Archive for December, 2013


Wednesday, December 4th, 2013

Pursuant to Section 9 of the KBA Bylaws, elections will be conducted to choose a Bar Governor in the following Supreme Court Districts (SCD) with the candidates for election listed alphabetically:

6th SCD
Gary Sergent, Covington
Jackie Sue Wright, Maysville

7th SCD
Rhonda Jennings Blackburn, Pikeville
John Vincent, Ashland

Ballots will be mailed December 16 to each KBA member in good standing who is entitled to vote in the election for either the 6th or 7th Supreme Court Districts. Ballots must be received by the Clerk of the Supreme Court of Kentucky no later than Jan. 15, 2014. For more information on the Bar Governor candidates for the 6th SCD, click here. For more information on the Bar Governor candidates for the 7th SCD, click here.

KBA members in the 6th and 7th Supreme Court Districts are reminded to make sure their addresses are up to date in order to receive a ballot. To check your current address, please log-in and look yourself up in the Lawyer Locator. If you need to update the email address on file, click on “Request for Address Change,” at the bottom of the page. You may access address change information at any time when you login and complete the online address update or return a PDF of the address change form.

6th. Circuit Says Crack Sentencing Reduction Law is Not Retroactive

Wednesday, December 4th, 2013

Court: Reduced crack sentences not retroactive
December 04, 2013 12:46 EST

By AMANDA LEE MYERS Associated Press

CINCINNATI (AP) — An appeals court has found that thousands of prisoners convicted of crack cocaine offenses aren’t eligible for reduced penalties if they were sentenced before 2010.

That’s when Congress passed a law to eliminate sentencing disparities that disproportionately affected offenders who were black.

In its Tuesday decision, the 6th Circuit Court of Appeals in Cincinnati vacated a May decision from a three-judge panel of the court that found prisoners convicted under the old guidelines have a right to resentencing hearings.

In Tuesday’s deeply divided decision, 10 of the court’s judges disagreed, saying Congress didn’t mean for the law to apply retroactively.

Seven judges dissented, with one justice writing that the majority opinion “continues to treat African-American offenders more harshly than white offenders, despite Congress’ aim to the contrary.”


Wednesday, December 4th, 2013

Dec. 4, 2013
Last December, the California Supreme Court declined to hear an appeal filed by a couple who had accused financial giant Wells Fargo & Co. of predatory lending.
One justice, who owned stock in the bank, recused himself from the case. But Justice Kathryn Werdegar, who owned as much as $1 million of Wells Fargo stock, participated — and shouldn’t have.
The Center for Public Integrity learned of Werdegar’s financial stake thanks to California’s relatively strong financial reporting requirements for justices. But California’s law is an exception.
Forty-two states and the District of Columbia received a failing grade in a Center evaluation of disclosure requirements for high court judges. And not a single state earned an A or a B.
Yet despite the dearth of information, the Center still found 35 examples of questionable gifts, investments overlapping with caseloads as well as other entanglements.
After reviewing three years of personal financial disclosures, the Center found judges who authored opinions favoring companies in which they owned stock. The Center found judges who ruled on cases even when family members were receiving income from one of the parties. And it found judges who accepted lavish gifts — like a $50,000 trip from a lawyer.
The Center also found that enforcement of disclosure rules is spotty. Twelve states, for example, rely on self-policing disciplinary bodies — made up of high-court justices themselves — to enforce the courts’ ethics rules.
Much has been made of the potential corrupting influence of campaign contributions on judicial elections. But little attention has been paid to the personal finances of the 335 judges in the state courts of last resort and how those holdings may influence decisions handed down from the bench.
States more lax than feds
After seeking input from leading judicial ethics experts, the Center created a grading system based on a slightly tougher version of disclosure requirements for federal judges. Federal disclosures scored an 84 out of 100 possible points for a letter grade of B. (See full methodology.)
Federal disclosures fell short because they are not available online and judges can report the value of investments in broad ranges rather than exact amounts.
Not one state equaled or bettered the federal system’s score. The two highest-scoring states — California and Maryland — got Cs. Six other states earned a D, while the rest failed.
In many states, it’s practically impossible to glean any meaningful information from judges’ financial disclosures.
In Kentucky, a state that earned just 15 points, judges are not required to provide the names of companies in which they have a financial interest. They report family stock ownership in companies in broad categories such as “insurance,” “entertainment” and “energy.”
The District of Columbia requires judges to complete an eight-page disclosure form, but only releases one page to the public.
Ohio asks justices to disclose who gave them gifts, but doesn’t ask what the gifts are or how much they are worth, creating a form that doesn’t distinguish between a keychain and a Cadillac.
Maryland, Missouri and Minnesota require requesters to pick up reports in person while judges in Montana, Utah and Idaho aren’t required to file any disclosure reports at all.
“Forty-seven other states have them. What’s wrong with you guys?” asked Les Abramson, a University of Louisville law professor who specializes in judicial ethics.
Investment entanglements
The Center identified 14 instances in the past three years of justices participating in cases involving companies whose stock was owned by the justices themselves or their spouses. (See complete list.)
Justices also ruled on cases in which they or their family members received oil and gas royalties or farming subsidies from parties to the litigation.
Like federal jurists, state justices are permitted to own stocks, bonds, mutual funds, real estate and other investments. But state codes of conduct, modeled after American Bar Association guidelines, advise judges to manage their investment portfolios to avoid frequent recusals and limit their business associations with people who are likely to end up appearing in the judges’ courtrooms.
Judges can avoid conflicts by investing in mutual funds rather than individual stocks and bonds. Blind trusts — which contain assets unknown to the judge and are controlled by an outside party — are another strategy used to avoid conflicts.
Still, direct stock investments are relatively common among the judges on the states’ highest courts. Of the 273 supreme court justices required to disclose stock holdings, 107 reported owning stock, or just under 40 percent.
North Carolina Justice Robert Edmunds is one of many judges who reported family ownership of shares in dozens of companies.
The Center found that he ruled in favor of two companies in which he owned stock — Abbott Laboratories and Wells Fargo & Co.
In an interview, Edmunds told the Center that it was not a conflict of interest for him to preside in those cases.
“Our ethical rules allow participation if the ownership is de minimis,” he said, using the Latin term to describe a trivial amount. “It was so minuscule. … It effectively means whatever decision I make will not have any impact on my financial situation.”
North Carolina’s forms only require that investments worth at least $10,000 be reported, but do not ask for an exact amount.
He declined to provide the value of his holdings in those companies.
“Our job is to make decisions and not to try to get out of cases,” he said.
Arkansas Justice Paul Danielson used the same logic to defend an opinion he wrote in a 2012 case involving XTO Energy, a natural gas company.
The same year Danielson wrote the court’s opinion in favor of XTO, a subsidiary of Exxon Mobil Corp., the justice reported his wife earned between $1,001 and $12,499 in income from the company. He reported the same range of income from XTO in 2011.
Danielson said his wife earned the XTO income in the form of oil and gas royalties tied to land she inherited from her family. He said he didn’t need to recuse himself from the XTO case. “It certainly wasn’t going to affect my decision,” he said.
“If I had Wal-Mart stock worth $100,000, I’d get off a Wal-Mart case,” Danielson said. “But I won’t get off a case for silly reasons.”

Despite owning up to $1 million in shares of Wells Fargo, Justice Kathryn Werdegar participated in a vote to deny an appeal by a couple who accused the bank of predatory lending.

Conflicts at a glance
See the nine justices we found who ruled on their own financial interests.
What constitutes a conflict?
But how much stock, real estate or other interests is enough to influence a judge’s rulings on the bench? And who gets to decide? The answer varies from judge to judge, and court to court.
In Massachusetts, judges evaluate both the dollar value of the financial interest and whether the interest comprises a substantial portion of the judge’s total economic holdings to determine whether an investment requires stepping aside from a case, said Massachusetts Supreme Judicial Court spokeswoman Jennifer Donahue.
The federal recusal statute, however, says that a judge may not sit if he or she or certain family members have even one share of stock in one of the parties involved in a case.
“The appearance of impartiality is as important as the fact of impartiality,” said Abramson, the Louisville law professor, who is married to Kentucky Supreme Court Justice Lisabeth Abramson. “It’s really about how the public perceives the judiciary.”
Some states — like Florida, Wyoming and Connecticut — do not include information about spouses, domestic partners or dependent children.
Ethics experts call such omissions unacceptable, noting that the financial interests of a spouse or minor child could directly benefit the judge.
But Montana Court Administrator Beth McLaughlin said disclosure could “provide information about a spouse or child’s place of employment or home, which is simply ridiculous and can pose a very real risk to judicial families.”
At the federal level, judges must report their family members’ investments, gifts and liabilities. Federal judges, however, are protected by the U.S. Marshals Service as needed, including a 24/7 response to threats. Federal judges can also choose to have security systems installed in their homes at the government’s expense, according to U.S. Marshals spokeswoman Lynne Donahue.
State court systems generally don’t have such formal programs. Judges can request help from state or local law enforcement agencies, though.
State judges’ financial disclosures also may not yield much sensitive security information about families beyond what a cursory search of the Internet might uncover — or what the judges already share.
In the online biographies on Montana Supreme Court’s own website, some justices have disclosed their children’s names or ages, which is more than most of the toughest disclosure forms require.

Justice Courtney Goodson discloses a trip to Italy she accepted from Arkansas attorney W.H. Taylor, for an estimated value of $50,000.

Justice Courtney Goodson discloses a Caribbean cruise she accepted from Arkansas attorney W.H. Taylor, for an estimated value of $12,000.
A $50,000 vacation?
In 2012, Arkansas Justice Courtney Goodson accepted a $50,000 trip to Italy from Arkansas attorney W.H. Taylor, according to Goodson’s financial disclosure. The year before, Taylor paid for Goodson’s $12,000 “Caribbean Cruise.”
Goodson’s trip to Italy was by far the most expensive gift reported by supreme court justices in 2012. But she wasn’t the only judge to accept something of value.
In fact, judges reported receiving everything from meals and Indianapolis 500 tickets to country club memberships and expense-paid trips to attend conferences. In some cases, gifts received by judges stood out because of their sheer value, or because the gift giver could have ended up before the court.
Out of 335 judges, 248 are required to report at least some information about gifts or reimbursements they receive, but only 201 are required to disclose the dollar value of the gifts. Of that number, 82 judges reported receiving roughly $279,000 in freebies, with a median value of more than $1,800 per judge.
Twelve states don’t require any disclosure of gifts received or expenses reimbursed.
Some states have gift limits or restrictions. The state of Washington’s rules are especially strong, limiting gifts to $50 or less. Still, the limits are not without problems due to exceptions or loopholes.
Washington judges can receive “unsolicited tokens or awards of appreciation” worth more than $50 yet still not have to report them. In Iowa, officials face restrictions but can receive gifts worth any amount on their wedding or 25th and 50th wedding anniversaries.
And West Virginia restricts public officials from accepting gifts worth $25 or more from lobbyists or parties who are likely to come before them, meaning judges have to anticipate who might end up in their courtroom.
Joan Parker, executive director of the West Virginia Ethics Commission, acknowledged that the statewide gift laws do not always “match up nicely” with judicial ethics standards. Additionally, West Virginia’s public officials may accept limitless food and drinks as long as the donor is present.
Stephen Gillers, a New York University law professor who specializes in ethics, said gifts should not be banned. “The solution is transparency and reporting.”
Most states only require gifts above a certain dollar amount to be reported and the starting points vary widely, from as little as $50 in Virginia to as high as $1,000 in New York and New Jersey.
In Goodson’s case, the two trips she received from the Arkansas attorney were allowed under the state’s rules. However, they raised eyebrows after media reports earlier this year revealed that Taylor’s clients include John Tyson, the chairman of Tyson Foods, Inc., a food-processing giant based in Arkansas. Taylor and John Goodson, the justice’s husband, have collaborated on several lawsuits.
In an emailed statement to the Center, court spokeswoman Stephanie Harris wrote that Goodson will recuse herself from cases involving Taylor, who is also the judge’s personal attorney. “And out of an abundance of caution,” Harris’ email said, “she will continue to recuse in cases involving Tyson.”
Henry Chambers, a professor of law at the University of Richmond, said that such an extravagant gift from an attorney to a judge might suggest a greater systemic problem with the state’s legal community.
“I just can’t imagine that there are very many legal cultures around the country where that would be viewed as anything but crazy, horrible judgment. You shouldn’t have to have a rule on something like that,” Chambers said. “That’s something where you’ve just got to clean up the legal culture.”
Sometimes judges don’t step aside from cases involving gift givers.
In 2012, for example, Be-Be Adams, a registered lobbyist for Barrick Gold of North America, gave a $250 gift to Nevada Supreme Court Justice Ron Parraguirre, presumably a ticket to a charity gala.
Less than two months after the benefit, Parraguirre’s court received a still-pending case referred by a U.S. Court of Appeals, involving one of the company’s mines.
His assistant, Roxanne Doyle, told the Center on his behalf that the gift posed no conflict.
“That information was disclosed pursuant to the rules,” she said. “It has no effect on his rulings.”
Gillers, the NYU professor, said judges often tell him they feel that people wrongly assume that a gift or an investment means they can be corrupted.
“I say, it’s not about you, and it’s not about your incorruptibility. It’s about the public’s confidence in unbiased decision-making,” he said. “You can have a just opinion, but if people think it’s unjust because of some undue influence, then the administration of justice has suffered.”
Who needs disclosure?
But discovering “undue influence” requires robust, easy-to-access financial disclosures — something few states have and which some state officials find unnecessary.
In Montana, where judges don’t file personal financial disclosures, officials say judges are subject to the American Bar Association’s Model Code of Judicial Conduct and that’s enough to discourage bad behavior. “Frankly, we believe the rules provide a solid guideline for justices to avoid financial conflicts or potential conflicts,” said McLaughlin, the state court administrator.
Minnesota’s court spokesman John Kostouros said his state, which earned just 17.5 points in the Center’s study, does not need the types of disclosure rules that are necessary in states such as Illinois or New York.
“You really have to watch public officials in those states,” Kostouros said. “Minnesota has a very low tolerance for corruption.”
However, Cynthia Gray, director of the American Judicature Society’s Center for Judicial Ethics, said financial disclosures are a crucial tool for courts to share with the public to help demonstrate the integrity of their judges.

In Justice Steven David’s 2010 disclosure, handwritten employer details are almost illegible.

Here, Justice Margot Botsford’s husband’s last name is redacted from his law firm’s title, an omission that does little as the information is readily available elsewhere.
“It’s important for the public to know that [judges] have no basis for their ruling other than the law or the arguments in a specific case,” she said.
In addition, disclosure reports in many states are difficult to obtain. For example, 11 states require judges to file multiple public reports, often kept in different offices. Reports are sometimes filled out in illegible handwriting or so heavily redacted as to reveal little useful information.
Most states supply disclosure reports upon request by mail or email, sometimes for a processing or copying fee — like the federal government. Only eight states post all of their supreme courts’ financial disclosure statements online. Another four post at least some sets of their reports online.
“It’s indefensible not to put them online,” said Gillers, the NYU professor. “It’s just a way of making it harder for the public to learn what the judge has an obligation to reveal. So it’s a way of cutting back on the disclosure obligation without omitting the information you have to file.”
Janet Wright, former counsel of Delaware’s Public Integrity Commission, said the state agency does not post financial disclosure reports online, fearing they could be used to “phish” for account numbers or create a false identity.
Gillers does acknowledge the safety concerns of putting judges’ phone numbers or home addresses on the documents but little else.
“The price of becoming a public servant, including a judge, is that you give up some privacy rights,” he said. “You don’t forsake all of your privacy, but here the loss of privacy, to the extent of identifying your investments, is low. Some would consider it to be nearly nonexistent and therefore not troubling at all.”
Furthermore, some of the states with the most detailed disclosures have not hesitated to go online. California and Hawaii, among the top-scoring states for their relatively robust disclosure rules, put their reports online. Additionally, more states are moving in that direction. Wyoming posted its reports online after the Center asked about them.
New Mexico, however, went in the other direction. It stopped posting disclosures online this year because the statute only calls for making them accessible to “citizens” of the state, said the secretary of state’s spokesman Ken Ortiz.
Spotty enforcement
Disclosure requirements are worthless without enforcement.
Thirty-six states have meaningful authority to enforce penalties on judges who file disclosures improperly, with penalties ranging from fines to jail time. However, 12 states have only self-policing mechanisms to enforce disclosure rules for their top state judges. They are Hawaii, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New York, South Carolina and Vermont.
In those states, a judicial commission can investigate complaints about the high-court judges but those same judges must ratify the commission’s decision or decide which penalties to hand down.
Wyoming has such a system, but it has taken steps to avoid justices ruling on their peers.
While the state Supreme Court is the ultimate stop for judicial misconduct cases, the state constitution calls for creating a special court made of up of district judges to rule on any investigations involving Supreme Court justices. The state even had to use it, said Ronda Munger, the court system’s spokeswoman, for a justice who ultimately agreed to retire from the bench.
“It was a good process. It was not a nice process,” she told the Center. “We really wish it didn’t happen.”
But sometimes even after a judge has been admonished, the problems do not end.
In 2007, Wisconsin Supreme Court Justice Annette Ziegler was officially warned by a state commission about conflicts of interest for her work in a lower court after she was reported to have presided in more than 22 cases involving companies in which she owned stock.
She apologized for the ethical violations, saying they were unintentional.
Yet the Center found that, as a Supreme Court justice, she again ruled on a case in which she had a financial stake in one of the parties.
Ziegler took part in a 2012 decision involving Merck & Co. and Johnson & Johnson after the drug companies were accused of charging inflated drug prices to the state’s Medicaid system. The court decided against the companies on two of the three legal questions presented in the appeal. Ziegler reported owning more than $50,000 worth of each company.
The justice did not return multiple calls for comment.
Meanwhile, in California, the reaction to the potential conflict raised by the Center was quite different.
The California Supreme Court said it will review its internal procedures meant to detect potential conflicts of interest, noting that something went wrong when it failed to discover Justice Werdegar’s financial interest in Wells Fargo.
“The justice regrets the error,” said court spokesman Cathal Conneely.


Tuesday, December 3rd, 2013

Bart Jansen, USA TODAY December 3, 2013
Rabbi was dropped from Northwest program after frequent complaints about service.
WASHINGTON — Lawyers and justices clashed Tuesday at the Supreme Court over the rules for frequent flier programs, and whether airlines can drop travelers from them for any reason.
The case involves Northwest Airlines, which revoked Rabbi Binyomin Ginsberg’s membership in the WorldPerks Platinum Elite program in June 2008. Ginsberg had complained 24 times in eight months about the airline’s service.
The case dealt with the complexities of contract law, and whether cases are blocked against airlines as part of deregulation. Justice Antonin Scalia said the whole purpose of the law was to prevent such lawsuits, to avoid regulation of airlines by federal or state governments.
Justice Ruth Bader Ginsburg asked whether contracts for frequent fliers are “illusory,” if an airline can oust its members “willy-nilly.”
Justice Elena Kagan said travelers would ignore staying loyal to one airline if they could be dropped. “I don’t see that that would make sense,” Kagan said.
Paul Clement, a former U.S. solicitor general representing Northwest, which became part of Delta Air Lines in a merger, said it would be foolish for airlines to abuse their most lucrative customers.
However, he said, airlines must be free to deal with passengers who are unruly or unmanageable, without fearing legal challenges in numerous jurisdictions. Clement said rather than filing lawsuits against airlines, passengers can file complaints with the Department of Transportation, which investigated 289 such cases last year.
“Airlines do not have an interest in getting rid of their most lucrative customers,” Clement said.
Ginsberg, who lives in Minnesota and who flies 75 times a year as a lecturer, filed a federal class-action lawsuit seeking $5 million, saying he was dropped in a breach of good faith and fair dealing. He acknowledged complaining about getting bumped from flights, but not every time.
Ginsberg seeks reinstatement for the program’s lower prices and enhanced services.
But Northwest contends that the 1978 Airline Deregulation Act law precludes any lawsuits dealing with the “price, route or service of an air carrier.”
The Justice Department agreed, and joined the case on the airline’s side.
A U.S. District Court dismissed Ginsberg’s case. But the Ninth U.S. Circuit Court of Appeals reinstated it, saying that Ginsberg could argue whether the airline acted in good faith.
Ginsberg’s lawyer, Adina Rosenbaum from the consumer group Public Citizen, argued that the loyalty program goes beyond “price, route and service” because credits can be exchanged for credit-card purchases and tickets to Broadway shows.
Their case contends that the law doesn’t prevent lawsuits “seeking recovery solely for the airline’s alleged breach of its own, self-imposed undertakings.” The airline breached its “contractual obligation of good faith and fair dealing,” according to written arguments.
Clement argued that a previous Supreme Court decision about a loyalty program ruled out Ginsberg’s case.
That 1995 decision, in a case involving American Airlines, dealt with a dispute about lost upgrades and blackout dates.
Clement said even if Ginsberg’s claims were allowed under state law, airlines would be faced with a patchwork of local policies that the deregulation law “was designed to eliminate.”
The case is closely watched by the business community, with the U.S. Chamber of Commerce and the International Air Transport Association filing arguments on behalf of the airline.
The chamber, which represents 300,000 businesses and associations, said allowing a case based on a breach of an implied covenant would “harm the airline industry upon which our nation’s economy depends.”
Sixteen states, including California and New York, filed an argument siding with Ginsberg because the federal law blocks state lawsuits.
The high court’s decision is expected by June.


Tuesday, December 3rd, 2013

Eric Deters has filed a motion seeking discretionary review of an ethics ruling by the Ky. Supreme Court.

Deters argues that the rules of procedure require any appeallate to the Ky. Supreme Court to cite the official record.

He argues that he was denied the right to make a record of the Board of Governors hearing, and therefore could not present the full record
to the Ky. Supreme Court. This issue was presented to the Ky. Supreme Court and was denied.

Deters offered to have a recording or transcription of the hearing to be made at his own expense. His request was denied.


Tuesday, December 3rd, 2013

Press Release Date: Monday, November 25, 2013

FRANKFORT, Ky. — Chief Justice of Kentucky John D. Minton Jr. told a legislative committee today that revising the Judicial Branch salary structure would be his priority budget request for the 2014 session of the General Assembly.
“It is an embarrassing fact that more than 800 – one-fourth – of our 3,300 non-elected employees fall under the federal poverty guidelines for a family of four,” Chief Justice Minton said. “An even larger number qualify for food stamps based on their salaries.”
Chief Justice Minton gave his remarks as he presented an overview of the Judicial Branch budget to the General Assembly’s Budget Review Subcommittee on Justice and the Judiciary at the Capitol Annex. He testified about the budget for the next fiscal biennium of Fiscal Years 2014-2016.
The chief justice told the committee that his budget request would be about “making systemic revisions to our compensation structure to ensure that court employees – the people who provide indispensible services and provide access to justice in courthouses in your home counties and across the state – are adequately and fairly compensated.”
Chief Justice Minton formed a Compensation Commission in 2010 to evaluate the Judicial Branch’s salary scale, which has historically trailed those of the Executive and Legislative branches. The proposed salary structure is based on the commission’s recommendations.
The chief justice is the administrative head of the state court system and is responsible for overseeing its operation. Chief Justice Minton was elected to the Supreme Court in 2006. His fellow justices elected him to serve a four-year term as chief justice in 2008 and re-elected him for a second term in 2014.