky. 2010). In Commonwealth ex rel. Armstrong v. Collins, 709 S.W.2d 437 (Ky. 1986), the Court held that the legislature has the authority under section 15 of the Kentucky Constitution to suspend substantive statutes for the biennium in the budget. The legislature exercises that power with provisions in the budget that say: “notwithstanding” a particular statute; hence, in Capitol jargon, suspensions of statutes are known as “notwithstandings.” The author argued the cause for Gov. Collins in that case. Blackburn v. Blackburn, 810 S.W.2d 55 (Ky. 1991). Id. Significantly, that same term the Supreme Court reaffirmed that the doctrine of strict compliance continues to govern statutory appeals. Louisville Gas & Elec. Co. v. Hardin & Meade County Prop. Owners for Co-Location, 319 S.W.3d 397 (Ky. 2010). The author argued the cause for the prevailing party in both cases. Id. (quoting Nelson County Bd. Of Educ v. Forte, 337 S.W.3d 617, 616 (Ky. 2011) (quoting City of Devondale, 795 S.W.2d at 957). Id. at 956. Id. at 957. Id. at 958. Id. Id. Id. at 958. 885 S.W.2d at 949-50 (italics in original) (quoting Manly v. Manly, 669 S.W.2d 537, 539 (Ky. 1984)); accord Beard v. Commonwealth ex rel. Shaw, 891 S.W.2d 382 (Ky. 1994). Crossley, 747 S.W.2d at 601. Id. Ready v. Jamison, 705 S.W.2d at 482. Crossley, 747 S.W.2d at 601. Ready, 705 S.W.2d at 482. See, e.g., IND. R. APP. P. 39; OHIO R. APP. P. 7A; see generally AM. BAR ASS’N, SUPERSEDING AND STAYING JUDGMENTS, A NATIONAL COMPENDIUM (2007). Bella Gardens Apartments, Ltd. v. Johnson, 642 S.W.2d 898, 900 (Ky. 1982). Id. (“The authority of an appellate court to grant intermediate relief is derived from CR 65 and CR 76.33.”). CR 76.36(4) also authorizes “intermediate relief” when an original action is pending in the Court of Appeals or the Supreme Court. Green Valley Envtl. Corp. v. Clay, 798 S.W.2d 141 (Ky. 1990). Russell County, Ky. Hosp. Dist. Health Facilities Corp. v. Ephraim McDowell Health, Inc., 152 S.W.3d 230 (Ky. 2004). Elk Horn Coal Corp. v. Cheyenne Res., Inc., 163 S.W.3d 408 (Ky. 2005). Taustine v. Fleig, 374 S.W.2d 508, 509 (Ky. 1964). (“An appeal does not stay a judgment.”). Id. at 900. Id. KY. R.C.A. 1.179 (1974). 33 Id. Id. at 144. Id. at 233 (citing Common Cause of Kentucky v. Commonwealth, 143 S.W.3d 634 (Ky. App. 2004)). Id. at 231. Id. at 233 (italics in original). Id. at 234 (italics in original). Id. at 235 (italics in original) (internal citation omitted). Id. at 235-36 (italics in original) (emphasis added) (internal citation omitted). Coleman v. PACCAR, Inc., 424 U.S. 1301, 1304 (1976) (italics in original). Coalition to Defend Affirmative Action v. Granholm, 473 F.3d 237, 244 (6th Cir. 2006) (“Our standard for reviewing a motion for a stay pending appeal is . . . [m]uch like the standard for determining whether to issue a preliminary injunction . . . .”). Ohio ex rel. Celebrezze v. Nuclear Regulatory Comm’n, 812 F.2d 288, 290 (6th Cir. 1987). Stephens v. Goodenough, 560 S.W.2d 556 (Ky. 1977); see also Gilliece v. City of Covington, 565 S.W.2d 451 (Ky. 1978). Grange Mut. Ins. Co. v. Trude, 151 S.W.3d 803, 808, 810-811 (Ky. 2004). 593 S.W.2d at 515 (quoting KY. CONST. §§ 110(2)(a), 111(2)). Id. Id. (emphasis added). Sweasy v. King’s Daughters Mem’l Hosp., 771 S.W.2d 812 (Ky. 1989). Id. at 817 (emphasis added). Doe v. Potter, 225 S.W.3d 395, 399 (Ky. App. 2006). Grange Mut. Ins., 151 S.W.3d at 809. Lexington Pub. Library v. Clark, 90 S.W.3d 53 (Ky. 2002). Id. at 56. Id. at 62 (quoting Southeastern United Medigroup Inc v. Hughes, 952 S.W.2d 195, 200 (Ky. 1997)). Sweasy, 771 S.W.2d at 817. Adams v. Karem, No. 2010-CA-001551-MR and No. 2010-CA-001609-MR, slip op. (Ky. App. Sept. 23, 2010). By treating the lawyers’ misnomer as controlling, the Court of Appeals deviated from the maxim that the law will “not . . . permit the formal designation or name of a motion to control the rights of the parties where the nature of the relief sought is apparent and the substantive rights of the parties may be properly determined.” Cargo Truck Leasing Co. v. Piper, 394 S.W.2d 472, 474 (Ky. 1965); accord, Griffith v. Schultz, 609 S.W.2d 125, 126 (Ky. 1980) (“However, the nature and legal effect of a pleading will be determined by its substance rather than by mere linguistic form.”). Both a motion for discretionary review and notice of appeal were filed because the circuit court had consolidated Adams’s appeal from district court with her original action in circuit court. The author was appellate counsel for Adams. 725 S.W.2d 865 (Ky. App. 1987), overruled by Bates v. Connelly, 892 S.W.2d 586 (Ky. 1995). Id. at 867. 34 Id. at 588. Ash v. Security Nat’l Ins. Co., 574 S.W.2d 346, 349 (Ky. App. 1978). Adams v. Karem, slip op. at 13. Id. KY. CONST. §§ 110, 111. IND. R. P. for Original Actions 1(a). MARK P. PAINTER & DOUGLAS R. DENNIS, OHIO APPELLATE PRACTICE § 10:48 (2007-2008 ed.) (“An action in prohibition involving any court inferior to the courts of appeals may be brought in the Supreme Court or the courts of appeals, since both have concurrent original jurisdiction in prohibition. . . . No other courts have jurisdiction in prohibition.”). KY. CONST. § 109. KY. CONST. § 112(5). See CR 76.36(1) (“Original proceedings in an appellate court may be prosecuted only against a judge or agency whose decisions may be reviewed as a matter of right by that appellate court.”). Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1063 (7th Cir. 1997) (“The vast majority of amicus curiae briefs are filed by allies of litigants and duplicate the arguments made in the litigants’ briefs, in effect merely extending the length of the litigant’s brief. Such amicus briefs should not be allowed. They are an abuse. The term ‘amicus curiae’ means friend of the court, not friend of a party.”). But that criticism is largely inapplicable to amicus filings at the discretionary review stage where the issue is whether the case is sufficiently important to merit further appellate review. Jent v. Ky. Util. Co., 2008-CA-001565, 2008-CA-001566, 2008-CA-001567 (Ky. App. May 6, 2009) (Order granting Mot. for Intermediate Relief). Ky. Util. Co. v. Jent, 2009-SC-000379-D (Ky. June 23, 2009). The utility also filed a motion for interlocutory relief pursuant to CR 76.33 and an original action pursuant to CR 76.36. The case presented the issues discussed above in the section advocating promulgation of a new rule to govern the procedure for obtaining review by the Supreme Court of stays issued by the Court of Appeals. Ky. Util. Co. v. Jent, 2009-SC-000379-D (Ky. July 8, 2009) (Motion for Leave to File Amici Curiae Brief in Support of Kentucky Utility Company’s Motion for Discretionary Review). Ky. Util. Co. v. Jent, 2009-SC-000379-D (Ky. Nov. 18, 2009) (Order Denying Discretionary Review). Jent v. Ky. Util. Co., 332 S.W.3d 102 (Ky. App. 2010); see also N. Ky. Port Auth., Inc. v. Cornett, 625 S.W.2d 104 (Ky. 1981). The author argued the cause for the utility in the Court of Appeals. SUP. CT. R. 37.2(a). OHIO S. CT. PRAC. R. 3.5 (“An amicus curiae may file a jurisdictional memorandum urging the Supreme Court to accept or decline to accept a claimed appeal of right or a discretionary appeal. Leave to file an amicus memorandum is not required.”). IND. R. APP. P. 41.
By: Sheryl G. Snyder*
*
Those who have practiced in Kentucky’s appellate courts during the last four decades have witnessed several positive developments in appellate practice, particularly the creation of the intermediate Court of Appeals
For example, the Supreme Court recently cited commentators’ criticism of a “trap for the unwary,” and overruled prior decisions requiring a cross-motion for discretionary review to preserve arguments for affirming the decision under review.
Requiring notices of appeal to name each and every appellee is an unnecessary trap for the unwary.
CR 73.03(1) contains a requirement unique to Kentucky – that a notice of appeal must name each and every appellee. The parallel federal rule does not include that requirement.
Interestingly, Kentucky did not include that requirement, either, prior to July 1, 1976. The requirement of naming each appellee was added when the rules were amended with the 2
advent of the intermediate Court of Appeals after passage of the Judicial Article. The prior rule, CR 73.03, mirrored the federal rule and required only that “[t]he notice of appeal shall specify the parties taking the appeal . . . .”
Prior to the Judicial Article, the appellate rules – denominated Rules of the Court of Appeals Relating to Practice and Procedure (Ky. R.C.A.) – were separate from the Rules of Civil Procedure.
The newly amended rule was first considered by the then-new, intermediate Court of Appeals sitting
In the consolidated companion case, the Court held the new rule would not apply until 3
January 1, 1977, to give lawyers more time to become familiar with the amendments promulgated in 1976. Presaging the advent of substantial compliance a decade later, the Court invoked “the new policy of Section 115 of the Kentucky Constitution that there shall be as a matter of right one appeal in every case.”
Unfortunately, however, the Court offered a rationale for the new rule: “In order that the court can determine who is entitled to the additional ten days to cross-appeal allowed by CR 74 . . . .”
The unfortunate
City of Devondale’s appeal and that the failure to specifically name them as appellees in the notice of appeal was therefore a jurisdictional defect.
In the final analysis,
For example, in
When Judge Wingate held the traveler’s check provision contravened section 51 of the Kentucky Constitution, the Budget Director appealed. The Treasurer’s nonactive status in the litigation gave rise to an alleged defect in the notice of appeal which almost cost the Budget Director her right to obtain appellate review of a decision declaring unconstitutional an important provision in the biennial budget.
As noted, CR 73.03(1) provides that the “notice of appeal shall specify by name all appellants and all appellees (‘et al.’ and ‘etc.’ are not proper designation of parties) . . . .” 5
Implementing that rule, Official Form 22 directs that the notice of appeal shall state “[t]he name[s] of the appellee[s] against whom this appeal is taken . . . .” The Budget Director’s notice of appeal therefore accurately stated:
The name of the Appellee against whom this appeal is taken is American Express Travel Related Services Company, Inc., the plaintiff in this proceeding.
The Commonwealth of Kentucky, Kentucky Department of Treasury, Jonathan Miller, Treasurer, was also a defendant in this proceeding, but is not a party against whom this appeal is taken.
Contending that this choice of words divested the appellate courts of jurisdiction over the Treasurer – whom American Express contended was an indispensible party to the appeal under
In a 7-0 decision, the Supreme Court reversed. As counsel for the Budget Director, I will concede that the Supreme Court was correct when it noted that “the notice contained multiple imperfections” and was not “a model pleading.” However, the Court was also correct in holding that the notice was sufficient to invoke the jurisdiction of the Court of Appeals over both the Budget Director’s appeal and the Treasurer. Reiterating its adherence to “a rule of substantial compliance in regard to notices of appeal” and holding “that the principal objective of a pleading is to give fair notice to the opposing party,” the Court held that the identification of the Department of the Treasury in both the caption and body of the notice of appeal “gave fair notice to American Express that the Budget Director was naming the Department as a party to the appeal, and thus under the
Unfortunately, however, the opinion in
Devondale
Indeed, after the decision in
In its very recent decision in
In view of these decisions, it is also worth reconsidering whether dissenting Justice Leibson was correct when he argued that
In
The City of Devondale argued that both the City of Louisville and Jefferson County had actual notice of the appeal because they were timely served copies of the notice of appeal and that the notice therefore substantially complied with CR 73.01 pursuant to CR 73.02(2), the rule of substantial compliance with appellate rules.
The Supreme Court adopted the Court of Appeals’ rationale that the City of Louisville and Jefferson County were indispensible parties to Devondale’s appeal because they were parties to a final judgment declaring Devondale’s annexation void and Devondale could not obtain a reversal of the judgment if Louisville and Jefferson County were not parties to Devondale’s appeal. Of course, all that begged the question whether the timely filed notice, served on counsel for those parties, substantially complied with CR 73.03 despite not expressly naming Louisville 8
and Jefferson County as appellees in the text of the notice.
The Supreme Court reasoned that a timely filed notice of appeal is essential to invoking the jurisdiction of the appellate court, which is why a timely notice of appeal is an exception to the rule of substantial compliance:
The plain language of CR 73 supports this view. CR 73.02(2) singles out the timely filing of a notice of appeal as being different from other rules relating to appeals and mandates that “[t]he failure . . . to file notice of appeal within the time specified in this Rule . . . shall result in a dismissal of the appeal.”
The dissent specifically disagreed with the majority’s interpretation of that portion of CR 73.02(2). Justice Leibson correctly stated that “[n]ew CR 73.02(2) specifies that the only defect in the notice of appeal which is automatically fatal to the appeal is ‘the failure of a party to file notice of appeal within the time specified.’”
Justice Leibson concluded that the decision in
As Justice Leibson carefully wrote in
Notices of appeal merely invoke the court’s jurisdiction. And the timely filing of those jurisdiction-invoking pleadings are exceptions to the doctrine of substantial compliance as a result of the policy decision made by the Supreme Court when promulgating CR 73.02(2), not because they are “jurisdictional”:
Contrary to the Court of Appeals’ opinion, filing a notice of appeal in compliance with CR 73.02 is not a matter of jurisdiction, but only of procedure. Our rule does not
To be precise, losing litigants are constitutionally vested with a right of appeal and appellate courts are constitutionally vested with jurisdiction. Strictly speaking, the notice of appeal is
Thus, in
The battle between strict compliance with the rules of appellate procedure to avoid dismissal . . . and substantial compliance . . . is now over.
The objective of the doctrine of substantial compliance is “deciding cases on the merits, and seeing to it that litigants do not needlessly suffer the loss of their constitutional right to appeal.”
Unlike the untimely notice of appeal in
timely filed – and having been served upon counsel for the parties whose names were negligently omitted from the notice of appeal by counsel for the appellants – the policy of “seeing to it that litigants do not needlessly suffer the loss of their constitutional right to appeal”
Browning
In sum, the court should simply amend CR 73.02 to reinstate the pre-1976 version of that rule – which is also the rule in federal and other state courts – by deleting the requirement that all appellees be named in the notice of appeal. That would eliminate a trap for the unwary that serves no useful substantive purpose in appellate practice and procedure. 11
The rules should expressly prescribe the procedure for obtaining review by the Supreme Court of a stay pending appeal issued by the Court of Appeals pursuant to CR 76.33.
Unlike the federal appellate rule
Otherwise, however, the Kentucky rules mention “a stay pending appeal” only in CR 75.10, the rule pertaining to the record for motions filed before the full record on appeal has been transmitted to the Clerk of the Court of Appeals. Of course, CR 76.33 authorizes “intermediate relief” when an appeal is pending, and “intermediate relief” includes a stay pending appeal.
original action pursuant to CR 76.36,
It is axiomatic that one need not supersede a judgment as a prerequisite to appealing from the judgment.
In
The Supreme Court first held that the supersedeas bond could not effect a stay of an injunction pending appeal:
[T]he provisions of CR 62.03 and CR 73.04 for effecting a stay of judgment by the execution of a supersedeas bond do not apply to a judgment granting or denying injunctive relief. . . . CR 65.08 is exclusive authority under which a stay may be had after a final judgment granting or denying injunctive relief has been appealed.53 13
The Court then explained that CR 76.33 is the rule authorizing an appellate court to stay a non-money judgment:
CR 62.04, which provides that a trial court may stay the effect of a partial judgment made final under CR 54.02, does not authorize an appellate court to do anything. The authority of an appellate court to grant intermediate relief is derived from CR 65 and CR 76.33.54
CR 76.33 was part of the new rules promulgated after passage of the Judicial Article, effective January 1, 1978. Prior to the promulgation of CR 76.33, a motion “for a stay pending appeal” was included in CR 75.10 (as it is today) and referenced in appellate Rule 1.170
In
Green Valley sought review by the Supreme Court pursuant to both CR 76.33 and CR 65.09, and also filed an original action pursuant to CR 76.36. The Supreme Court held that only CR 76.36 could be used to obtain review by the Supreme Court of the stay pending appeal issued by the Court of Appeals pursuant to CR 76.33.
First, the Supreme Court held that a stay issued pursuant to CR 76.33 is not an order granting injunctive relief that may be reviewed pursuant to CR 65.09: 14
Although the effect of the Court of Appeals’ action in granting a stay of further administrative procedures herein may have been somewhat akin to the granting of injunctive relief, this Court is without jurisdiction to grant relief pursuant to CR 65.09. The specific mandate of the rule states that such action arises only when a party is affected by an order of the Court of Appeals in a proceeding under CR 65.07, CR 65.08 or in a habeas corpus proceeding. No such injunctive relief pursuant to CR 65.07 or CR 65.08 or proceeding for a writ of habeas corpus having been so filed, movant’s motion for interlocutory relief pursuant to CR 65.09 is denied . . . .
The Supreme Court also held that the stay issued by the Court of Appeals was an interlocutory order, not a final judgment, and therefore dismissed Green Valley’s purportedly matter-of-right appeal. The Court had previously denied Green Valley’s motion for relief under CR 76.33 and therefore did not expressly decide whether CR 76.33 was also unavailable, but that would seem to be a logical extrapolation from the dismissal of the matter-of-right appeal because CR 76.33 seems to contemplate a motion filed in the court in which the appeal is pending. The literal language of CR 76.33 does not encompass Supreme Court review of a decision by the Court of Appeals to issue a stay under that rule.
Third, the Supreme Court held that it could and would review the stay issued by the Court of Appeals under the auspices of the original action filed pursuant to CR 76.36. The inevitable consequence of that holding, however, was to apply the extremely narrow standards for obtaining a writ of prohibition, rather than to decide whether the Court of Appeals had correctly applied the standards for issuing a stay pending appeal. Noting the obvious point that “the Court of Appeals was proceeding within its jurisdiction,” the Supreme Court held that “Green Valley has the burden to prove it is without an adequate remedy by way of appeal and that it will suffer great and irreparable injury without extraordinary relief.”
In addition to applying the standard for a writ of prohibition, rather than determining whether the Court of Appeals had abused its discretion, the decision that a litigant may use CR 15
76.36 to obtain review by the Supreme Court of a stay issued by the Court of Appeals makes such review a matter-of-right, in contrast to CR 65.09, which provides that in a case involving the grant or denial of injunctive relief, “[t]he decision [by the Supreme Court] whether to review such order [by the Court of Appeals] shall be discretionary with the Supreme Court.”
As noted above, the holding in
The lessor filed an original action in the Supreme Court under CR 76.36 and a motion for intermediate relief under CR 76.36(4), as well as a matter-of-right appeal under CR 76.36(7) and a motion under CR 65.09. The Supreme Court denied the motions filed under CR 76.36(4) and CR 65.09, respectively, but held that the “petition for a writ of prohibition filed under CR 76.36″ was an appropriate vehicle for review by the Supreme Court of “the
In the Supreme Court’s view, the dispositive question was “whether an original action is
The argument could be raised that because CR 76.36(7)(a) allows for a direct, matter of right appeal of decisions in original actions at the Court of Appeals to this Court, then allowing a separate original action in this Court is unnecessary or somehow contrary to the spirit of CR 76.36(7)(a). . . . While that is certainly the appropriate remedy once the Court of Appeals has finally ruled on a petition for a writ of prohibition, what could be done if the Court of Appeals 16
somehow acted outside its jurisdiction while an original action was still pending before that court? The obvious and appropriate remedy in such a case would be a writ of prohibition from this Court, but such a writ can only be obtained by an
Proceeding to the merits of the motion for intermediate relief, the Court cited
As discussed above, CR 76.36(1) allows that an original action may be brought in ”
Read literally, that portion of the opinion would overrule
original actions, then an order issued by the Court of Appeals pursuant to CR 76.33 would no longer be reviewable by the Supreme Court via an original action – which
However, the statement in
The practice in the Supreme Court of the United States is that a single Justice may decide a motion to dissolve a stay issued by a federal circuit court of appeals despite the fact that no statute comparable to 28 U.S.C. § 1253 (expressly providing for Supreme Court review on preliminary injunctions) expressly authorizes dissolution of a stay. As Justice Rehnquist wrote in the course of reviewing such a stay: 18
[A] Circuit Justice has jurisdiction to vacate a stay where it appears that the rights of the parties to a case pending in the court of appeals, which case could and very likely would be reviewed here upon final disposition in the court of appeals, may be seriously and irreparably injured by the stay, and the Circuit Justice is of the opinion that the court of appeals is demonstrably wrong in its application of accepted standards in deciding to issue the stay. A narrower rule would leave the party without any practicable remedy for an interlocutory order of a court of appeals which was
That practice should be incorporated into a new Kentucky rule.
The model is CR 65.09 which provides that further review in a case involving injunctive relief is discretionary with the Supreme Court and the standard for review is appropriately very high:
The decision whether to review such order shall be discretionary with the Supreme Court. Such a motion will be entertained only for extraordinary cause shown in the motion.
CR 65.09 is also analogous because the standards for issuing a stay pending appeal are very similar to the standards for issuing a temporary injunction,
In addition to incorporating a new rule patterned after Rule 8 of the Federal Rules of Appellate Procedure, including review by the Supreme Court patterned after CR 65.09, the committee should consider incorporating into the body of the rule the four-prong standard for issuing a stay of a nonmonetary judgment pending appeal because the caselaw in Kentucky is unclear as to the standard and that lack of clarity is exacerbated by the Supreme Court’s decision 19
that a stay issued by the Court of Appeals is reviewed under the standard for obtaining a writ of prohibition, not the standard for reviewing the issuance of an injunction. Because the likelihood of success prong for a stay pending appeal is not merely presenting a substantial question, but having a strong likelihood of success on the merits of the appeal, it would be useful to the bench and bar to spell out the test in the rule rather than promulgating the rule and announcing the test months or even years later in an opinion construing the rule.
A new rule delineating the procedure for obtaining a stay pending appeal should not only enunciate the criteria to be applied by the Court of Appeals when deciding whether to grant the stay, but should also provide that further review by the Supreme Court would be a discretionary decision by the Supreme Court, consistent with the approach reflected in CR 65.09 and the
Appeals to the Supreme Court in original actions should be discretionary rather than matter-of-right.
The Supreme Court should also reconsider CR 76.36(7), which provides for a matter-of-right appeal to the Supreme Court in original actions commenced in the Court of Appeals. While the Court held in
A petition for relief in the nature of mandamus or prohibition is actually a form of interlocutory appellate review of a decision of the trial court, similar to appellate review of an 20
interlocutory decision granting or denying injunctive relief. Indeed, the source of the appellate courts’ jurisdiction to grant writs of mandamus or prohibition is the All Writs Clause in the Constitution, which empowers the Court of Appeals to issue a writ in aid of its future appellate jurisdiction over the case from which the petition arises. And a requirement for such relief (if the trial court has jurisdiction) is that subsequent appellate review would be inadequate, justifying interlocutory appellate review.
In
In the simplest of terms, both courts
Section 115 guarantees one appeal as a matter of right “in all cases . . .” A petition for a writ is not truly a separate “case,” but is an appellate proceeding seeking interlocutory appellate relief from an order issued in a circuit court “case.” Section 115 therefore does not require the Supreme Court to hear an appeal in every “original action” commenced in the Court of Appeals. Moreover, section 110(2)(b) limits the Supreme Court’s mandatory jurisdiction to certain appeals 21
in criminal cases and expressly provides that “[i]n all other cases, criminal and civil, the Supreme Court shall exercise appellate jurisdiction as provided by its rules.” Section 110(2)(b) warrants interpreting section 115 as permitting the Supreme Court to decide in its discretion whether to review decisions by the Court of Appeals granting or denying petitions for writs, especially since
The Court recognized the reality that petitions for writs are interlocutory appellate review when it added subsection 8 to CR 76.36 in 1985, which states that the trial judge is a nominal party and that the adverse party in circuit court is the “real party in interest” in writ proceedings in the appellate courts. In
An original action in the Court of Appeals, such as this seeking a writ of mandamus or prohibition ordering a trial judge to grant or deny interlocutory relief
Recognizing this problem, in 1985 we amended the Civil Rules, CR 76.36(2) and (8), to provide that the “real party in interest” as well as the “party (judge) against whom relief is sought” can “file a response” to a petition seeking prohibition or mandamus against a trial judge. We define “real party in interest” in this Rule as “any party in the circuit court action from which the original action 22
arises who may be adversely affected by the relief sought pursuant to this Rule.” The real party in interest in the trial court is the person who will be adversely affected if the Petition is granted; he may respond and defend even though the trial judge does not. It is this party and not the trial judge who has an interest in perfecting the appeal when the writ of prohibition or mandamus is granted.
In federal appellate courts, the trial judge is prohibited from addressing the petition “unless invited or ordered to do so by the court of appeals.”
The misapprehension that the Court of Appeals is sitting as “a trial court” in “a separate civil action” arises, in part, from the terminology “original action.”
“applies only to actions . . . within the original jurisdiction of the Supreme Court under Article IV, Section 2 of the Ohio Constitution.”
In sum, the Supreme Court should overrule
Gaps in the rules applicable to appeals from district court to circuit court create traps for the unwary.
Even experienced appellate practitioners rarely handle appeals from district court. Those proceedings are more often handled by the district court practitioners who are familiar with the substantive law applicable to matters within the jurisdiction of district courts. It might therefore surprise even seasoned appellate advocates to learn that the ordinary civil rules govern much of appellate practice in circuit court, rather than the rules of appellate procedure found in CR 73 through CR 76.
For example, in a recent, unpublished decision, the Court of Appeals dismissed a matter-of-right appeal from the denial of relief in an original action in the circuit court, holding that a motion under CR 65.07 was the exclusive avenue for appealing the circuit court’s denial of relief.
filed in circuit court. The next day, counsel refiled their petition in circuit court, seeking the exact same relief they had sought in the Court of Appeals, namely, an order prohibiting the district judge from taking certain action. But since they were now in circuit court, the lawyers slightly modified the wording of the petition to refer to a restraining order, citing CR 65. When relief was denied by the circuit court, an appeal was taken as a matter-of-right pursuant to CR 76.36(7). But the Court of Appeals held that CR 65.07 was the exclusive avenue for obtaining appellate review of the circuit court’s decision, and that the time had expired for filing such a motion. The Supreme Court denied discretionary review.
In that same case, the Court of Appeals dismissed as untimely a motion for discretionary review,
These rulings demonstrate the traps for the unwary created by gaps in the civil rules resulting from the failure of the rules to expressly state how and when they apply when the appeal is in circuit court rather than the Court of Appeals. The new rules of appellate procedure being drafted by Justice Abramson’s committee could remedy these problems.
CR 72 – entitled “Appeals from district courts” – relates to matter-of-right appeals from district court to circuit court. But Rule 72 covers only the manner of perfecting such an appeal. CR 72 stops there, and is silent as to what occurs after the counterstatement of appeal is filed by the appellee. Appellate counsel must look elsewhere in the rules for guidance after that step in the appellate process. 25
Looking elsewhere is authorized by CR 73.01(1), which expressly provides that “Rules 73, 74, 75 and 76 apply to all appeals in civil actions except as otherwise provided in Rule 72 . . . .” The practitioner would assume that CR 73.01(1) was intended to subsume most, if not all, of the procedural rules set forth in CR 76. But the Court of Appeals and Supreme Court have held otherwise.
For example, in
Literally, CR 76.20(2)(a) provides that a “motion for discretionary review by the Court of Appeals of a circuit court judgment in a case appealed from the district court shall be filed within 30 days after the date on which the judgment of the circuit court was entered, subject to the provisions of Rule 77.04(2) and Criminal Rule 12.06(2)”, which are the rules pertaining to the clerk making a notation in the record of the date the judgment was served upon counsel for the parties. In contrast CR 76.20(2)(b) expressly provides that the time for filing a “motion for discretionary review by the Supreme Court of a Court of Appeals decision” is suspended by “a timely petition [for rehearing] under Rule 76.32 . . . .” Likewise, CR 73.02(1)(e) literally provides that a Rule 59 motion suspends the time for filing a notice of appeal and does not 26
mention motions for discretionary review. The Court of Appeals therefore held in
But CR 76.20(2)(a) expressly incorporates CR 77.04(2) as the trigger date, and a “judgment” is not a judgment for purposes of that rule until any timely filed Rule 59 motion is denied. Accordingly, in
Moreover,
The practitioner could easily extrapolate from CR 73.01(1) that a petition for rehearing is the appropriate procedural vehicle. After all, “a petition for rehearing is a request by a party for an appellate court to modify or set aside its own judgment in an appeal.”
However, CR 76.32(1) literally permits a petition for rehearing to be filed only as to “an opinion of the Supreme Court or Court of Appeals . . . .” The Court of Appeals therefore held in
Whether one agrees or disagrees with the Court of Appeals decision in
The Constitution vests jurisdiction to issue writs only in the Supreme Court and the Court of Appeals, expressly stating that each “shall have the power to issue all writs necessary in aid of its appellate jurisdiction . . . .”
writs of mandamus or prohibition against inferior courts.
The circuit court is correctly described in the Constitution as “a trial court of general jurisdiction . . . .”
Amicus curiae briefs in support of motions for discretionary review should be allowed.
Under a prevailing (albeit unwritten) practice, the Kentucky Supreme Court Clerk will not accept for filing motions for leave to file an amicus curiae brief in support of a motion for discretionary review. While CR 76.12(7) provides for the filing of a brief for an amicus curiae if leave of court is granted, it is a subsection of the rule for the parties’ briefs on the merits and it therefore could logically be interpreted as being limited to amicus curiae briefs on the merits of an appeal. Moreover, CR 76.20, which prescribes the procedure for motions for discretionary review, makes no reference to filings by amici in support of (or opposition to) a grant of discretionary review. 29
Not surprisingly, then, when an amicus files a motion for leave to file a brief in support of a pending motion for discretionary review, the Clerk refuses to accept the motion for leave and returns it as “an unauthorized filing.” The Supreme Court should reconsider that unwritten policy.
While friend of court briefs on the merits are increasingly criticized as “friend of friend” briefs,
Discretionary review was denied.
Fortunately for Kentucky’s public utilities, the subsequent decision on the merits by the Court of Appeals effectively overruled the stay and reestablished the rule that public projects 30
should not be delayed by dragging out eminent domain litigation.111
In the United States Supreme Court, amicus briefs in support of petitions for certiorari are a staple for Supreme Court practitioners. The amicus briefs are often written by Supreme Court advocates with considerably more experience with certiorari practice than counsel for the parties, and amicus filings are therefore deemed useful by the Justices in deciding whether or not to grant certiorari. My partners in Indiana and Ohio tell me the practice is equally frequent in those states’ Supreme Courts. One would think that the Justices of the Kentucky Supreme Court would likewise benefit by a rule that would permit filings in support of motions for discretionary review.
The rules of the U.S. Supreme Court expressly authorize
From the standpoint of drafting new rules, a stand-alone rule governing all amicus filings – both at the discretionary review stage and the merits stage – would make the most sense to practitioners, rather than adding a subsection to CR 76.20 relating to motions for discretionary review and retaining CR 76.12(7) as to briefs on the merits. The Supreme Court could repeal CR 76.12(7) and promulgate a new, separate rule applicable to amicus filings in support of motions for discretionary review and amicus briefs on the merits of appeals. Such a rule could be patterned after U.S. Supreme Court Rule 37. 31
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4 Fed. R. App. P. 3(c)(1)(A).
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10 545 S.W.2d 296 (Ky. App. 1976).
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Conclusion
These five issues of Kentucky appellate practice and procedure are surely not the only challenges facing Justice Abramson’s committee and the Court. They are five vexing issues that this appellate advocate has encountered over the years. Hopefully, as they write the much needed rules of appellate procedure, the committee and the Court will consider: (1) amending CR 73.02 to the pre-1976 version of that rule, eliminating the requirement of naming every appellee in the notice of appeal; (2) adopting a new rule delineating the procedure and criteria for obtaining a stay pending appeal, and providing for discretionary review of stays by the Supreme Court; (3) amending CR 76.36(7) to provide that further review by the Supreme Court in original actions is discretionary; (4) encompassing appeals from district court in the rules of appellate procedure while vesting in the Court of Appeals, rather than circuit courts, jurisdiction of original actions involving district judges; and (5) permitting amicus curiae filings in support of motions for discretionary review. 32
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19 795 S.W.2d 954.
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21 308 S.W.3d at 718.
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24 356 S.W.3d 134 (Ky. App. 2011).
25 2013 WL 646201, No. 2011-SC-000459-DG (Ky. Feb. 21, 2013).
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27 795 S.W.2d at 955.
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34 885 S.W.2d 944 (Ky. 1994).
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36 885 S.W.2d at 950 (citations omitted) (emphasis added).
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40 122 S.W.3d 585 (Ky. 2003).
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43 2013 WL 646201 at *3.
44 Fed. R. App. P. 8.
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52 642 S.W.2d at 899.
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59 152 S.W.3d 230 (Ky. 2004).
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71 593 S.W.2d 514 (Ky. 1980).
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84 CR 76.36(1).
85 Rules of Practice in the Ohio Supreme Court X § 1(A).
86 Fed. R. App. P. 21(a)(1).
87 Fed. R. App. P. 21(c).
88 At present, circuit courts entertain petitions seeking mandamus or prohibition against a district judge. This article argues (in the next section) that all such petitions should be filed in the Court of Appeals, not in circuit court. However, if that recommended change is not adopted, then the matter of right appeal from circuit court to the Court of Appeals would need to be considered. For the same reasons that the author favors vesting jurisdiction of petitions from district court in the Court of Appeals, matter of right appeals from circuit court decisions in original actions could remain appropriate. The better resolution of that policy question is to place the jurisdiction in the Court of Appeals.
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90 295 S.W.3d 136 (Ky. App. 2009).
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95 892 S.W.2d 586 (Ky. 1995).
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Chris Tobe, Advocate for Pension Reform in Kentucky will talk Pensions with Mandy WHAS84 radio Thursday March 14th 9:30-10 AM

Wednesday, March 13th, 2013

Chris Tobe, Advocate for Pension Reform in Kentucky will talk Pensions with Mandy WHAS84 radio Thursday March 14th 9:30-10 AM

http://www.whas.com/pages/MandyConnell.html

For more details you can go to http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2212510 and download my 7 pg. whitepaper on the Impact on Louisville of the Pension Crisis

The Ky. Supreme Court Is Reviewing the Boone County Summary Judgment – See the troubling issues if they overrule the Ct. of Appeals

Tuesday, March 12th, 2013

The Ky. Supreme Court Is Reviewing the Boone County Summary Judgment
In Angela Ford’s Fen Phen action. See the troubling issues they face if they overule the Court of Appeals.

Ford is reported to have seized some $42 million dollars in assets of GMC and distributing them, including $12 million in attorney fees. She has resisted for over two years the efforts of the U.S. Attorney to obtain a dispostion accounting of who received these fees and how much they received. The Sup. Ct. has apparently not sought information about how much money Ford has collected and how much was paid to her lawyers hired to seize assets. When will a proper court ask these questions and force answers by Angela Ford.

The reputation of those attorneys who assisted Ford in seizing $42 million dollars on a judgment that has been overruled is in question. The innocent will be best protected by a full release of information…not by more years of silence. The KBA has apparently ignored Ford’s handling of $42 milolin in seized funds….we ask WHY!!!! Would the KBA and Bar Counsel ignore such acts by a small law firm from Pikeville or Paducah or Carrollton? We doubt it….but Angela Ford seems to be immune from KBA review.

The Court of appeals in Cunningham v. Abbot reversed the Boone County ruling and cited the following legal reasons for their reversal. If the Supreme Court overrules Abbot and the Ct. of Appeals it appears the court would be creating a precedent for one Circuit Court to overrule another Circuit Court. LawReader’s head is swimming at such a potential result.

CUNNINGHAM V. ABBOTT (KY. APP., 2011) FEBRUARY 4, 2011

“GALLION, MILLS, CUNNINGSHAM’s first argument is that Abbott’s filing of an independent action is an impermissible collateral attack on valid orders entered by Bamberger in the Guard action even though they have not specified any such order that has been attacked.

They contend that to garner review of GMC’s handling of the Fen-Phen settlement, Abbott should have moved to alter, amend or vacate the judgment in the Guard action under CR 59.05; moved to set aside the Guard judgment under CR 60.02; appealed the Guard judgment under CR 73; or entered an appearance in the Guard action through separate counsel under CR 23.03(2)(c).

Having taken none of these steps, GMC argues the filing of an independent action was forbidden because the Boone Circuit Court had both personal and subject matter jurisdiction over the Guard action and therefore its judgment and orders are presumed valid absent clear and convincing evidence to the contrary. Burchell v. Hammons, 289 S.W.2d 737, 739 (Ky. 1956); Mitchell Mill Remnant Corp. v. Long, 3 S.W.2d 639 (Ky. 1928); Luckett v. Gwathmey, 16 Ky. 121 (1811).

Finally, they argue it is not the role of one circuit court to review the orders of another circuit court. Lowe v. Taylor, 29 S.W.2d 598, 599 (Ky. App. 1930).”

See March Oral Arguments from Ky. Supreme Court….including argument on expungements – MARCH 13 AND 14

Tuesday, March 12th, 2013

See March Oral Arguments from Ky. Supreme Court….including argument on expungements -MARCH 13 AND 14TH.

Go to:

http://apps.courts.ky.gov/Supreme/CALENDAR/SCOMAR13.pdf

If the foregoing link is not hot…copy and paste it into your browser.

LAW SCHOOLS SETTING UP NON-PROFIT LAW FIRMS TO PLACE GRADUATES

Friday, March 8th, 2013

By ETHAN BRONNER Published: March 7, 2013
TEMPE, Ariz. — When Douglas J. Sylvester, dean of the law school at Arizona State University, was visiting the Mayo Clinic in Minnesota a couple of years ago he mentioned the shifting job market for his students — far fewer offers and a new demand for graduates already able to draft documents and interact with clients.
The Mayo dean responded that his medical students and graduates gained clinical experience in hospital rounds closely supervised by attending physicians.
“I realized that was what we needed,” Mr. Sylvester recalled. “A teaching hospital for law school graduates.”
The result is a nonprofit law firm that Arizona State is setting up this summer for some of its graduates. Over the next few years, 30 graduates will work under seasoned lawyers and be paid for a wide range of services provided at relatively low cost to the people of Phoenix.
The plan is one of a dozen efforts across the country to address two acute — and seemingly contradictory — problems: heavily indebted law graduates with no clients and a vast number of Americans unable to afford a lawyer.
This paradox, fed by the growth of Internet-based legal research and services, is at the heart of a crisis looming over the legal profession after decades of relentless growth and accumulated wealth. It is evident in the sharp drop in law school applications and the increasing numbers of Americans showing up in court without a lawyer.
“It’s a perfect storm,” said Stacy Caplow, a professor at Brooklyn Law School who focuses on clinical education. “The longstanding concerns over access to justice for most Americans and a lack of skills among law graduates are now combined with the problems faced by all law schools. It’s creating conditions for change.”
A pilot program at the University of California Hastings College of the Law will place some third-year students into offices like the public defender’s for full-time training on the understanding that the next year those students will be employed there for small salaries. The program is called Lawyers for America, a conscious echo of Teach for America, in which high-achieving college graduates work in low-income neighborhood schools. The hope, said Prof. Marsha Cohen of Hastings, is that other law schools will follow the model. Professor Caplow of Brooklyn Law said her school planned to be one of the first.
A dozen law schools, including City University of New York and Thomas Jefferson School of Law in San Diego, have set up incubators to train future solo practitioners in their first year out of school, offering office space and mentors. Pace Law School in White Plains, opened what it calls a community law practice last fall with four graduates serving the region.
“You can’t just hang out a shingle and expect clients to show up in droves,” said Jennifer C. Friedman, executive director of the Pace Community Law Practice. “We want to provide our graduates with the tools of success while serving low- and moderate-income clients.”
And the incoming president of the American Bar Association, James R. Silkenat, of New York, said his top priority next fall would be to establish a “legal job corps” to match lawyers who need jobs with clients who need legal assistance.
“We have these two issues running in opposite directions,” Mr. Silkenat said in an interview. “There are unmet legal needs because of money and geography that seem to be growing, and the question of how to make use of unemployed recent graduates.”
All law schools, including the elites, are increasing skills training by adding clinics and externships. Starting this fall, the University of Virginia will allow students to earn a semester of credit while working full time for nonprofit or government employers anywhere in the world. Law students at the University of Pennsylvania, starting in September, can earn a certificate of management from its Wharton School to improve management skills and accounting literacy. Many of the schools and plans mention medical education as their model.
The Arizona State approach, called the Alumni Law Group, appears to be the most ambitious because of the number of lawyers it will employ (30), its projected cost (a commercial firm of comparable size would cost $5 million a year to run, according to the school’s projections) and its hope to be self-sufficient in a couple of years by charging for its services and gathering donations.
The plan is to have four to five groups of lawyers each overseen by a full-time, salaried supervising lawyer serving a range of clients. The firm will do legal work for other parts of the university, including its high-tech innovation center. The aim is to charge $125 an hour in an area where the going hourly rate is $250. The school also says it wants to reach out to veterans, Hispanics and American Indians whose legal needs are not well met.
Other changes may help the program along. Arizona has just become the first state to allow law students to take the bar exam in their third year rather than after graduation. The school has announced the creation of the North American Law Degree, a three-year J.D. aimed at licensure in both Canada and the United States. Dean Sylvester, who is Canadian, said a big need for lawyers in Canada remained as well as for cross-border practice. The number of Canadians applying to Arizona State for law studies has just risen, as a result.
Arizona’s plan, mooted at bar meetings and within law school circles, is producing envy — but also skepticism. Some see a naked attempt to improve the school’s ratings in U.S. News and World Report by increasing the percentage of its graduates who find work while doing little to address the access-to-justice problem.
Critics say that $125 an hour is too high to serve those in need and too low to break even. Others say that Phoenix, a city of intense growth and few law students, could support such an operation but that others could not and that local law firms would resent the competition.
“We charge $50 an hour, and I don’t take any pay,” said Dennis A. Gladwell, who runs a smaller firm at the University of Utah with a staff of five graduates started 16 months ago. “If you are going to charge $125, you are not going to serve an underserved population.” Mr. Gladwell, who retired as a partner from the big firm of Gibson Dunn & Crutcher, also said that despite having asked top local firms to send along cases they considered too small for themselves, none responded.
There are other obstacles. Teaching hospitals have a federal tax dispensation. For nonprofit law firms to qualify for an exemption, legislation is probably required. That seems unlikely at the moment. Arizona State is attaching its firm to its nonprofit alumni association to get around the problem for now.
Still, postgraduate training programs appear to be the way of the future for many of the nation’s 200 law schools. The law dean of Rutgers University just announced plans for a nonprofit law firm for some of his graduates.
“I would love to blink and wake up in 10 years and see where all this ends,” said Ms. Friedman of Pace Law School. “We know about 10 to 15 programs opening in the coming years. That means there are 30 more behind them. Every faculty is talking about this.”

Texas: Justice Seeks Inquiry Into Wrongful Convictions

Friday, March 8th, 2013

By THE ASSOCIATED PRESS Published: March 6, 2013 New York Times
Justice Wallace Jefferson of State Supreme Court called for a commission to investigate wrongful convictions, suggesting on Wednesday that faith in the legal system might be undermined given that Texas leads the nation in prisoners set free by DNA testing. Addressing the Legislature, the chief justice of Texas’ highest civil court said, “If innocent people are rotting in prison for crimes they did not commit, we certainly have not achieved justice for all.” He pointed to statistics showing that over the past 25 years, 117 Texans have been exonerated, 47 of them by DNA testing, the most nationwide.

Is a Physical Impact or Touching Required to Recover for Claims of Emotional Distress? by Nick Nighswander

Thursday, March 7th, 2013

Nicholas Nighswander on behalf of
Nicholas M Nighswander PLLC Attorney at Law

Is a Physical Impact or Touching Required to Recover for Claims of Emotional Distress?

Just before Christmas last month, the Kentucky Supreme Court in the case of Osborne vs. Keeney rendered a decision addressing this very issue. Kentucky law has always required some kind of physical contact to the Plaintiff to allow recovery for a claim that included damages for emotional distress. This article does not address the other issues in the case decided by the Kentucky Supreme Court.

Post traumatic stress disorder (PTSD) damages are now recognized and occur to persons who witness or are involved with horrific events. The result of which can cause serious and lifelong emotional problems. Such persons may now have a legal action for damages against a tortfeasor who causes the terrible event if this case becomes final.

Kentucky has been in the minority of other jurisdictions in still requiring an impact or touching to be able to bring a claim for emotional distress. Sufficient touching in the past to satisfy such a claim in Kentucky has been with the use of X-rays on the plaintiff. On the other hand in another case, sunlight rays have not satisfied the touching requirement in Kentucky.

The Kentucky Supreme Court in this case decided to have Kentucky join the majority of states that recognize claims for emotional distress suffered from traumatic events without the need of a physical impact or touching to support the claim. The Kentucky Supreme Court’s analysis of the law and the reasoning for the change starts on page 18 of the opinion. A major factor for the change is that medical science and treatment for such injuries have come along way in addressing such claims.

In Osborne vs. Keeney, the Court ruled that emotional distress plaintiffs must first satisfy the proof elements of a general negligence claim: 1) the defendant owed a duty of care to the plaintiff; 2) the defendant breached that duty of care to the plaintiff; 3) there was an injury to the plaintiff; and 4) legal causation between the defendant’s breach and the plaintiff’s injury. However, the emotional distress injury to the plaintiff is required to be severe or serious.

What are the facts in this case? In 2002, the Plaintiff Mrs. Osborne was sitting in her home watching television when an airplane took off from a nearby airport. After take off, the airplane lost engine power and crashed through the roof of her home destroying the home and its contents from the crash and subsequent fire. Mrs. Osborne ran out of her home at the time of the crash and did not suffer any physical injury. However, she saw the destruction to her home from the crash of the airplane and fire. Mrs. Osborne had suffered for some time prior to the crash from anxiety, insomnia and depression among other ailments. She was transported to the local hospital from the scene and was treated for shock. The treating doctor testified that the crash and destruction of her home exacerbated her conditions. For which, Mrs. Osborne was treated for an extended time after the crash.

Witnesses to horrific events or who are involved in the events but escape without any physical injuries but continue to suffer emotionally after the event, will now have a recourse for their injuries in a court of law in Kentucky if this case becomes final. This letter will keep you informed as to the finality of this case in future issues as it is an important legal development for persons who are victims of severe emotional distress.

This case is not yet final and should not be cited as a authority. A link to this recent Court Opinion follows:

http://opinions.kycourts.net/sc/2010-SC-000397-DG.pdf

Know your rights and stay within the law.

For more information about personal legal issues click on Read More

About Our Law Firm

Nicholas M Nighswander PLLC Attorney at Law was established to help clients with their personal legal problems. We do not represent big businesses and corporations. Your legal problem is our problem and we want to have a positive impact with you in doing the best to solve it.

Nicholas M Nighswander PLLC Attorney at Law
(859) 746-1259

e-mail address: nicklaw@fuse.net

Public Record of Formal Proceedings In re the matter of: Timothy A. Langford, Circuit Judge, 1st Judicial Circuit

Thursday, March 7th, 2013

LOUISVILLE, Ky., March 7, 2013 –

As provided in SCR 4.130, the Judicial Conduct Commission makes public the record of formal proceedings In re the matter of: Timothy A. Langford.

To access the record of formal proceedings, click this link: http://courts.ky.gov/commissionscommittees/JCC/Pages/publicinformation.aspx Select the document under Public Actions on the right side of the web page.

Judicial Conduct Commission

The mission of the Kentucky Judicial Conduct Commission is to protect the public, to encourage judges, commissioners and candidates for judicial office to maintain high standards of conduct, and to promote public confidence in the integrity, independence, competence, and impartiality of the judiciary.

The Commission accomplishes this mission through its investigation of complaints of judicial misconduct, wrongdoing or disability. In cases where judges, commissioners and candidates for judicial office are found to have engaged in misconduct or to be incapacitated, the Kentucky Constitution authorizes the Commission to take appropriate disciplinary action, including issuing admonitions, reprimands, censures, suspensions, or removal from office.

LAWREADER HAS READ THE DEFENSIVE PLEADING OF JUDGE LANGFORD, AND WHILE THIS IS NOT CONCLUSIVE , THE JUDGE MAKES A COMPELLING DEFENSE IN HIS BEHALF. The allegations seems to be that he spoke to a grandmother about two minor boys getting the oppotunity to attend an easter egg party. This is hardly stuff upon which serious sanctions would usually be found.!!!

COAKY Decision Distinguishes Verification From Certification, Upholds Dismissal of Unemployment Action

Thursday, March 7th, 2013

By David Kramer | dkramer@dbllaw.com

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In a recent case, Taylor v. Kentucky Unemployment Insurance Commission, 382 S.W.3d 826, 833 (Ky. 2012), the Kentucky Court of Appeals noted the distinction between certification and verification for purposes of a civil action challenging denial of an unemployment claim. The lawyer’s failure to have his signature verified (i.e., notarized) resulted in dismissal of the action by the circuit court. The dismissal was upheld by the Court of Appeals.

The Court held that a lawyer’s unnotarized signature that constitutes certification under Rule 11 is not equivalent to verification. Verification is defined by Black’s Law Dictionary as “a formal declaration made in the presence of an authorized officer, such as a notary public, by which one swears to the truth of statements in the document.” Consequently, “[w]hile the signature upon verification may suffice as a certification, the reverse is not true.” Since the statute governing judicial review by the circuit court of an Unemployment Commission decision required filing and verification within 20 days of the Commission’s decision, the lack of verification was a jurisdictional defect and fatal to the claim. The Court also held that the lawyer’s certification did not amount to substantial compliance with the verification requirement.

Needless to say, lawyers (and self-represented litigants) should take care to see that legal documents requiring verification are properly executed.

Note: The foregoing post includes commentary reprinted from the forthcoming 2013 supplement to Rules of Civil Procedure Annotated, 6th ed. (Vols. 6 & 7, Kentucky Practice Series), by David V. Kramer, with permission of the author and publisher. Copyright (c) 2013 Thomson Reuters. For more information about this publication please visit http://store.westlaw.com/rules-of-civil-procedure-annotated-6th-vols-6-7-kentucky/130503/11774808/productdetail.

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SUPREME COURT JUSTICE SCALIA SHOULD TAKE A CUE FROM POPE BENEDICT XVI

Saturday, March 2nd, 2013

By Ana Garcia-Ashley Huffington Post
Posted: 03/01/2013
When you are not serving the people, it may be time to step aside. And not serving the interests of the people is exactly what Supreme Court Justice Antonin Scalia did Wednesday when he called a vital protection, a “perpetuation of racial entitlement.” As a woman of color, leading an organization that fights for social justice every day, I was aghast.
After all, Scalia is speaking about the Voting Rights Act (VRA) which dictates that certain states and counties with a record of racial discrimination receive permission from the U.S. Department of Justice (DOJ) before they can change their election laws. We all know our country’s civil rights history so I say this is a good law to have on the books for it promises to keep the democratic process honest and open.
At the root of it, what was Scalia trying to say, that the courts don’t have jurisdiction over state’s rights, that Congress can’t be trusted?
It may be time for Scalia to brush up on the Civil Rights movement and read some news articles on the recent gerrymandering actions across the country that occurred right before the 2012 presidential election. As someone who is in the business of protecting people’s civil rights, I say ‘hands off’ the VRA. This law works and it works well.