Archive for June, 2012

SUPREME COURT ASSERTS THEIR CONTROL OVER SENTENCING IN THE ATTORNEY DISCIPLINE PROCESS – ORDER REINSTATMENT OF ATTORNEY ERIC DETERS

Friday, June 15th, 2012

On June 15, 2012 the Ky. Supreme Court issued a ruling ordering that attorney Eric Deters be reinstated to the practice of law.

The court had originally upheld a finding of the Board of Governors that l5 of l9 counts against Deters be dismissed. The penalty for the remaining four counts was a sanction of a 61 day suspension from the practice of law. This original sentence was recommended to the Supreme Court by the Board of Governors, and was approved by the Supreme Court.

The Office of KBA Bar Counsel used a little known rule and objected to the reinstatement of Deters after he had served the 61 day suspension. This rule required the Character and Fitness Committee to hold a hearing and determine if Deters should be reinstated.

Both Deters and the Bar Counsel filed pleadings with the Character and Fitness committee. The Bar Counsel even advised the C&F Committee that they had new charges pending against Deters, (for which Deters had not exhausted his remedies).

The Character and Fitness Committee allowed the Bar Counsel to take their best shot, and still ruled that Deters should be reinstated.

The arcane procedures in such matters, imposed by the motion of the Bar Counsel, required a new hearing before the Board of Governors and the Supreme Court to consider the ruling of the Character and Fitness in favor of Deters.

The Board of Governors, who had previously recommended a suspension of 61 days against Deters, were alleged by persons in attendance at their second hearing, to have scorched the hide off of the Bar Counsel and was very critical of Bar Counsel’s continuing pursuit of Deters.

Strangely, the Board of Governors, in a closed voting session, then voted 13 to 0 to overrule the Character and Fitness ruling. They reportedly said in their findings and order that they didn’t believe that Deters was sufficiently “contrite.”

We will submit a dictionary definition of “contrite” as we don’t find that emotion to be a condition of reinstatement in any Supreme Court Rule.

The dictionary defines “contrite” as “feeling or showing sorrow and remorse for a sin or shortcoming

The reasoning of the Board and the Bar Counsel that a 61 day suspension was not a sufficient punishment of Deters is apparently based on grounds we cannot find as being allowed by the SCR’s. It appears that the Supreme Court didn’t recognize such a standard for denial of reinstatement of a lawyer.

The Board of Governors at the second hearing, abandoned their own original sentence, (61 day suspension), and now at their second hearing, sought additional punishment of Deters because he was not in their opinion “contrite.” Why didn’t they just ask for permanent disbarment at the first hearing?

We will likely never know how the Board at the second hearing basically took the Bar Counsel’s office to the woodshed, yet when the door was closed, for them to consider their finding, not one vote against the Bar Counsel was produced from among the l3 Board members present. (Two members of the 15 member Board were absent).

We don’t question the findings of the Board or the motion of the Bar Counsel, we do however have some trouble in understanding their ruling. It scares the devil out of this author to think that the Board of Governors and the Bar Counsel’s Office thinks that all licensed lawyers must be “contrite” when we are in their presence.

For give me for watching too many PBS historical shows, but I fear the required “contriteness” might require that every attorney never look a member of the Board or the Bar Counsel in the eye.

And we should never turn our backs to them when we leave their throne room. We should back slowly out of the room, with our hat off, and our head bowed low. We should bow and scrape and perhaps remain prostrate on the floor in their presence. Is this the type of contriteness the Bar Counsel is demanding?

Even the most self-confident judges don’t require contriteness. Blind obedience to their orders is sufficient.

We briefly interviewed Eric Deters, and he sounded to us to be humble and “contrite”.

He assured LawReader that he would improve his conduct in the future, and that he was already taking “anger counseling”.

Deters refrained from any comment about the Board and the Bar Counsel. (That restraint in our opinion, indicates a big time change in Eric Deters.)

Thankfully for Deters (and all lawyers who may find themselves being investigated by the Bar Counsel in the future), the actions of the Bar Counsel and the Board of Governors were subject to review by seven adults.

The Kentucky Supreme Court wasted no time in reviewing the reversal of the Board of Governors. In their ruling released June 15, 2012, the Court overruled the Board of Governors, and ordered that Deters be reinstated.

This ruling evidenced the Supreme Court’s confidence in the independent Character and Fitness Committee. We would speculate that this ruling sends a message to the Board of Governors, that the respect the Supreme Court has traditionally shown their findings, is now in question. LawReader has received a number of e-mails and comments to articles which call for firing of Bar officials who prey on attorneys by use of questionable practices in ethics prosecutions.

The Supreme Court’s ruling did not go into great detail as to why they overruled the Board of Governors…they didn’t have to…the mere fact that they overruled the Board of Governors is novel enough to send a loud message to the Board. Some might suggest the possibility that the Supreme Court has politly told the KBA that the level of trust they have enjoyed in the past will be more closely questioned in the future.

Attorneys we have interviewed about the ruling of the Supreme Court expressed their appreciation of the Court’s “adult” and ”proper” ruling. Several attorneys (not including any party) concluded that “this ruling was a message to the Board to start exercising its administrative control of the Bar Counsel’s Office.” Further one attorney opined that “it was a message to the Bar Counsel that they if they cross the line and become vindictive and fail to honor thier duty to be ‘Ministers of Justice’, the Supreme Court will look very closely to their actions.”

The Supreme Court ruling states:

TO BE PUBLISHED
Supreme Court of Kentucky
2012-SC-000344-KB

ERIC C. DETERS
v.

IN SUPREME COURT

MOVANT

KENTUCKY BAR ASSOCIATION
OPINION AND ORDER REINSTATING

RESPONDENT

Eric C. Deters, KBA Member No. 81812 of Kenton County, Kentucky, was
admitted to practice law in Kentucky in 1986. This Court suspended Movant from
the practice of law for a period of sixty-one (61) days, effective February 23,
2012. Pursuant to SCR 3.510 he has now applied for reinstatement. The
Character and Fitness Committee of the Kentucky Office of Bar Admissions
(the Committee) has recommended approval of the application for reinstatement
‘of Eric. C. Deters. The Board of Governors of the Kentucky Bar Association (the
Board) has recommended disapproval of the application for reinstatement.
This Court’s order of suspension, entered February 23, 2012, found
Movant guilty of violating SCR 3.130-8.2(a), SCR 3.130-3.3(a). SCR 3.130-
7.09(2), and SCR 3.130-1.16(d), and ordered as follows:

(1)

For these violations, Deters is hereby suspended from the practice
of law for sixty-one days and required to attend the entire KBA
Ethics and Professionalism Enhancement Program (EPEP), which
is anticipated to be seven hours, within one year of the date of this Order;

(2) Deters will not apply for Continuing Legal Education credit of any kind for his attendance at the EPEP. He will furnish a release and waiver to the Office of Bar Counsel to review his records of the CLE Department that might otherwise be confidential, such release to continue in effect until after he completes his remedial education, in order to allow the Office of Bar Counsel to verify that he has not reported any hours to the CLE Commission that are to be taken as remedial education.
(3) Pursuant to SCR 3.390, Deters shall, within ten days from the entry
of this Opinion and Order; notify all clients with Kentucky cases in
writing of his inability to represent them, and notify all courts in
which he has matters pending of hls suspension from the practice
of law, and furnish copies of said letters of notice to the Director of
the KBA. Furthermore, to the extent possible and necessary, Deters shall immediately cancel and cease any advertising activities in which he is engaged;
(5) In accordance with SCR 3.450, Deters shall pay costs associated with these proceedings in the amount of $1,834.02, for which
execution may issue from this Court upon finality of this Order.
On March 5, 2012, the Office of Bar Counsel, filed an Objection to
Movant’s automatic reinstatement pursuant to SCR 3.510(2). Since Bar Counsel
did not withdraw its Objection within thirty (30) days, the matter proceeded to the
Committee, pursuant to SCR 3.510(2), after Movant filed his application for
reinstatement on April 23, 2012.
On May 15, 2012, the Committee conducted a hearing on Movant’s
application for reinstatement. On May 21,2012, the Committee filed its Findings
of Fact, Conclusions of Law, and Recommendation, recommending that Movant
be reinstated conditioned on (1) obtaining anger management counseling. (2)
filing an Affidavit of Compliance as required by SCR 3.510(2), and (3) promptly
notifying the KBA of any reciprocal discipline imposed by Florida or Ohio.
2

Pursuant to SCR 3.510(3). the Board of Governors of the Kentucky Bar
Association then reviewed the record and report of the Character and Fitness
Committee, and on June 13, 2012 filed its’ recommendation of disapproval of .
Movant’s application for reinstatement.
This Court notes that both the Committee and the Board have reviewed
the evidence presented and both have found that Eric Deters has met the
requirements of SCR 2.300(6)(a), (c) and (d). The Committee found overall
compliance with SCR 2.300(6) and recommended approval of his reinstatement,
with conditions. However, the Board held that Movant failed to prove that his
conduct while under suspension showed him to be worthy of the trust and
confidence of the public or that he appreciated the wrongfulness of his
misconduct, was contrite and had rehabilitated himself. SCR 2.300(6)(b) and (e).
While this Court is mindful of the findings of the Board regarding Movant’s
behavior, we concur with the recommendation of the Committee for approval of
Eric C. Deters’ application for reinstatement. Mr. Deters seeks reinstatement
herein from this Court’s imposition of a sixty-one (61) day suspension from the
practice of law. His application for reinstatement has been timely addressed by
both the Committee and the Board. Any other pending disciplinary charges against Mr. Deters will be considered when promptly processed according to the
Rules and presented to this Court.
Accordingly, it is ORDERED that Eric C. Deters, KBA Member No. 81812,
is hereby reinstated to the practice of law in this Commonwealth as of the date of
this order. It is further ordered that:
3

(1) Movant shall pay the costs incurred by the Character and Fitness
Committee, said costs being in the amount of $338.80.
(2) Movant shall promptly notify the Bar Counsel of the Kentucky Bar
Association of any reciprocal discipline imposed by Florida.
(3) Movant shall request from the Director of the Kentucky Lawyer
Assistance Program the name of one or more reputable Anger
Management Therapists or Counselors. Deters shall schedule and
attend the number of anger management counseling sessions
recommended by the therapist/counselor he selects from the
individuals referred to him by KYLAP within a reasonable time.
(4) Movant shall provide the Committee with a letter from the provider
describing the initial assessment and the extent of any additional
counseling required.
(5) Within ten (10) days of the date of the entry of this Opinion and
Order, The Kentucky Bar Association shall provide a more detailed
statement of costs to this Court and Movant shall then pay the
necessary costs incurred by the KBA once determined by this
Court.
All sitting. All concur .
. ENTERED: June 15,2012.

4

IMPORTANT DISSENT BY JUDGE SARA COMBS IN KY. PARAMUTUAL RULING WHICH WAS REMANDED ON TECHNICAL GROUNDS

Friday, June 15th, 2012

The Kentucky Court of Appeals remanded a ruling of the Franklin Circuit Court re: paramutual gambling based on prior horse races. The court ruled that the trial Judge should have allowed discovery prior to his issuance of a summary judgment order. The case was remanded to allow the defendant to conduct additional discovery.

Neverthelss Judge Sara Combs dissented and wrote a separate opinion. Her dissent has the possiblity of showing the direction that this case might take after the technical problem involving discovery has been solved. This ruling delays the case, but it is not a final ruling.

COMBS, JUDGE, DISSENTS AND FILES SEPARATE OPINION.

COMBS, JUDGE, DISSENTING: I agree with the disposition of most of the issues discussed in the majority opinion: justiciability; the propriety of using
the declaratory judgment act; and the statutory delegation of authority to the Racing Commission to promulgate regulations pertaining to the horse racing
industry. However, I agree with the trial court that all issues before it were purely legal issues precluding the need for — or recourse to — discovery. Therefore, I file
this dissent.

Family Foundation has made excellent and persuasive arguments about virtually every aspect of instant racing. Nonetheless, the narrow legal issue
remains: did the Racing Commission act within the scope of its broad delegation of authority by the General Assembly pursuant to KRS 230.215(2), which provides
as follows:
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It is hereby declared the purpose and intent of this chapter in the interest of the public health, safety, and welfare, to vest in the racing commission forceful
control of horse racing in the Commonwealth with the plenary power to promulgate administrative regulations prescribing conditions under which all legitimate horse
racing and wagering thereon is conducted in the Commonwealth so as to encourage the improvement of the breeds of horses in the Commonwealth, to regulate
and maintain horse racing at horse racing meetings in the Commonwealth of the highest quality and free of any corrupt, incompetent, dishonest, or unprincipled horse
racing practices, and to regulate and maintain horse racing meetings in the Commonwealth so as to dissipate any cloud of association with the undesirable and
maintain the appearance as well as the fact of complete honesty and integrity of horse racing in the
Commonwealth. (Emphasis added.)

The Franklin Circuit Court properly addressed this legal issue and found that the Commission indeed had acted as intended and as empowered by the General
Assembly.

Because the majority opinion held that discovery should be conducted, it stopped short of addressing numerous other issues raised in the briefs. Because I
believe that all issues before the trial court were purely legal in nature, I have endeavored to address the remaining issues in this dissent.
Family Foundation principally contends that the amendments to the regulations lacked statutory authority because historic racing is not an exercise of
pari-mutuel wagering. Family Foundation claims that the Commission acted beyond the scope of its legitimate statutory authority by embarking into uncharted
territory (historic racing) that does not encompass pari-mutuel wagering.
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Pari-mutuel wagering was invented in the 1870’s by a French parfumier (perfume manufacturer) Pierre Oller. Joan S. Howland, Let’s Not “Spit the Bit” in
Defense of “The Law of the Horse”: The Historical and Legal Development of American Thoroughbred Racing, 14 Marq. Sports L. Rev 473, 496 (2004). It is a
system of wagering in which the bettors’ money is pooled and then divided among the winners. The odds are determined by the amount of money wagered on each
horse; the more that is wagered, the lower are the odds and the payout to the winner. Id. Critical to the legality of the system is that the bettors wager among
themselves rather than against the operator of the pool (i.e., the Racing Association or the “house”).

In 1881, the predecessor of our Supreme Court examined pari-mutuel wagering and held that it was lawful in Kentucky because the operator of the pool
did not risk his own funds. The wagering was among the bettors and not against the operator – although the operator received a commission. Commonwealth v.
Simonds, 79 Ky. 618 (Ky. 1881).

Horse tracks in Europe and America experimented with pari-mutuel racing in the 1880’s and 1890’s, but it was not used widely. Howland, 14 Marq. Sports L.
Rev at 497. Then, in 1908, wagering at the Kentucky Derby was threatened by Louisville Mayor James Grinstead, who moved to enforce a state law that made
bookmaking illegal. Id. In response, Colonel Matt Winn, the manager of Churchill Downs, moved for a restraining order. Id. The Kentucky Court of
Appeals subsequently found that pari-mutuel wagering was not subject to the
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bookmaking statute; therefore, it was legal in the state of Kentucky. Grinstead v. Kirby, 110 S.W. 247 (Ky. 1908). Colonel Winn promptly resurrected some dusty
pari-mutuel machines from the basement of Churchill Downs, and wagering was carried on at the 1908 Kentucky Derby. Howland, supra.
Pari-mutuel wagering became the standard method used by horse tracks across the country. Id. By 1931, the predecessor to our modern-day Supreme
Court described its operation in Commonwealth v. Kentucky Jockey Club, 238 Ky. 739, 38 S.W.2d 987, 991 (Ky. 1931):

French pool or Paris mutual is a machine or contrivance used in betting …. In French pool the operator of the machine does not bet at all. He merely conducts a game,
which is played by the use of a certain machine, the effect of which is that all who buy pools on a given race bet as among themselves; the wagers of all constituting a
pool going to the winner or winners. The operator receives 5 per cent of the wagers as his commission.
(Emphasis added.)

Pari-mutuel racing has been adopted by the Association of Racing Commissioners International (RCI). Its model rules define pari-mutuel wagering
as “a form of wagering on the outcome of an event in which all wagers are pooled and held by a pari-mutuel host for distribution of the total amount, less the
deductions authorized by law, to holders of tickets on the winning contestants.”
pCI Model Rules 004-007(M). Additionally, Kentucky law defines pari-mutuel wagering as “a system or method of wagering approved by the commission in
which patrons are wagering among themselves and not against the association and
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amounts wagered are placed in one or more designated wagering pools and the net pool is returned to the winning patrons.” 810 KAR 1:001(48).
The General Assembly has codified its intention “to foster and encourage the business of legitimate horse racing with pari-mutuel wagering thereon in the
Commonwealth on the highest possible plane.” KRS 230.215(1). In 1906, the General Assembly established a state racing commission to oversee racing and
wagering in the Commonwealth. State Racing Comm’n v. Latonia Agric. Ass’n, 123 S.W. 681 (Ky. 1909). As mentioned previously in this opinion, the
Commission has been vested with “plenary power to promulgate administrative regulations prescribing conditions under which all legitimate horse racing and
wagering thereon is conducted in the Commonwealth[.]” KRS 230.215(2).

(Emphasis added.) Citing the definition of plenary from Black’s Law Dictionary at 1154 (6th ed. 1990) as “full, complete, absolute, perfect, unqualified,” the
Commission aptly noted in its brief that: “It is hard to imagine a greater delegation of authority over horse racing and pari-mutuel wagering ….” Commission’s Brief,
p. 11. KRS 230.361 directly and sweepingly authorizes the Commission to regulate pari-mutuel wagering on licensed premises.

The requirements for historical racing fall within the meaning of pari-mutuel racing. First, it may only be conducted by associations who are licensed to
conduct live horse race meets. 810 KAR 1:011(3)(2). The payouts are prescribed by regulation:
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(1)(a) A wager on an historical horse race, less deductions permitted by KRS Chapter 230 or 810 Chapter 1, shall be placed in pari-mutuel pools approved
by the commission.
(b) A payout to a winning patron shall be paid from money wagered by patrons and shall not constitute a wager against the association.
(c) An association conducting wagering on an historical horse race shall not conduct wagering in such a manner that patrons are wagering against the association, or in
such a manner that the amount retained by the association as a commission is dependent upon the outcome of any particular race or the success of any particular wager.
(2) An association shall only pay a winning wager on an historical horse race out of the applicable pari-mutuel pool and shall not pay a winning wager out of the
association’s funds. Payment of a winning wager shall not exceed the amount available in the applicable parimutuel pool.
(3) An association offering wagering on an historical horse race shall operate seed pools in a manner and method approved by the commission as set forth in 810
KAR 1:120.3 For each wager made, an association may assign a percentage of the wager to seed pools. The seed pools shall be maintained and funded so that the amount
available at any given time is sufficient to ensure that a patron will be paid the minimum amount required on a winning wager.
(4) An association shall provide the funding for the initial seed pool for each type of exotic wager. The funding for the initial seed pool shall be non-refundable
and in an amount sufficient to ensure that a patron will be paid the minimum amount required on a winning wager. 810 KAR 1:011(4).

Thus, historic races clearly fall within the scope and rules of pari-mutuel betting. Although the participants bet on different races, their money is
nonetheless being pooled. Several types of exotic bets (which have not been 3 This regulation governs exotic wagering.
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challenged in court) have been available at Kentucky’s race tracks for many years. These include Daily Doubles and Pick Six wagers, which involve multiple races
and often take place over the course of multiple days. Family Foundation argues on the contrary that the use of seed pools indicates that historic racing does not come within the definition of pari-mutuel
betting. However, the seed pools are a safeguard against “minus pools,” which occur when “the amount of money to be distributed on winning wagers exceeds the
amount of money contained in the net pool.” 810 KAR 1:001(41). The seed pool is funded by the patrons — except for the initial seed pool, which is funded by the
associations. 810 KAR 1:001(33). The initial seed pool is non-refundable, a fact that distances the association from it. No statutory or case authority has been cited
that indicates any illegality with the seed pools. Thus, there is no basis to conclude that historic racing does not involve pari-mutuel wagering. I cannot agree that the
trial court erred on this issue.

Family Foundation further contends that the historic racing regulations are illegal because the instant racing terminals are illicit “gambling devices” pursuant
to KRS 528.010(4). Once again, I agree with the reasoning of the trial court, which correctly noted that KRS 436.480 exempts pari-mutuel wagering from the
provisions of KRS Chapter 528. Therefore, the critical issue is whether the wagering is pari-mutuel – regardless of the mechanism involved. Since I agree
with the trial court that historical racing is pari-mutuel in nature, it comes within the governance of KRS Chapter 230. KRS 436.480 unequivocally provides that
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“KRS Chapter 528 shall not apply to pari-mutuel wagering authorized under the provisions of KRS 230.” I would note again that concern for possible criminal
repercussions of KRS Chapter 528 was one of the compelling reasons underlying the filing of the declaratory action as a matter of prudence and foresight for patrons
wagering under the new regulations.

Family Foundation also contends that the historic races violate KRS 230.070 and KRS 230.080 because they are anonymous. KRS 230.070 prohibits entering a
horse in a competition under an assumed name. KRS 230.080 prohibits the change of a horse’s name after it has participated in a contest. However, neither of these
statutes is applicable to historic racing. Both statutes concern the horse’s name at the time of the live competition. Historic races only include races that: 1) were
previously run at licensed pari-mutuel facilities in the United States; 2) concluded with official results; and 3) concluded without scratches, disqualifications, or deadheat
finishes. 80 KAR 1:001(30) Any horses that had violated rules involving name changes would have been disqualified, rendering the race ineligible for use in
historic racing. Thus, the Commission’s authorization of a horse for historic racing purposes presumes the qualification of the horse ab initio in the live race that later
becomes the video.

However, I do agree with Family Foundation that it is improper for the Department of Revenue to collect excise taxes on the historic races. KRS 138.150(1)(a) authorizes the Department of Revenue to collect an excise tax “on all tracks conducting pari-mutuel wagering on live racing under the jurisdiction of
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the commission.” (Emphasis added). The tax is imposed on the daily live handle. The daily live handle is:
the total amount wagered at a track on live racing and does not include money wagered:
(a) At a receiving track;
(b) At a simulcast facility;
(c) On telephone account wagering;
(d) Through advance deposit account wagering; or
(e) At a track participating as a receiving track or simulcast facility displaying simulcasts and conducting interstate wagering as permitted by KRS 230.3771 and
230.3773.
KRS 138.511(3). The lower court found historic racing to be synonymous with live racing because the bettor does not know the outcome. I cannot agree with this
reasoning.
Statutory interpretation is based on plain meaning of statutes.
Commonwealth v. Garnett, 8 S.W.3d 573, 576 (Ky. App. 1999). A broadcast that has been video-recorded by definition is not live. No other construction of the
word live is possible. Furthermore, the regulations promulgated by the Commission itself clearly differentiate between live racing and historic racing.
In order for the revenue from historic racing to become taxable, an amendment of the revenue statute is required. And that amendment is beyond even
the plenary power of the Commission to regulate and belongs solely to the General Assembly. Family Foundation last contends that the historic racing regulations
are improper because they constitute special legislation, which is prohibited by
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sections 59 and 60 of the Kentucky Constitution. However, those provisions apply to the acts of the General Assembly. The Commission is a division of the
Executive branch of the Commonwealth and is not subject to those constitutional provisions. Furthermore, special laws relate to particular persons while general
laws relate to a class. Johnson v. Commonwealth ex rel. Meredith, 165 S.W.2d 820, 825 (Ky. 1942). In this case, the regulations relate to the class of racing
associations in the Commonwealth rather than individual, specific associations.

Therefore, I am not persuaded that the regulations constitute special regulation that is prohibited by the Constitution of Kentucky.
In summary, I would affirm the ruling of the Franklin Circuit Court that the historic racing regulations are a legitimate exercise of the authority of the
Kentucky Horse Racing Commission and that they constitute pari-mutuel wagering. I would vacate as to the Revenue Cabinet on the issue of taxability of
revenue generated by historic races and remand for entry of judgment on this issue alone.

NEW OHIO BAR CHIEF NOTES BUDGET PROBLEMS IN OHIO COURTS – WE ARE PRODUCING TWICE AS MANY LAWYERS AS JOB OPENINGS

Friday, June 15th, 2012

On July 1, Judge Patrick Fischer of the 1st District Court of Appeals in Hamilton County becomes the new president of the Ohio Bar Association, only the second sitting judge to hold that position.

The occasion provides an opportunity to ask Judge Fischer about legal matters of importance to Ohioans – sometimes, whether they realize it or not.

We’re hearing about the effect budget cuts are having on courts across the country. In Kentucky, Supreme Court Chief Justice John D. Minton Jr. said court funding has been cut by 50 percent in the last three years with 235 employees lost. He called it “a hollowing-out” of the court system. What’s the situation in Ohio?
Over the last two budgets in Ohio, the state court budget has been cut by 18 percent. But there are 88 other court budgets – in 88 counties – and no one knows how much is being spent, or cut, in them. In Hamilton County, the Clerk of Court’s office went from 350 employees to about 213. At 213, it’s literally slowing down the court processes. It means that, for example, if lawyers in a small firm submit things by paper that need to be scanned into the system, what used to happen overnight now takes three or four days. It could be things like complaints, notices, court orders. Or maybe a defendant is out on bail and doesn’t show up for court. If he gets a traffic ticket, the police won’t know there’s a capias out there, and that person is off to the races.
In one Ohio county, they didn’t have enough money for paper. You had to bring your own paper, for example, to get a summons for someone to testify in court. In New Hampshire, they had to stop civil jury trials for a year because they only had enough money to do criminal trials.
So what’s the solution?
A big one is technology. If you’d get people filing everything electronically instead of on paper, you’d save tremendously. But with 18 percent cut out of the budget, that’s tough. But it’s a capital cost – one-time funding that would result in tremendous savings This year, Ohio has begun a task force to study the death penalty. What is its goal?
The task force was appointed jointly by the state Supreme Court and the state bar association. It’s not looking at whether the death penalty should exist in Ohio but – since it does exist – at the fairness and timeliness of the process. There are prosecutors, public defenders, judges, court administrators and corrections officers on the task force.
It’s a very important issue. A person’s life is at stake, and the state should be very careful but deliberative in making that decision because it’s the ultimate penalty.
You’ve overseen a death-penalty case. It’s a heavy responsibility.
The three of us (appeals judges) went over the convicted killer’s record very carefully – all 25 years of it.
Before you sign that order, you take not just one breath, but 10 breaths. You’ve got to be right. I literally read every line in the file to make sure I didn’t miss anything.
A legislature can pass a death penalty act. The governor can sign it or even give a pardon. But it is only a judge who can order an execution. That’s where the weight of it falls. But you always remember the victim.
Right now an Ohio prisoner, Abdul Awkal, is facing execution next week after being granted a last-minute stay so lawyers could debate his mental competency.
I can’t comment on a pending or impending case, but American jurisprudence protects the mentally ill. The system must make sure you are competent at the time of the crime, the time of the trial and the time of the execution. The system has built-in safeguards, and it should.
You’ve mentioned that, when you become president of the Ohio Bar Association, one focus will be helping people better understand the legal profession and lawyers.
Lawyers are perceived as only out for themselves, and that’s totally inaccurate. About 26 percent of the general population does volunteer work, while 73 percent of lawyers do pro bono work on a regular basis. I don’t know any lawyer who doesn’t take on pro bono cases on a regular basis.
People may not realize when they’re talking about ethics that the legal profession is a self-regulating profession. We prosecute problems. I talk to groups all the time about why courts are important and what good things lawyers do for our society. What’s the alternative? We wrote a pretty good Constitution in 1788 – most of the people who signed it were lawyers.
One of the things we rarely talk about when it comes to the justice system is the role of the average citizen.
Every person who has talked to me about serving on a jury has had a higher appreciation of judges and lawyers than those who haven’t served, because they’ve seen the system work. I don’t think people comprehend that the reason there are juries is to protect against government over-reach. Juries are part of our constitutional checks and balances.
I’ve never been called for jury duty, but I want to be. I don’t want to be the leader or the foreman on the jury, to have other people defer to me. Every lawyer or judge should serve on a jury like any other citizen, because it’s a duty of democracy.
The bar association is, of course, interested in legal education and recruiting good candidates into the profession. How is the job market looking for entering lawyers?
The Bureau of Labor Statistics says we’re producing 48,000 J.D.s a year, but there are only 23,000 positions open.

For the public it’s a good thing, because there are plenty of lawyers available.
But it’s a difficult time for young lawyers – there are so many lawyers out there, and the average student leaves law school with $98,500 of debt.

Ohio Supreme Court Justice Evelyn Lundberg Stratton is retiring at the end of this year. Your name has come up as a replacement.
I’m honored that people would consider me, but right now I have to earn my re-election for the office of appellate judge.

PROCEDURE FOR REINSTATEMENT OF LAWYER WHO HAS BEEN SUSPENDED from Practice of Law.

Thursday, June 14th, 2012

PROCEDURE FOR REINSTATEMENT OF LAWYER WHO HAS BEEN SUSPENDED from Practice of Law.

SCR 3.505 Character and Fitness Committee; reinstatements

(1) The Character and Fitness Committee created by SCR 2.040 shall, in addition to the powers and duties conferred in that rule, consider all applications for reinstatement to the practice of law by persons who:

(a) have been suspended for more than one hundred eighty (180) days;
(b) have been suspended for one hundred eighty (180) days or less, but whose reinstatement has been opposed by Bar Counsel.
(2) The Character and Fitness Committee may act upon the application and such investigative material as it may gather or Bar Counsel may tender to it, all of which information not submitted by the Applicant shall be made available to the Applicant.
(3) The Applicant or Bar Counsel shall have the right to a hearing before the Character and Fitness Committee prior to the issuance of its decision. The hearing shall be held within sixty (60) days from the request. The report of the Committee shall be filed within sixty (60) days of receipt of the transcript of hearing.
(4) If either party requests a hearing before the Character and Fitness Committee, the Applicant shall have the rights accorded a Respondent in a disciplinary proceeding pursuant to SCR 3.300, except that the Character and Fitness Committee shall hold the hearing rather than a Trial Commissioner. The burden of proof of one’s good character and fitness to practice law shall be on the Applicant.
HISTORY: Amended by Order 2003-4, eff. 1-1-04; adopted by Order 98-1, eff. 10-1-98

SCR 3.510

SCR 3.510 Reinstatement in case of disciplinary suspension
(1) No former member of the Association who has been suspended for a disciplinary case for more than one hundred eighty (180) days shall resume practice until he/she is reinstated by order of the Court. Application for reinstatement shall be on forms provided by the Director and Continuing Legal Education Commission, filed with the Director, and shall be accompanied by a filing fee of $250.00 which shall be made payable to the Kentucky Bar Association. An additional filing fee of $1250.00 shall be made payable to the Kentucky Office of Bar Admissions. The Director shall not accept an application for filing unless all costs incurred in the suspension proceeding have been paid by the former member, the Office of Bar Counsel has certified to the Applicant that there is no pending disciplinary file, and the costs in the reinstatement proceeding (whether costs of the Association or of the Character and Fitness Committee or of the Kentucky Office of Bar Admissions) have been secured by the posting of a cash or corporate surety bond of $2500.00. Any additional costs will be paid by Applicant. The Director shall refer the application to the Continuing Legal Education Commission within ten (10) days of receipt for certification under Rule 3.675. The Continuing Legal Education Commission shall make its certification within twenty (20) days of the referral which shall be added to the record in the reinstatement proceedings.

(2) If the period of suspension has prevailed for one hundred eighty (180) days or less, the suspension shall expire by its own terms upon the filing with the Clerk and Bar Counsel of an affidavit of compliance with the terms of the suspension, which must include a certification from the CLE Commission that the Applicant has complied with SCR 3.675.

The Registrar of the Association will make an appropriate entry in the records of the Association reflecting that the member has been reinstated; provided, however, that such suspension shall not expire by its own terms if, not later than ten (10) days preceding the time the suspension would expire, Bar Counsel files with the Inquiry Commission an opposition to the termination of suspension wherein Bar Counsel details such information as may exist to indicate that the member does not, at that time, possess sufficient professional capabilities and qualifications properly to serve the public as an active practitioner or is not of good moral character.

A copy of such objection shall be provided to the Character and Fitness Committee, to the member concerned, and to the Registrar. If such an objection has been filed by Bar Counsel, and is not withdrawn within thirty (30) days, the Character and Fitness Committee shall conduct proceedings under SCR 2.300. In cases where a suspension has prevailed for one hundred eighty (180) days or less and the reinstatement application is referred to the Character and Fitness Committee, a fee of $1250.00 shall be made payable to the Kentucky Office of Bar Admissions.

(3) If the period of suspension has prevailed for more than one hundred eighty (180) days, the matter shall be referred to the Character and Fitness Committee for proceedings under SCR 2.300. The Character and Fitness Committee will determine whether the application of a member who has been suspended one hundred eighty (180) days or less but whose termination of suspension has been objected to, or a member who has been suspended for more than one hundred eighty (180) days, should be approved. The Character and Fitness Committee shall file with the Director and the Clerk the entire record, including a written report and recommendation by the Character and Fitness Committee. The Board shall review the record and report and recommend approval or disapproval of the application to the Court. The Court may enter an order reinstating the Applicant to the practice of law or deny the application.

(4) If the period of suspension has prevailed for more than five (5) years, the Director shall refer the application to the Character and Fitness Committee for proceedings under SCR 2.300. The Committee shall file a written report and recommendation with the Director and the Clerk. The Board shall review the record and report and recommend approval or disapproval of the application to the Court. If the Committee and the Board recommend approval of the application, the Committee shall refer the application to the Board of Bar Examiners for processing in accordance with Rule 3.500(3) and shall file the entire record with the Clerk, including the written report and recommendation of the Committee. The Board of Bar Examiners shall certify the results of the examination to the Director and the Court. If the Applicant successfully completes the examination, the Court may, at its discretion, enter an order reinstating the suspended member to the practice of law. However, if the Applicant fails to pass the examination, the Court shall enter an order denying the application.
(5) A suspended member of the Association who desires to resume practice as quickly as possible following a period of suspension may file an application to do so at any time during the last ninety (90) days of the period of suspension.
(6) If the Committee and Board recommend approval of reinstatement on conditions, as provided in SCR 2.042, or approval with such additional conditions as the Board may recommend, the Court may include such conditions in any order of reinstatement.
HISTORY: Amended by Order 2009-12, eff. 1-1-2010; prior amendments eff. 1-1-07 (Order 2006- 09), 1-1-04 (Order 2003-4); 2-1-90 (Order 99-1), 10-1-98 (Order 98-1), 9-15-90 (Order 90-1), 1-1- 88, 2-24-86, 7-1-84, 4-1-82, 1-1-78, 7-2-71

SCR 2.011 Moral character and fitness
All applicants for admission to the bar of this state must be of good moral character and general fitness requisite for an attorney.
(1) Every applicant shall be of good moral character. The applicant shall have the burden of proving that he or she is possessed of good moral character. The term “good moral character” includes qualities of honesty, fairness, responsibility, knowledge of the laws of the state and the nation and respect for the rights of others and for the judicial process. Good moral character is a functional assessment of character and fitness of a prospective lawyer. The purpose of requiring an applicant to possess present good moral character is to exclude from the practice of law those persons possessing character traits that are likely to result in injury to future clients, in the obstruction of the administration of justice, or in a violation of the Code of Professional Responsibility.
(2) Fitness is the assessment of mental and emotional health as it affects the competence of a prospective lawyer. The purpose of requiring an applicant to possess this fitness is to exclude from the practice of law any person having a mental or emotional illness or condition which would be likely to prevent the person from carrying out duties to clients, Courts or the profession. A person may be of good moral character, but may be incapacitated from proper discharge of his duties as a lawyer by such illness or condition. The fitness required is a present fitness, and prior mental or emotional illness or conditions are relevant only so far as they indicate the existence of a present lack of fitness.
(3) If the Committee’s initial review and investigation into the character and fitness of an applicant reveals any of the following conduct, further detailed investigation shall be undertaken, as determined to be warranted, prior to the Committee’s determination regarding whether the applicant possesses the requisite character and fitness to practice law in Kentucky:
A. Unlawful conduct
B. Academic misconduct
C. Making a false statement, including omissions of material information
D. Misconduct in employment
E. Acts involving dishonesty, fraud, deceit or misrepresentation
F. Abuse of legal process
G. Neglect of financial responsibilities
H. Neglect or disregard of ethical or professional obligations
I. Violation of an order of court
J. Conduct indicating mental or emotional instability impairing the ability of an applicant to perform the functions of an attorney
K. Conduct indicating substance abuse impairing the ability of an applicant to perform the functions of an attorney
L. Denial of admission to the bar in another jurisdiction on character and fitness grounds
M. Disciplinary complaints or disciplinary action by an attorney disciplinary agency or a professional disciplinary agency of any jurisdiction
(4) Each applicant for admission to the Kentucky Bar shall pay all investigative fees, reporting fees or other expenses required and assessed by the Character and Fitness Committee as deemed necessary in determining the character and fitness of the applicant.
HISTORY: Adopted by Order 2007-007, eff. 2-1-08; prior amendment eff. 1-1-02 (Order 2001-2)

ILLINOIS COURTS SEEK METHODS TO HELP POOR GET ACCESS TO COURTS – LEGAL DOCUMENTS

Thursday, June 14th, 2012

SPRINGFIELD, Ill. (AP) — Throwing its weight behind a movement to make the justice system more accessible, the Illinois Supreme Court on Wednesday created a commission that will study the hurdles that keep some people from getting their day in court.

One of those hurdles is the complexity of legal documents, which can keep people from representing themselves in court even on routine matters. Another is the difficulty of reaching downstate courthouses for people who are poor or disabled.

The court also wants to promote legal self-help centers and assist people in finding affordable legal representation.

“The purpose is to make access to justice a high priority for everyone in the legal system,” Chief Justice Kilbride said in a statement Wednesday. “This includes judges, clerks, attorneys, other court personnel and even our law schools.”

Kilbride said 26 other states and the District of Columbia already have similar commissions. The Illinois panel is supposed to work with groups that are already trying to improve access, such as the Illinois Coalition for Equal Justice.

The executive director of that group, Joseph Dailing, said the civil justice system should be “more user-friendly and accessible for the growing number of people who are coming to the courts without lawyers.”

Dailing said poor people are often pulled into the legal system over divorces, rent disputes, consumer complaints and wills. Attorneys are too expensive for them and the legal process is too complex, he said, so people are left with little protection.

The commission could help with that by simplifying procedures and forms for routine legal matters. It could also work to ensure that self-help legal centers around the state are protected or even expanded.

Legal procedures aren’t the only roadblock to access. So are physical location and services.

Poor or disabled people in downstate Illinois can find themselves far from the nearest courthouse with no car and no public transportation. People with physical disabilities may not be able to get the help they need.

Technology could help with some of those problems. The IIT Chicago-Kent College of Law, for instance, has developed “Access to Justice” software that guides people through some legal procedures, and Illinois Legal Aid Online is another resource.

SELLER BEWARE: WARRANTIES IN THE SALE OF REAL ESTATE

Thursday, June 14th, 2012

jUNE 14, 2012

By Richard Meyer | rmeyer@dbllaw.com

Whether a consumer is purchasing a vehicle from a used car lot or any product online, it is prudent to keep in mind the old axiom “buyer beware.” But in the everyday sale of real estate, it is just as prudent to be guided by the maxim “seller beware.” Most real estate transactions are accomplished by means of a general warranty deed. Even if not spelled out in the deed, the general warranty includes a promise by the seller that there are no outstanding liens, or charges of any kind, against the property (unless specifically spelled out in the deed). And the seller promises to pay all costs, including the purchaser’s attorney fees, incurred by the purchaser to eliminate the liens or charges. As a result of this general warranty in the typical real estate transaction, the seller can benefit from a title examination which will disclose all outstanding liens and charges against the property. The seller can then factor these items, if any, into the selling price or negotiate removal of the liens and charges.

When the general warranty in the sale of real estate has to be litigated in the courts, the outcome may be surprising. If there have been multiple sales of the property over the years, a remote seller may be liable to the current owner for a lien or charge that has not been removed for many years. The usual statute of limitations is fifteen years. However, there is a limit on the remote seller’s liability. His or her liability cannot exceed the amount received for the property. This rule of damages does not consider any increased value of the land at the time of removal of the lien.

Thus, if the remote seller had received $100,000 for the property, but the lien is $150,000, the liability is limited to $100,000. Nor does interest run on the purchaser’s damages until he or she pays to remove the lien or charge.

Another somewhat surprising outcome is that, even if the purchaser of the property knew of the outstanding lien or charge, the seller is still liable for the cost of removing it. As the court opinions state, the general warranty “is a security afforded to all subsequent grantees.” There is strict liability for any breach of the warranty, regardless of the purchaser’s knowledge of the lien or charge.

One final unresolved issue is whether the purchaser’s recovery is limited by the amount he or she paid for the property or the amount received by the last in line seller who transferred the property by means of a general warranty deed despite an outstanding lien or charge. A title examination is preferable to finding out the answer to this unresolved issue by litigation through the courts.
Richard Meyer is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.

Kentucky Supreme Court hears oral arguments in Fen Phen Drug Civil Case

Wednesday, June 13th, 2012

Based in part on June 13, 2012 article By Beth Musgrave — Herald Leader

FRANKFORT — The Kentucky Supreme Court heard oral arguments June 13, 2012 in a high-profile diet-drug case against three disbarred Lexington-area lawyers.
The Kentucky Court of Appeals ruled in February 2011 that a trial court judge erred when he awarded more than $42 million to the former clients of Melbourne Mills Jr., Shirley Allen Cunningham and William Gallion. Special Judge William Wehr had ruled that the former attorneys owed their clients the money after finding that the bulk of a $200 million fen-phen settlement went to the attorneys instead of the 431 people they represented.

Judge William Wehr ruled in 2006 that Gallion, Cunningham and Mills had kept more money than their contracts with their clients said was allowed.
The Court of Appeals found that Wehr was incorrect when he ruled that the attorneys should have to repay their clients. Wehr granted the summary judgment without a trial, but the Court of Appeals said that there still were unanswered questions about the case and that Wehr’s ruling was premature.

On Wednesday, Ford argued that Wehr— after looking at several key documents — ruled the three attorneys had breached their fiduciary duty.
Those documents included contracts between the lawyers and their clients. The contracts said the lawyers were entitled to 30 percent and 33 percent of the total settlement. But documents in the case show the clients received only $74 million of the $200 million settlement.

“The trial court found that these documents established that the defendants kept settlement funds that vastly exceeded their fee contracts with their clients,” Ford said.
The Court of Appeals said that an affidavit by an expert witness, attorney Kenneth Feinberg, raised questions about the case, and those questions should have been answered before summary judgment was granted.

But Feinberg later recanted his affidavit, saying he was not aware of all of the facts of the case and said he relied on information provided by Gallion.
Ford told the court Wednesday that Wehr did not need Feinberg or other expert affidavits to determine where the lawyers had breached their fiduciary duty to their clients.
Andre Regard, a lawyer representing Gallion and Cunningham, argued Wednesday that the case was a class-action settlement, which means that the contracts with the clients were void and that the court could set attorney fees. Regard also argued that the three lawyers thought they had to withhold some of the money in case new defendants stepped forward with claims against the fen-phen manufacturer.
But Supreme Court Justice Lisabeth Hughes Abramson said she didn’t understand how the lawyers could say it was a class-action settlement when the case was clearly dismissed as a class action by a Boone Circuit Court judge in 2001. Abramson also said there was little evidence in the settlement documents that the three attorneys had to withhold part of that $200 million settlement in case of future claims.
If the Supreme Court upholds the Court of Appeals ruling, the case could be remanded for a trial. If the court sides with Judge William Wehr, the $42 million judgment could be reinstated.
The $42 million dollars awarded by Judge Wehr has reportedly already been seized by Ford and distributed.

If the Supreme Court upholds the Court of Appeals it could be difficult for Ford to justify her distribution of these funds which include payment of some $12 million to herself and other attorneys who she employed to assist her. Ford has argued that the granting of a new trial by the Court of Appeals did not affect the summary judgment ruling of Judge Wehr. Others argue that the ruling of the Court of Appeals set aside the summary judgment.

JUDICIAL ESTOPPEL DOCTRINE EXPLAINED

Wednesday, June 13th, 2012

Hisle v. Lexington-Fayette Urban County, 258 S.W.3d 422 (Ky. App., 2008)

The doctrine of judicial estoppel, which is a subset of the quasi-estoppel principle, also can be applied to prohibit a party from taking inconsistent positions in judicial proceedings. See generally 28 Am.Jur.2d Estoppel and Waiver § 74; Colston Investment Co. v. Home Supply Co., 74 S.W.3d 759 (Ky.App.2001). Although there is no absolute general formula for this principle, several factors have been recognized such as:
(1) whether the party’s later position is clearly inconsistent with its earlier position;
(2) whether the party succeeded in persuading a court to accept the earlier position; and
(3) whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. See New Hampshire v. Maine, 532 U.S. 742, 750-51, 121 S.Ct. 1808, 1815, 149 L.Ed.2d 968 (2001).

Judicial estoppel is an equitable principle intended to protect the integrity of the judicial process. Id.; Colston Investment Co., supra.

Kentucky Judges Should Consider Equity and Equitable Remedies

Wednesday, June 13th, 2012

Kentucky Judges Should Consider Equity and Equitable Remedies

By Hon. Ben Carter – Louisville

(complete article found at: http://bencarterlaw.com/blog/2011/10/10/open-letter-to-kentucky-judges-regarding-the-ongoing-foreclo.html )

Five hundred years ago, England developed equitable proceedings for cases in which the strict enforcement of rigid legal principles made the attainment of justice unlikely. Our own legal system, descended from the English system, requires courts to exercise both legal and equitable jurisdiction. Modern practice in Kentucky merges the two systems of law and equity. Ford v. Gilbert, 397 S.W.2d 41 (1965). The Kentucky Constitution “imbues the circuit courts with the general power to determine all matters of controversy arising under common law or equity.” Hisle v. Lexington-Fayette Urban County Government, 258 S.W.3d 422, 432 (Ky. App. 2008).

In Hisle, the Court notes that “[a]lthough modern partition proceedings generally involve statutory provisions, the jurisdiction of equity courts to partition real property is very ancient and has existed in common law both in England and this country since its founding.” Hisle at 431. Therefore, statutes that govern partition of land “supplement, or are supplemented by, the traditional jurisdiction of equity courts to decree partition.” Hisle at 432 quoting Atkinson v. Kish, 420 S.W.2d 104, 110 (Ky. 1967).

Similarly, in a foreclosure proceeding, the statutory provisions intersect with equitable considerations. Equitable relief is available in states, like Kentucky, where foreclosure is a statutory action. Union National Bank of Little Rock v. Cobbs, 509 A.2d 719, 721 (Pa.Super. 1989). “Foreclosure is peculiarly an equitable action, and the court may entertain such questions as are necessary to be determined in order that complete justice may be done.” Morgera v. Chiappardi, 813 A.2d 89, 98 (Conn. App. 2003) quoting Hartford Federal Savings & Loan Assn. v. Lenczyk, 217 A.2d 694 (1966). Emphasis in original. “The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court.” LaSalle National Bank v. Freshfield Meadows, LLC., 798 A.2d 445 (Conn.,2002).

Today, Kentucky courts [13] have the ancient opportunity and duty to weigh the equities present in each foreclosure case. To evaluate the equity of the situation, the Court should ask itself two questions:
1. Does the bank deserve the right to foreclose on this particular homeowner?
2. Should the Court allow the bank to inflict a foreclosure on the community?

DAUBERT DOWNS ANOTHER PLAINTIFF

Tuesday, June 12th, 2012

Daubert Downs Another Plaintiff

By Todd McMurtry | tmcmurtry@dbllaw.com

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In Simmons v. Novartis, 11-5053 (Not Recommended for Full-Text Publication), the Sixth Circuit affirmed the district court’s decision granting summary judgment after Plaintiff failed to establish specific causation for claimed injuries. The basis for this failure was the district court’s ruling to exclude the expert testimony of Plaintiff’s treating physician and retained expert in support of her product liability claims. An abuse of discretion standard applies to a decision to exclude expert testimony. Id. (citing Tamraz v. Lincoln Elec. Co., 620 F.3d 665, 668 (6th Cir. 2010)). The Court concluded that the district court had not abused its discretion when it excluded the two experts.

Plaintiff, Clarissa Simmons, claimed FDA-approved bisphosphonate drugs (Zometa and Aredia) used to treat skeletal problems associated with her cancer treatment caused her to develop osteonecrosis of the jaw (ONJ) following a dental procedure. Two experts testified in support of her claims.

Dr. Obeid, her treating physician and head of the Department of Oral and Maxillofacial Surgery at Washington Hospital Center in Washington, D.C., testified “he found a ‘very close association’ between ONJ and bisphosphonates.” Dr. Gutman, Plaintiff’s retained expert and an experienced oral surgeon, testified that based upon “what he had read” and within “a reasonable degree of dental certainty” that the majority of people who have invasive dental procedures while on bisphosphonates will develop ONJ.

Relying upon Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597 (1993), the district court ruled that Dr. Obeid’s opinion of a close association did not establish causation. As well, Dr. Obeid’s opinions were not founded upon a reliable methodology and were better characterized as hypotheses.

The district court then turned its attention to Dr. Gutman. It found that he had never treated patients affected by bisphosphonates, never diagnosed ONJ, and never determined the cause of ONJ. Dr. Gutman’s knowledge was based upon six articles plaintiff’s counsel had given him. The district court concluded that Dr. Gutman’s opinion lacked a “sound methodology and foundation required by Daubert.”

The Sixth Circuit affirmed the district court’s decision to exclude the proffered testimony and granting summary judgment. Citing Johnson v. Manitowoc Boom Trucks, Inc., 484 F.3d 426, 434-35 (6th Cir. 2007), the Court noted that it “views with special caution expert testimony prepared solely for purposes of litigation, rather than flowing from an expert’s line of scientific or technical work.”

Todd McMurtry is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.

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THE KY. SUPREME COURT HAS THE JURISDICTION TO MODERATE THE HARSH APPLICATION OF SUPREME COURT RULES

Saturday, June 9th, 2012

THE KY. SUPREME COURT HAS THE JURISDICTION TO MODERATE THE HARSH APPLICATION OF SUPREME COURT RULES…THIS IS CALLED EQUITY.

June 8, 2012
The Ky. Supreme Court has the power to administer, investigate and regulate the Kentucky Bar Association and the Office of Bar Counsel.
First we note that the Bar Association is created by rules adopted by the Ky. Supreme Court, and this suggests that if the Court made the rules, they can change the rules. But their jurisdiction goes further due to Section 110 of the Ky. Constitution.

Section 110 of the Ky. Constitution clearly grants jurisdiction to the Supreme Court to “exercise control of the court of justice”. The KBA (and the Office of Bar Counsel) is a creation of the Supreme Court. We would suggest that this constitutional provision grants the Ky. Supreme Court to investigate and control the acts of the Office of Bar Counsel in their administration of the attorney discipline process.
This constitutional power appears to be sufficiently broad to allow the Supreme Court to inquire about such issues as the secret dismissal of complaints by the Bar Counsel, and to examine and change practices which are found to be “excessive” and “fundamentally unfair”, to examine the expenditure of funds authorized by the Supreme Court, the power to review the appointment of Trial Commissioners in ethics cases, and most importantly, the Supreme Court has the jurisdiction to inform itself about the conduct of discipline investigations and prosecutions and to regulate the fairness, length of time of such investigations and prosecutions, and to investigate the personal conflicts of interest of Bar Counsel prosecutors and Trial Commissioners.

We would argue that if a situation arises where the Supreme Court has a case on their bench awaiting decision, and it is believed that a pending ethics investigation regarding one of the parties to this appeal may be ongoing, which may affect the case on their bench, then the Supreme Court has the power to examine in camera any actions and claims raised in the ongoing investigation of a party whose related case is before the court. We suggest that Section 110 grants this jurisdiction and that the Rules of Equity also justify such an inquiry by the Supreme Court.

We note that the SCR 3.150 Access to disciplinary information, does not provide an exception for the Supreme Court to review the pending records of an ongoing investigation of the Bar Counsel, but that rule is inferior to Section 110 of the Kentucky Constitution which grants the Supreme Court the jurisdiction to “exercise control of the court of justice.”

It was recently argued by attorney Ben W. Carter of Louisville, in an excellent seminar he taught at the 2012 State Bar convention, titled “Foreclosure: it’s Time to Occupy the Courthouse”, that the courts have the power under the doctrine of Equity, to moderate the results of black letter law where their application would operate harshly.

Ben Carter argued that all courts in Kentucky are courts of “Law and Equity”. He would argue that too often the courts overlook their power to apply the law of Equity to prevent injustice.

KENTUCKY CONSTITUTION:

Section 110
________________________________________
Composition — Jurisdiction — Quorum — Special justices — Districts — Chief Justice.
________________________________________
(1) The Supreme Court shall consist of the Chief Justice of the Commonwealth and six associate Justices.
(2) (a) The Supreme Court shall have appellate jurisdiction only, except it shall have the power to issue all writs necessary in aid of its appellate jurisdiction, or the complete determination of any cause, or as may be required to exercise control of the Court of Justice.

See definitions of Equity below:

Equity (law) From Wikipedia, the free encyclopedia

This article is about the area of law. For remedies offered by this area of law, such as injunctions and specific performances, see equitable remedy.
In jurisdictions following the English common law tradition, equity is the set of legal principles that supplement strict rules of law where their application would operate harshly. In civil legal systems, broad “general clauses” allow judges to have similar leeway in applying the code.[1]
Equity is commonly said to “mitigate the rigor of common law”, allowing courts to use their discretion and apply justice in accordance with natural law. In practice, modern equity is limited by substantive and procedural rules, and English and Australian legal writers tend to focus on technical aspects of equity. There are 12 “vague ethical statements”[2][3] that guide the application of equity, and an additional five can be added.[2]

As noted below, a historical criticism of equity as it developed was that it had no fixed rules of its own, with the Lord Chancellor occasionally judging in the main according to his own conscience. The rules of equity later lost much of their flexibility, and from the 17th century onwards equity was rapidly consolidated into a system of precedents much like its common-law cousin.

History
Equity was developed two or three hundred years after common law as a system to resolve disputes where damages are not a suitable remedy and to introduce fairness into the legal system. The distinction between “law” and “equity” is an accident of history. The law courts or “courts of law” were the courts in England that enforced the king’s laws in medieval times. Here the King’s Judges, educated in law rather than theology, administered the universal law of the realm.[4] This body of law evolved on the basis of previously set precedent into what is recognised as the Common law of England. However, if changes were not quick enough, or if decisions by the judges were regarded as unfair, litigants could still appeal directly to the King, who, as the sovereign, was seen as the ‘fount of justice’ and responsible for the just treatment of his subjects. Such filings were usually phrased in terms of throwing oneself upon the king’s mercy or conscience. Eventually, the king began to regularly delegate the function of resolving such petitions to the Chancellor, an important member of the King’s Council.[4] The early Chancellors were often clergymen or nobles, acting as the King’s confessor and thereby literally as keeper of the King’s conscience. As a result of their theological and clerical training, Chancellors were well versed in the Latin and French languages as well as in classical Roman civil and canon law, which heavily influenced equity.[5] Soon the Chancery, the Crown’s secretarial department, began to resemble a judicial body and became known as the “Court of Chancery”.
By the 15th century, the judicial power of Chancery was recognized. Equity, as a body of rules, varied from Chancellor to Chancellor, until the end of the 16th century. After the end of the 17th century, only lawyers were appointed to the office of Chancellor.

One area in which the Court of Chancery assumed a vital role was the enforcement of uses, a role which the rigid framework of land law could not accommodate. This role gave rise to the basic distinction between legal and equitable interests.

Development of equity in England
It was early provided that, in seeking to remove one who wrongfully entered another’s land with force and arms, a person could allege disseisin (dispossession) and demand (and pay for) a writ of entry. That writ not only gave him the written right to re-enter his own land, but it also established this right under the protection of the Crown if need be, whence its value. In 1253, to prevent judges from inventing new writs, Parliament provided that the power to issue writs would thereafter be transferred to judges only one writ at a time, in a “writ for right” package known as a form of action. However, because it was limited to enumerated writs for enumerated rights and wrongs, the writ system sometimes produced unjust results. Thus, even though the King’s Bench might have jurisdiction over a case and might have the power to issue the perfect writ, the plaintiff might still not have a case if there was not a single form of action combining them. Therefore, lacking a legal remedy, the plaintiff’s only option would be petitioning the King.

People started petitioning the King for relief against unfair judgments and as the number of petitioners rapidly grew, the King delegated the task of hearing petitions to the Lord Chancellor. As the early Chancellors had no formal legal training, and were not guided by precedent, their decisions were often widely diverse. However, in 1529 a lawyer, Sir Thomas More, was appointed as Chancellor, marking the beginning of a new era. After this time, all future Chancellors were lawyers, and from around 1557 onwards, records of proceedings in the Courts of Chancery were kept, leading to the development of a number of equitable doctrines. Criticisms continued, the most famous being 17th century jurist John Selden’s aphorism: ‘Equity is a roguish thing: for law we have a measure, know what to trust to; equity is according to the conscience of him that is Chancellor, and as that is larger or narrower, so is equity. ‘Tis all one as if they should make the standard for the measure we call a foot, a Chancellor’s foot; what an uncertain measure would this be? One Chancellor has a long foot, another a short foot, a third an indifferent foot: ‘tis the same thing in a Chancellor’s conscience.’[6]
As the law of equity developed, it began to rival and conflict with the common law. Litigants would go ‘jurisdiction shopping’ and often would seek an equitable injunction prohibiting the enforcement of a common law court order. The penalty for disobeying an equitable ‘common injunction’ and enforcing a common law judgment was imprisonment.

The Chief Justice of the King’s Bench, Sir Edward Coke, began the practice of issuing writs of habeas corpus that required the release of people imprisoned for contempt of chancery orders.
This tension grew to an all-time high in the Earl of Oxford’s case (1615), where a judgment of Chief Justice Coke was allegedly obtained by fraud.[7] The Lord Chancellor, Lord Ellesmere, issued a common injunction out of the Chancery prohibiting the enforcement of the common law order. The two courts became locked in a stalemate, and the matter was eventually referred to the Attorney-General, Sir Francis Bacon. Sir Francis, by authority of King James I, upheld the use of the common injunction and concluded that in the event of any conflict between the common law and equity, equity would prevail. Equity’s primacy in England was later enshrined in the Judicature Acts of the 1870s, which also served to fuse the courts of equity and the common law (although emphatically not the systems themselves) into one unified court system.

Once equity became a body of law, rather than an arbitrary exercise of conscience, there was no reason why it needed its own courts. Consequently the Judicature Act was established, which is the basis of the court structure in England to this date, to ensure that there would no longer be different procedures for seeking equitable and common law remedies. The Judicature Acts fused only the administration of common law and equity; there is still a body of rules of equity which is quite distinct from that of common law rules, and acts as an addition to it. Although they are implemented by the same courts, the two branches of the law are separate. Where there is conflict, equity still prevails.

Comparison of equity traditions in common law countries

As with the geographical transmission of any cultural artifact, direct English influence over equity weakened with time and distance, although the widespread import of printed opinions provided a corrective force, however long delayed. As the colonies gained political independence, each of their legal systems began drifting from the original in an irreversible departure from the English way of making laws and deciding cases. Nonetheless, each former colony acknowledged the reception of the common law and equity of England as a vital source of their jurisprudence.

The comparative question is an easy one to pose. Did English equity develop maturity early enough that all of its derivative systems necessarily tended toward the same doctrines, based on exactly the same set of general principles? Or did the split-offs of any of the colonies occur somewhere in the middle of its development so that substantial permanent differences resulted? One equity, or many?
The answer generally accepted in America, the earliest of the English colonies to gain independence, is the former, that the outcome of a case to be decided today upon principles of equity should be expected to be substantially the same whether decided in the UK or the US. The reasonableness of the belief enjoys strong historical support.

The perfection of modern equity as a system has been authoritatively credited to Philip Yorke, 1st Earl of Hardwicke who served as Chancellor 1737–1756.
For a review of several distinct approaches to identifying how law changes that utilize English legal history as a test bed see Robert Palmer, English Legal History course.
United States.

In modern practice, perhaps the most important distinction between law and equity is the set of remedies each offers. The most common civil remedy a court of law can award is monetary damages. Equity, however, enters injunctions or decrees directing someone either to act or to forbear from acting. Often this form of relief is in practical terms more valuable to a litigant; for example, a plaintiff whose neighbor will not return his only milk cow, which had wandered onto the neighbor’s property, may want that particular cow back, and not just its monetary value. However, in general, a litigant cannot obtain equitable relief unless there is “no adequate remedy at law”; that is, a court will not grant an injunction unless monetary damages are an insufficient remedy for the injury in question. Law courts can also enter certain types of immediately enforceable orders, called “writs” (such as a writ of habeas corpus), but they are less flexible and less easily obtained than an injunction.

Another distinction is the unavailability of a jury in equity: the judge is the trier of fact. In the American legal system, the right of jury trial in civil cases tried in federal court is guaranteed by the Seventh Amendment, but only “[i]n Suits at common law,” i.e., in cases that traditionally would have been handled by the law courts. The question of whether a case should be determined by a jury depends largely on the type of relief the plaintiff requests. If a plaintiff requests damages in the form of money or certain other forms of relief, such as the return of a specific item of property, the remedy is considered legal, and a jury is available as the fact-finder. On the other hand, if the plaintiff requests an injunction, declaratory judgment, specific performance, or modification of contract, or some other non-monetary relief, the claim would usually be one in equity.

Thomas Jefferson explained in 1785 that there are three main limitations on the power of a court of equity: “If the legislature means to enact an injustice, however palpable, the court of Chancery is not the body with whom a correcting power is lodged. That it shall not interpose in any case which does not come within a general description and admit of redress by a general and practicable rule.”[9] The U.S. Supreme Court, however, has concluded that courts have wide discretion to fashion relief in cases of equity. The first major statement of this power came in Willard v. Tayloe, 75 U.S. 557 (1869). The Court concluded, “…relief is not a matter of absolute right to either party; it is a matter resting in the discretion of the court, to be exercised upon a consideration of all the circumstances of each particular case.”[10] Willard v. Tayloe was for many years the leading case in contract law regarding intent and enforcement.[11][12] as well as equity.[11][13]

In the United States today, the federal courts and most state courts have merged law and equity in the courts of general jurisdiction, such as county courts. However, the substantive distinction between law and equity has retained its old vitality.[14] This difference is not a mere technicality, because the successful handling of certain law cases is difficult or impossible unless a temporary restraining order (TRO) or preliminary injunction is issued at the outset, to restrain someone from fleeing the jurisdiction taking the only property available to satisfy a judgment, for instance. Furthermore, certain statutes like ERISA specifically authorize only equitable relief, which forces U.S. courts to analyze in lengthy detail whether the relief demanded in particular cases brought under those statutes would have been available in equity.[15]
Equity courts were widely distrusted in the northeastern U.S. following the American Revolution. A serious movement for merger of law and equity began in the states in the mid-19th century, when David Dudley Field II convinced New York State to adopt what became known as the Field Code of 1848.[16] The federal courts did not abandon the old law/equity separation until the promulgation of the Federal Rules of Civil Procedure in 1938.

Today four states still have separate courts for law and equity, although merger in some states is less than complete.[17] Delaware is one notable example, as its Court of Chancery is where most cases involving Delaware corporations are decided. Some other states (such as Illinois and New Jersey) have separate divisions for legal and equitable matters in a single court. Although Virginia consolidated the two courts in 2006,[18] it maintains much of the same actions and remedies. Besides corporate law, which developed out of the law of trusts, areas traditionally handled by chancery courts included wills and probate, adoptions and guardianships, and marriage and divorce.

After U.S. courts merged law and equity, American law courts adopted many of the procedures of equity courts. The procedures in a court of equity were much more flexible than the courts at common law. In American practice, certain devices such as joinder, counterclaim, cross-claim and interpleader originated in the courts of equity. Also, the modern class action evolved out of the equitable doctrine of virtual representation, which enabled a court of equity to fully dispose of an estate even though it might contain contingent interests held by persons which the court did not have direct jurisdiction over.

equity
n. 1) a venerable group of rights and procedures to provide fairness, unhampered by the narrow strictures of the old common law or other technical requirements of the law. In essence courts do the fair thing by court orders such as correction of property lines, taking possession of assets, imposing a lien, dividing assets, or injunctive relief (ordering a person to do something) to prevent irreparable damage.
The rules of equity arose in England where the strict limitations of common law would not solve all problems, so the King set up courts of chancery (equity) to provide remedies through the royal power. Most eastern states had courts of equity or chancery separate from courts of law, and others had parallel systems of law and equity with different procedural rules. Now most states combine law and equity and treat both under “one cause of action.” 2) the net value of real property, determined by subtracting the amount of unpaid debts secured by (against) the property from the appraised value of the property.

court of equity
n. originally in English common law and in several states there were separate courts (often called chancery courts) which handled lawsuits and petitions requesting remedies other than damages, such as writs, injunctions and specific performance. Gradually the courts of equity have merged with courts of law. Federal bankruptcy courts are the one example of courts which operate as courts of equity.
See also: chancery court of law equity

eq•ui•ty
 ˈɛkwɪtiShow Spelled[ek-wi-tee] Show IPA
noun, plural eq•ui•ties.
1.
the quality of being fair or impartial; fairness; impartiality: the equity of Solomon. Synonyms: disinterest, equitableness, impartiality, fair-mindedness, fairness, justness, evenhandedness, objectivity; justice, probity. Antonyms: bias, discrimination, inequity, injustice, partiality, partisanship, prejudice, unfairness, unreasonableness; injustice.
2.
something that is fair and just: the equities of our criminal-justice system.
3.
Law .
a.
Also called chancery . the application of the dictates of conscience or the principles of natural justice to the settlement of controversies.
b.
Also called chancery . a system of jurisprudence or a body of doctrines and rules developed in England and followed in the U.S., serving to supplement and remedy the limitations and the inflexibility of the common law.
c.
an equitable right or claim.
d.
equity of redemption.
4.
the monetary value of a property or business beyond any amounts owed on it in mortgages, claims, liens, etc.: Over the years, they have carefully avoided tapping into their home equity for unnecessary expenses.
5.
Informal . ownership, especially when considered as the

U.S. SUPREME COURT RULING PROTECTS MAKERS OF GENERIC DRUGS – Limits Tort Rights of Victims of Generic Drugs

Saturday, June 9th, 2012

SUPREME COURT RULING PROTECTS MAKERS OF GENERIC DRUGS – Limits Tort Rights of Victims of Generic Drugs

By Joan Biskupic, USA TODAY
WASHINGTON — Makers of generic drugs cannot be sued for failing to warn people of dangerous side effects as long as their labels follow the brand-name counterpart, the Supreme Court ruled Thursday. The 5-4 decision would affect the vast majority of prescriptions nationwide.
• Justice Clarence Thomas, writing for the majority, said federal regulations, which require generic drugs to have the same warning labels as the brand-name prescription, override state personal injury law that lets people sue manufacturers for allegedly inadequate labels. The state laws at issue dictated that drug manufacturers strengthen their labels as they became aware of new risks.
Thomas said the court was bound by the principle that federal law trumps the states and by relevant U.S. regulations. Yet he acknowledged it “makes little sense” that, based on court interpretation of varying U.S. regulations, people who are injured by generic drugs have no state failure-to-warn claim but those injured by brand-name drugs do.
In the 2009 Wyeth v. Levine case, the high court allowed such a state law claim to go forward against a brand-name manufacturer.

Thomas was joined Thursday by the more conservative justices. The liberal dissenters said the majority misconstrued principles regarding the intersection of federal and state law and asserted the decision would lead to “absurd consequences.”

Justice Sonia Sotomayor, writing for dissenters, said, “As a result of today’s decision, whether a consumer harmed by inadequate warnings can obtain relief turns solely on the happenstance of whether her pharmacist filled her prescription with a brand-name or generic drug. The court gets one thing right: This outcome makes ‘little sense.’”
She noted that about 75% of all prescription drugs dispensed in the USA are generics.
Thursday’s ruling in Pliva v. Mensing marked one of two major victories for the pharmaceutical industry. In a separate case, the justices by a 6-3 vote struck down, as a First Amendment free-speech violation, a Vermont law that prevented pharmacies from selling prescription information for marketing purposes.

The dispute over safety labels traced to the early 2000s when Gladys Mensing in Minnesota and Julie Demahy in Louisiana took generic versions of Reglan, prescribed for digestive tract problems and containing the active ingredient metoclopramide.
The women developed a severe neurological disorder. They sued Pliva and other generic manufacturers under their respective state laws, alleging that the manufacturers had a duty to strengthen their warning labels as problems related to the long-term use of metoclopramide became evident.

Lower U.S. courts of appeals said the claims could go forward, rejecting manufacturers’ arguments that they were pre-empted by federal law.

Reversing those decisions Thursday and providing a legal shield for generic drugs, Thomas said it is impossible for makers of generics to meet the requirements of state laws — demanding tougher warning labels as safety problems surface — and follow federal law, which Thomas said requires merely that the generic label be the same as the brand-name equivalent.

He was joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Samuel Alito.

Sotomayor criticized the decision’s reasoning and its consequences for consumers. She said generic manufacturers, who dominate the drug market, have a duty under federal law to monitor their products’ safety and approach the Food and Drug Administration to propose label changes.

JUDGE GLENN E. ACREE NAMED CHIEF JUDGE OF CT. OF APPEALS

Saturday, June 9th, 2012

June 8, 2012
FRANKFORT, KY– Judge Glenn E. Acree of Lexington has been elected to serve as chief judge of the Kentucky Court of Appeals. His term as chief judge will begin July 1.

“I am honored to have been chosen by my colleagues to serve as chief judge,” Judge Acree said. “I will do my best to live up to the fine examples of the chief judges who have preceded me. I draw strength from the support of my fellow judges and, more significantly, I am inspired by our unsung support staff who remains dedicated to ensuring justice for all Kentuckians despite being asked to make personal sacrifices necessitated by the underfunding of the Judicial Branch.”

The Court of Appeals judges elected Judge Acree during their regular court meeting June 5. The chief judge provides administrative oversight to the Court of Appeals and serves in the position for a four-year term under the Kentucky Constitution.

Judge Acree will succeed Court of Appeals Judge Jeff S. Taylor as chief judge. Judge Taylor has served as chief judge since July 1, 2010. He is stepping down after completing the term of Court of Appeals Judge Sara Walter Combs, who resigned as chief judge in May 2010. Judge Taylor will continue serving as a Court of Appeals judge.

Judge Acree
Judge Acree was elected judge for the Kentucky Court of Appeals in November 2006 to serve Division 2 of the 5th Appellate District. He was appointed to that position in August 2006 to fill a vacancy created when Judge Julia K. Tackett retired June 30, 2006.

The 5th Appellate District is comprised of Anderson, Bourbon, Boyle, Clark, Fayette, Franklin, Jessamine, Madison, Mercer, Scott and Woodford counties.

Judge Acree resides in Lexington, where he had a solo practice from 1997 until his appointment to the Court of Appeals. He was a partner in the Lexington law firms of Stidham & Acree from 1996 to 1997, and Thomas, Stidham & Acree from 1994 to 1996. From 1985 to 1994, he was an associate in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland.

BAR COUNSEL PLACES GROUNDHOG DAY SITUATION UPON SUPREME COURT – How many times must the Supreme Court grant Bar Counsel new hearings in Deters case?

Friday, June 8th, 2012

LawReader has viewed a new pleading filed by Eric Deters in his argument against the motion of the Bar Counsel’s Office to deny his re-instatement to the practice of law. This argument appears to be an example where the Bar Counsel has made inconsistent legal arguments.

Deters argues in a brief he submitted to the Supreme Court that he had been denied Due Process by the actions of the Bar Counsel attempting to keep him from being re-instated.
The Bar Counsel responded that the hearing Deters received before the Character and Fitness Committee was his Due Process. (The Character and Fitness Committee ruled in favor of Deter’s re-instatement.)

The procedures being taken in the Deters case has imposed an additional hearing before the Board of Governors and an additional review by the Supreme Court, but SCR 3.505 does not mention or require these subsequent and redundant hearings.

The review before the Character and Fitness Committee appears to have been final. The C&F Committee heard claims of new disciplinary charges argued by the Bar Counsel in their brief, but the C&F Committee denied the Bar Counsel’s motion, and ordered that Deters be re-instated.

“SCR 3.505 Character and Fitness Committee; reinstatements
(1) The Character and Fitness Committee created by SCR 2.040 shall, in addition to the powers and duties conferred in that rule, consider all applications for reinstatement to the practice of law by persons who:
(a) have been suspended for more than one hundred eighty (180) days;
(b) have been suspended for one hundred eighty (180) days or less, but whose reinstatement has been opposed by Bar Counsel
(2) The Character and Fitness Committee may act upon the application and such investigative material as it may gather or Bar Counsel may tender to it, all of which information not submitted by the Applicant shall be made available to the Applicant.
(3) The Applicant or Bar Counsel shall have the right to a hearing before the Character and Fitness Committee prior to the issuance of its decision. The hearing shall be held within sixty (60) days from the request. The report of the Committee shall be filed within sixty (60) days of receipt of the transcript of hearing.
(4) If either party requests a hearing before the Character and Fitness Committee, the Applicant shall have the rights accorded a Respondent in a disciplinary proceeding pursuant to SCR 3.300, except that the Character and Fitness Committee shall hold the hearing rather than a Trial Commissioner. The burden of proof of one’s good character and fitness to practice law shall be on the Applicant.”

Under the argument of the Bar Counsel the jurisdiction of the Character and Fitness Committee was voided merely by the action of the Bar Counsel to announce that they had new charges pending against Deters. They claim that this removed jurisdiction from the Character and Fitness Committee to allow reinstatement of Deters.

In Deters motion, filed June 8, 2012, he argues that it is inconsistent for the Bar Counsel to argue that the Character and Fitness Committee “had no authority to find in favor of the Defendant” yet also argue to the Supreme Court that the hearing Deters received from the Character and Fitness Committee was his Due process hearing.

Deters argues that if the prior hearing was prohibited by the Rules to consider the attorneys claim on the merits, then it was not a Due Process hearing…and the Bar Counsel can’t argue that he was granted a Due Process and also argue that the Character and Fitness had no jurisdiction to find in Deters favor. (??)

Deters was sentenced by the Supreme Court to serve a 61 day suspension. The Bar Counsel then filed a motion to deny his automatic re-instatement after he had served his 61 day suspension. This post conviction motion of the Bar Counsel demands a hearing before the Character and Fitness Committee, a new review by the Board of Governors and a new review by the Supreme Court. As a result of these additional moves by the Bar Counsel, Deters original suspension of 61 days now exceeds 100 days with no end in sight.

The Board of Governors reviewed the original Deters case, and found him not guilty of l5 out of l9 charges. They recommended a suspension of 61 days. The Supreme Court reviewed the issue on appeal and sustained the recommendation of the Board of Governors. The Bar Counsel then filed an objection to Deters automatic re-instatement thereby overruling the final judgment of the Supreme Court.
As we understand the current status of this ongoing drama, the re-instatement issue, as argued by the Bar Counsel, must be reviewed by the Supreme Court. It is not known by LawReader when or if such a hearing may be held. Since we have found no rule which requires the Board of Governors or the Supreme Court to hear appeals from the ruling of the Character and Fitness Committee, the issue would appear to be moot.

The Supreme Court ordered a 61 day suspension, that suspension was served, and the Character and Fitness Committee refused to deny automatic re-instatement to Deters. We would suggest that the finding of the Character and Fitness Committee should be final, and there is no real justification for two additional hearings as demanded by the Bar Counsel.

The only thing clear from all this is that the Bar Counsel must have spent a small fortune in lawyer‘s dues (which funds their office) just to go after Deters. Months ago the Bar Counsel said their costs exceeded $44,0000….. One can only imagine how much this is costing the KBA and Deters.

We point out that the ruling on this pending case does not in any way limit or prevent the Bar Counsel from pursing new charges against Deters, it would just not allow these new allegations not to be used to affect the sentence already imposed.

The greatest cost however is the useless waste of time imposed upon the Supreme Court who has very difficult and time consuming work to do in ruling on the law in real cases. They have made a ruling in the Deters case, and we have seen no rule which subjects the Supreme Court to a Groundhog Day situation where they must continue to hear this same case day after day just because the Bar Counsel really, really wants to disbar Deters.

Court Of Appeals Judge Kelly Thompson Authors Important Discussion Of KRS Chapter 395 RE: “SEALING OF COURT RECORDS”.

Thursday, June 7th, 2012

June 6, 2012

In this addition to the decision in Kincaid v. Kincaid, Judge Thompson provides a useful tutorial on when and how court records must be considered for sealing. The law does not favor the non-disclosure of judicial records.

Kincaid v. Kincaid (Ky. App., 2011) 2009-CA-002202
THOMPSON, JUDGE: The controversy between the parties is whether Joan Kincaid and Jane Kincaid (the Kincaid daughters) and Michael D. Foley, an unrelated accountant, collectively referred to as (the advisory committee members), are entitled to compensation for their service as advisors to the estate and trust of Garvice D. Kincaid. However, before addressing the issues presented by the parties, this Court is compelled to discuss the sealing of the record. Although the parties sought and achieved the sealing of the entire record, we believe that the matter is one that is of significant public interest that has infrequently been the subject of judicial opinion. Therefore, we take this opportunity to provide guidance to the trial courts.

Mr. Kincaid’s estate consisted of a myriad of investments and an estate valued at over $23 million. The largest estate asset included majority ownership in the voting shares of the once legally and financially troubled Kentucky Central Life Insurance Company and Central Bank. Alleging the need to protect the financial entities, during the proceedings to approve the final allocation and distribution of the estate and trust assets, the advisory committee moved the trial court for a confidentiality order. Of particular concern to the parties was that information regarding the financial status of Central Bank would be subject to public review. The court issued a broadly written protective order that applied “to all information and documents disclosed in this action….”

The litigation concerning the allocation and distribution of the estate assets continued during which the estate’s beneficiaries, Brett Kincaid and Kevin Kincaid (Mr. Kincaid’s grandsons and referred to as the grandsons) were represented by Johnson True & Guarnieri, LLP. After the parties reached a settlement, litigation ensued concerning the amount and payment of attorney fees to the law firm. In 2008, an appeal was filed in this Court. Because the record was sealed in the trial court, an order was issued by our Court sealing the entire record.

When the current appeal was filed, Central Bank and the advisory committee members sought an order similar to that entered in the 2008 appeal. Because there was no objection and in reliance on the sealing of the records in the earlier appeal, an order was issued sealing the entire record in the current appeal. With the records sealed in both cases pending before this Court, the cases proceeded.
In February 2010, this Court rendered a “To be Published” opinion in the 2008 appeal. Again, an effort was made to privatize the judicial proceeding. Upon receipt of the opinion, the Kincaid daughters filed an emergency motion seeking to remove the opinion from this Court’s website and to designate it as unpublished. In ruling on the motion, this Court stressed that lawsuits are public events and despite the prior order sealing the record, there was no basis for disregarding the presumption of the openness of judicial proceedings.

We have outlined the state of the record when this appellate panel began its review and discovered that the entire court records in both cases consisting of over 1,000 pages were sealed, including mere procedural matters. Thus, on its own motion, this Court ordered the parties to file supplemental briefs addressing the propriety of sealing the entire record. Central Bank and the advisory committee advised this Court that they had no objection to unsealing the records and the Kincaid brothers likewise had no objection. However, the lack of objections by the parties neither resolves our concern nor diminishes the need to offer guidance to our trial courts.

The sealing of court records offends the public’s right to access court documents or material that derives from the common law and the First Amendment. Roman Catholic Diocese of Lexington v. Noble, 92 S.W.3d 724 (Ky. 2002).[fn.] 4 It is a right so entrenched in our judicial system that there is a presumption that judicial records are available to the public. Courier-Journal v. McDonald-Burkman, 298 S.W.3d 846 (Ky. 2009). Yet, it is becoming an increasing practice for trial courts to seal records without a hearing or findings and only because the parties do not want their case open to the public. While it is understandable that parties seek to avoid public embarrassment, scrutiny, or financial exposure, the courts must use caution when denying public access to court records.

Although a trial court retains the inherent supervisory power over its own records and files and has the discretionary authority to deny access to its records and files, it should be done only for compelling reasons. Roman Catholic Diocese of Lexington, 92 S.W.3d at 730. When exercising that discretion, the trial court is required to balance its inherent right to control and the public’s presumptive right of access. Cline v. Spectrum Care Academy, Inc., 316 S.W.3d 320, 325 (Ky.App. 2010). Our concern in this case is the procedure followed by the trial court when determining whether to seal court records. Unfortunately, there is no applicable Kentucky Rule of Civil Procedure. However, we believe that the case law does provide guidance to the trial court in deciding whether to seal a record and the procedure that must be followed.

In Lexington Herald-Leader Co., Inc. v. Meigs, 660 S.W.2d 658 (Ky. 1983), the Court addressed the issue in the context of an order closing a criminal proceeding to the public and the press. We summarize the procedure set forth:
(1) There must be a hearing;
(2) The trial court must consider less restrictive means;
(3) The burden of proof is upon the party seeking closure and it must be established that:
(a) the right or interest sought to be protected is sufficiently important to warrant the extraordinary protection of the closed court;
(b) the asserted right or interest probably cannot be adequately protected by less restrictive alternatives to closure; and
(c) the right or interest he seeks to protect will be protected by a closed proceeding. Id. at 664.
The Kentucky Supreme Court has held that the principles enunciated in Meigs are applicable to court records and civil proceedings. Courier-Journal and Louisville Times Co. v. Peers, 747 S.W.2d 125 (Ky. 1988). Thus, although guidance is absent from our civil rules, the procedure in Meigs must be followed.
We add an additional principle that emerges from the facts in the present case. There was no hearing conducted and no findings by the trial court and, as a result, there was no compelling reason to seal the court record. It was sealed solely because the parties requested confidentiality. We conclude that the parties’ agreement to seal a court record without a hearing and appropriate findings cannot be the basis for denying public access. Otherwise, the fundamental premise of an open and transparent judicial system is undermined.
In conclusion, we note that the rule adopted in Meigs is similar to the comprehensive rule adopted in California. California Rules of Court, Rule 2.550 and 2.551. To provide clarity to our trial courts and to preserve the integrity of an open and transparent judiciary, we encourage the Kentucky Supreme Court to follow those states that have promulgated civil rules providing procedural guidance for sealing records.
NOW, THEREFORE, this Court hereby ORDERS that all records in these appeals are hereby unsealed.
Moreover, contrary to the court’s suggestion that the advisory committee did not previously seek a fee during the administration of the estate, in 2000 it sought annual fees pursuant to KRS 386.180, [KRS 386.180 Repealed, 2008.]
which authorized annual fees or a one-time fee payable at the time of distribution. The request was denied based on First Sec. Nat. Bank & Trust Co. of Lexington, where the Court held that the trust had waived its statutory option of requesting an annual fee by not requesting a fee for thirty-three years. However, the court recognized that the trustee would still be entitled to a fee upon distribution of the trust assets. Id. at 477. Thus, there is no indication that the advisory committee members intended to serve voluntarily or that Central Bank intended to waive its right to seek a fee to compensate the advisory committee. To the contrary, the Fayette Circuit Court previously held that the advisory committee could not seek a fee until the closure of the estate. Thus, Central Bank justifiably believed that the advisory committee would be paid and the record is absolutely devoid of any indication that Central Bank voluntarily and intentionally surrendered or relinquished its right to charge a reasonable fee, including payment to advisors as permitted pursuant to KRS 395.150 and KRS 395.195(18).

Barker v. Stearns Coal & Lumber Co., 291 Ky. 184, 163 S.W.2d 466, 470 (1942).

In summary, we hold that Central Bank is entitled to supplement its executor fee to which it is entitled pursuant to
KRS 395.150 and KRS 395.195(18)
for the purpose of compensating the advisory committee members for their sixteen years of service as advisors to the Bank, as executor and trustee. During their service, the advisors were entangled in complex litigation and burdened with increasing estate assets on the verge of financial collapse to a value of $240 million. Because the circuit court found that the compensation requested is reasonable, it is required to permit Central Bank to supplement its fee in the amount of $1.65 million.
Based on the foregoing, to the extent that the October 28, 2009, order permits Central Bank to compensate the advisory committee members for future services, it is affirmed. However, to the extent that it denied past compensation to the advisory committee members, it is reversed and the case remanded for entry of an order approving the requested supplemental fee to allow Central Bank, as executor and trustee, to compensate the advisory committee members for their service. The advisory committee members’ appeal from the summary judgment denying their request for compensation is moot.

ALL CONCUR.

FN4. Our discussion does not apply to cases that the legislature has designated as confidential. See KRS 625.045 provides that voluntary termination of parental rights cases shall be confidential; KRS 199.570(1)(a) provides that adoption proceedings shall be confidential; KRS 610.320(3) provides that juvenile records must be confidential; and KRS 413.249(3) provides that certain childhood sexual assault or abuse cases shall be kept confidential.

KBA BAR COUNSEL FILES RECUSAL MOTION AGAINST THE ENTIRE BOARD OF GOVERNORS – The Board has the authority to discharge the Bar Counsel at “their pleasure.”

Wednesday, June 6th, 2012

June 5, 2012

In the ongoing Eric Deters saga, the Bar Counsel’s Office through deputy ethics prosecutor Sarah Coker, is seeking the recusal of the entire Board of Governors in one complaint recently filed against Deters.
We do not know the facts of this new charge, but that is not as interesting as the fact that the Board of Governors has the authority to dismiss any member of the Bar Counsel’s Office at “the pleasure” of the Board of Governors. The Bar Counsel must feel confident that they can object to the findings of their own boss.

The Bar Counsel filed the recusal motion with the Clerk of the Supreme Court, but the Clerk refused to accept the filing of the motion with the Supreme Court and returned the motion back to the Bar Counsel. The Clerk stated that the motion was not properly filed with the Supreme Court, and that it should have been filed with the KBA.

This latest filing by the Bar Counsel follows a line of setbacks in the Deters case by the Bar Counsel prosecutors. The Bar Counsel originally brought l9 charges against Deters but the Board of Governors and the Supreme Court acquitted Deters of 15 of the l9 counts.

Deters was given a 61 day suspension. Shortly before the suspension sanction was completed the Bar Counsel filed a notice with the Character and Fitness Committee objecting to the automatic reinstatement of Deters upon the expiration of the 61 suspension given him by the Supreme Court. The Character and Fitness Committee denied the motion to deny automatic reinstatement to Deters, and the matter then had to go back to the Board of Governors before a second review by the Supreme Court.

After the Bar Counsel had lost l5 of l9 counts against Deters they filed a brief with the Character and Fitness Committee and reported that they had six new counts pending against Deters.
Deters has not been tried on any of these six new counts, and they were subject to the confidentiality rule. The Character and Fitness Committee could have asked for information on the new charges, but if they didn’t ask for information on the six new charges, then it is possible that the Bar Counsel’s Office violated the Confidentiality Rule by mentioning these six new charges to the Character and Fitness Committee. Several other exceptions to the Confidentiality Rule may have applied, but we can’t confirm this.

At the present time, Deters has been suspended from the practice of law in excess of 100 days even though the Supreme Court only suspended him for 61 days.
The SCR which allows the Bar Counsel to object to the automatic reinstatement of an attorney is SCR 3.505. This rule imposes on the defendant attorney the burden to prove his fitness for reinstatement. In most prosecutions, the accuser has the burden of proof, but in attorney discipline procedures, the burden of proof is placed on the defendant lawyer. This procedure places an awesome power in the hands of the prosecutor, and in effect they are authorized by SCR 3.505 to obtain a new sentencing hearing, which goes into effect immediately, solely by writing a letter. No similar procedure is allowed in criminal law. Can you imagine the Commonwealth Attorney being able to object to the sentence of the Supreme Court?

The Character and Fitness Committee ruled against the Bar Counsel , and slapped down their motion to extend Deters suspension of 61 days imposed by the Ky. Supreme Court.
The relevant parts of the rule states:

SCR 3.505 Character and Fitness Committee; reinstatements
(1) The Character and Fitness Committee created by SCR 2.040 shall, in addition to the powers and duties conferred in that rule, consider all applications for reinstatement to the practice of law by persons who:

(b) have been suspended for one hundred eighty (180) days or less, BUT WHOSE REINSTATEMENT HAS BEEN OPPOSED BY BAR COUNSEL.

It appears that the Bar Counsel after almost two years of prosecution of Deters has found a way to enhance the penalties imposed by the Supreme Court.

It is not known when the Supreme Court will consider the Bar Counsel’s objection to the ruling of the Character and Fitness Committee which denied their motion opposing his reinstatement.
The motion by the Bar Counsel’s Office to recuse the entire Board of Governors in one of the six new counts is a very novel motion. The Board of Governors fired Linda Gosnell last November and no reason has been given by the KBA for her termination.

One would think that at some point the Board of Governors might inquire about the justification to expend so much money to pursue Deters, and they might someday ask why the six new charges were only pursued by the Bar Counsel’s Office after Deters was acquitted of l5 of l9 counts. If the Board fired the Chief Ethics Prosecutor, (one unconfirmed report claimed Gosnell was terminated for “excessive prosecution”), it is possible that the Board at some point might review the actions of the Bar Counsel’s Office in continuing to pursue Deters.

The Bar Counsel’s office months ago sought to collect from Deters their claim of attorney fees in the amount of $44,000. That motion was denied by the Supreme Court. If this case had cost the Bar Counsel’s Office $44,000 some six months ago, one must wonder how much of their resources they are expending to get Deters.

SCR 3.505 clearly limits the finality of decisions of the Supreme Court. This is a strange rule which allows an angry prosecutor to simply write a letter objecting to the period of suspension ordered by the Supreme Court, and by doing so, add additional days or months of suspension to the attorney’s penalty.

SUPPLEMENT: COPY OF MOTION BY BAR COUNSEL SEEKING RECUSAL OF BOARD OF GOVERNORS Note the Bar Counsel states they obtained permission of Character and Fitness Committee to provide info about new pending count…but Character and Fitness even with this info voted to deny the motion of the Bar Counsel to deny reinstatement of Deters.

SUPREME COURT OF KENTUCKY
KBA FILE 16037
KENTUCKY BAR ASSOCATION
v. MOTION TO RECUSE BOARD OF GOVERNORS

COMPLAINANT

ERIC C. DETERS RESPONDENT
* * * * * * *
The Kentucky Bar Association moves to recuse the entire Board of Governors, pursuant
to SCR 3.370(3), from consideration of Kentucky Bar Association v. Eric Deters, KBA File
16037. The Motion is filed with the Supreme Court, as it is the Court of original jurisdiction for
disciplinary cases.
In support of this Motion, the KBA states as follows:
On February 21,2012, Trial Commissioner W.E. Quisenberry JI. filed his Report
recommending that Respondent be suspended from the practice oflaw. A subsequent Motion to
Amend the Report was denied, and the Report became final on March 21,2012. Respondent
filed a Notice of Appeal to the Board of Governors, pursuant to SCR 3.365, on April 20, 2012.
Respondent then requested, and was granted, additional time up to and including June 10,2012
to file his brief.
While this matter has been pending, the Respondent was suspended for sixty-one (61) in
an unrelated disciplinary matter on February 23,2012. The KBA objected to his automatic
reinstatement pursuant to SCR 3.510(2) on March 7,2012. The Character and Fitness
Committee of the Kentucky Office of Bar Admissions conducted an expedited hearing upon
Respondent’s demand and later filed a Report recommending that he be reinstated to the practice
of law. That Report is currently scheduled for review and hearing by the Board of Governors on
June 5, 2012.

In the course of the reinstatement proceedings, General Counsel for the Character and
Fitness Committee, Bonnie Kittinger, tendered a request for confidential information pursuant to
a waiver signed by Respondent as well as SCR 3.lS0(4)(a)(i). The rule states:
Request for Non-Public Information. A request for non-public information to the
Office of Bar Counsel may be considered. by the Inquiry Commission and may be
granted if the request relates to an investigation by the requestor and is made by:
i. The Character and Fitness Committee.”
. The Chairman of the Inquiry Commission, Michael J. Schmitt, granted the request and provided
the information to the Character and Fitness Committee.
The Report of the Character and Fitness Committee, which is of record in the
reinstatement proceeding currently before the Board, contains all of the information disclosed by
the Inquiry Commission pursuant to SCR 3.lS0(4)(a)(i). This includes the subject matter and
posture of all pending matters which involve Respondent, including bar complaints and
investigative files in the very early stages of investigation.
Disciplinary proceedings are confidential until a Trial Commissioner or the Board itself
recommends a public sanction. SCR 3.150(1). Neither the Trial Commissioner nor the Board
are informed of the existence of pending disciplinary Charges, Complaints, or investigations in
order to preserve the confidentiality of those proceedings and protect the attorneys and the
process from an adverse inference.
The Trial Commissioner has recommended a sixty-day suspension from the practice of
law – a significant sanction. Respondent and the Office of Bar Counsel are entitled to
proceedings conducted in conformance with the Supreme Court Rules, free from consideration of
other pending matters that are not before the Board.
SCR 3.370(3) states:
2

Any member, including a non-lawyer member, who has participated in any phase
of a disciplinary case submitted to the Board under this rule, or who has been
challenged on grounds sufficient to disqualify a Circuit Court Judge shall be
disqualified … Any challenge to a member’s qualifications shall be determined by
the Chief Justice in accordance with KRS 26A.015, et. .seq.
KRS 26A.015(2)states:
Any justice or judge of the Court of Justice or master comnnssioner shall
disqualify himself in any proceeding: (a) Where he has a personal bias or
prejudice concerning a party, or personal knowledge of disputed evidentiary facts
concerning the proceedings, or has expressed an opinion concerning the merits of
the proceeding … (e) Where he has knowledge of any other circumstances in which
his impartiality might reasonably be questioned.
The knowledge that there are pending Charges, Complaints, and investigations is
sufficientto reasonably questions the Board’s impartiality under these extraordinary and
unprecedented circumstances. It would be difficult, ifnot impossible, to put aside the knowledge
that Respondent has another case in which a public sanction has been recommended or that there
are other investigations pending into conduct similar to that before the Board in this matter.
For the foregoing reasons, the KBA requests the recusal of the entire Board of Governors.

Deputy Bar Counsel
Office of Bar Counsel
Kentucky Bar Association
514 West Main Street
Frankfort, Ky 40601
502/564-3795
3

COMMENTS BY ERIC DETERS ABOUT HIS REINSTATEMENT MOTION

Tuesday, June 5th, 2012

June 5, 2012

The Results of My Reinstatement Hearing in Kentucky

I am going to protect the privacy of the process and not provide any detail about what happened in the hearing. It is a confidential process. However, since everyone knew about the hearing, I want to report the result and next step.

Character and Fitness recommended my reinstatement to the practice of law in Kentucky. This recommendation went to the Board of Governors this morning. I will share with you Bar Counsel has argued that my reinstatement can’t happen under current law. The Board of Governors voted 13 to 0 against my reinstatement. However, even if they voted 13 to 0 for me I would not be reinstated until this matter went before the Supreme Court, the next stop in this process.

It is public knowledge I have challenged the constitutionality of a rule before the Supreme Court related to my bar matter on due process grounds. This is the rule allowing Bar Counsel to object to my automatic reinstatement which was scheduled for April 25.

I remain confident of victory in this matter. My application for reinstatement is the first of its kind based upon reasons I won’t disclose. Based on what I know about my facts, my case and the law involved, I’m optimistic and confident the Supreme Court will give me justice by granting my reinstatement. They will have to change the law to do it, but as our highest court, the Supreme Court does this all the time.

Until then, my cases in Kentucky and Ohio are being handled by all my dedicated lawyers and staff.

I still believe I’ll be back very soon and on the same time frame as if they had recommended my reinstatement. Based on the current law, I’m speculating the Board of Governors believed they had to vote against my reinstatement. The Board can’t change the law. The Court can and I believe will.

Thanks for all the prayers, loyalty and support. I would be unable to go through this process without it. Florida has reciprocal discipline too, but for now I’m fully licensed there.

I’ll be back soon one way or the other, but I predict through a Supreme Court victory. I must stress my matter doesn’t involve disbarment but suspension. This will be over soon.

The Character and Fitness Committee and the Board of Governors have been very fair to me in this process including giving me expedited hearings so I can move closer to the Supreme Court. I’m finally there.

 

LARGE LAW FIRMS BANKRUPTCY LAWYERS FEES CHALLENGED

Tuesday, June 5th, 2012

Reuters) – The bankruptcy lawyers who handle the biggest U.S. corporate restructurings responded with hostility on Monday to new scrutiny of their fees, which can reach hundreds of millions of dollars at the expense of creditors.

 

The lawyers told officials of the U.S. Justice Department they do not want to keep a budget, they do not want to disclose details of their billing practices and they do not want to justify expenses under $500.

 

The lawyers tried to make their case on the 7th floor of Washington’s Justice Department at a rare public meeting called to consider whether bankruptcy fees are inflated, unjustified or wasteful.

 

The airing of ideas took place amid tales of limousine rides and clothing put on expense accounts, and in the face of questions about what exactly lawyers do to bill at rates up to and above $1,000 an hour.

 

In one recent example, during the two-and-a-half-year restructuring of Lehman Brothers, payments to the law firm Weil Gotshal & Manges totaled $383 million, according to a securities filing in March.

 

Legal fees are at issue also in the bankruptcy of MF Global Holdings Inc, whose estate has paid $17 million to lawyers in four months, according to court filings on Monday.

 

Bankruptcy lawyers bill at higher rates than lawyers in most other specialties, although the reason is in dispute. The top billers say the market values their experience and knowledge in restructuring companies such as Chrysler Group LLC. Critics say it is because managers of bankrupt companies are less aggressive than other clients in asking for discounts.

 

The Justice Department’s U.S. Trustee Program is considering changes designed to impose what it considers financial discipline.

 

INACCURATE DATA

 

At Monday’s meeting, lawyer Richard Levin said the data that the U.S. Trustee Program wanted to collect about hourly rates would be useless. He said legal billing records often were inaccurate because he and colleagues forgot to write down time they spent on cases.

 

“Lawyers are notoriously bad at administrative tasks, including putting data in properly,” said Levin, a partner at Cravath, Swaine & Moore in New York and vice chairman of trade group the National Bankruptcy Conference.

 

In bankruptcy cases, lawyers’ fees are at the mercy of the bankruptcy courts. Lawyers submit applications for compensation and objections may come from creditors, many of whom lose out in a bankruptcy, or from trustees, who are federal officials.

 

The final decision on fees is up to a bankruptcy judge, guided by what U.S. law says is “necessary” and “reasonable.”

 

The U.S. Trustee Program wants to know whether law firms inflate their rates in bankruptcy cases — for example, by using more lawyers than necessary, or by dragging their feet — knowing they are unlikely to be challenged by the court.

 

“It cannot possibly be, can it, that everyone works through budgets except bankruptcy lawyers?” asked Clifford White, director of the Executive Office of U.S. Trustees.

 

Damian Schaible, one of five private lawyers who answered questions in person from White and his staff, said the process of budgeting was often useless, especially in the context of a legal team working on an unpredictable bankruptcy.

 

“How can anyone budget in the real world what they’re going to spend?” asked Schaible, a partner at Davis Polk & Wardwell in New York, dismissing budgets also in personal bankruptcies.

 

LARGE FIRMS’ DNA

 

Big law firms, which can throw scores of lawyers at a single case, cannot help but splurge on a major bankruptcy, said Albert Togut, managing partner of a boutique law firm that specializes in bankruptcy.

 

“It’s in their DNA that, when they approach a project, they bring every resource at their disposal to the project,” he said.

 

He urged the trustee staff to make a change that would encourage greater use of small, specialized law firms.

 

There has been a disproportionate number of major bankruptcy cases in recent years — including Lehman, General Motors, Washington Mutual — and the proposed new scrutiny from the U.S. Trustee Program is aimed at big cases, those with combined assets and liabilities of $50 million or more.

 

But there is disagreement even on that threshold. A group of 118 law firms opposed to the trustee proposal wants to set the line at $250 million.

 

A lawyer was scheduled to speak on behalf of those 118 firms on Monday, but he did not appear. D.J. “Jan” Baker of Latham & Watkins had, in written comments, assailed the trustee proposal as illegal and wasteful.

 

Baker preferred to meet in private, White said, adding that he was disappointed by the absence.

 

“Private meetings do not afford the level of transparency that today’s meeting will provide,” he said early on.

 

Baker did not respond to a request for comment later on Monday.

 

 

GOVERNOR SIGNS SYNTHETIC DRUG BILL

Tuesday, June 5th, 2012
  • Gov. Beshear signs synthetic drug bill
    Thursday, May 31, 2012
    Issued By: Governor Steve Beshear’s Communications Office
    Saying the law would help Kentucky stay one step ahead of backyard chemists who constantly change the formulas of banned drugs to keep them legal, Governor Steve Beshear today ceremonially signed House Bill 481, which bans whole classes of synthetic drugs.
  • KY. SUPREME CT. TO HOLD IMPORTANT ORAL ARGUMENTS IN FRANKFORT ON JUNE 13-14

    Tuesday, June 5th, 2012

     

    FRANKFORT, Ky. — The Supreme Court of Kentucky will convene Wednesday and Thursday, June 13 and 14, in Frankfort to hear oral arguments in cases that originated in Boone, Franklin, Jefferson, Lincoln and Rockcastle counties. Proceedings are open to the public and will take place in the Supreme Court Courtroom on the second floor of the state Capitol at 700 Capitol Ave.

     

    The public may also observe oral arguments via the Supreme Court live stream on the Kentucky Court of Justice website. Oral arguments are available online as they occur in real time and are not available as archives.

     

    The Supreme Court is the state court of last resort and the final interpreter of Kentucky law. Seven justices (bios) sit on the Supreme Court and all seven justices rule on appeals that come before the court. The justices are elected from seven appellate districts and serve eight-year terms. A chief justice, chosen for a four-year term by fellow justices, is the administrative head of the state’s court system and is responsible for its operation. The Supreme Court may order a ruling or opinion to be published, which means that the ruling becomes the case law governing all similar cases in the future in Kentucky.

     

    WEDNESDAY, JUNE 13, 2012

     

    9 AM

     

    2011-SC-266-DG

    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY V. HODGKISS-WARRICK

     

    Summary: “Underinsured Motorist Coverage. Conflict of Law. Summary Judgment.”

     

    Discretionary Review granted 12-15-2012

    Rockcastle Circuit Court, Judge Jeffrey Thomas Burdette

     

    Attorneys for Movant: Douglas Loy Hoots, Tyler Griffin Smith and Timothy Edward Davis

    Attorney for Respondent: Charles Clay Adams Jr.

     

    10 AM

     

    2011-SC-030-DG

    MILLER V. COMMONWEALTH OF KENTUCKY

     

    Summary: “Criminal Law. Probation Revocation. Sex Offender Treatment Program. Impossibility. The issue is the appropriate remedy where the trial court ordered the defendant to two years probation and Probation and Parole ordered the defendant to complete the Sex Offender Treatment Program; however, due to the length of the program, the defendant cannot complete the program prior to the expiration of his probation.”

     

    Discretionary Review granted 8-17-2012

    Lincoln Circuit Court, Judge Jeffrey Thomas Burdette

     

    Attorney for Movant: John Richard Clay

    Attorney for Respondent: Julie Scott Jernigan

     

    11 AM

     

    2011-SC-291-DG

    ABBOTT, ET AL. V. CHESLEY, ET AL.

     

    Summary: “Torts. Fen-Phen Litigation. Issues include whether plaintiffs were entitled to summary judgment regarding alleged breaches of attorneys’ fiduciary duty.”

     

    Discretionary Review granted 12-14-2011

    Boone Circuit Court, Judge William J. Wehr

     

    Attorney for Movants: Angela Margaret Ford

    Attorneys for Respondents: Frank V. Benton IV, James M. Gary, Sheryl G. Snyder, Griffin Terry Sumner, John Kendrick Wells IV, Andre Fereole Regard, Calvin Ray Fulkerson, James A. Shuffett and John Christian Lewis

     

    Note: Justice Schroder is recused.

     

    THURSDAY, JUNE 14, 2012

     

    9 AM

     

    2011-SC-095-DG

    DEPARTMENT OF REVENUE, FINANCE AND ADMINISTRATION CABINET, ET AL. V. WADE, ET AL.

     

    Summary: “Employment Law. Termination. The issue is whether a state employee who requested a pre-termination hearing after receiving notice of termination waives said hearing by repeatedly engaging in conduct that delays the hearing.”

     

    Discretionary Review granted 12-14-2011

    Franklin Circuit Court, Judge Thomas D. Wingate

     

    Attorney for Movants: Travis Alan Powell

    Attorneys for Respondents: Paul F. Fauri, Mark A. Sipek and Boyce Andrew Crocker

     

    10 AM

     

    2011-SC-157-CL

    COMMONWEALTH OF KENTUCKY V. WILSON

     

    Summary: “Certification of the Law. Ex parte motion by a defendant to set aside his arrest warrant.”

     

    Jefferson Circuit Court, Judge Sheila A. Collins

     

    Attorneys For Petitioner: Michael J. O’Connell and David A. Sexton

    Attorney For Respondent: Paul S. Gold