Archive for February, 2008

What’s Happening in Prisons? Crime rates flat while prisons bulge.

Friday, February 29th, 2008

By DAVID CRARY,  AP  2008-02-28 Nation News
 NEW YORK – For the first time in U.S. history, more than one of every 100 adults is in jail or prison, according to a new report documenting America’s rank as the world’s No. 1 incarcerator. It urges states to curtail corrections spending by placing fewer low-risk offenders behind bars. Go to:  What’s Happening in Prisons?

Is John McCain constitutionally ineligible to serve as president?

Thursday, February 28th, 2008

Feb. 29, 2008 by LawReader Senior Editor Stan Billingsley – A news story broke on Feb. 28th. which suggested that an issue has been raised about the eligibility of Sen. John McCain to serve as president due to the fact he was born outside of the United States. He was born Aug. 29, 1936 in the Panama Canal Zone. 

The U.S. Constitution at Article II, Section 1 says “No person except a natural born Citizen….shall be eligible to the Office of President.? 

This raises the question as to the meaning of “natural born? as used in Article II. 

For many years it has been the widely held belief that this term meant that future presidents had to actually have been born in the U.S. and that this provision was written to prevent Tories who had migrated from England from having undue prominence in our young country. This provision effectively prevented an English Nobleman from bringing their wealth and titles across the sea and to impose their royal influence on the United States. The McCain campaign quickly released a legal opinion by Theodore Olson a former Solicitor General in the Bush Administration.  Olson concluded that there was really no issue and that McCain could indeed serve as president. 

We have read Article II Sec. 1 of the Constitution and we do not see that issue is clearly resolved in McCain’s favor as does Solicitor Olson. We note that Congress passed a law in l790 declaring a child born of U.S. Citizens to be “natural born citizens.?  But here’s the rub, Congress is not entitled to interpret the U.S. Constitution.  Only the courts can interpret the Constitution. 

This issue is further complicated by an act of Congress in l952 while felt it necessary to declare that children born in the Panama Canal Zone (as was Sen. McCain) were U.S. citizens.  See the provision for yourself:

Article. II.  -  U.S. Constitution  Section 1.

No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.

  We note that Congress is without power to amend the meaning of the U.S. Constitution by a legislative act.  However, in l790 Congress wrote a definition for Art. II, Sec. 1 by defining a child born to U.S. citizens while absent from the U.S. to be “natural born.?  

That act, The Naturalization Act of 1790, held that children of citizens of the United States, that were born “beyond the sea?…?shall be considered as natural born citizens?.  If this act and subsequent acts by Congress are used as authority on this issue, then one must explain where Congress derived the power to interpret and make exceptions to constitutional provisions.  Mr. Olson did not explain that to us.

Whatever the term ”natural born” means, it no doubt does not include a person who is ”naturalized.

The Supreme Court has gone so far as to rule that even a subsequent amendment to the Constitution (the l4th. Amendment) could not provide a definition for a term in the original portion of the  Constitution. In Freytag v. CIR , 501 U.S. 868 (1991),  the Supreme Court declined to be bound by the language of the 25th Amendment in determining the meaning of ”Heads of Departments” in the appointments clause.            See also id., 917 (Justice Scalia concurring).


If the Fourteenth Amendment is relevant and the language is exclusive, that is, if it describes the only means by which persons can become citizens, then, anyone born outside the United States would have to be considered naturalized in order to be a citizen, and a child born abroad of American parents is to be considered ”naturalized” by being statutorily made a citizen at birth.?

   The issue remains that Congress is not empowered to amend the constitution by declaring a “naturalized citizen? to be the same as a “natural born citizen? particularly when the requirement for being a “natural born citizen? is a requirement for service in the Office of President.

This issue is not an open and shut case as Olson claims.  

We conclude that only the U.S. Supreme Court can put this issue to rest, by providing an opinion about the meaning of “natural born? as used in Art. II, Sec. 1.   

Since the Supreme Court has among its members so called “strict constructionists? and  Justice Scalia is committed to the doctrine of “original intent? , it will be fun to see how they deal with this issue.

Will they say that this concept of “natural born citizen? is outmoded and write some new constitutional law? And thereby make the constitution fit into the realities of the modern era, thereby giving McCain the benefit of the doubt?  Or would they live up to the original intent doctrine and strictly hold that the clause means actually born in the United States?


SEN. JOHN MCCAIN WAS BORN IN THE PANAMA CANAL ZONE as the child of a father who was a citizen and who was in the United States Navy.  The following provision of the U.S. Code declare that he is a citizen of the U.S. but does not declare him to be a “natural born citizen? per Art. II , Sec. 1 of the Constitution.

       Part I--Nationality at Birth and Collective Naturalization
Sec. 1403. Persons born in the Canal Zone or Republic of Panama
        on or after February 26, 1904
           (a) Any person born in the Canal Zone on or after February 26, 1904,
and whether before or after the effective date of this chapter, whose
father or mother or both at the time of the birth of such person was or
is a citizen of the United States, is declared to be a citizen of the
United States.
    (b) Any person born in the Republic of Panama on or after February
26, 1904, and whether before or after the effective date of this
chapter, whose father or mother or both at the time of the birth of such
person was or is a citizen of the United States employed by the
Government of the United States or by the Panama Railroad Company, or
its successor in title, is declared to be a citizen of the United
States. (June 27, 1952, ch. 477, title III, ch. 1, Sec. 303, 66 Stat. 236.)

See: FREYTAG v. COMMISSIONER, 501 U.S. 868 (1991)

JUSTICE BLACKMUN delivered the opinion of the Court.

The leading Framers of our Constitution viewed the principle of separation of powers as the central guarantee of a just government. James Madison put it this way: "No political truth is certainly of greater intrinsic value or is stamped with the authority of more enlightened patrons of liberty." The Federalist No. 47, p. 324 (J. Cooke ed. 1961). In this litigation, we must decide whether the authority that Congress has granted the Chief Judge of the United States Tax Court to appoint special trial judges transgresses our structure of separated powers. We answer that inquiry in the negative.

Despite Congress' authority to create offices and to provide for the method of appointment to those offices, "Congress' power . . . is inevitably bounded by the express language of Article II, cl. 2, and unless the method it provides comports with the latter, the holders of those offices will not be `Officers of the United States.'" Buckley, 424 U.S., at 138 -139 (discussing Congress' power under the Necessary and Proper Clause).

The judgment of the Court of Appeals is affirmed.

It is so ordered.


Thursday, February 28th, 2008

The next time it will be a day earlier (March 22) will be in the year 2285 (277 years from now).

 By LawReader CEO Gwen Billingsley – Feb. 28, 2008

  Easter this year is: Sunday, March 23, 2008, as you may know Easter is always the 1st Sunday after the 1st full moon after the Spring Equinox (which is March 20).
This dating of Easter is based on the lunar calendar that Hebrew people used to identify Passover which is why it moves around on our Roman calendar. Found out a couple of things you might be interested in!

 Based on the above Easter can actually be one day earlier, March 22nd.; but, that is pretty rare. This year is the earliest Easter any of us will ever see the rest of our lives! And only the most elderly of our population have ever seen it this early (95 years old or above!). And none of us have ever or will ever see it a day earlier!
 Here are the facts: The next time Easter will be this early (March 23) will be in the year 2228 (220 years from now).

The last time it was this early was in 1913 (so if you’re 95 or older you are the only ones that were around for that!). The next time it will be a day earlier (March 22) will be in the year 2285 (277 years from now). The last time it was on March 22 was in 1818. So no one alive today has or will ever see it any earlier than this year!

Articles on Civil False Claims Act, Chap. 9 , 403(b) Rules, and Revenue Ruling

Thursday, February 28th, 2008

CIVIL FALSE CLAIMS ACT: The Supreme Court Hears Argument On “Presentment” Requirement In The False Claims Act: Justices´ Questioning Probed Statutory Construction Issues As Well As Unusual Evidentiary Posture Of The Case

Fallout From The Credit Crunch May Squeeze Municipalities: Is It Time to Dust Off

Rarely-Used Chapter 9  (Chap. 9 provides procedures for bankruptcy of municipalities.)

First Comprehensive Rules For 403(b) Plans Issued In 43 Years
From Leonard Street & Deinard

 IRS Releases Revenue Ruling 2008-13 Adopting Position That Performance Based Compensation Is Non-Excludible Under 162(m) If Also Payable On Termination Without Cause, For Good Reason Or For Voluntary Retirement – But Prospective Application
From Fenwick & West LLP

United States: N.Y. Appellate Court Upholds Right Of Former Directors And Officers To Corporate Attorney-Client Privileged Documents In Defense Of Third Party Action

Thursday, February 28th, 2008

22 February 2008 

Article by Marvin G. Pickholz  

The New York Supreme Court, Appellate Division, First Department, on February 19, 2008, ruled that former officers and directors of a public corporation are entitled to access to memoranda containing legal advice to the corporation. The former directors and officers had asserted as defenses that they had acted in good faith and had relied upon advice of corporate counsel in engaging in the transactions that the government alleged were shams designed to bolster the corporation’s financial statements. 

In People of the State of New York v. Maurice Greenberg and Howard Smith, 401720/05 (Appellate Division, 1st Dept., Feb. 19, 2008), the New York Appellate Court seized the opportunity to declare that under New York law, former officers and directors have an “unequivocal right” to examine relevant documents and records from the time when they served the corporation: 

[T]he fact that Greenberg and Smith are no longer directors is not fatal to their motion to compel where their conduct while directors has been called into question and the inspection is needed to prepare their defense. 

Prior to the Appellate Court’s ruling, the trial court had denied the former CEO and former CFO of American International Group, Inc., access to the memoranda AIG received from its outside counsel containing legal advice. In reversing that ruling, the Appellate Court bypassed the issue of waiver of any privilege in view of AIG’s production of the documents to the SEC in an investigation. The Appellate Court also bypassed the opportunity to simply declare that since AIG is a Delaware corporation and the Delaware Chancery Court had made a similar ruling in June 2007, that ruling governed. 

What effect, if any, this court ruling and the earlier one from the Delaware Chancery Court will have on the decisions of corporations to settle governmental actions through agreements that do not resolve potential claims against officers and directors, or on corporations’ decisions to terminate such persons as part of settling government actions, remains to be seen. 

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances 


Sup. Ct. opens door a little, for evidence of job bias testimony

Tuesday, February 26th, 2008

Jeannie Shawl  Jurist Feb. 26, 2008    [JURIST] The US Supreme Court [official website; JURIST news archive] ruled Tuesday that testimony from workers who suffered job bias but were not parties to a federal age discrimination case “is neither per se admissible nor per se inadmissible” under the Federal Rules of Evidence. The decision came in Sprint/United Management Co. v. Mendelsohn [LII case backgrounder], where the US Court of Appeals for the Tenth Circuit ruled that Ellen Mendelsohn was deprived of a full opportunity [opinion, PDF] to present her Age Discrimination in Employment Act (ADEA) [text] case to the jury when the trial court excluded evidence from other former Sprint employees.

The Supreme Court vacated and remanded the appeals court decision, saying that the Tenth Circuit improperly concluded that the District Court applied a per se rule when deciding to exclude the evidence:
The question whether evidence of discrimination by other supervisors is relevant in an individual ADEA case is fact based and depends on many factors, including how closely related the evidence is to the plaintiff’s circumstances and theory of the case. Applying Rule 403 to determine if evidence is prejudicial also requires a fact intensive, context-specific inquiry. Because Rules 401 and 403 do not make such evidence per se admissible or per se inadmissible, and because the inquiry required by those Rules is within the province of the District Court in the first instance, we vacate the judgment of the Court of Appeals and remand the case with instructions to have the District Court clarify the basis for its evidentiary ruling under the applicable Rules.
Read the Court’s unanimous opinion [text] per Justice Thomas. SCOTUSblog has more.

Statement by Governor Beshear On Limited Expanded Gaming

Tuesday, February 26th, 2008

Feb. 26, 2008

“The entire leadership of the House of Representatives has on numerous occasions publicly and privately committed to me to work in a unified manner in passing a Constitutional Amendment allowing the issue of limited expanded gaming to be placed on the ballot.

Today’s actions, as well as inactions evidenced in the Elections and Constitutional Amendments Committee, very clearly demonstrate that House leadership remains deeply divided.

House Leadership should remember that more than 80% of Kentucky voters want the right to express themselves on this amendment.

Such a disagreement also seriously threatens the people’s right to decide for themselves whether or not they favor capturing the hundreds of millions of new dollars now being lost to other states.  These are dollars that could be available to us for education, health care and other vital services.

I publically call on them to get their act together quickly.  Only with their unified support will this amendment stand a chance of passage.?

“The entire leadership of the House of Representatives has on numerous occasions publicly and privately committed to me to work in a unified manner in passing a Constitutional Amendment allowing the issue of limited expanded gaming to be placed on the ballot.

Today’s actions, as well as inactions evidenced in the Elections and Constitutional Amendments Committee, very clearly demonstrate that House leadership remains deeply divided.

House Leadership should remember that more than 80% of Kentucky voters want the right to express themselves on this amendment.

Such a disagreement also seriously threatens the people’s right to decide for themselves whether or not they favor capturing the hundreds of millions of new dollars now being lost to other states.  These are dollars that could be available to us for education, health care and other vital services.

I publically call on them to get their act together quickly.  Only with their unified support will this amendment stand a chance of passage.?

Jud. Nominating Commission sends names of Cunningham, Kemper and Silverthorn to Governor for Jefferson District Court bench

Tuesday, February 26th, 2008

Tuesday, February 26, 2008   

FRANKFORT, Ky. – The Judicial Nominating Commission, led by Chief Justice Joseph E. Lambert, today announced the nominees to fill a vacant circuit judgeship for the 30th Judicial Circuit, Division 4, and a vacant district judgeship for the 30th Judicial District, Division 16, both of which consist of Jefferson County. 

The three attorneys named as nominees to fill the Circuit Court vacancy are Charles L. Cunningham Jr., William Douglas Kemper and Robert S. Silverthorn Jr., all of Louisville. 

The Circuit Court judgeship was left vacant by Judge Denise Clayton, who was appointed to the Court of Appeals to represent the 4th Appellate District, Division 2. 

The three attorneys named as nominees to fill the District Court vacancy are David P. Bowles, David Larry Holton II and Ann Bailey Smith, all of Louisville. 

The District Court judgeship was left vacant by Judge Audra Jean Eckerle, who was elected circuit judge for the 30th Circuit, Division 7, consisting of Jefferson County. 

Judicial Nominating Process
When a judicial vacancy occurs, the executive secretary of the Judicial Nominating Commission publishes a notice of vacancy in the judicial circuit or the judicial district affected. Attorneys can recommend someone or nominate themselves. The names of the applicants are not released. Once nominations occur, the individuals interested in the position return a questionnaire to the Office of the Chief Justice. Chief Justice Lambert then meets with the Judicial Nominating Commission to choose three nominees. Because the Kentucky Constitution requires that three names be submitted to the governor, in some cases the commission submits an attorney’s name even though the attorney did not apply. A letter naming the three nominees is sent to Gov. Steve Beshear for review. The governor has 60 days to appoint a replacement, and his office makes the announcement.

District Court
District Court is a court of limited jurisdiction which hears civil cases involving $4,000 or less, juvenile matters, city and county ordinances, misdemeanors and cases relating to domestic violence and abuse, guardianships for disabled people, traffic offenses, small claims, probate of wills and felony preliminary hearings. 

The Administrative Office of the Courts in Frankfort supports the activities of 4,000 Kentucky Court of Justice employees, including the elected offices of justices, judges and circuit court clerks

Competition between versions of Casino amend. delay passage in House Committee

Tuesday, February 26th, 2008

The second attempt to dislodge Gov. Beshear’s  referendum for Casino gambling failed to get out of committee Tuesday morning.  Further attempts will of course be tried shortly.

The first version of the referendum bill failed this morning in a committee meeting, with three yes votes, five no votes and three passes.
Rep. Rob Wilkey and Rep. Larry Clark, supported by three Republican votes, managed to get their preferred version before the committee.  That version is different than the version backed by House Speaker Jody Richards and the committee chairman, Rep. Darryl Owens, D-Louisville.
The two factions have been fighting over the first part of the proposed constitutional amendment. The version backed by Richards, Owens and others states:
“The General Assembly may enact laws permitting the operation of no more than nine casinos in the Commonwealth, of which no more than five may be established by horse racing tracks. “
The horse-industry-supported draft backed by Wilkey, Clark and others states:
“The General Assembly may enact laws permitting the operation of up to five casinos by horse racing Associations licensed by the Commonwealth as of January 1, 2008, and up to four other casinos. At no time shall the number of casinos authorized to operate in the Commonwealth exceed nine.?
There doesn’t seem to be much difference in the bills, but the horse industry believes the Richards version provides more guidance to the legislator to grant them five licenses, than does the Wilkey – Clark version.

Can state courts consider allegations that a drug company misled the Food and Drug Administration to win approval for a drug?

Tuesday, February 26th, 2008


The Supreme Court on Monday wrestled with a Michigan law that shields pharmaceutical companies from product liability lawsuits, unless they committed fraud to get their drug approved.

At issue is whether that fraud exception, which allows lawsuits to proceed, is preempted by federal regulation of pharmaceuticals.

Carter Phillips, a lawyer for Pfizer Inc. told the justices that it should be.

“There is a very unique federal interest” in the Food and Drug Administration’s regulation of pharmaceuticals, he said. “There is no legitimate state interest here.”

The dispute stems from several suits against Warner-Lambert over its diabetes drug Rezulin. Warner-Lambert is now owned by Pfizer.

Justices Stephen Breyer and Anthony Kennedy appeared to side with Pfizer, expressing broad skepticism about product liability suits against pharmaceutical companies. Breyer said they essentially second-guess the FDA’s decision to approve the drug.

Breyer’s remarks are significant because the court has already accepted a case for its next term, which begins in October, that takes on the broader issue of when drug companies can be held liable for products that have been approved by the FDA. That case is Wyeth v. Levine, 06-1249.

Other justices, however, were more sympathetic to allowing the suits to proceed. Justice John Paul Stevens dismissed concerns raised by the Bush administration that they would prove burdensome to the FDA as “theoretical.”

Monday’s case is one of several before the court that tests the limits of federal preemption of state regulations in areas such as drugs, medical devices and online tobacco sales.

The justices ruled last Wednesday in a case involving Medtronic Inc. that federal regulation of advanced medical devices preempts lawsuits in state courts against their manufacturers.

The case before the court Monday won’t provide as broad a shield against lawsuits as the Medtronic case, because it won’t apply to all pharmaceutical suits.

Instead, it focuses on a specific issue: whether state courts can consider allegations that a drug company misled the Food and Drug Administration to win approval for a drug.

In a 2001 ruling, the justices said that lawsuits alleging “fraud on the FDA” are preempted by federal law, because they interfere with the federal government’s regulation of pharmaceuticals.

The question in this case is whether that means the exception in Michigan’s law is also preempted.

The Food and Drug Administration ordered Rezulin off the market in March 2000 after it was linked to nearly 400 deaths and hundreds of cases of liver failure.

A group of 27 Michigan plaintiffs, including relatives of six Rezulin patients who died from liver damage, sued Warner-Lambert after the FDA ordered Rezulin off the market in 2000. The drug has been linked to nearly 400 deaths.

Allison Zieve, a lawyer for the plaintiffs, argued the Michigan law is different than the one struck down by the court in 2001, because proving fraud on the FDA “is just the first step to litigating” the product liability suit. Claims of fraud against the agency aren’t the focus of the case, she said.

The court’s decision could impact laws in seven other states that shield the pharmaceutical industry from liability, but provide some exceptions in the case of fraud.

Chief Justice John Roberts has recused himself from the case. He owns between $15,001 and $50,000 in Pfizer stock, according to his latest financial disclosure form.

The case is Warner-Lambert v. Kent, 06-1498. A decision is expected by July.

Justices To Review Auto Searches when driver has been arrested and moved from scene

Tuesday, February 26th, 2008

Feb. 26, 2008

In another development on Monday, the U.S. Supreme Court accepted an appeal from the State of Arizona on whether the police need a warrant to search a car after arresting the driver and any passengers and removing them from the car’s vicinity. 

Over the years, the Supreme Court has ruled on so many permutations of automobile searches that it might have seemed safe to assume that all possible questions had been answered. But the one presented by this case, Arizona v. Gant, No. 07-542, evidently has not been. 

The Arizona Supreme Court ruled that once a car’s occupants had been arrested and secured, presenting no threat to officers on the scene, there were no “exigent circumstances? to justify a search without warrants, and that the Fourth Amendment required a warrant. 

Arizona is arguing that its Supreme Court places too great a burden on the police by underestimating the threat to their safety and requiring them to make detailed assessments of different circumstances. Instead, the state argues, there should be a “bright-line rule? that permitted searches without warrants of cars whose occupants had just been arrested. 


Sup. Ct. to review Money Laundering standards

Tuesday, February 26th, 2008

   New york times  By LINDA GREENHOUSE   February 26, 2008
WASHINGTON — In colloquial terms, “money laundering? means cleaning “dirty? money — the proceeds of a drug transaction, for example — by using it in a way that hides its origins and gives it the appearance of legitimate wealth.
The Supreme Court is not known for its bent for the colloquial, but a majority of the justices appeared ready to insist on this definition, as a matter of statutory interpretation, during an argument on Monday on the scope of the federal Money Laundering Control Act.
That presented an obvious problem for the government, which interprets the law a good deal more broadly, applying it in this case to the activity of a courier who hid $83,000 in cash under the floorboard of his car as he headed for the Texas border with Mexico.
According to the government, that act of concealment, as part of a plan to take the money out of the country, was exactly what Congress had in mind when it passed the act in 1986. The federal appeals court in New Orleans agreed, upholding the money-laundering conviction of a Mexican man, Humberto F. R. Cuellar, who was stopped on a Texas highway for driving substantially under the speed limit. The police officers began searching the car after they smelled marijuana on the roll of bills that Mr. Cuellar took out of his pocket.
The justices on Monday appeared unpersuaded by the breadth of the government’s argument, wondering why its interpretation of the statute might not make a criminal out of someone who walked across the border with a few dollars tucked into a shoe.
“I don’t know why they call this statute ‘Laundering of Monetary Instruments,’ ? Justice Stephen G. Breyer, referring to the set of provisions at issue. “Why didn’t they call it ‘shoe hiding’??
And Justice Ruth Bader Ginsburg observed, “On the government’s theory, anyone who transports hidden money to get it out of the country, who drives the car, just the driver, is a money launderer.?
An assistant to the solicitor general, Lisa H. Schertler, replied, “No matter how you see it, this was precisely the conduct that Congress was getting at.?
The law makes it a crime to take the proceeds of “some form of unlawful activity? out of the country while concealing or disguising any of five of the proceeds’ “attributes.? These are the money’s “nature,? location, source, ownership or control.
Mr. Cuellar’s lawyer, Jerry V. Beard, urged the justices to interpret the word “conceal? in context, to mean some activity other than simply hiding cash. “The statute does not criminalize concealing money’s existence,? Mr. Beard said. He added that while his client “may have in fact concealed money itself, he did not conceal the ‘nature, source, location, ownership or control’ of the unlawful proceeds.?
“Well, he certainly concealed the location,? Chief Justice John G. Roberts Jr. said.
“All money changes location,? Mr. Beard replied, adding that the government’s position “would effectively render all transportation of funds necessarily to be money laundering.? By contrast, he said, the crime of money laundering requires the effort to “minimize the criminal taint of unlawful proceeds? by making them appear legitimate.
Although the chief justice’s initial questions during the argument suggested that he supported the government, he later appeared to share the mounting skepticism of his colleagues. When Ms. Schertler said that putting money in a suitcase in a car’s trunk might be evidence of a “design to conceal,? Chief Justice Roberts said: “When I use a suitcase, I’m using it to carry my clothes, not to conceal them.?
Justice John Paul Stevens told Ms. Schertler that the government’s position in the case, Cuellar v. United States, No. 06-1456, seemed to make the concept of money laundering, as such, irrelevant. “Is this just a total wild goose chase?? the justice asked.
The statute is a powerful prosecutorial weapon that carries a sentence of up to 20 years and fines of $500,000 or more. In 2006, it accounted for nearly 1,000 convictions. Another law, which requires reporting the transportation of more than $10,000 in cash across the border, carries much lighter sentences and is not often useful in the case of drug couriers, because it requires proof that the defendant knew the law’s requirements and was deliberately violating them.

Supreme Court Appears Conflicted On Suit Against Pfizer Unit

Monday, February 25th, 2008

February 25, 2008: 

WASHINGTON -(Dow Jones)- The U.S. Supreme Court Monday appeared divided as to whether it should stop a Michigan product liability lawsuit against Pfizer Inc.’s (PFE) Warner-Lambert unit brought by diabetes patients harmed by Rezulin, a drug the company removed from the market in 2000. 

The Michigan case is proceeding under a unique state drug products liability law that favors pharmaceutical companies by generally barring lawsuits over drugs approved for sale by the U.S. Food and Drug Administration. But the law has an exemption that allows injured patients to sue if they allege a drug company committed fraud during the FDA drug review process. 

“Who would you rather have make the decision as to whether this drug is on balance going to save people or on balance going to hurt people, an expert agency, on the one hand, or 12 people pulled randomly for a jury role?” Justice Stephen Breyer asked. 

At issue is whether earlier Supreme Court precedent, which restricted FDA fraud claims in product liability lawsuits, also bars the Michigan case. 

The issue of federal preemption of state lawsuits over drugs is narrowly presented in this case, but will be considered more broadly in the fall when the Supreme Court takes up Wyeth’s (WYE) challenge to a $6.8 million judgment awarded to a Vermont woman over complications from an anti-nausea drug. 

During oral arguments Monday in the Michigan lawsuit, some justices indicated they were uncomfortable with allowing state-level lawsuits to proceed – through legal discovery and possible jury verdicts that don’t adhere to drug safety protocols – and potentially disrupt the FDA’s ability to review positive and negative factors when approving drugs. 

Justices Anthony Kennedy and Samuel Alito expressed concerns echoing Breyer’s. Meanwhile, justices Ruth Bader Ginsburg, John Paul Stevens and Antonin Scalia asked whether the exemption in an otherwise manufacturer-friendly law is allowed under prior legal precedent. “You could also say this is giving the manufacturer an invigorated regulatory compliance defense,” Ginsburg said while questioning Carter Phillips, the Washington, D.C.-based attorney representing the Pfizer unit. 

The federal government appeared in support of the company, expressing concerns that lawsuits probing for fraud against the FDA are at odds with federal drug oversight. Representing the patients who sued was Washington, D.C.-based attorney Allison Zieve, who said provisions in the Michigan law don’t raise problems the high court cited in an earlier case that restricted liability lawsuits over drugs. 

The lawsuit was brought by individuals who allege they were injured by the diabetes drug. Rezulin was sold from 1997 to 2000 but removed from the market at the FDA’s request amid concern the drug harmed the livers of some patients. 

Following the drugs’ removal from the market, lawsuits sprang up across the country and were consolidated in a New York federal court. The Michigan claims were thrown out by a federal trial judge in 2005 because of a state law that limits lawsuits against drug companies, unless they withheld information when the FDA was reviewing the drug. 

On appeal, the 2nd U.S. Circuit Court of Appeals in New York revived the suit, saying it believed legal precedent set a high bar for stopping product liability lawsuits against drug makers. 

Pfizer, which acquired Warner-Lambert in 2000, announced a fourth-quarter charge against earnings in 2003 to cover all the costs associated with Rezulin litigation. 

The case is Warner-Lambert Co. v. Kent, 06-1498. A decision is expected by July. 

-By Mark H. Anderson, Dow Jones Newswires; 202-862-9254; mark.anderson@ 



Did Justice Stevens Pull a Fast One? The Hidden Logic of a Recent Retroactivity Case in the Supreme Court

Monday, February 25th, 2008  By MICHAEL C. DORF   Monday, Feb. 25, 2008

Last week, in Danforth v. Minnesota, the U.S. Supreme Court ruled that a state court was free to give greater protection to defendants’ rights than the Supreme Court itself requires. Stated that way, the decision is hardly news. In our system of federalism, federal constitutional law is not a ceiling, but a floor. It sets out the minimum protections to which people are entitled. If states–through their constitutions or otherwise–choose to add protection, that is their prerogative.
Yet Danforth was no ordinary application of the floor-but-not-a-ceiling principle, because the question in the case was not whether Minnesota could interpret its own state law more broadly than federal law. Everyone accepts that it (like every other state) can. The question in Danforth was whether Minnesota could over-protect federal law. Perhaps surprisingly, the Supreme Court said yes.
Although the Danforth case involved highly technical and somewhat convoluted doctrine, it nonetheless warrants unpacking, for it may reveal an unexpected and important shift in the Justices’ thinking about the relationship of state law to federal law.
The Danforth Case and the Retroactivity Question
At Stephen Danforth’s 1996 trial for sexual conduct with a minor, the prosecution introduced a videotaped interview of his six-year-old victim. Danforth objected to this evidence, but the state courts rejected the objection under the standard the Supreme Court had set forth in the 1980 case of Ohio v. Roberts: whether the evidence was sufficiently reliable to satisfy the Sixth Amendment right of the accused to confront his accuser. Danforth was convicted.
After Danforth had exhausted his direct appeals, in 2004, the Supreme Court overruled the Roberts decision. In Crawford v. Washington, the Justices held that the admission into evidence of videotaped testimony of a witness who is otherwise available for trial, violates the Sixth Amendment (which applies to the states via the Fourteenth Amendment). After the Crawford decision, Danforth filed a habeas corpus petition in Minnesota state court, seeking a new trial.
If Danforth had sought habeas relief in federal court, he would have lost. Under the Supreme Court’s landmark 1989 decision in Teague v. Lane, federal courts do not grant habeas relief to state prisoners based on “new rules” of constitutional law, except in two narrow circumstances. The rationale for the Teague rule is straightforward: States have a strong interest in the finality of criminal convictions; if a defendant had a trial that conformed to the constitutional standards that were understood to apply at the time of that trial, then the state generally should not have to re-try the defendant simply because it failed to anticipate a novel decision by the Supreme Court.
A contrary rule would put too great a burden on the state and could also create a disincentive for the Justices to recognize constitutional rights: If recognizing a new constitutional right required new trials for defendants who had originally been tried decades earlier, then the Justices would be very reluctant ever to recognize new rights.
So, did Crawford announce a new rule? Of course it did. Further, the Court said in the 2007 case of Whorton v. Bockting, Crawford‘s new rule requiring live testimony–overruling Roberts–did not fit into either of the exceptions to the Teague non-retroactivity principle. Thus, Danforth could not get federal habeas relief based on Crawford.
Moreover, all the Justices agreed that the Minnesota courts were not required to apply Crawford in Danforth’s case. After all, the same fear of opening old cases that leads to the application of the Teague non-retroactivity rule in federal court, applies to state habeas cases also.
The Minnesota Supreme Court went a step further, however: It also said that the state courts were not permitted to apply Crawford retroactively in Danforth’s case.
Is Retroactivity a Choice-of-Law Question or a Remedial Question?
In the U.S. Supreme Court, two Justices–Chief Justice Roberts and Justice Kennedy–agreed with the Minnesota Supreme Court. Crawford was an interpretation of federal constitutional law, they said, and therefore the question whether to apply it retroactively is also a question of federal law. And citing precedents going back to the early Eighteenth Century, the Chief Justice said that the Supreme Court, not state courts, decides federal questions.
The 7-2 majority, in an opinion by Justice Stevens, did not exactly disagree with the Chief Justice’s general point. If retroactivity were a pure question of federal law, Stevens acknowledged, then the Minnesota courts would not be free to fashion a view of retroactivity that differed from the Supreme Court’s view. But the majority did not view retroactivity as a purely federal question.
Whether to apply Crawford or any other federal decision retroactively is a question of remedy, the majority said, and “the remedy a state court chooses to provide its citizens for violations of the Federal Constitution is primarily a question of state law.” Federal law, in this now-familiar view, creates a floor but not a ceiling: States must give retroactive remedial effect to decisions the Supreme Court says apply retroactively, but states are also free to choose whether or not to give retroactive remedial effect to decisions the Supreme Court says they are not required to apply retroactively.
The dissenters strenuously objected to the characterization of retroactivity as a question of remedy. Teague and subsequent cases, the dissenters said, treat retroactivity as a question of what law applies to a given case–old law or new law. And that question, they added, can, itself, only be a matter of federal law.
The Puzzling Split in the Danforth Case
For non-specialists–indeed, even for specialists–it is difficult to see why the result in the Danforth case should have turned on the semantic question of whether we characterize retroactivity as a matter of remedy or a matter of choice of law (old or new). Surely, one thinks, there must be something else driving the decision. But what?
Ideology is not a very good candidate. Although the Court’s most liberal Justices–Stevens, Souter, Ginsburg, and Breyer–were all in the majority, the case split the conservatives: Justices Scalia, Thomas and Alito joined the majority, while Chief Justice Roberts and Justice Kennedy dissented. Nor is that result entirely surprising as an ideological matter, because the case pitted two conservative principles against each other: On one hand, allowing the state courts to give greater retroactive effect to Supreme Court decisions than the Justices themselves requires, vindicates states’ rights. On the other hand, denying state courts that right vindicates the competing conservative principle of finality in criminal law.
Although general principles of conservatism cannot explain the split in Danforth, perhaps other “psychological” analyses of the Justices can shed some light on the ruling. In his majority opinion in Danforth, Justice Stevens repeatedly invoked–and quoted at length from–earlier decisions written by Justice Scalia. Moreover, the underlying principle at stake came from the Crawford opinion, which Justice Scalia authored for the Court. Nonetheless, it is hard to believe that Justice Scalia would have voted with Justice Stevens simply out of vanity or gratitude for the respect granted his prior work.
Did Justice Stevens Hoodwink Six of His Colleagues?
Moreover, Danforth is an especially puzzling decision in light of another case–one not mentioned by either the majority or dissent. In 1983, in Michigan v. Long, the Court confronted the question of whether it had jurisdiction to entertain a petition by a state alleging that its own state high court had over-protected federal constitutional rights. In that case, the Michigan Supreme Court’s opinion was unclear as to whether the ruling was based on federal law alone or a combination of state and federal law. The Court said that jurisdiction was proper in the case, but more importantly for our purposes, Justice Stevens wrote a remarkable solo dissent.
In Long, Justice Stevens said that the Supreme Court should never reverse a decision by a state court over-protecting federal rights. Over-protection of American citizens’ federal constitutional rights by Michigan, he said, is no different from over-protection of American citizens’ rights by a foreign nation such as Finland.
Not surprisingly, no other Justice agreed with this characterization of Michigan and Finland as standing in the same relationship relative to the United States, for the obvious reason that Michigan is part of the United States, while Finland is not. As the majority opinion in the Long case noted in response to Justice Stevens, state courts issue thousands of final rulings of federal law each year. Accordingly, the view expressed by Justice Stevens would threaten the uniformity of federal law.
The same point was raised in vain by Chief Justice Roberts last week in his Danforth dissent. The retroactive effect of a federal constitutional ruling, he said, is a question of federal law, and so giving states latitude to give such a ruling extra retroactive effect results in the disuniformity of federal law.
Justice Stevens had a response in Danforth that did not, as a technical matter, depend on his view that Michigan (or Minnesota) is no different from Finland: Retroactivity, he pointed out, is primarily a matter of state law. And everyone agrees that state courts can fashion their own rules of state law.
Nonetheless, it is difficult to shake the impression that Justice Stevens pulled a fast one in Danforth, mostly because he did not clearly explain why the retroactivity of a decision of federal law should be a matter of state law. Article I, Section 6 of the Minnesota Constitution contains a Confrontation Clause that is virtually identical to the Sixth Amendment of the U.S. Constitution. No one doubts the authority of the Minnesota Supreme Court to interpret its state constitutional provision to embody the Crawford rule, and to apply that interpretation retroactively. However, the Danforth decision confers on the state courts a very different power.
If, God knows why, Finland were to decide to apply Crawford retroactively, that would be no concern of the U.S. Supreme Court. But Minnesota is not Finland.
Michael C. Dorf is the Isidor & Seville Sulzbacher Professor of Law at Columbia University. He is the author of No Litmus Test: Law and Politics in the Twenty-First Century and he blogs at

Ky. Sup. Ct. Reverses Business Guest Rule

Monday, February 25th, 2008

Feb. 25, 2008

The Kentucky Supreme has overruled prior case law by holding that a corporation could not be held responsible for injury or death of a guest who was accompanying an employee on a business trip, if the presence of the guest was not for a business purpose, even in cases where the corporation had not established a “no rider? rule.

Appeal reversing Ct. of Appeals and upholding summary judgment ruling of the MONTGOMERY CIRCUIT COURT - Case TO BE PUBLISHED  



LawReader Keywords and Synopsis. 

Even if the employer fails to adopt a “no rider’ rule, and the employee’s invitation is within the scope of his/her employment, liability for tortious injures does not attach unless the invitation to the guest also served the purpose of accomplishing the work of the employer 

The question in this appeal is whether an employer is liable for an employee’s tortious injuries to a guest who accompanied the employee on a business trip. We 

opine that in order to hold the employer liable for the employee’s tortious injuries to the employee’s guest on a business trip, the employee must have acted within the scope of his authority in inviting the guest and for the purpose of accomplishing the work of the employer. Because the guest in this case had a strictly non-business purpose in accepting the employee’s invitation, we reverse the Court of Appeals and reinstate the trial court’s dismissal . 


Edwards had a business trip to Indianapolis, and invited his pastor, Reverend William Clinton Bryant, along to visit the Reverend’s family while Edwards worked . The trip for the Reverend was free and involved no business purpose on his part for Mid-States. On this trip, Edwards personally leased a plane rather than flying his own. Unfortunately, the plane struck a cell phone tower and crashed on the return trip, killing both Edwards and Reverend Bryant. 

The Reverend’s estate and family filed suit against Mid-States and Edwards’ estate . The claim against Mid-States was premised on vicarious liability for the employee’s negligent piloting of the plane. 

In our case, it is clear that Reverend Bryant was a guest of Edwards and his presence “could not be construed as being for the purpose of accomplishing the work of the corporation,” as required by Wigginton before liability attaches to the master. 71 S.W.2d at 16 .

Also, the fact that Edwards was an officer of Mid-States (President, as well as the General Manager and Chief Executive) and not just an employee does not change the outcome. Wigginton made clear that “in order for a company to be held responsible for the tort of one of its officers he must be acting within the scope of his employment and in the furtherance of the corporation’s business .” Id. 

Even if the employer fails to adopt a “no rider’ rule, and the employee’s invitation is within the scope of his/her employment, liability for tortious injures does not attach unless the invitation to the guest also served the purpose of accomplishing the work of the employer. Since the invitation to Reverend Bryant in no way served the employer, Mid- States, the trial court was correct in granting summary judgment and dismissing the claim . 

 For the foregoing reasons, we reverse the Court of Appeals and reinstate the trial court’s entry of summary judgment dismissing the claims of the estate and family against Mid-States Plastics, Inc. 

 All sitting, except Cunningham, J . Abramson, Minton, Noble, and Scott, JJ ., concur. Lambert, CJ, dissents by separate opinion

This week at the State Capitol

Sunday, February 24th, 2008

FRANKFORT — As the 2008 session of the Kentucky Legislature passed its midpoint this week, three of the big-ticket, big-headlines issues of this session were in plain view:·         The budget was being grappled with in subcommittees that will make recommendations to the full House Appropriations and Revenue Committee for its budget bill soon.
·         The casino gambling amendment campaigned upon and proposed by Gov. Steve Beshear was is in committee and being tweaked, though no vote was taken and its final form is uncertain.
·         And finally this week, Beshear unveiled his own plan to rescue the state-employee pension system from a $20 billion shortfall and likely insolvency by the year 2022.
The governor’s pension proposal envisions that future state employees and teachers be required to contribute more to their retirement than current workers. New state employees would also have to work longer before qualifying for benefits, although teachers would not.

In addition, the annual cost-of-living adjustment for current and future retirees would be fixed at 1.5 percent, rather than tied to the national inflation rate. In recent years, state retirees have enjoyed COLAs in the 3-percent range, based on increases in the Consumer Price Index.
The proposal delays till at least 2010 any state increase in its contribution to the pension fund. The two-year budget proposed by Beshear keeps that contribution at its current level, a freeze the administration says is necessary because of the state’s bleak revenue picture.
The state pension systems include about 300,000 current and retired state employees.
Meanwhile, a House task force formed specifically to study casino gambling in Kentucky voted this week to recommend an amendment to the state constitution — subject to voter approval — that allows only up to nine casinos in Kentucky, rather than the 12 Beshear had called for. The task force plan did not guarantee any casino licenses for the state’s racetracks, as Beshear and many other supporters had wanted.
Subsequently, the House Elections and Constitutional Amendments Committee took up the recommendation, and amendments were proposed specifying that tracks get up to five of the nine licenses. The committee adjourned without taking action on either the amendments or the bill, although the proposal remains very much alive.
Beshear’s original proposal specified that up to seven casinos could be operated by racetracks, in addition to five free-standing ones whose licenses would be put up for bid. The administration has projected casino gambling in Kentucky would generate about $600 million in tax and licensing revenues annually.
As the budget review process continued in House subcommittees this week, several hundred students from the state’s eight public universities rallied in the Capitol Rotunda against some of the more dramatic cuts the governor proposed in his budget — the 12 percent reduction in funding for higher education, cuts totaling $300 million over two years.
The students expressed concerns about possible dramatic tuition hikes resulting from those cuts, as well as anxieties about losing a portion of their state merit scholarship money. Beshear has proposed a $14 million reduction the Kentucky Educational Excellence Scholarship (KEES) funding. KEES awards are based on merit.
Meanwhile this week, the halfway point of the 60-day session saw the first bill to pass both chambers being sent to the governor for his signature. House Bill 168 will give returning servicemen and -women a 90-day grace period to renew their expired Kentucky driver’s licenses. The bill came in response to reports of soldiers coming home from overseas duty only to be ticketed for driving on an expired license soon after.
The General Assembly has a number of ways for citizens to stay informed about legislative activities during the session. They can visit the Legislative Research Commission website at or call several toll-free numbers:
·                     The Bill Status Line: 866-840-2835.
·                     The Calendar Line (for meeting schedules): 800-633-9650.
·                     The Message Line (to leave a message for an individual legislator): 800-372-7181.

Cancer patient awarded $9 million in insurance lawsuit. Punitive damages allowed. Company cancelled policy after patient got ill.

Sunday, February 24th, 2008

By THOMAS WATKINS Associated Press  Feb. 23, 2008 

LOS ANGELES — A woman who had her medical coverage canceled as she was undergoing treatment for breast cancer has been awarded more than $9 million in a case against one of California’s largest health insurers. 

Patsy Bates, 52, a hairdresser from Lakewood, had been left with more than $129,000 in unpaid medical bills when Health Net Inc. canceled her policy in 2004. 

On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay that amount while providing $8.4 million in punitive damages and $750,000 for emotional distress. 

“It’s hard to imagine a situation more trying than the one Bates has had to endure,” Cianchetti wrote in the decision. “The rug was pulled out from underneath, and that occurred at a time when she is diagnosed with breast cancer, one of the leading causes of death for women.” 

Bates, a mother of two, said she screamed when she heard about the damage award. 

“I am elated,” she said. 

Bates’ attorney William Shernoff said he wanted other insurers to take notice of the award. 

“We are going to stop a put to this practice,” he said. 

Health Net said it was implementing a freeze on policy cancelations that would last until the company sets up a third-party review panel to scrutinize cases. 

“Obviously we regret the way that this has turned out, but we are intent on fixing the processes to maintain the public trust,” spokesman David Olson said. 

The award came a day after the Los Angeles city attorney sued Health Net, claiming it illegally canceled the coverage of about 1,600 patients. City Attorney Rocky Delgadillo also said the company illegally ran an incentive program in which it paid bonuses to an administrator for meeting targets of policy cancelations. 

Health Net acknowledged that such a program existed in 2002 and 2003 but was subsequently scrapped. 

“It’s hard to imagine a policy more reprehensible than tying bonuses to encourage the recision of health insurance that helps keep the public well and alive,” Cianchetti wrote in the Bates decision. 

Bates had been insured with another company but was persuaded to switch over to a Health Net policy after an agent suggested she could save money. 

She said she had undergone surgery to remove a tumor and had received her first two chemotherapy treatments when doctors stopped treating her because her bills were going unpaid. 

“I was devastated. I didn’t know what was going to happen,” Bates said. “It’s boggling that someone can do that to you.” 

Bates went on to complete her cancer treatment through a state-funded program. 

Health Net also said it would review its practices and the way its brokers and agents are trained. 

Bill to extend the Senior Judge Program past Jan. 31, 2009 has little chance for passage.

Sunday, February 24th, 2008

Chief Justice said to be target of Sen. Williams due to Supreme Court ruling against legislative pension bill in 2003.

Feb. 24, 2008

The current Senior Judge program has a sunset expiration date of Jan. 31, 2009.  An attempt was made to extend this program during the last session of the legislature but was shot down in the Senate under the leadership of  Sen. David Williams.  There is nothing to suggest that Senator Williams will permit the current bill to get through the Senate during this session.

LawReader has been told by highly placed sources that they believe that Sen. Williams wants to kill the current Senior Judge’s program in order to force Chief Justice Joseph Lambert to resign this year before the current program expires.

The Chief Justice, as well as all other Judges, receive an enhanced retirement benefit if they agree to enter the Senior Judge program and work for an additional 600 days over a five year period, after their retirement.  If the Chief Justice fails to retire by Jan. 31, 2009 and enter the program, he could lose retirement benefits of some $40,000 a year.  This would be hard for any judge to turn down.  The retirement benefit allowed under this program would not exceed the Judge’s highest salary.

The failure of the Legislature to extend the program has influenced dozens of judges to retire early so as not to lose the retirement benefit enhancement.

The story goes that this is a payback against the Chief Justice and the Supreme Court, by Senator Williams, for a ruling of the Supreme Court which killed an effort by the Legislature to sweeten their own retirement programs in 2003.  The Sup. Ct. found the law adopted by the Legislature to be unconstitutional.  The law  would have increased Legislator’s  retirement benefit by 72%.  This bill would have allowed a retirement benefit which was 20% higher than their highest salary as a legislator.    If this is true, it is a low blow of the worst sort.  The Chief  Justice or any other Judge should not be punished for a ruling they have made. The strange thing about this claimed basis for Sen.William’s ire against the Chief Justice is that the Chief Justice did not participate in that decision.  The published decision states that the ruling was adopted by  “GRAVES, JOHNSTONE, KELLER and STUMBO, JJ., concur. WINTERSHEIMER, J., concurs by separate opinion. LAMBERT, C.J., not sitting?(See quotes from this case below: Board of Trustees v. Attorney General of the Commonwealth of Kentucky, No. 2002-SC-0699-DG (Ky. 10/23/2003) (Ky., 2003))We have been informed that the enmity of Senator Williams against the Chief Justice is so great that when William’s father died, his office called the Chief Justice and requested that he not attend the funeral.

At a luncheon meeting at a Judicial conference held last fall in Lexington, Ky. Wayne County District Judge Robyn E. Williams, the wife of Senator David Williams, spoke to the group made up of some 80 District Judges and AOC personnel. In that meeting Judge Robyn Williams described the Senior Judge program as “welfare for judges?. 

Senator Williams accompanied his wife to the Judges conference but was not in the room when this statement was made.  A person who was in attendance said no one in the audience challenged that characterization of the program by Judge Williams but there was amazed eye contact among the various judges. 

Judge Robyn Williams was appointed District Judge for Clinton, Wayne and Russell counties by then Gov. Ernie Fletcher in October 2004. The ending date for the current Senior Status Judge is Jan. 31, 2009.

See: “KRS 21.580 Senior Status Program for Special Judges.
(2) The Senior Status Program for Special Judges created by this section shall be open to any member who is a judge in office on the June 24, 2003, and who subsequently retires as a Senior Status Special Judge on or before January 31, 2009.? Effective: June 24, 2003

History: Amended 2003 Ky. Acts ch. 128, sec. 6, effective June 24, 2003. — Amended2002 Ky. Acts ch. 258, sec. 1, effective July 15, 2002. — Repealed 2000 Ky. Acts ch.

305, sec. 4, effective July 1, 2007 — Created 2000 Ky. Acts ch. 305, sec. 1, effective

July 14, 2000.

Legislative Research Commission Note (6/24/2003). 2000 Ky. Acts ch. 305, sec. 1,created KRS 21.580, which established the Senior Status Program for Special Judges.

Section 4 of the same Act repealed KRS 21.580 effective July 1, 2007. Thereafter,

2002 Ky. Acts ch. 258, sec. 1, amended KRS 21.580 to change the retirement date

from June 30, 2007, to January 31, 2009, and 2003 Ky. Acts ch. 128, sec. 6,

amended KRS 21.580 to extend eligibility for the program to judges in office on June

24, 2003. Neither of these Acts specifically addresses the repeal set out in the 2000


H.B. 581 the current bill states:

HB 581/AA (BR 1914) – R. Wilkey
     AN ACT relating to the Court of Justice.
     Amend KRS 21.580 to establish prerequisites for entry into the senior status judge program and establish a sunset date of July 1, 2012; make technical corrections.
     Feb 19-introduced in House
     Feb 21-to Judiciary (H)

The 2003 Ruling of the Supreme Court:

Board of Trustees v. Attorney General of the Commonwealth of Kentucky, No. 2002-SC-0699-DG (Ky. 10/23/2003) (Ky., 2003)
“The significance of KRS 61.510(13) is that KRS 6.520(1) calculates a legislator’s initial retirement benefit by multiplying 3.5% of the legislator’s “final compensation” times the legislator’s years of service and defines “final compensation” as the “creditable compensation” defined in KRS 61.510(13). A 72% increase in the “assumed salary” would, therefore, translate into a concomitant 72% increase in a legislator’s retirement benefits.

For example, a legislator earning $27,500.00 and retiring after twenty years of service would be entitled to an annual retirement benefit of $19,250.00 before HB 389(4) (3.5% X $27,500.00 X 20 years) but an annual retirement benefit of $33,115.60 after HB 389(4) (3.5% X $47,308.00 X 20 years) even though the legislator never earned a salary in excess of $27,500.00.?
“This theory that the amendment of KRS 21.450 actually amended KRS 61.510(13) has three immediately apparent flaws. First, HB 389(4) refers to an “accrual of benefits provided under . . . any . . . applicable statute.” (Emphasis added.) However, no “accrual of benefits” is “provided under” KRS 61.510(13); it merely identifies a legislator’s “creditable compensation,” which is but one factor used in calculating that legislator’s initial retirement benefit. Second, the theory misapplies accrual of benefits to creditable compensation. “Accrual of benefits” means, in a defined benefit plan,1 “the process of accumulating pension credits for years of credited service, expressed in the form of an annual benefit to begin payment at normal retirement age.” Employment Benefit Plans: A Glossary of Terms, supra note 1, at 1. Applying that definition, “accrual of benefits” pertains not to the retiree’s “creditable compensation” but to the retiree’s “service credits,” i.e., the retiree’s years of creditable service, KRS 6.515, yet another factor used in calculating the initial retirement benefit. Clearly, annual CPI increases do not apply to allow the accumulation of additional “service credits.” A third flaw in the theory is that HB 389(4) refers to the “last establishment of that benefit,” and “creditable compensation,” in the case of a legislator, is an assumed “salary,” not a benefit.? “I. LEGISLATIVE HISTORY OF KRS 21.450(3).
        Senate Bill 349.
        On March 13, 2000, Senate Bill (SB) 349 was introduced and read on the Senate floor. 2000 Sen. J. 1544. As written, Section 1(13) of SB 349 would have read as follows:
        [F]or members of the General Assembly who retire under Section 12 of this Act, or who die in office, “final compensation” shall be forty-five thousand dollars ($45,000). The assumed salary for legislators in this subsection shall be adjusted annually . . . to reflect changes in the current purchasing power of the dollar. The maximum possible compensation for legislators under this subsection shall be based precisely upon the consumer price index formula approved Matthews v. Allen, Ky., 360 S.W.2d 139 (1962).
        Thus, its sponsor clearly intended for SB 349 to increase the “assumed salary” of legislators from $27,500.00 to $45,000.00 and to provide for CPI increases of the assumed salary on an annual basis thereafter. An actuarial analysis dated March 10, 2000, presumably obtained in compliance with KRS 6.350, indicates that the increase of the “assumed salary” to $45,000.00 would have required $725,000.00 per year of additional funding for the JFRS. Letter from Gagel to Early of 3/10/00, at 3. When the tenor of the floor debate indicated that the proposed increases would fail, SB 349 was withdrawn and replaced by a committee substitute that retained the $27,500.00 “assumed salary” and did not provide for future annual CPI increases. 2000 Sen. J. 1590. The committee substitute then passed the Senate and was sent to the House where it was reported and received its first reading on March 24, 2000. 2000 House J. 4622. On March 27, 2000, a House floor amendment to SB 349 (committee substitute) was introduced that would have reinstated the amendments deleted by the Senate, i.e., immediate increase of “assumed salary” to $45,000.00 with annual CPI increases thereafter. 2000 House J. 4909. The bill was never called to a vote and was recommitted to the appropriations committee from which it did not re-emerge. Id. at 5297.
        House Bill 389.
        Meanwhile, on March 13, 2000, the same day the original version of SB 349 was debated and withdrawn, HB 389 was passed by the House and sent to the Senate. This bill, as passed by the House, would have amended various unrelated provisions of the Legislators’ and Judicial Retirement Plans, but not KRS 21.450. 2000 House J. 3359. It was first referred to the Senate Appropriations Committee, 2000 Sen. J. 2090, then to the State and Local Government Committee. Id. at 2926. On March 23, 2000, the latter committee adopted and added to the consent calendar by voice vote a committee substitute for HB 389 that deleted several sections and added a new section (4). Minutes, Sen. Comm. on State & Local Gov’t (15th meeting, March 23, 2000). The Legislative Research Commission then requested that the executive director of the JFRS provide an actuarial analysis of all four sections of HB 389 (committee substitute). On March 27, 2000, the executive director responded that the impact of Sections 1 and 2 would be “zero,” the impact of Section 3 would be “negligible,” and “I am unable to determine the fiscal impact, if any, of Section 4.” Letter from Early to Dutton of 3/27/00.
        On March 29, 2000, HB 389 (committee substitute) passed the Senate without debate as part of the consent calendar. 2000 Sen. J. 3366. Later that same day, the House concurred with the Senate’s committee substitute for HB 389 with only this comment by the House sponsor:
        Section 4 was added . . . and I have a report here . . . from the retirement system . . . that says . . . “I am unable to determine the fiscal impact, if any, of Section 4.”
        Videotape: House Floor Debate (3/29/2000); 2000 House J. 5229.
        Unable to decipher what effect, if any, HB 389(4) might have on the JFRS, the executive director of the JFRS requested a formal opinion from the Attorney General, pursuant to KRS 15.025(1) as to the bill’s proper interpretation and effect with respect to the following potential issues:
        1. Does the amendment to KRS 21.450 require that the assumed salary in the Legislat[ors'] Retirement Plan be annually increased by the CPI?
        2. If the amendment to KRS 21.450 provides that the assumed salary under the Legislat[ors'] Retirement Plan is to be annually increased by the CPI, is the increase retroactive?
        3. If the amendment to KRS 21.450 provides that the assumed salary under the Legislat[ors'] Retirement Plan is to be annually increased by the CPI, at what date is the increase to be first applied?
        4. Does the amendment to KRS 21.450 provide that in a year in which a judicial salary increase falls below the CPI, will the salary be adjusted by the CPI? If the amendment requires that a judicial salary be adjusted by the CPI, is the increase retroactive? If the amendment requires that a judicial salary be adjusted by the CPI, at what date is the increase to be first applied?
        5. Is the legislator or judge required to make personal contributions on the additional assumed salary or salary on which the benefits ultimately will be calculated?
        6. To whom does the amendment apply — members, retirees, or both?
        OAG 00-5, at 2 (quoting the questions posed by the executive director of the JFRS).
        In the course of drafting his response, the Attorney General requested that Senator Robinson, chair of the Senate State and Local Government Committee, provide any research or documentation utilized in drafting the committee substitute for HB 389(4). Letter from Sen. Robinson to Carrico, 5/18/00, at 1 (referring to Attorney General’s information request). By letter dated May 18, 2000, Senator Robinson responded that no such documents existed and gratuitously added that the intent of the bill was to increase legislators’ retirement benefits by applying annual CPI increases to the “assumed salary” of legislators retroactive to 1982. He further explained:
        Since it was our intent to not make the provision of the amendment so visible; and based on staff’s proposal, we decided to place the substance of our proposal on one of the judicial statutes that are identified with KRS 6.525. Therefore, we chose to peg our proposal to KRS 21.450.
        Id. On June 13, 2000, the Attorney General rendered his opinion that HB 389(4) was void because it (1) was enacted without obtaining the actuarial analysis required by KRS 6.350; (2) is so vague as to be unintelligible; and (3) violates the “nondelegation doctrine” by delegating legislative authority to an administrative agency. OAG 00-5.
        The Board of Trustees of the JFRS filed this action in the Franklin Circuit Court for a declaratory judgment pursuant to KRS 418.040, requesting that the court declare HB 389(4) valid and judicially construe its meaning. The Franklin Circuit Court accepted the theory that the amendment of KRS 21.450 actually amended KRS 61.510(13) and that its effect was to increase the “assumed salary” of legislators to $47,308.00 as of July 14, 2000, and to apply CPI increases to the assumed salary on an annual basis thereafter. The circuit court further concluded that HB 389(4) was unintelligible only to laypersons but understandable to pension law specialists (despite the fact that the executive director of the JFRS was unable to comprehend its meaning). The circuit court did not address the nondelegation doctrine despite conceding that only an expert could decipher the bill’s meaning. Finally, the circuit court found substantial compliance with KRS 6.350 because the General Assembly had made an unsuccessful attempt to obtain an actuarial analysis from the executive director of the JFRS. KRS 6.350 provides, inter alia:
        A bill which would increase the benefits . . . of any public retirement system . . . shall not be reported from a legislative committee of either house of the General Assembly . . . unless the bill is accompanied by an actuarial analysis . . . show[ing] the economic effect of the bill on the public retirement system, including a projection of the annual cost to the system of implementing the legislation for at least ten (10) years . . . prepared by an actuary who is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary under the Employees’ Retirement Income Security Act of 1974.
        The Court of Appeals reversed the Franklin Circuit Court without addressing the vagueness and nondelegation issues, deeming KRS 6.350 mandatory and, thus, the failure to obtain the actuarial analysis fatal. Having granted discretionary review, we disagree with the Court of Appeals that the General Assembly’s noncompliance with KRS 6.350 invalidates HB 389(4). However, we also disagree with the Franklin Circuit Court and find HB 389(4) unconstitutional because it is void for vagueness in that it is unintelligible and because it violates the nondelegation doctrine.?“ All parties have assumed this to be a valid law unless it violates some specific provision of the Kentucky Constitution, but there is another ground upon which we may declare this enactment ineffective as a law. That is the lack of intelligibility. In other words, if the language of the law is so ambiguous as to completely obscure the legislative intent and to defy rational meaning, it is simply inoperative as a law.
        Id. at 364. Citing Kerth and Folks, the Court found that the relevant words in the statute were “meaningless;” thus, it deemed the statute “an abortive effort” and “a nullity.” Id. at 366.
        Kentucky is not alone in requiring that statutes be facially intelligible. Spinelli v. Immanuel Lutheran Evangelical Congregation, Inc., 515 N.E.2d 1222 (Ill. 1987), the Supreme Court of Illinois invalidated a statute permitting teachers to inspect some, but not all, of the documents in their personnel files because that statute was so vague that it was impossible for school districts to discern which documents were subject to disclosure. Id. at 1228. It noted the rule that:
        While it is the duty of the courts to ascertain the meaning of and to give effect to every valid act of the legislature, yet they cannot supply omissions or remedy defects in matters committed to the legislature. A legislative act which is so vague, indefinite and uncertain that the courts are unable, by accepted rules of construction, to determine, with any reasonable degree of certainty, what the legislature intended, or which is so incomplete or conflicting and inconsistent in its provisions that it cannot be executed, will be declared to be inoperative and void.?
“We conclude that HB 389(4), subsequently codified at KRS 21.450(3), is unconstitutional because it is unintelligible and violates the nondelegation doctrine embodied in Sections 27, 28, 29 and 60 of our Constitution. Accordingly, the decision of the Court of Appeals is affirmed, though on different grounds than expressed in its opinion.
        GRAVES, JOHNSTONE, KELLER and STUMBO, JJ., concur. WINTERSHEIMER, J., concurs by separate opinion. LAMBERT, C.J., not sitting?


9th. Circuit holds that assertion of Right to Remain Silent can not be ignored

Sunday, February 24th, 2008

 The case is Anderson v. Terhune, No. 04-17237

 Metropolitan News-Enterprise By STEVEN M. ELLIS, Staff Writer  February 19, 2008

An en banc panel of the Ninth U.S. Circuit Court of Appeals on Friday tossed out a Shasta County man’s conviction of a murder he confessed to because authorities violated his right against self-incrimination when they continued to interrogate him after he repeatedly told them, “I plead the Fifth.?
Holding that Jerome Alvin Anderson unequivocally invoked his right to remain silent and end the interrogation when he made the statements, a majority of the 15-judge panel ruled that the Third District Court of Appeal’s determination that Anderson’s invocation of his rights was ambiguous, and its determination that Anderson waived the right when he responded to the questions of officers who ignored his invocation, were unreasonable factual determinations in light of clearly established U.S. Supreme Court precedent.
Anderson was found guilty of murder by a jury in 1998 for the execution-style shooting of his friend Robert Clark in a dispute over a stolen car. He was sentenced to life in prison without the possibility of parole.
A key piece of evidence against Anderson was a confession that he gave to officers of the Shasta County Sheriff’s Department who took him into custody for a parole violation three days after the shooting.
The officers initially questioned Anderson about the murder, but when they began asking him about his drug use on the day of the murder Anderson stated repeatedly that he was “through with this,? that he wanted to “be taken into custody? and that “I plead the Fifth.?
One of the officers asked Anderson, “Plead the [F]ifth. What’s that,? and continued to question him until Anderson later asked for a lawyer. The officers turned off the tape recorder, but then questioned him further—leading to the confession—after Anderson reinitiated the discussion.
Shasta Superior Court Judge James Ruggiero rejected Anderson’s challenge to the admissibility of his confession at trial, and the Third District Court of Appeal agreed. Writing for the Court of Appeal, Justice Coleman Blease, who was joined by Justices Richard Sims III and Rodney Davis, concluded that Anderson’s invocation of his right to remain silent was ambiguous because Anderson’s comments were “ambiguous in context.?
Blease wrote that Anderson’s comments could have been interpreted as a refusal to talk about his drug use, rather than a desire to terminate the entire interview, and said that the officer had asked a legitimate clarifying question by asking Anderson what he meant. Blease also wrote that Anderson waived any invocation of the rights to silence or counsel when he re-initiated the interrogation after the officers turned off the tape.
However, Judge M. Margaret McKeown wrote for the Ninth Circuit that the Court of Appeal’s decision was both unreasonable and contrary to precedent the U.S. Supreme Court had clearly established in Miranda v. Arizona (1966) 384 U.S. 436.
“[S]urely,? she wrote, “when a criminal defendant says, ‘I plead the Fifth,’ it doesn’t take a trained linguist, a Ph.D, or a lawyer to know what he means.?
McKeown rejected the Court of Appeal’s use of context to conclude that the statements were ambiguous, writing that, “[u]sing ‘context’ to transform an unambiguous invocation into open-ended ambiguity defies both common sense and established Supreme Court law.
She similarly rejected the determination that the officers had asked Anderson a legitimate clarifying question and that Anderson had waived his right against self-incrimination by continuing to talk to them.
“Instead of scrupulously honoring the request,? she wrote, “the interrogating officer decided to ‘play dumb.’?
Writing that the situation brought to mind the lyrics “What part of ‘no’ don’t you understand?? in a song popularized by country music singer Lorrie Morgan, McKeown asked “[w]hat about the words ‘I plead the Fifth’ is unclear, ambiguous, or confusing to a reasonable officer??
“Nothing,? she answered. “The officer thought that continuing the interrogation was ‘reasonably likely to elicit an incriminating response’…. And he was right.?
McKeown continued:
“We cannot simply suppress the portion of the interrogation that occurred after the invocation of the right to silence and before Anderson’s purported re-initiation of the interrogation. Doing so would eviscerate the mandate to “scrupulously honor[ ]? the invocation of Miranda rights.?
Judges Mary M. Schroeder, Stephen Reinhardt, Sidney R. Thomas, Kim McLane Wardlaw, William A. Fletcher, Ronald M. Gould, Richard A. Paez, Richard R. Clifton, and Sandra S. Ikuta joined McKeown in her opinion.
In dissent, Judge Richard C. Tallman, joined by Judge Consuelo M. Callahan, disagreed with the majority’s conclusion that Anderson’s invocation was unambiguous.
Quoting the Court of Appeal’s statement that there was no “clear-cut Supreme Court rule that certain magic words automatically bring all questioning to a halt—regardless of the circumstances of the interrogation,? Tallman wrote that “[i]nvoking the lyrics of a popular Country-Western song in lieu of Supreme Court authority is not good enough.?
Tallman similarly rejected the majority’s conclusion that the officer’s clarifying question was not legitimate, writing that “[a]dmittedly, the detective could have phrased his clarifying question differently, and perhaps he should have uttered it with less sarcasm, but a poorly-phrased question without more is not grounds to grant federal habeas corpus relief.?
Judge Barry G. Silverman, joined by Judge Johnnie B. Rawlinson, wrote separately to concur with the majority on the basis that the officer’s “feigned ignorance of the Fifth Amendment? was not a legitimate clarifying question.
Judge Carlos T. Bea also wrote separately to concur with the majority’s conclusion as to Anderson’s invocation and the legitimacy of the officer’s clarifying question, but he dissented with the holding on the grounds that the record showed a “clear waiver? by Anderson of his rights because the police had stopped the interrogation when Anderson asked for a lawyer, and the confession had occurred only after Anderson reinitiated the conversation.
The decision may leave Shasta County District Attorney Gerald Benito with the decision whether to retry Anderson without the use of the confession or to allow him to go free.
“We’re not done fighting by any stretch of the imagination,? Benito said Friday in an interview with the Sacramento Bee.
“We will first ask the (California) Attorney General’s Office to take it to the (U. S.) Supreme Court. If that doesn’t work, we will review what evidence we have left with the idea of a retrial.
“We have no intention of letting Mr. Anderson walk out of prison without paying for what he’s done,? Benito said.
A spokesperson for Attorney General Jerry Brown said that the attorney general thought that the Court of Appeal had decided the issue correctly, and that the dissent made good points and provided a basis for upholding the judgment.
He said that no decision had yet been made on whether to appeal the decision to the U.S. Supreme Court.
Anderson’s attorney, Charles M. Bonneau, could not be reached for comment on Friday.
However, attorney Peter C. Pfaffenroth, who argued in the case on behalf of amicus curiae the National Association of Criminal Defense Lawyers, told the MetNews that the decision “definitely seems to align with intuitive sense of what rights are and the respect authorities should show to them.?
Pfaffenroth said that the lower court decisions threatened Miranda by opening the door “too broadly? to attempts to import context on “a completely clear right to remain silent.?
The case is Anderson v. Terhune, No. 04-17237

Supreme Court to review Exclusionary Rule on evidence

Sunday, February 24th, 2008

Conservative justices have their eyes on the controversial doctrine that requires judges to throw out anything improperly obtained by police.


By David G. Savage, Los Angeles Times  February 20, 2008

WASHINGTON — The Supreme Court agreed Tuesday to reconsider the reach of the “exclusionary rule,” a doctrine that has been controversial since the 1960s because it requires judges to throw out evidence if it was obtained improperly by the police.

Several of the court’s conservatives, including Chief Justice John G. Roberts Jr. and Justice Antonin Scalia, have signaled they would like to rein in this rule.

Every day, police officers stop cars or make arrests by relying on information in the files or on the computers of a police department. On occasion, the information is outdated or inaccurate. What should be done, then, if the officer finds drugs or guns in a stopped car, only to learn later that he relied on faulty information when he stopped the vehicle?

Judges have been divided on that question. Some have said the evidence is tainted and should be suppressed. Others have said the evidence should be used if the officer was not to blame for the error.

The high court said it would hear next fall a drug case from Alabama, Herring vs. United States, to decide the question.

In July 2004, Bennie D. Herring went to a police station to retrieve several items from an impounded car. Investigator Mark Anderson saw him and began calling around to see if there were any outstanding warrants against Herring.

A police employee from a neighboring county said there was such a warrant, and then Anderson and another officer set off in pursuit of Herring. They pulled him over, arrested him and found methamphetamine in his pocket and a gun in his car. Minutes later, the police employee called back to say there was a mistake. The warrant against Herring had been revoked, but the entry in the computer file had not been updated.

When Herring went to trial on federal drug charges, a judge refused to suppress the evidence against him. The U.S. Court of Appeals in Atlanta agreed, saying it made no sense “to scuttle a case” when the arresting officer was “entirely innocent of any wrongdoing or carelessness.”

Two Stanford law professors appealed on Herring’s behalf. They argued the that court should not allow arrests and prosecutions that were triggered by computer errors and faulty record-keeping by the police.

The high court first announced the exclusionary rule in a 1914 case involving a federal prosecution for illegally sending lottery tickets in the mail. The rule was meant to enforce the 4th Amendment’s ban on “unreasonable searches and seizures.”

Its aim was to deter officers from breaking the law to obtain evidence.

It gained wide attention only after 1961 when the court extended the rule to cover state troopers and local police.

The rule has always had its share of skeptics. As Benjamin N. Cardozo, then a New York state judge, famously put it: “The criminal goes free because the constable has blundered.”