Archive for September, 2012


Tuesday, September 18th, 2012


The following KRS topics are now in force.

KRS CHAPTER 386A Subchapter 1. General Provisions NEW 2012

KRS CHAPTER 386A Subchapter 2. Formation — Certificate of Trust and other Filings NEW 2012

KRS CHAPTER 386A Subchapter 3. Governing Law — Authorizations — Duration — Powers NEW 2012
KRS CHAPTER 386A Subchapter 4. Series NEW 2012

KRS CHAPTER 386A Subchapter 5. Trustees and Trust Management NEW 2012
KRS CHAPTER 386A Subchapter 6. Beneficiaries and Beneficial Rights NEW 2012
KRS CHAPTER 386A Subchapter 7. Mergers and Conversions NEW 2012
KRS CHAPTER 386A Subchapter 8. Dissolution and Winding Up NEW 2012
KRS CHAPTER 386A Subchapter 9. Foreign Statutory Trusts NEW 2012
KRS CHAPTER 386A Subchapter 10. Miscellaneous Provisions NEW 2012

The KBA continues to pursue attorney Eric Deters. Mr. Deters has submitted the following letter to LawReader and we have elected to publish his comments

Tuesday, September 18th, 2012

LawReader has read the tea leaves where the Ky. Supreme Court in several recent decisions has overruled actions of the KBA Board of Governors. These recent rulings against KBA findings, to us demonstrates a change in attitude in the trust and deference that the Supreme Court has traditionally given towards the KBA discipline process.

A good argument can be made that the Supreme Court has been sending a message to the KBA, but the KBA and (a majority of) the Board of Governors and the Bar Counsel have all failed to read the tea leaves.

LawReader may be wrong, but the further the KBA goes in refusing to protect the rights of lawyers, the less likely the Supreme Court will be to walk the plank with them.

There are troubling issues which are of concern to attorneys across the state.
1. Secrecy policies…they refuse to provide an accounting of their expenditure of dues funds for the hiring of outside counsel.
2. They have not informed the public of their reason for discharging Linda Gosnell.
3. They have had some type of ethics investigation of a former KBA President hidden from view for the last four years. (See Courier-Journal story from 2008).
4. The Angela Ford distribution list being sought by the U.S. Attorney for the last two years has not been publically discussed by the KBA. The public should be informed as to the names of all attorneys who shared $12 million with Angela Ford. Rumors persist that when this list is finally released that it may be highly embarrassing to the KBA. Is the KBA pursuing this issue or are they trying to bury this controversy?
5. The Board of Governors reviewed the decision to fight the John M. Berry, Jr. ACLU federal lawsuit seeking to obtain a ruling on the constitutionality of the SCR Rule 3.130 (8.2) which allows the sanction of a lawyer who makes a “truthful but reckless” statement. That decision by the Board of Governors cost the Bar Association over $400,000. This money was spent to enforce a rule that allows the Bar Association to punish truthful political speech of attorneys. We are aware that a minority of Board Members opposed the decision to defend the Berry/ACLU lawsuit. We hope that those Board Members who voted to waste $400,000 and to restrict lawyers free speech rights will explain why they did this.

The following letter from attorney Eric Deters expresses his frustration about yet another attempt to sanction him. Deters is a right leaning radio talk show host and a pretty good lawyer. Some people don’t agree with most of his radio comments (i.e. everyone at LawReader), but we defend his right to express his views. Just because he is a lawyer, doesn’t mean the KBA has any right to silence him by constantly pursuing him for things that are alleged to have occurred ten years ago. Why weren’t these old charges combined with the l9 counts they previously prosecuted him for? He won l5 of l9 counts…so now they trot out new charges. We do not purport to know the facts of these new charges, but the Deters letter raises procedural issues which everyone can evaluate.

Time will reveal whether or not the Supreme Court has been sending the KBA a warning that “they are going too far”. That is the conclusion we make when we read the tea leaves. Apparently the KBA believes they are above reproach, and they haven’t learned anything about several recent rulings against them by the Supreme Court. (Don’t forget the Supreme Court ruling partially rejecting the KBA requests for an increase in dues and the displeasure expressed about the budget of the KBA.

The Supreme Court is a sleeping giant. If the KBA continues to do everything it can to awaken the sleeping giant, they may learn that the Supreme Court created the KBA, the Bar Counsel’s Office, the Board of Governors, and the Court approves their annual budget. The KBA is a mandatory program, but only half of all states have rules which mandate bar membership. If the Supreme Court decided to ditch the current Bar set-up Kentucky Bar Association could be converted to a “voluntary” bar association.

Wikipedia: Mandatory, integrated or unified bar associations
“Some states require membership in the state’s bar association to practice law there. Such an organization is called a mandatory, integrated, or unified bar, and is a type of government-granted monopoly.
They exist at present in a slight majority of U.S. states: Alabama, Alaska, Arizona, California, Florida, Georgia, Idaho, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon,Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, Washington State, West Virginia, Wisconsin, and Wyoming. The other states have “voluntary” associations.


Dear LawReader: Sept. 17, 2012

I wanted to report to you an update on my ongoing ordeal with the office of the Kentucky Bar Counsel and the Kentucky Bar Association Board of Governors. I know you are at the forefront of reform. I’ve read “A Parliament of Owls” which you recently published which focuses on the issues, in novel form, with Bar Counsel and the Board.

On Saturday Sept. 15, 2012, the Board voted on a ten year old matter, to suspend me for 60 days. Of course this is not final. They also voted on a two year matter, 30 days, and apparently that would run concurrent. Since all we received is a call at this point from the Disciplinary Clerk reporting for the Board, its unclear all which they did. They have 45 days to write a written opinion and then I have 30 days to appeal to the Kentucky Supreme Court which of course I will.

Larry Forgy, my legal counsel, and I have decided we have been foolish to think the Bar Counsel and the Board will ever change their attitude towards me regardless what I’m put through. I do whatever they ask (ie. Not speak ill of them; reform my lawsuit practices etc.) and it makes no difference.

Word on the street is the Bar Counsel’s office and the Board are upset with Character and Fitness and the Supreme Court for reinstating me over their objection and they want to show the Court they aren’t going to give up suspending me longer.

The following facts would support this assertion:

1. KBA President Doug Myers and the Board refused my request to have a court reporter and/or videographer present to make a record. This shocked me. The last discipline hearing I had, they refused my videographer because they said I needed to request it in advance. So, this time I requested in advance and they refused it.

Why would the Bar not want a record of the oral argument?

The Supreme Court records oral argument. The Court of Appeals records oral argument.

Why did we want to?

At my reinstatement hearing before the Board, they were tough on Bar Counsel. We were certain we won. Then they voted 13-0 against me. We felt played. We wanted to have a record this time to cite to the Supreme Court. What would be the Board’s motive to overrule this except to avoid scrutiny?

2. They had a Deputy Sheriff guard the meeting! No kidding! One of the Board members came out after the hearing (Richard Hay) and apologized to me for it. Larry Forgy and I have never, in any of these hearings (First Discipline, Character and Fitness, Board Reinstatement, or this one) been nothing but courteous, polite and understated.

So no record and a guard. I assume the guard cost money.

3. The two matters were not involving moral turpitude, a crime, theft, lying or any serious issue. They involved two misstatements in lawsuits. One ten years old. Why is this important? Because they know I went through a federal audit on this and attended 20 hours of ethics in less than two months! I attach a copy of the oral argument paper we prepared and submitted in advance of the hearing. I made these arguments at the hearing.

Anyone who not biased, who would review that, would have to conclude- I have been through enough, have already served 52 more days of suspension in Kentucky and since I took all those ethics courses, we should move on.

I even submitted three documents to prove I’ve learned to be more careful. (also attached.)

Bar Counsel called my ethics courses and these forms irrelevant. Imagine. The 7 hours ethics course ordered by the Kentucky Supreme Court, the 20 hours ordered by Judge Reeves and the 7 hours order by Ohio is not relevant to a ten year old and a two year old misstatement in two lawsuits.

But, it gets better. At the hearing when I pointed out every day I receive pleadings from defense lawyers with false statements in them—i.e. Answers asserting defenses which the lawyer knows don’t apply, they all laughed. Two Board members admitted they did it and would keep doing it! (Now we know why they didn’t want a record.)

4. I’m a victim of the non-application of a double jeopardy. They used these two issues to file the Objection they filed before which caused me to be suspended 52 more days, then turn around and want me suspended on them again! How fair is that? Suspend me twice on same issues.

Also, I told them the Bar Counsel will file another Objection and off I go to the Character and Fitness when nothing changes since I was reinstated June 15, 2012.

The entire purpose of punishment is twofold:

1. Punishment
2. Deterrence

I argued I was punished enough and I took all these ethics courses and I should be given a chance not to commit these same issues. I haven’t. After a review of my oral argument, what do you think?

Our Plan

In light of the Bar Counsel’s and Board’s vindictive treatment of me, Larry Forgy and I have decided we have no choice or at least no reason to do the following:

1. Under the Berry decision, exercise our free speech rights to criticize the Bar Counsel’s office and the Board. They aren’t judges. Regardless, we see no rule which doesn’t allow us to speak out about their rules, policies and conduct and we will.

2. We call on lawyers across the state and rise up and run against all these Board members. We aren’t going to change things without changing the Board.

3. We are going to ask the Supreme Court to decide our action challenging the Objection rule since the Bar Counsel will no doubt use it again on me. A Board member asked Sarah Coker if the Bar Counsel office would use it again. She dodged the question.

4. We have to change the cozy relationships the Board has with the office of Bar Counsel. The prosecutor (Bar Counsel), grand jury (Inquiry Commission) and the jury/judge (Board) appear to all be on the same side.

My matters have all been “presented” to the Board by one of the Board members. When we walked into this hearing, this Board member was sitting right next to Bar Counsel! Also, he and others asked questions in such a mean and nasty way to us. But to Bar Counsel, they ask in great deference. It’s so unfair.

5. We are going to file another original action in the Kentucky Supreme Court to challenge all which we believe is unconstitutional. We also are going to challenge the silence the Board has maintained on Linda Gosnell’s firing and the attorney’s fees paid to outside counsel. The lawyer dues from the Kentucky lawyers have been mismanaged by the Board and Bar Counsel. The dues could be reduced if they were not.

Another point of amusement is it’s been nearly a year and the Board hasn’t been able to find and name new Bar Counsel. A year!


A final thought on how it’s clear no matter what I do, Bar Counsel and the Board will not give up in the pursuit of me.

Their big issue before, including in reinstatement, was my “lack of remorse.”

I would suggest that the Board has neglected to consider the Alford Plea philosophy, where a defendant is permitted to admit there is sufficient evidence to convict, but they are still allowed to maintain their innocence. The Bar Counsel argument on “contriteness” provides no room for a person to maintain their innocence. There is no rule which requires an attorney to be “contrite” in such matters.

As you can see from my statement I expressed remorse for the mistakes. It meant nothing. I feel naïve that I could convince them to have some humanity. Look at all the hell I went through with the last suspension. What was their response? “We don’t care.”

The Story of Prometheus

Prometheus was the son of a Titan who tricked Zeus. To punish him, Zeus had his arms and legs staked to the ground. A vulture pecked at his liver every day. At night, the liver regenerated so Prometheus was pecked for eternity, but never killed. Hercules would later kill the bird.

I told this story to the Board and asked them to kill the “bird” pecking at me. Instead, I’ll have to endure more pecking until the Supreme Court hopefully sends a message to them they will listen too.

I have no idea how the Court will rule. However, I’m hopeful based upon the story I’ve outlined here the Court will show the same wisdom and fairness as they did on June 15.


Eric C. Deters

Eric Deters
Summary of Oral Argument

1. The two matters today were used by Bar Counsel (along with several others) to suspend me an extra 52 days by their Objection to my automatic reinstatement after 61 days. I was suspended February 23. I was to return April 25. I was not reinstated until June 15, 2012. Therefore, I’ve served 52 more days than ordered by the Supreme Court.

Plus, most of the nine matters they used to suspend me 52 days longer were dismissed. These two and one other remain. It too is dated nearly ten years and is still before the Supreme Court.

On the two matters today, they want to suspend me 60 days on one and 30 on the other. However, on the 30, Bar Counsel had asked for only a public reprimand from the Trial Commissioner. Now they want 30 days. These trial commissioners do not have the full picture and context of my discipline history in the context of the Character and Fitness report, Supreme Court ruling and audit. This Board, Bar Counsel and the Supreme Court do.

2. Therefore, I was suspended 61 days on the prior matters. Plus an additional 52 days. I have served really all but 38 days of the 90 requested. However, should I serve 38 more days? I was also suspended as follows as a direct result of the Kentucky suspension:

A. Extra 45 days in the Eastern District for a total of 61 + 52 + 45 = 158 days. I was also suspended in the Western District, but they reinstated me right away.

B. 90 days in Ohio and the Southern District instead of 61 because of the reinstatement process for Ohio begins after the 61 days.

C. I will be suspended in Florida. This is set for a hearing in October.

D. I fail to understand how it is fair for a lawyer with more than a Kentucky license to be punished more than a lawyer with just a Kentucky license. The Kentucky Bar knows there is reciprocal discipline. Therefore, why shouldn’t knowing there will be more discipline not be factored into the punishment.

E. I went through the Character and Fitness process and the Committee and the Supreme Court (7-0) reinstated me over the objection of Bar Counsel and the Board.

F. If suspended again, Bar Counsel will file an Objection and off I go through the Reinstatement Process again when nothing has changed and there is nothing new since that process. I’ll also be suspended again in Ohio and Florida.

G. I went through the federal audit at my option on the Reeves sanction. I could have just paid the sanctions. This audit addressed my lawsuit filing. (See attached form.) I bet my office is the only law office in Kentucky self imposing filling out such a form.

H. I took the Supreme Court ordered remedial ethics course and test given by the KBA. (7 hours). In irony, I received the reinstatement news before the test and at the end of the seminar. Should I not be given an opportunity to practice these remedial lessons? (See attached the retainer form we use as a result of that seminar. This too was one of the suspending issues I had.) I actually sent out a memorandum to my entire office after the seminar informing them a few things I wanted to put in practice. (See attached.) These are proof I paid attention, listened and took action.

I. I took another 13 hours under the federal audit and the Ohio suspension. (Ohio accepted Kentucky’s suspension, but not their ethics course.)

J. A total of 20 hours of ethics focused CLE were taken from June 15 to August 1, 2012. This is three times what was ordered by Kentucky.

K. I’ve behaved in public and private and I’ve not had any more Rule 11 or sanction issues. (In light of my suspension, I get threatened all the time by lawyers who think they can take advantage of my fear of more bar issues. Should not, “he’s learned a lesson,” be factored in on these two matters? It seems wrong to have a lawyer go through remedial ethics and then not give him credit how he performs after? I missed only two questions on the test and I think I had reason to refute the answer they wanted. At least one of the two was on the issue of a suspended lawyer being a paralegal.)

L. I lost an opportunity to be on the Board of the Ohio Justice Association by my Kentucky suspension. I was asked to be on the Board. Then it was retracted.

M. Character and Fitness recognized the permanent Google stain of my suspension.

N. My lost business is unquantifiable because it’s unknown.

O. Stress. I literally could feel the stress fall off my body for weeks after my reinstatement.

P. On Concept Homes, Justices Cunningham and Scott wanted to grant discretionary review.

Q. On Sanders, Judge Sheehan overruled the Rule 11 Motion and asked us to consider leaving each other alone. We have. While we still are involved in cases, there have been no more public barbs of a personal nature. I believe my Sanders relationship has moved past the past.

R. The Bar Counsel office tried to get attorney fees from litigation. I successfully defended this.

S. The bond issue rule changed during my case.

T. The rule on reinstatement with pending discipline changed based upon my battle.

U. I’ve left alone lawyers, judges, Bar Counsel and the Bar.

V. I’m representing clients and doing my job.

W. The Berry 6th Circuit Decision would apply to the Judge Bates matter for which in part I served a suspension. Under Berry, there would have been no violation.

X. I’ve withheld filing more lawsuit challenges against the Bar including challenging the restriction to quit the Kentucky Bar with pending discipline. I find it remarkable the Bar doesn’t allow you to quit. This can’t be constitutional. I’ve not pushed the pending litigation on the Objection rule since I was reinstated. If suspended again, I will have to because I know Bar Counsel will use it again. I think it is clear they are obsessed with getting me. I want to move on. Bar Counsel rejected our proposal to drop these old charges and I’d dismiss all litigation.

Y. To suspend me again on these matters I believe after all I’ve gone through is not fair. I’m unaware of a single new bar complaint which would reflect misconduct after the Character and Fitness recommendation, Supreme Court ruling and my ethics courses.


This was an issue before. Let me be clear. Despite my belief I did not commit any ethical violation, I admit had I not been negligent or distracted on Concept Homes I would have known by the presuit letter that the LCC was not formed. But, I didn’t read it and ignore it! Also, when I realized it, I acted properly. I also had a public sanction which I paid. On the Sanders matter, I want to admit it may not have been accurate if public knowledge, but under confidential rules it was. Regardless, Bar Counsel only wanted a public reprimand. Also, it really relates again to more of the negligence and distraction of my review of the Complaint prepared by a lawyer in my office which relates again to all which I have already addressed. I express remorse and apologize for a matter concerning facts in a lawsuit not being completely accurate. However, it was sloppy review, not intentional dishonesty. And, it’s all been addressed and corrected. Furthermore on Sanders, the statement in issue related to me, not an attack against him. He was not harmed or incurred any expense at all as a result. On Concept Homes, I had to pay 50% of their awarded attorney fees for the entire matter, for an issue resolved in the first few months of the lawsuit filing. Therefore, they were not harmed or incurred expense as a result. Again, it too was about a LLC not a negative remark about them.


Monday, September 17th, 2012

No RFP’s for Kentucky Pensions- all back room deals.
by Chris Tobe, CFA

I estimate that over $65 million to as high as $85 million a year is paid out in fees in non-bid contracts by the pension systems in Kentucky.

While the 2012 placement agent bill was an extremely watered down version from that of 2011, it is currently unenforceable because there is no documentation from an RFP to check.

Because of total lack of oversight the $13 billion Kentucky Retirement System (KRS) have been able to bypass many of the competitive bidding practices typically used by other parts of state government. The Government Finance Officers Association officially recommends a RFP process for public pension managers to hire investment managers. While KRS does issue RFP’s for relatively minor expenditures like the investment consultant and headhunters, well over 95% of expenditures bypass the RFP process.

According to the Report of Independent Counsel to SEC: Placement Agent Abuses at Kentucky Retirement System “… contrary to prudent investment practices for public pensions, KRS does not utilize RFPs seeking competitive bids from prospective money managers. Failure to solicit bids undermines the integrity of public pension contracting. RFPs ensure that contracts for investment management services are competitively bid and that requirements related to such contracts are clearly and publicly stated.” KRS pays 66 Money Managers over $56 million a year in fees and not one has ever filled out an RFP. pg.98-100.

Kentucky Judicial and Legislative Retirement System to my knowledge has never issued an RFP and uses just one Kentucky money manager and one Kentucky broker to manage that plan. While I am not as familiar, I believe the Kentucky Teachers Retirement Systems uses RFP’s very sparingly for Investment consultants etc.

Legislation should require all the Retirement systems to use RFP’s for all major purchases or services over $25,000 a year .

UK President Announces Kentucky Native for Legal Counsel Job

Monday, September 17th, 2012

Dear Colleagues and Students,
I am very pleased to announce that Bill Thro has accepted my offer to serve as the University of Kentucky’s General Counsel. A news release about Bill’s appointment, which will be distributed later today, can be read at:
The General Counsel serves every unit of the University on our various legal and policy issues. In Bill Thro, we have someone with the necessary intellect, experience and passion for higher education and his native state to help lead our university as we continue our ascent.
He is a native of Elizabethtown, Ky. and has more than 20 years of experience in higher education, most recently as University Counsel at Christopher Newport University in Newport News, Virginia. He is President-Elect of the Education Law Association. Previously, Bill served as Solicitor General for the Commonwealth of Virginia. As the top litigator and policy adviser for that office, Bill made successful arguments in front of the U.S. Supreme Court as well as winning complex legal cases throughout the state and federal courts.
Bill also is a scholar and intellectual student of the law, having authored or co-authored more than 100 publications, including several peer-reviewed articles. He is a graduate of the University of Virginia’s School of Law, where he was a member of the Virginia Law Review.
Bill begins his important work with us on October 15. I know you will warmly welcome Bill and his family to our community and their new UK home.
Eli Capilouto
University of Kentucky

U.S. ATTORNEY CONTINUES TO SEEK RECOVERY OF FUNDS ANGELA FORD SEIZED FROM FEN PHEN ATTORNEY DEFENDANTS. KBA Bar Counsel has not revealed any effort to assist U.S. Attorney while $43 million has been disbursed. Will KBA aid U.S. Attorney?

Sunday, September 16th, 2012

The following article was originally published on LawReader in Nov. of 2011. In Dec. of 2011 Angela Ford filed her second appeal to the Sixth Circuit seeking protection from the U.S. District Court’s order for her to release to the U.S. Attorney a copy of her distribution list of funds she seized in the Fen Phen case. That appeal is still pending.
Kentucky Supreme Court Rule 3.130 (1.15) is an ethics rule which requires an attorney to place funds in escrow until there is a final court order. The ruling of the Ky. Ct. of Appeals voided the summary judgment of the Boone Circuit Court, and the case will not be final until the pending appeal to the Ky. Supreme Court renders a ruling on Ford’s appeal of the Ct. of Appeals reversal. She reports to the newspapers that she has distributed all money seized from the Fen Phen defendants, has paid herself a legal fee, and has shared that legal fee with “other attorneys”. We would ask if the failure to hold the $43 million dollars in escrow pending a final ruling by the Ky. Supreme Court is act which violates SCR 3.130(1.15).
“SCR 3.130(1.15) Safekeeping property
(a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client, third person, or both in the event of a claim by each to the property. The separate account referred to in the preceding sentence shall be maintained in a bank which has agreed to notify the Kentucky Bar Association in the event that any overdraft occurs in the account. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation.
(b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client, third person, or both in the event of claims by each to the property. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, third person, or both in the event of a claim by each to the property, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.
(c) When in the course of representation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.
(d) A lawyer may deposit the lawyer’s own funds in a client trust account for the sole purpose of paying bank service charges on that account, but only in an amount necessary for that purpose.
(e) Except for non refundable fees as provided in 1.5(f), a lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred. HISTORY: Amended by Order 2009-05, eff. 7-15-09; prior amendment eff. 10-1-98 (Order 98-1); adopted by Order 89-1, eff. 1-1-90 “

Originally Posted Nov. 29, 2011 By Senior Editor Stan Billingsley
LawReader has reviewed correspondence between the U.S. Attorney’s office and Angela Ford in which the U.S. Attorney’s office has sought an accounting of $43,000,000 in funds held by Angela Ford. These letters are exhibits in the record of the Federal Criminal trial against Gallion and Cunningham. The criminal convictions of Gallion and Cunningham are currently on appeal to the 6th. Circuit Court of Appeals.
We have found a 2009 news story by Andy Wolfson of the Courier Journal quoting Angela Ford as saying at that time she had been paid $7.5 million for attorneys fees, but that she shared this fee “with other lawyers”. These funds came from her seizure of the assets of the Ky. Fund for Healthy Living. This fund contained $23 million. It has apparently been disbursed two years ago. The accounting sought by the U.S. Attorney would presumably list the names and amounts that “other lawyers” received from this distribution and a total distribution of $43 million.
In a letter to Angela Ford, dated Feb. 16, 2011 the U.S. Attorney’s office warned her that:
“Since the judgment (i.e.Boone Circuit Court summary judgment) has been reversed and remanded to the Boone Circuit Court, any funds collected in the state court case are now potentially subject to being reclaimed by the defendants pending further litigation. ”
“Therefore, it is essential that the government be given a complete accounting of all funds distributed, held in escrow for the benefit of the victims, retained or distributed pursuant to fee agreements, or otherwise held. Since time is of the essence, we hope that you can provide this accounting expeditiously.”
“The authority for holding collected funds in the state case presumably lapsed upon reversal of the judgment.”
“We want to continue to work with you to protect the victims of the defendant’s crimes and advise the court that all appropriate steps are being taken to preserve assets that will be used to compensate victims for their loss.”
In the letter to Ford, dated March 23, 2011 the U.S. Attorney’s office referring to Ford’s response to the U.S. Attorney letter of Feb. 16, 2011 requesting an accounting:
“…you have provided brief email responses indicating that defendants in the civil case will have to sue individual victims to recover money that was collected on the reversed judgment. ”
(LawReader: The forgoing sentence was apparently a reference to the effect that if Gallion et al won the civil case at the new trial ordered on Feb. 4, 2011 by the Court of Appeals, that Anglea Ford argues that Gallion et al could sue the some 440 (??) Fen Phen plaintiffs to recover the assets she had distributed without the support of a valid court judgment.)
The U.S. Attorney’s office continued:
“…it may be appropriate to bring the recent developments to Judge Reeve’s attention, but we thought a discussion with you would better inform our future decisions. Should you disagree, we will put this matter before the Court for its guidance.”
The U.S. Attorney’s office then cited five cases which had held that once a judgment was set aside on appeal it had no legal effect, and could not support her right to hold any of the funds or to disburse any funds to her clients:
“Under Kentucky law, when a judgment is reversed on direct appeal, it is as though it never existed. Clay v. Clay, 707 S.W.2d 352, 353 (Ky. App. 1986). As the Kentucky Supreme Court of Kentucky stated in a recent opinion, “(i)t has long been the law in Kentucky that the complete reversal of a judgment nullifies it and returns the parties to the positions they occupied before it was rendered…and the could should not allow th party who procured (the judgment) to retain an advantage gained by reason of it.” See Marshall v. Goodwine, 2010 WL 3374404 (Ky. 2010); see also Knight’s Admr. V. Illinois Central Railroad Co. 136 S.W. 874 (1911); Drury v. Franke, 57 S.W.2d 969 (1933); Baker’s Heirs v. Duff, 238 S.W.2d 841 (Ky. 1951) (no rights can be derived from a reversed judgment).”
“…the party who executes on the judgment during the pendency of an appeal does so at her own risk because, if the judgment is reversed, any benefits obtained by virtue of the execution must be restored to the adverse party. Elk Horn Coal Corporation v. Cheyenne Resources, Inc., 162 S.W. 3d 408 (Ky. 2005).”
“We have found no legal authority which would allow you to retain the funds you have collected when the judgment has been reversed. ” “…you cannot continue to collect on a judgment that is no longer in existence, you cannot justify continuing to hold collected funds without providing an accounting to the sole judgment creditor or obtaining an order of the court.”
“If we have not heard from you by March 29, 2011, we will file our motion with the court.”
Angela Ford responded on March 29, 2011 with a letter contesting the U.S. Attorney’s office understanding of the law:
“…you state that “(a)lthough (the civil case plaintiffs) have filed a motion for rehearing with the Court of Appeals, at present time the judgment remains reversed(.)” This is incorrect. The judgment entered by the Boone Circuit Court stands unless and until the Kentucky appellate courts render a final opinion vacating or reversing it. Plain, unequivocal black letter Kentucky law provides that “any reliance on a non-final opinion of an appellate court is misplaced.” Kohler v. com. Transp. Cabinet_, 944 S.W.2d 146, 147 (Ky. Ct. of Appeals 1997; see also_Kentucky Nat. ins Co. v. Shaffer_, 155 S.W. 3d 738, 740 n5 (Ky.Ct. App. 2004) (chastising party for citing as authority opinion that was “not final due to pending motion for discretionary review in the Supreme Court”) (See LawReader footnotes below for review of Ford’s authorities)
“I am not aware of any procedural rule or authority that would compel me to restore those funds to your office.”
Subsequent to Ford’s letter to the U.S. Attorney’s office, they kept their promise and filed a motion for an accounting with Federal Judge Danny Reeves. Reeves granted the government’s motion and ordered an accounting. Ford sought relief in the 6th. Circuit Court of Appeals, but last week the 6th. Circuit denied her motion to avoid having to file an accounting.
LawReader has learned that the accounting is currently in the possession of the U.S. Attorney and “is being worked on”. LawReader’s request for a copy of the accounting has not been granted at this time.
This correspondence raises several questions. In light of the actions by the U.S. Attorney’s office that began at least by December of 2010. The U.S. attorney objected to a judicial sale of William Gallion’s home in Jessamine County in which Ford used clients escrow money to purchase the home. The Jessamine Circuit Judge set aside the judicial sale, and later the U.S. attorney resold the home. (In Ford’s March 29, 2011 letter she criticized the U.S. Attorney’s office handling of the sale.)
The Jessamine County sale and purchase of the Gallion home with client’s money was quickly acted upon by the U.S. Attorney’s office. We must ask, where was the KBA Bar Counsel’s office? Stories were in the press regarding the sale of Gallion’s home. LawReader read such a news story and called the Master Commissioner of Jessamine to confirm the story. One phone call confirmed the story! The U.S. Attorney’s motion is a public record. Where was the Bar Counsel’s office?
The U.S. Attorney has sought an accounting from Angela Ford. We have not heard of any action by the Bar Counsel’s office to support the U.S. Governments motions. Where was the Bar Counsel’s office?
There are confidentiality rules of the attorney discipline process which hide all charges from the public unless the defendant attorney waives the confidentiality rule.
We emphasize that we have no knowledge of any such pending action by the KBA against Angela Ford. The secrecy rules forbid the public from knowing when charges against an attorney are pending. But this raises the question of why the Supreme Court Rules regulating the discipline of attorneys protect the attorney’s reputation at the risk of harm to the clients?
Secondly, the main stream media has enjoyed almost a decade of condemning everyone connected with the Fen Phen case. Perhaps the actions of the U.S. Attorney’s office will encourage the press to dig a little deeper.
They can begin getting this story right by seeking a copy of the Ford Accounting which is currently “being worked on” by the U.S. Attorney’s office. We suggest that the main stream media, “Follow the money!” The accounting may answer many questions.
If the confidentiality rules are being applied to this case by the Bar Counsel, then this demonstrates why such rules do not serve the public interest.
Footnotes – Examination of Ford’s authorities:
1. Kohler v. Com. Transp. Cabinet_, 944 S.W.2d 146, 147. LawReader comment: For god’s sake this is a DUI case! It is a criminal case and deals with a judgment that was “void ab initio” i.e. void from the beginning..and the defendant cited another unrelated non-final case as authority. The defendant cited an unofficial case but in the Ford case, the U.S. Attorney correctly cites the effect of a ruling on the specific case being tried. Once the Court of Appeals reversed the Boone Circuit Court the reversal was effected. The judgment of the Court of Appeals against Ford’s position is in effect until overruled. Ford’s citation of the rule prohibiting the citation of an unpublished case simply does not support her argument.
2. Kentucky Nat. Ins. Co. v. Shaffer, 155 S.W.3d 738 (Ky. App., 2004). This authority cited by Ford deals with a bad faith insurance claim. Footnote No. 5 to that decision reads: . In its reply brief, Kentucky National relies on our recent opinion in Knotts v. Zurich Ins. Co., ___ S.W.3d ___, 2002-CA-001846-MR, 2004 WL 221213 (Feb. 6, 2004), which held Kentucky’s UCSPA only applies to pre-litigation claims and conduct. According to Knotts, once litigation has commenced, the UCSPA no longer plays a role, but instead the Rules of Civil Procedure provide “redress for improper conduct of litigants.” However, Kentucky National cannot rely on Knotts as it failed to preserve this issue at the trial court level. Furthermore, although the Knotts opinion was designated for publication, it is not final due to pending motion for discretionary review in the Supreme Court. It is impermissible to cite Knotts as authority. See CR 76.28(4)(c) (unpublished opinions “shall not be cited or used as authority in any other case in any court of this state”); Kohler v. Commonwealth, Transp. Cab., Ky.App., 944 S.W.2d 146, 147 (1997) (trial court cannot rely on nonfinal opinion of appellate court).
Ford does not mention in her letter to the U.S. Attorney that both of her authorities cited, dealt only with unpublished cases. She failed to mention that the Court of Appeals ordered that their reversal of Abbott v. Gallion et al, should be published on Feb. 4, 2011. (See LawReader synopsis of Court of Appeals decisions for Feb. 4, 2011. )
A published case by the Court of Appeals remains in effect until overruled. A dismissed case remains overruled until an appeal reversals the Court of Appeals.
Conclusion, the U.S. Attorney’s office scores big in its authorities. Ford fails embarrassingly to support her claim that the reversed Boone Circuit Court case provides authority for her to seize and distributed $42 million dollars.


Saturday, September 15th, 2012

Courthouse spending not prudent

By the Messenger-InquirerOwensboro Messenger-Inquirer, Owensboro
Sept. 13, 2012

Fourteen years ago, the Kentucky Court of Justice began a mammoth building campaign that would bring new courthouses to a majority of counties in the state.

Many of the courthouses were old, energy hogs and constantly in disrepair.

So for good reason, the General Assembly began approving the funds to construct new courthouses — more modernly referred to as judicial centers — across the state.

Hancock (33,700 square-foot, $11.6 million project), Breckinridge (33,000 square-foot, $13.3 million project) and Grayson (39,900 square-foot, $12 million project) were regional counties that were among the 70 judicial centers authorized between 1998 and 2008.

Costs of maintaining the buildings combined with the debt service have climbed from $61 million in 2007 to $122 million this fiscal year. And making matters worse was the unforeseen recession that hit after many of these courthouses were approved.

Chief Justice John Minton Jr. and his predecessor, Joseph Lambert, are now taking heat because budget constraints have forced workers to take unpaid furloughs and closing courthouses when they would normally be open for business.

Lambert said the two issues were unrelated, calling it “misguided to attribute furloughs to the courthouses” because they’re “different units in the budget.”

Still, when the public sees that another $316 million has been appropriated for the 2013-2014 budget to construct more courthouses, it’s only fair to question the prudence of the spending.

We don’t fault the building decisions that were made prior to the recession.

But with a $30 billion underfunded pension liability, salary freezes and overall budget problems that are now plaguing this state, the financial climate is far worse off than it was in 1998.

The state and the Kentucky Court of Justice need to recognize times have changed.

And before building any more courthouses, how about the state get its own financial house in order first.


Corporate Law Firms Now Paying $280,000 Signing Bonuses For Supreme Court Clerks

Saturday, September 15th, 2012

By Ian Millhiser on Sep 14, 2012

Major corporate law firms are now paying recent Supreme Court clerks, many of whom are only two years out of law school and can be as young as 28 years old, a $280,000 signing bonus simply for showing up to their first day of work. That’s in addition to base salaries around $185,000 for the first year out of clerkship and a year-end bonus in the five figures. Lawyers who clerked for lower federal court judges can earn signing bonuses as high as $60,000, and that’s also in addition to base salaries and bonuses similar to their colleagues who clerked for a justice.

Lest there be any doubt, these kinds of big dollar payments can have a significant impact on the shape of U.S. law. Federal law clerks are overwhelmingly drawn from the nation’s top-performing law students, and excellent attorneys can often change the outcome of court decisions. Simply put, there is a reason why every conservative official in the country wants to hire Republican superlawyer Paul Clement to present their most constitutionally indefensible arguments. The kinds of law firms that can afford to pay six figure recruitment bonuses primarily represent major corporations and other well moneyed clients, not the kind of ordinary Americans who are already at a disadvantage in this Supreme Court.


Friday, September 14th, 2012

Posted: Wednesday, September 12, 2012 .

By RICHARD HANNERS Hungry Horse News

Jerry O’Neil says he lost every battle in his decade-long fight against the Montana Bar Association and the Montana Supreme Court’s Commission on the Unauthorized Practice of Law.
“But in the end, I won the war,” he recently told the Hungry Horse News.
O’Neil said he “officially” began his career as an independent paralegal in 1984 when he registered his business as Kalispell Mediation Services. He also became licensed to practice law as a lay advocate on the Blackfeet Indian Reservation that same year.
A staunch libertarian who believes in less government and more freedom, O’Neil’s problems with the state’s lawyers and judicial branch began in February 2001 when Flathead County District Court Judges Ted Lympus, Katherine Curtis and Stewart Stadler wrote to the Commission complaining that O’Neil was “engaged in the unauthorized practice of law.”
According to the Montana Supreme Court in their 2006 ruling on the case, O’Neil never attended law school, was never licensed to practice law in Montana, had never sat for the state bar exam and “has not met the Montana Supreme Court’s character and fitness requirements.”
O’Neil claims the judges’ letter was prompted by work done by another Flathead independent paralegal, not him.
“Nobody has ever complained about my work,” he said.
But according to the Montana Supreme Court, Lympus wrote to Chief Justice J.A. Turnage in June 1998 about O’Neil’s work in a dissolution hearing. And a state social worker complained to the Commission in February and March 2000 about O’Neil providing legal advice to an incapacitated individual.
Then in November 2000, state bar general counsel Betsy Brandborg learned from a U.S. West Dex representative that O’Neil was listed in the phone book under “attorneys.”
O’Neil told Brandborg he was licensed as an attorney by the Blackfeet Tribal Court and by the Confederated Salish and Kootenai Tribal Court. Brandborg learned that he was a “licensed lay advocate” for the Blackfeet. The Salish-Kootenai subsequently terminated O’Neil’s license after being contacted by Brandborg.
Commission chairman John Connor wrote to O’Neil in May 2001 requesting detailed information about O’Neil’s work, which he claimed he never received. According to the Montana Supreme Court, O’Neil “engaged in a tirade” and told the Commission, “If your object is to try me without a jury, you had better bring along your chains and restraints.”
O’Neil got his day in court in 2004, but following a two-day trial, Lake County District Court Judge Deborah Christopher, sitting in for Lympus, Curtis and Stadler, found O’Neil in contempt for engaging in the practice of law when not authorized to do so and permanently enjoined him from engaging in the practice of law “until such time as he becomes duly authorized.”
The Montana Supreme Court upheld Christopher’s ruling in 2006. O’Neil took his case to federal district court in Missoula and lost, and then appealed his case to the Ninth Circuit Court of Appeals and lost again. But things changed after that, he notes.
O’Neil has long claimed that state law on the authorized practice of law was “unconstitutionally vague” and that it restricts economic freedom by giving the state bar association a monopoly.
In a complete turnaround, the Montana Supreme Court on April 20, 2010, dissolved its Commission on the Unauthorized Practice of Law, noting that “we conclude that this court is not authorized either directly or through a Commission to regulate the ‘unauthorized practice of law.’” It also concluded that “what constitutes the practice of law, not to mention what practice is authorized and what is unauthorized is, by no means, clearly defined.”
O’Neil notes that he had an ally in his cause — the U.S. Department of Justice’s Antitrust Division, which he had contacted about his case. They wrote to the Montana Supreme Court on April 17, 2009, to comment on the Commission’s proposed revisions to rules on the unauthorized practice of law.
“Consumers generally benefit from competition between lawyers and non-lawyers,” Acting Assistant Attorney General Scott Hammond wrote. “We are concerned that the Commission’s proposal, by identifying broad categories of activities that may constitute the practice of law … will unduly restrict non-lawyers from competing with lawyers.”
O’Neil, who continues to work as an independent paralegal in Columbia Falls, says that in hindsight, another factor probably led to the Commission’s demise — money.
“I learned that the Commission’s budget was $2,000 a year,” he said. “I couldn’t do all that legal work for that much money. I think I broke them. I lost every battle, but I won the war.”

The Godfather Wouldn’t Hire Tom Hagen Until He had Three Years of Real Law Practice – KBA prosecutors can be hired without any practice experience.

Friday, September 14th, 2012

In Stan Billingsley’s new book A PARLIAMENT OF OWLS which was released Sept. 10, 2012 he calls for law schools and the KBA to provide post-graduate education in the actual practice of law.

The book may be purchased from LawReader Books on or call 502-732-4617.

The Bar Counsel’s Office prosecutors are not required to employ attorneys with real law practice experience. District Judges are required to have four years of experience and Circuit Judges must have eight years experience.

Prosecutors may be hired without ever appearing in a court room, without ever dealing with a client, and without ever having looked a jury in the eye.

In the Godfather novel by Mario Puzo, Tom Hagen saved Sonny Corleone’s life and was taken into the Corleone family. He became a studious young boy, going to law school in the 1930s.
After graduating from law school, Hagen offered to work for Corleone as though he were one of the Don’s own sons. He did so knowing full well that Vito wasn’t merely an olive-oil importer, but the most powerful crime boss in the nation. Vito was more than willing to take Tom into his employ, saying that a lawyer could steal more than a phalanx of gunmen.

Don Corleone first required that Tom Hagen must work for an outside law firm for three years before he was deemed experienced enough to work for the Corleone family as their consigliore.
After Michael Corleone became operating head of the Corleone family, he removed Hagen as consigliore on his father’s advice, restricting him to handling the family’s legal business in Nevada, Chicago, and Los Angeles. When Tom asks why he was being removed, Michael answers by telling him he just isn’t “a wartime consigliere”.


Friday, September 14th, 2012

Back on the Radio Monday!

I’ll be back on the radio on ClassX Radio Monday 6-9 AM on FM 88.9, 89.1, and 89.3. Depending upon where you live in the tri-state, one station will have a stronger signal than the other. I’m excited to be back. The show will be the same format I was doing for the morning. However, I’ll be on at 6 AM, not 7 AM. Also, we will play a great song from time to time.

It will be another week or two for our television quality video simulcast.

Also, the show will be podcasted and videocasted on,, and

You can also listen on tune in radio, the ClassX app and on the internet at

My producer will be former 700 WLW and Clear Channel ace, Garrett Sabelhaus.

Real Estate Owned by Nonresident Alien Liable to Escheat To State of Kentucky

Wednesday, September 12th, 2012

KRS 381.300 Realty of nonresident alien liable to escheat after eight years unless he becomes citizen.
(1) Except as otherwise provided in this chapter, the real estate of a nonresident alien may be escheated to the state at any time after the expiration of eight (8) years after the time he acquires title thereto.
(2) Any alien who has purchased, or contracted to purchase, any real estate, or who holds or has title thereto, and who becomes a citizen of the United States before the property is escheated, and any purchaser, lessee, heir, or devisee, from him, if a citizen of the United States, who becomes the owner thereof by purchase or inheritance before the property is escheated, shall take and hold the property free and released from any right or claim of the state by reason of such person’s having been an alien.
Effective: July 13, 1984


Tuesday, September 11th, 2012

redesigned Kentucky Court of Justice website is user-focused, has new look and feel

I am pleased to announce the upcoming launch of the redesigned Kentucky Court of Justice website, which will debut at the end of this week.

The revamped KCOJ website offers interactive functions along with intuitive navigation and a fresh look and feel. The site now operates on SharePoint technology, which greatly improves its usability and appeal. The user-focused design will help visitors be more efficient while on the site.

The KCOJ website is one of the largest in Kentucky state government, providing information on all aspects of the court system. It offers Supreme Court and Court of Appeals opinions, trial court dockets, information on all 120 Offices of Circuit Court Clerk, local rules, a legal forms library, descriptions of court programs, court news, a court calendar, the ability to pay certain court fines and fees online and much more.

When the website goes live later this week, you can visit it at If you have questions about the site, please contact Casie Anderson Prible, who serves as webmaster/public information specialist for the Administrative Office of the Courts. Casie did a great job on this project and I appreciate all of her hard work.

Laurie K. Dudgeon
Administrative Office of the Courts
100 Millcreek Park
Frankfort, Ky. 40601


Monday, September 10th, 2012

SEPT. 109, 2012


The Judicial Conference Advisory Committees on Appellate, Bankruptcy, Criminal, and Evidence Rules have proposed amendments to their respective rules and requested that the proposals be circulated to the bench, bar, and public for comment.
The following rules were approved for publication by the Judicial Conference Committee on Rules of Practice and Procedure on June 11, 2012. The public comment period opens August 15, 2012, and closes February 15, 2013.
• Preliminary Draft of Proposed Amendments to the Federal Rules of Practice and Procedure (pdf)
On August 15, 2012, the public comment period opens for proposed amendments to Appellate Rule 6; Bankruptcy Rules 1014(b), 7004(e), 7008, 7012, 7016, 7054, 8001-8028, 9023, 9024, 9027, and 9033, and Offiical Forms 3A, 3B, 6I, 6J, 22A-1, 22A-2, 22B, 22C-1, and 22C-2; Criminal Rules 5(d) and 58; and Evidence Rules 801(d)(1)(B) and 803(6)-(8).
• Public Comments Received
Your comments are welcome on all aspects of each proposal. The advisory committees will review all timely comments, which are made part of the official record and reproduced here for the public.
• Appellate Rules Comments
• Bankruptcy Rules Comments
• Civil Rules Comments
• Criminal Rules Comments
• Evidence Rules Comments
• Submitting a Comment on Preliminary Draft of Proposed Rules Amendments


Thursday, September 6th, 2012

The following sexual offenses bring into effect KRS 532.043 ..see below.

If a defendant is convicted of one of the listed sexual offenses, then his post jail probation period is automatically imposed at five years.
Applicable sexual offenses which trigger post-incarceration probation.

Chapter 510, • SEXUAL OFFENSES
529.100 involving commercial sexual activity, (prostitution offenses)
530.020 Incest.
530.064(1)(a) 530.064 Unlawful transaction with a minor in the first degree.
531.310, Use of a minor in a sexual performance.
531.320 Promoting a sexual performance by a minor.

KRS 532.043 Requirement of postincarceration supervision for certain felonies.
(1) In addition to the penalties authorized by law, any person convicted of, pleading guilty to, or entering an Alford plea to a felony offense under KRS Chapter 510, 529.100 involving commercial sexual activity, 530.020, 530.064(1)(a), 531.310, or 531.320 shall be subject to a period of postincarceration supervision following release from:
(a) Incarceration upon expiration of sentence; or
(b) Completion of parole.
(2) The period of postincarceration supervision shall be five (5) years.
(3) During the period of postincarceration supervision, the defendant shall:
(a) Be subject to all orders specified by the Department of Corrections; and
(b) Comply with all education, treatment, testing, or combination thereof required by the Department of Corrections.
(4) Persons under postincarceration supervision pursuant to this section shall be subject to the supervision of the Division of Probation and Parole and under the authority of the Parole Board.
(5) If a person violates a provision specified in subsection (3) of this section, the violation shall be reported in writing by the Division of Probation and Parole.
Notice of the violation shall be sent to the Parole Board to determine whether probable cause exists to revoke the defendant’s postincarceration supervision and reincarcerate the defendant as set forth in KRS 532.060.
(6) The provisions of this section shall apply only to persons convicted, pleading guilty, or entering an Alford plea after July 15, 1998.
Effective: March 3, 2011
History: Amended 2011 Ky. Acts ch. 2, sec. 91, effective March 3, 2011. — Amended 2007 Ky. Acts ch. 19, sec. 15, effective June 26, 2007. — Amended 2006 Ky. Acts ch. 182, sec. 42, effective July 12, 2006. — Amended 2000 Ky. Acts ch. 345, sec. 9, effective July 14, 2000. — Created 1998 Ky. Acts ch. 606, sec. 25, effective July 15

The Trigger Date For the Duty To Preserve Evidence By Todd McMurtry

Thursday, September 6th, 2012

The Trigger Date For the Duty To Preserve Evidence

By Todd McMurtry |
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In Nacco Materials Handling Group v. Lilly Company, the United States District Court for the Western District of Tennessee issued an opinion that serves as helpful guidance on when the duty to preserve evidence arises as it relates to preservation of electronically stored information (“ESI”). 278 F.R.D. 396 (W.D. Tenn. 2011). This “trigger date” is the date from which a court will evaluate a party’s duty to preserve ESI and other evidence.
Nacco, a lift truck manufacturer, did business as Yale Materials. Lilly was a former Yale dealer that improperly accessed Yale’s secure website over 40,000 times. Yale discovered this activity and took steps to prevent reoccurrence of these unwanted intrusions. Lilly learned about its employees’ involvement in improperly accessing Yale’s secure website in December 2010 when another company that Yale had contacted about the intrusions advised Lilly of Yale’s investigation. Yale learned from this third party that Lilly was that source of the intrusions.
Yale filed suit on February 25, 2011. Lilly’s counsel sent Lilly a litigation hold letter on March 9, 2011. The broad litigation hold letter instructed Lilly to: (1) issue an internal litigation hold; (2) identify key players and preserve their electronic and other documents; (3) cease deletion of email; (4) preserve records of former employees; and (5) preserve back-up tapes where the tapes are the sole source of relevant information. Yale also issued a litigation hold letter to Lilly in March 2011.
As the litigation progressed, Yale challenged Lilly’s efforts to preserve evidence as inadequate and moved for sanctions. The Court stated that “a duty to preserve evidence is a prerequisite to imposing spoliation sanctions.” Id. at 402. (citations omitted.) In evaluating a party’s efforts to preserve evidence, it is important to know when it first became subject to a duty to preserve. The duty first arises on the “trigger date.” “The trigger date is the date a party is put on notice that it has a duty to preserve evidence.” Id. (citing Clark Constr. Group, Inc. v. City of Memphis, 229 F.R.D. 131, 136 (W.D.Tenn 2005)).
The Court found that Lilly’s duty to preserve evidence was triggered when it was served the complaint on February 25, 2011. Yale argued that Lilly should have anticipated litigation when it first learned of the problem in December 2010. The Court disagreed stating that:
Merely because Lilly knew of its employees’ access does not necessarily mean that Lilly had reason to anticipate litigation. Yale did not contact Lilly or send a cease-and-desist letter. Based on these facts, the court cannot conclude that Lilly had reason to anticipate litigation prior to being served with the lawsuit. Therefore, at the earliest, on February 25, 2011, when Lilly was served the complaint, Lilly knew or should have known that electronic evidence residing in its computers would be relevant to the litigation.
Id. at 403.
Through this holding, the Court set a helpful standard for counsel to calculate the trigger date when the duty to preserve arises.
Todd McMurty is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.
Subscribe to the DBL Civil Litigation blog.

State Pretrial Services leader Tara Boh Klute, receives 2012 Public Advocate Award

Wednesday, September 5th, 2012

State Pretrial Services leader receives 2012 Public Advocate Award

AOC’s Tara Boh Klute recognized for promoting pretrial justice

FRANKFORT, Ky., Sept. 5, 2012 – Tara Boh Klute, head of the statewide Pretrial Services program for the Administrative Office of the Courts, has received the 2012 Public Advocate Award from the Kentucky Department of Public Advocacy for promoting pretrial justice. State Public Advocate Ed Monahan presented the award to Klute at the DPA’s Public Defender Education Conference in Louisville on June 5. The award is given annually to individuals who advance justice in the commonwealth.

In presenting the award, Monahan praised Klute’s work with the risk-assessment tool that pretrial officers use to make recommendations to judges on pretrial release for defendants.

“Tara has been a major contributor in the evolution of Kentucky’s validated, evidence-based risk assessment, which uses facts, not rhetoric or ideology, for making decisions on bail,” Monahan said. “It is imperative to a just and effective criminal justice system that we have decision making that is informed, reasonable and meets the constitutional call for pretrial release. The Kentucky Pretrial Services program operates with these values.”

Klute assisted with developing and implementing the risk-assessment tool and, in 2010, secured funding for a federal study to measure its effectiveness. The study results showed that Kentucky’s pretrial release, rearrest and failure-to-appear rates were among the best reported by any criminal justice program in the nation, according to the non-profit Pretrial Justice Institute in Washington.

PJI Executive Director Timothy J. Murray said Klute’s “remarkable leadership and professionalism have set a new standard for pretrial practitioners everywhere.”

“Her dogged commitment to justice, collaboration and accountability has made the Kentucky justice system safer, more effective and fairer while inspiring stakeholders across the nation to reach for the standards she has worked so hard to make a reality,” Murray said.

As chief operations officer for Pretrial Services, Klute assists in operating a department with more than 280 pretrial officers and other employees. The department provides investigation, supervision and diversion programs as part of the state court system. Klute has worked in Pretrial Services for the AOC for 17 years and has been at the helm of the program for four years. Klute began her career in Pretrial Services as a line interviewer for Fayette County. She served in several supervisory positions before being named assistant general manager of Pretrial Services in April 2006 and then moving up.

“Since Tara began working for the court system as a pretrial interviewer in 1995, she has earned many promotions and helped Kentucky build one of the strongest pretrial programs in the country,” AOC Director Laurie K. Dudgeon said. “The Kentucky Pretrial Services program is known throughout the state and country and Tara is considered an expert in the area of pretrial release. The Public Advocate award recognizes all she has done to ensure that defendants in Kentucky are treated fairly during the pretrial process.”

In addition to her role with the pretrial risk-assessment tool, Klute has been instrumental in the Judicial Branch’s implementation of House Bill 463, the state’s sweeping penal code reform that went into effect in June 2011. During the past five years, she has played a key role in developing a sophisticated statewide case management system that replaced a paper system. She was also involved with expanding the Pretrial Diversion Program to 26 counties and implementing the Monitored Conditional Release Program statewide.

Klute has served on committees for the National Association of Pretrial Services Agencies and was named NAPSA Member of the Year in 2009. She has presented and served as a facilitator at state and national conferences.

Pretrial Release

Kentucky requires its pretrial officers to interview individuals within 12 hours of arrest. Pretrial officers perform an investigation and collect background information. Once they verify the information and conduct a background check, they complete an objective 13-question risk assessment and make recommendations to the presiding judge on granting pretrial release.

A defendant’s release is based on an assessment of his or her flight risk, anticipated criminal behavior and danger to the community. These factors are measured by the defendant’s family ties, employment, education, length of residence, criminal history and other related matters. The current risk-assessment tool was adopted in 2006.

Administrative Office of the Courts

The AOC is the operations arm for the state court system and supports the activities of nearly 3,300 court system employees and 403 elected justices, judges and circuit court clerks. As the fiscal agent for the state court system, the AOC executes the Judicial Branch budget.

LawReader’s August Visitors Statistics Sets New Record—108,018

Wednesday, September 5th, 2012

Sept. 5, 2012

Final statistics for August 2012, reveals that and Kentucky Legal News recorded an average of 3,506 visitors per day or a total of 108,018 visitors.

This final August statistic reflects an increase from July when there were 94,000 visitors, and June when there were 90,000 visitors.

Our users tell us that if you want to know what’s happening in the Kentucky legal community, and its Kentucky Legal News, is the place to go.

LawReader and Kentucky Legal news (both found at invites the submission of articles and suggestions for topics. The LawReader legal research resources require a membership. If you are interested just log on and you can sign up online for only $34.95 per month. There is a large discount if you sign up for one year. This resource includes a national case law data base, and thousands of topics discussion Kentucky law. LawReader continues to be the most economical legal research site available.

Our Case Law data base includes all the Federal and State cases sold by other research sites. Same cases…why pay more than $34.95 a month?

The Kentucky Legal News feature is found on the front page of LawReader. This feature does not require a membership…it is free to the public.


Sunday, September 2nd, 2012

Even though a federal abuse-of-power investigation closed without criminal charges, a civil case brought by a small group of Latinos who accuse Arpaio’s office of systematically racially profiling is awaiting a verdict.

PHOENIX — The federal abuse-of-power investigation into America’s self-proclaimed toughest sheriff may have been closed without criminal charges but Maricopa County Sheriff Joe Arpaio’s legal troubles are far from over.
A civil case brought by a small group of Latinos who accuse Arpaio’s office of systematically racially profiling is awaiting a verdict from an Arizona-based federal judge.
The U.S. Department of Justice has also sued the sheriff for alleged constitutional violations including racial profiling, retaliating against Arpaio critics, punishing Latino jail inmates with limited English skills for speaking Spanish and failing to adequately investigate a large number of sex-crimes cases. No trial date in that case has been set.
The Justice Department announced late Friday that it would not pursue criminal charges against the sheriff or his office, or against former Maricopa County top prosecutor Andrew Thomas and a top Thomas aide, Lisa Aubuchon, for abuse of power.
Thomas and Aubuchon were disbarred by the state Supreme Court earlier this year after an ethics panel decided they brought criminal charges against two county officials and a judge in December 2009 with the purpose of embarrassing them. The cases were investigated by Arpaio’s now-closed anti-public corruption squad.
Thomas was a longtime Arpaio ally.
Authorities were investigating Arpaio for his part in failed public corruption cases against officials who were odds with him. The sheriff brought cases against a judge and two county officials in 2009 and Thomas prosecuted them.
Federal authorities also said Friday that they have decided to not prosecute matters tied to alleged misuse of county credit cards by sheriff’s officials, alleged misspending of jail-enhancement funds and other matters.
The yearslong probe by the FBI and federal prosecutors into Arpaio, Thomas and their offices began during the tenure of President George W. Bush, although Arpaio, a fellow Republican, has since called it politically motivated since.
“If I did something wrong there would be indictments floating all over the place,” Arpaio said at a news conference called late Friday night. “I’m not going to get into all the details whether it’s political, a witchhunt or whatever you have. The bottom line is we were cleared and we should stay with that and not get into all the politics involved.”
Arpaio critics reacted with dismay to the decision not to seek criminal charges, saying they had hoped the Justice Department would finally act against what they call an out-of-control sheriff’s office.
“It’s an understandable reaction,” said Paul Charlton, a former U.S. attorney in Arizona who has worked for one of the county supervisors who was charged. “I can see how after so many years and so much misconduct by Joe Arpaio you would have that feeling.
Charlton said prosecutors had to measure the likelihood of proving any criminal case beyond a reasonable doubt.
“You have to have a reasonable likelihood of success and I trust they made this decision based upon the facts and the law.”
But the sheriff will have a different challenge in the civil cases he now faces.
“As a practical and a legal matter it means nothing,” Charlton said of the decision not to pursue criminal cases. “This is a different venue and a different standard of proof. It is one that many of Joe Arpaio’s critics, including myself, would have liked to have seen come out differently.
“But the end of Joe Arpaio’s legal troubles is a long, long way away. He already has lost many legal fights. He has been found to have committed significant misconduct, not the least of which was the finding in the state bar proceeding regarding Andrew Thomas. And I think we will see more of those findings in the future.”
Arpaio, 80, is seeking re-election to a sixth term in November. He has a multi-million dollar campaign account on hand to repel two challengers seeking his seat.

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