Archive for the ‘Uncategorized’ Category


Friday, December 19th, 2014

CASE NO. 14-5763







* * * * *

The United States objects to William J. Gallion’s motion for a certificate of appealability because he has failed to make “a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). A certificate of appealability is a jurisdictional prerequisite to this Court’s review. Miller-El v. Cockrell, 537 U.S. 322, 336 (2003). To make “a substantial showing of the denial of a constitutional right,” Gallion must establish that “reasonable jurists could debate” whether “the petition should have been resolved [by the district court] in a different manner or that the issues presented were ‘adequate to deserve encouragement to proceed further.’” Slack v. McDaniel, 529 U.S. 473, 484 (2000) (quoting Barefoot v. Estelle, 463 U.S. 880, 893 n.4 (1983)).

Gallion was convicted at trial of conspiracy to commit wire fraud and wire fraud in violation of 18 U.S.C. §§ 1343 and 1349. [R. 599: Superseding Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 1


Indictment at 10,837; R. 820: Verdict at 14,216.] The district court sentenced him to twenty-five years in prison and entered a restitution award of $127,678,834.05. [R. 955: Judgment at 16,696, 16,699.] This Court affirmed Gallion’s conviction. United States v. Cunningham, 679 F.3d 355 (6th Cir. 2012). The Supreme Court denied his petition for a writ of certiorari. Gallion v. United States, 133 S. Ct. 772 (2012).

Last year, Gallion filed a motion to vacate his sentence pursuant to 28 U.S.C. § 2255. [R. 1406: Motion to Vacate at 24,882.] He alleged that he was denied the effective assistance of trial counsel because (1) his counsel suffered from severe health conditions that prevented him from performing at a constitutionally effective level; (2) his counsel did not seek a continuance to retain an expert witness and did not hire Kenneth Feinberg as an expert witness; (3) his counsel permitted him to testify in his own defense; (4) his counsel failed to demand that the jury determine the amount of loss and the defendant’s role in the offense; and (5) his counsel failed to petition the Kentucky Supreme Court to inspect the Kentucky Bar Association’s (“KBA”) disciplinary files of three witnesses, Stanley Chesely, Joseph Bamberger, and David Helmers. [Id. at 24,897-98.] He further alleged his due process rights were violated denying him a fair trial (1) because the government allegedly failed to disclose impeachment Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 2


materials from the KBA relating to Chesley, Bamberger, and Helmers, and (2) because Judge Reeves was allegedly biased against him and was believed to have engaged in an ex parte communication with counsel for the KBA’s Office of Bar Counsel. [Id. at 24,899-900.] The magistrate judge recommended denying of Gallion’s claims. [R. 1419: Report and Recommendation at 25,008.] Gallion filed objections to the report and recommendation as it related to the denial of his ineffective assistance of counsel claim relating to (1) his trial counsel’s health, (2) his trial counsel’s failure to secure an expert witness, and (3) his trial counsel’s failure to seek KBA investigatory records relating to Chesely, Bamberger, and Helmers. Gallion further objected to the magistrate’s findings he was not denied a fair trial relating to the alleged withholding of impeaching material by the government for Chesely, Bamberger, and Helmers, and the alleged judicial bias of Judge Reeves. [R. 1422: Objections at 25,030.]

Gallion also moved to recuse the trial judge, Danny C. Reeves, and to transfer the § 2255 motion to the Western District of Kentucky. Gallion’s motion included arguments already made and, in an effort to sidestep the one-year period of limitations of 28 U.S.C. § 2255(f), additional arguments that he failed to raise in his motion to vacate. [R. 1427: Motion to Recuse at 25,496.] Judge Reeves overruled Gallion’s objections and adopted the report and recommendation. The

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district court further found the motion to recuse to be out of time and alternatively without merit. The district court also denied Gallion a certificate of appealability. [R. 1433: Opinion and Order at 25,540.]

Gallion now seeks a certificate of appealability as it relates to his claims that (1) Judge Reeves was biased against him, (2) the government allegedly withheld exculpatory evidence, (3) the government allegedly knowingly used perjured testimony to convict, (4) Gallion was denied a fair trial, and (5) Gallion was denied effective assistance of counsel. See Gallion’s Motion at 19-44. Gallion fails to make a substantial showing of a denial of a constitutional right, even after giving his convoluted arguments their most expansive reading.*

Judge Reeves was not biased against Gallion

Gallion’s argument that Judge Reeves was biased against him fails because, as Judge Reeves properly recognized, Gallion’s motion for recusal was an attempt to argue matters that were not presented in his § 2255 petition and were outside the time restrictions for habeas petitions. See 28 U.S.C. § 2255(f). Judge Reeves properly found that the claim of judicial bias was not argued on direct appeal and,

*Throughout Gallion’s motion, he cites to the district court record using “D.E.” cites. Apparently, those cites relate to the appendix that he filed in district court with his notice of supplemental filing. [See R. 1424: Notice at 25,063-439.]

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therefore, were procedurally barred. [R. 1433: Opinion and Order at 25,544 (citing United States v. Frady, 456 U.S. 152, 168 (1982)).]

Regardless, Gallion’s allegations of judicial bias lack any basis. As Judge Reeves properly explained, the standards for judicial disqualifications are:

First, judicial rulings alone almost never constitute a valid basis for a bias or partiality motion. In and of themselves (i.e., apart from surrounding comments or accompanying opinion), they cannot possibly show reliance upon an extrajudicial source; and can only in the rarest circumstances evidence the degree of favoritism or antagonism required . . . when no extrajudicial source is involved. Almost invariably, they are proper grounds for appeal, not for recusal.

[R. 1433: Opinion and Order at 25,545 (quoting Liteky v. United States, 510 U.S. 540, 555 (1994)).] Gallion argues that bias is shown because of an alleged ex parte communication with Jane Graham, counsel for the KBA. He presumes that such a meeting took place for the improper purpose of limiting the availability of impeachment evidence for Chesley and Bamberger.

Gallion completely fails to advance any credible evidence that Judge Reeves engaged in an improper ex parte communication with Graham for any purpose. KBA Chief Bar Counsel, Linda Gosnell, testified at trial on February 24, 2009. [R. 1160: Linda Gosnell, TR (Vol. 6-A) at 20,460-87.] The billing records that Gallion submitted show that Gosnell’s counsel, Jane Graham, attended the trial on that day. [See R. 1406: Motion at 24,923.] During the morning, Graham filed Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 5


a motion for a protective order and, outside the presence of the jury, argued that the court should prohibit any questioning of Gosnell about whether any attorneys, other than the defendants, were the subject of an investigation by the KBA Inquiry Commission. [R. 728: Motion at 11,500; see R. 1160: Colloquy, TR (Vol. 6-A) at 20,432-36.] After considering the parties’ positions, the court granted the motion based on the law. [R. 1160: Colloquy, TR (Vol. 6-A) at 20,436-40.]

Moments later, Gallion’s counsel, O. Hale Almand, Jr., addressed Judge Reeves:

MR. ALMAND: If it please the Court, I would just like to finish my record. I understand that the Court has ruled, but if I could just put this on the record.

The fact that one of the witnesses, Mr. Chesley, we know of the investigation on him because we have been contacted directly by the Bar asking us to provide information on him. So that is a matter that’s already been disclosed to us. So that’s no secret as far as that is concerned. So we are fully aware of that, which means that that being the case, we certainly as to him should have the ability to inquire into that.

And Judge, I would also ask, has there been – I’m not aware of how the courts work in Kentucky in regards to communication with judges by the Bar Association, and I didn’t know whether there had been any communications with the Court or not directly concerning this matter that we’re not aware of, but if there were, I would just ask that question. And I’m assuming there’s not, but I just ask.

THE COURT: You’ve asked the question.

MR. ALMAND: Yes, sir. Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 6


THE COURT: It doesn’t mean I have to answer it.

[R. 1160: Colloquy, TR (Vol. 6-A) at 20,441-42.]

Almand’s questions to the court had nothing to do with Gosnell or Graham. Instead, Almand was attempting to find out if the KBA had contacted Judge Reeves for the purpose of obtaining information about Chesley. Thus, Gallion’s assertion that Graham had potentially made an ex-parte communication with the court relating to Gosnell and Graham’s motion for a protective order lacks any support in the record. Nevertheless, Gallion argues he is entitled to an evidentiary hearing for the purpose of questioning Graham. See Gallion’s Motion at 25-26. A hearing is not necessary, however, when a petitioner’s claims “‘cannot be accepted as true because they are contradicted by the record, inherently incredible, or [are] conclusions rather than statements of fact.’” Valentine v. United States, 488 F.3d 325, 333 (6th Cir. 2007) (quoting Arredondo v. United States, 178 F.3d 778, 782 (6th Cir. 1999)).

Gallion cannot show judicial bias merely because the district court granted Graham’s motion for a protective order. This Court upheld the ruling because disciplinary proceedings are confidential in Kentucky until there is a final determination that an ethical violation has occurred. Cunningham, 679 F.3d at 384 (citing Ky. Sup. Ct. R. 3.150(1)). Gallion has failed to show that this ruling is Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 7


indicative of bias. See Caravalho v. Pugh, 177 F.3d 1177, 1179 (10th Cir. 1999) (mere disagreement with merits of court’s decision does not support recusal of judge). Because recusal was unnecessary and would have been a waste of valuable judicial resources, the district court properly denied Gallion’s motions to recuse and to transfer. [R. 1433: Opinion and Order at 25,544-46.]

The government did not withhold exculpatory evidence

Gallion’s claim that the government withheld exculpatory evidence from the KBA that he claims existed at the time of trial in files allegedly relating to the disbarment of Chesley, Bamberger, and Helmers also lacks any basis. Gallion claims that the government had this information because the Kentucky Supreme Court issued an order allowing the government access to the KBA files of defendants, Gallion, Cunningham, and Mills. See Gallion’s Motion at 26. Nothing in the record indicates that the government was provided with any other witness statements or any impeaching or exculpatory material by the KBA that was not provided as part of the files pertaining to Gallion, Cunningham, and Mills. The KBA provided information to the government only because the government successfully moved for an order to obtain the release of documents relating to the disciplinary case it had against Gallion, Mills, and Cunningham. [R. 1406: Motion, Exhibit B at 24,920-22.] The Kentucky Supreme Court rule allows for

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disclosure only where, as here, a law enforcement agency is conducting an investigation into a criminal matter relating to the target and the information is believed to be essential to that investigation. Ky. Sup. Ct. R. 3.150(4)(c).

For the first time, Gallion now accuses the government of failing to provide a summary of the interview of David Schaefer, an attorney for American Home Products, which Gallion alleges is exculpatory. See Gallion’s Motion at 27. Nowhere in his original § 2255 petition, his objections, or his motion to recuse does he mention Schaefer in the context of this argument. [See R. 1406: Motion at 24,882; R. 1422: Objections at 25,030; R. 1427: Motion to Recuse at 25,496.] Because he failed to raise this claim either on direct appeal or in his § 2255 motion, the Court should ignore his allegation. See Frady, 456 U.S. at 164 (holding that issues not raised on direct appeal are waived); Hewlett v. United States, No. 91-5832, 1991 WL 253308, at *1 (6th Cir. Nov. 26, 1991) (holding that claims not raised in prior § 2255 motion “not reviewable”).

Although Gallion does not explain when he received the Schaeffer interview summary, he claims that the use of the summary during the trial would have caused the jury to accept his advice-of-counsel defense. Gallion’s Motion at 27. But the portion of the interview upon which Gallion relies merely provides:

Schaefer recalled that during the mediation sessions (2001), there was talk by some of the plaintiffs’ attorneys, of the establishment of

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a charitable fund to receive any left over monies as part of the settlement. Although he could not remember exactly which attorneys participated in this discussion, Schaefer believed that Pierce Hamblin, David Helmers, Shirley Cunningham, William Gallion and Stanley Chesley were present, along with Schaefer’s two co-counsel.

[R. 1406: Motion, Exhibit A at 24,918-19.] Schaefer also stated that in his experience he had never heard of a charitable fund being established by plaintiffs’ attorneys. [Id. at 24,919.] Schaefer’s trial testimony does not contradict his interview summary statements. Schafer testified that although he was present at times during the mediation, he was not involved in the negotiations. [R. 1171: David Schaefer, TR (Vol. 16-A) at 21,421, 21,431.] At best, he recalled that Chesley, among others, were present. [Id. at 21,424-25.] Thus, Gallion’s claim that the interview “contradicts Judge Reeves[‘s] interpretation of the Settlement Documents and the ruling that denied the defense right to offer Expert Testimony,” Gallion’s Motion at 27, fails.

Much of Gallion’s argument is simply a rehashing of his complaints about legal rulings in the case. For example, he continues to attack Judge Reeves’s ruling that the case resulted in an aggregate settlement and repudiates this Court for upholding this ruling. See Cunningham, 679 F.3d at 376. He argues that Judge Reeves misinterpreted the settlement letter and nullified Gallion’s trial testimony that the limitation was on attorney’s fees citing to the affidavit of Kenneth Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 10


Feinberg. In so doing, he improvidently ignores that Feinberg disavowed his earlier opinion once he acquired more details surrounding the defendants’ actions. See Ky. Bar Ass’n v. Chesley, 393 S.W.3d 584, 593 (Ky. 2013). Gallion could not show that Almand was deficient by failing to call an expert witness on an issue that was no longer before the jury. See Cunningham, 679 F.3d at 380 (noting that such an expert would be “irrelevant and confusing to the jury.”) Moreover, Gallion could not provide that he was prejudiced by the failure to retain an expert such as Feinberg. As the district court recognized, “it is highly likely that Feinberg’s testimony would have harmed Gallion’s case after he had been fully apprised of the circumstances surrounding the settlement. In short, there is no reasonable probability that, but for the decision not to call an expert such as Mr. Feinberg, the outcome of Gallion’s trial would have been different.” [R. 1433: Opinion and Order at 25,552.]

Gallion makes an impermissible argument regarding the district court’s ruling on the side letter relating to indemnification. He argues that the court wrongfully applied the parole evidence rule. Gallion’s Motion at 28. Gallion did not raise this argument on appeal. See Cunningham, 679 F.3d at 380. Further, nowhere in his motion to vacate or in his objections does he make this argument. Thus, this argument also cannot support a certificate of appealability. Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 11


The government did not use perjured testimony to convict Gallion

Gallion’s argument that the government knowingly used perjured testimony to convict him, see Gallion’s Motion at 38, is yet another argument raised for the first time in his motion for a certificate of appealability. Again, such a claim cannot support a certificate of appealability. See Frady, 456 U.S. at 164 (holding that issues not raised on direct appeal are waived); Hewlett, 1991 WL 253308, at *1 (holding that claims not raised in prior § 2255 motion “not reviewable”). Gallion fails to support his claim that government presented perjured testimony.

The argument is based on a mishmash of conjecture and unsupported allegations of bad faith primarily directed at the government (1) because Chesley testified that he simply did not recall being at a meeting where attorney’s fees were discussed with Judge Bamberger, Gallion, and Cunningham, and (2) because Bamberger testified that Gallion told him that the claimants were thrilled to learn that a cy pres trust had been created. See Gallion’s Motion at 38-41. But the government presented the full testimony of Chesley and Bamberger, and the defendants thoroughly cross-examined these witnesses. [R. 998: Joseph Bamberger, TR (Vol. 14-B) at 17,369-408; R. 1175: Stanley Chesley, TR (Vol. 22-A) at 21,771-845.]

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Gallion was not denied a fair trial

To prevail on his claim, Gallion must demonstrate a constitutional error that was of such a magnitude that it had a substantial and injurious effect or influence on the jury’s verdict. Griffin v. United States, 330 F.3d 733, 736 (6th Cir. 2003) (citing Brecht v. Abrahamson, 507 U.S. 619, 637 (1993)). Gallion would be entitled to relief only by showing “a fundamental defect which inherently results in a complete miscarriage of justice.” Davis v. United States, 417 U.S. 333, 346 (1974). His argument that disbarment orders were admitted into evidence by the government, see Gallion’s motion at 42-43, cannot succeed because this Court rejected this argument on direct appeal. See Cunningham, 679 F.3d. at 383-84 (finding that any error would have been harmless in light of overwhelming and independently-supported evidence of guilty).

Gallion did not receive effective assistance of counsel

In his last argument, Gallion claims that his trial counsel’s poor health compromised his effectiveness in several respects. He alleges that his counsel was ineffective for not contacting Kenneth Feinberg as a replacement expert when his proposed expert, Richard Robbins, was not permitted to testify, or for failing to request a continuance to obtain another expert. He claims that his counsel was ineffective for acquiescing in the court’s suppression of the disciplinary files of

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Chesely, Bamberger, and Helmers. He further complains that he was wrongfully denied an evidentiary hearing on his ineffective assistance of counsel claim. Gallion’s Motion at 43-44. Again, each of Gallion’s arguments fail.

Prior to the second trial before Judge Reeves, Gallion’s counsel, O. Hale Almand, Jr., moved to withdraw due to conflicts in his schedule; however, Gallion opposed this request. Instead, Gallion personally asked for a two-week continuance to accommodate Almand’s schedule. [R. 694: Motion to Withdraw at 11,226; R. 695: Minute Entry at 11,251, R. 710: Colloquy, TR (Final Pretrial Conference) at 11,333-38.] The court later granted Gallion’s pro se motion for a continuance. [See R. 703: Order at 11,273.] Moreover, during the trial, Judge Reeves allowed several continuances to give Almand the opportunity to address medical issues relating to dizzy spells. [R. 1165: Court, TR (Vol. 10) at 20,975; R. 1166: Court, TR (Vol. 11) at 20,985; R. 1167: Court, TR (Vol. 12) at 20,989; R. 1002: Court, TR (Vol. 18-B) at 17,749-50.] Judge Reeves stated his concern about Almond’s health and not wanting to do anything to jeopardize it, and Almand expressed his appreciation to the court for the personal consideration he had been given. [R. 1167: Court, TR (Vol. 12) at 20,991, 20,994.]

Later, during the trial, Judge Reeves appointed Willis Coffey as stand-by counsel to consult with Gallion regarding the best manner to proceed in light of

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Almand’s illness. [R. 1173: Court, TR (Vol. 19) at 21,625.] During that consultation, Almand conversed intelligently about the case and stated that he wished to continue as Gallion’s counsel. Gallion agreed. Coffey requested a short continuance to give Gallion the opportunity to decide how he wished to proceed. [R. 1173: Colloquy, TR (Vol. 19) at 21,628.] This Court found no error with the procedure employed by the Judge Reeves. Cunningham, 679 F.3d at 385-86.

Judge Reeves recognized the high level of effectiveness that Almand provided despite his health issues:

THE COURT: To this point, Mr. Almand has provided very effective and very zealous advocacy on behalf of Mr. Gallion. I don’t think anyone could argue to the contrary on that, sir.

[THE GOVERNMENT]: We do not certainly disagree with that.

THE COURT: I want to make sure that he’s able to do that as the case proceeds. I don’t want Mr. Gallion to be prejudiced by a medical condition that obviously is not the choosing of Mr. Almand. It is what it is. We’re faced with the situation that we’re faced with.

[R. 1004: Colloquy, TR (Vol. 20-B) at 17,781].

Judge Reeves requested a medical opinion from Almand’s physician. Judge Reeves determined that the immediate concern was determining whether Almand was able to proceed “over the next ten days in representing Gallion and do so in an effective and zealous manner – not overly zealous, but in a zealous manner that’s Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 15


expected of all attorneys.” [Id. at 17,782-83.] When trial resumed, Coffey announced that Almand was able to proceed.” [R. 1174: Colloquy, TR (Vol. 21-A) at 21,642.]

In his opinion denying Gallion’s § 2255 petition, Judge Reeves correctly stated:

The record establishes that Gallion was aware of Mr. Almand’s health problems but preferred that Almand continue as his attorney. The Court thoroughly considered Mr. Almand’s advocacy and granted several continuances to ensure that Almand could effectively represent Gallion. When appointed for this very purpose, Coffey agreed that Almand could competently represent Gallion. In short, Gallion has not shown that his counsel’s performance was deficient because of his health condition.

[R. 1433: Opinion and Order at 25,549.]

Even if Gallion could demonstrate that Almand’s representation fell below the standard of reasonableness, he cannot show that that he suffered any prejudice as required by Strickland v. Washington, 466 U.S. 668, 694 (1984). As previously explained, see supra, any failure to contact Feinberg did not prejudice Gallion, and Gallion was not entitled to the KBA disciplinary files of Chesely, Bamberger, and Helmers. Additionally, Gallion’s argument that Almand should have requested a continuance to obtain another expert is equally unfounded because Gallion cannot show that the testimony of such an expert would have affected the outcome of the trial in light of the overwhelming evidence of his guilt. Case: 14-5763 Document: 22 Filed: 12/18/2014 Page: 16


Accordingly, this Court should deny Gallion’s motion for a certificate of appealability


Friday, December 19th, 2014


By: John Hayward
12/19/2014 10:02 AM


It might not get the news coverage it deserves with everything else going on at the moment, but the unanimous ruling by a three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati against a federal gun law is a very big deal.  The court held that the federal ban on gun ownership by people who have been committed to a mental institution is an unconstitutional violation of the Second Amendment.  Rulings of that caliber (if you’ll pardon the pun) don’t come down all that often.  The previous instance was the Supreme Court’s Heller ruling against Washington D.C.’s firearms ban in 2008, which those on both sides of the gun control debate would agree was a very big deal.

Today’s ruling was prompted by the efforts of 73-year-old Clifford Charles Tyler to purchase a gun.  His application for a permit was denied because he spent one month in a mental institution, in 1986, due to emotional problems following his divorce.  (According to the background material in the 6th Circuit Court decision , his ex-wife allegedly cleaned out his bank accounts and ran off with another man, leaving Tyler so despondent that he wept incessantly, couldn’t sleep, and had suicidal thoughts.  He was committed for treatment after his fearful daughters called the police.  He never did anything more violent than pound on his own head in despair.)

The law provides individuals with such troubles in their distant past with an opportunity to prove they have recovered from their disability, but unfortunately federal funding for programs to demonstrate relief was terminated over 20 years ago, and Tyler’s home state of Michigan never set up a program of its own.  Tyler, and other Michigan residents, were therefore left with a theoretical concession to their Second Amendment rights that was impossible to take advantage of in practice.  He passed screenings by both his physician and a psychologist, who agreed that his depressive episode decades previously had been an isolated incident, and he has since remarried, but none of that was good enough to satisfy the federal gun law.

That didn’t pass muster with Judge Danny Boggs, who drew a sharp distinction between the need to keep guns away from the mentally ill, and an unconstitutional burden placed upon rehabilitated individuals with brief periods of difficulty in their distant past.  Somehow I suspect gun-control zealots will spectacularly fail to draw that distinction, and parody the 6th Circuit Court’s decision as “putting guns in the hands of madmen,” which they claim is an unwritten bullet point in the hidden agenda of the National Rifle Association.  (Once again, pardon the pun.)

This attitude would seem difficult to square with the Left’s general enthusiasm for restoring the rights of criminals as quickly as possible – especially their voting rights – on the grounds that no one’s life should be permanently ruined for anything less than the most heinous offense.  The gun-control movement will cast those principles aside in order to argue that public safety is unacceptably compromised by allowing a 73-year-old man who spent a month in an institution for emotional distress when he was 45 to buy a gun… something even the law as written would have permitted, if the government had given him a reasonable opportunity to demonstrate his rehabilitation.

Judge Boggs went pretty hard on the regulatory trap Tyler was caught in, comparing it to the bureaucratic nightmares satirized in the novel “Catch-22.”  Boggs wrote that “under this scheme, whether Tyler may exercise his right to bear arms depends on whether his state of residence has chosen to accept the carrot of federal grant money and has implemented a relief program.  His right thus would turn on whether his state has taken Congress’s inducement to cooperate with federal authorities in order to avoid losing anti-crime funding.”  The cooperation in question involves states contributing information to the federal background-check system, in exchange for which grants would be issued to finance various state anti-crime programs.  The fact that federal law allows previously-committed non-felons to petition for gun licenses clearly indicates that the government doesn’t think they’re dangerous enough to warrant permanent suspension of their Second Amendment rights, which means setting up a system that makes it effectively impossible for them to actually petition for the relief they are theoretically entitled to is constitutionally unacceptable.

The new decision quotes the Supreme Court’s Heller decision extensively – see, it was a very big deal! – comtrasting the restrictions that Tyler ran afoul of against various other constitutionally acceptable restrictions, including the one that forbids illegal aliens to possess firearms.  “In light of Heller’s characterization of the right at issue as one of ‘law-abiding, responsible citizens’ and case law permitting Congress to distinguish among citizens, aliens, and illegal aliens, these holdings are not difficult,” writes Boggs.  Oh, I don’t know about that, Your Honor.  Give Emperor Obama some more time to wipe out the distinction between legal citizens and illegal aliens with his magic memorandums, and it might become very difficult indeed.  How long will it be before one of Obama’s new above-the-law imported super-constituents becomes embroiled in a gun case?

Boggs also draws distinctions between the restriction struck down by his court and a variety of broadly similar gun restrictions by noting that the permissible ones aretemporary.  The Second Amendment can endure temporary restrictions, but the permanent loss of gun rights is a very serious business, which cannot be justified by vague concerns about increased risk.  “It is certain that there is a non-zero chance that a previously institutionalized person will commit gun violence in the future,” writes Boggs, “but that is true of all classes of persons.”  Furthermore, the nature of the bureaucratic trap Tyler found himself snared in amounted to disparate treatment under federal law for an entire class of people based on “whether they reside in a state that has chosen to participate in a joint federal-state administrative scheme.”

The overall thrust of the 6th Circuit’s decision is to affirm that the Second Amendment, along with the rest of the Bill of Rights, stakes out some very valuable individual real estate, where the government must fear to tread.  Gun rights remain a contentious issue because the government cites the needs of public safety when it restricts the ownership of firearms, but Boggs challenges the government to provide compelling reasons for those infringements, especially when they are permanent.  He finds it unsurprising that legal fallout from the Heller decision is still raining down, since that ruling was only handed down six years ago, but notes that “provisions of our Constitution do not lose their force even with the passage of decades.”  Oooh, that’s not going to go over well with the “living Constitution” crowd – a group that overlaps rather heavily with gun-control zealots.


Heien v. North Carolina – SCOTUS docket no. 13-604 Dec. 17, 2014 – REASONABLE SUSPICION FOR TRAFFIC STOP BASED ON IGNORANCE OF THE LAW

Thursday, December 18th, 2014



See complete ruling at:



Docket No., 13-604


Whether a police officer’s mistake of law can provide the individualized suspicion that the Fourth Amendment requires to justify a traffic stop.

Merit Briefs

Amicus Briefs




Location: Interstate 77

Facts of the Case 

On April 29, 2010, Sergeant Darisse of the Surry County Sheriff’s Department observed Maynor Javier Vasquez driving north on I-77 with a broken brake light. When Darisse pulled over the vehicle, he noticed another man, Nicholas Heien, lying under a blanket in the backseat. Darisse spoke with the two men, felt that their stories did not match up, and was concerned that Heien had not gotten up from the back seat. Darisse asked for permission to search the vehicle. Heien agreed, and Darisse found a bag containing 54.2 grams of cocaine in the car.

A grand jury indicted Heien for two counts of trafficking cocaine. Heien filed a motion to suppress the evidence discovered during the search of his vehicle, and the trial court denied the motion. The North Carolina Court of Appeals reversed the trial court and held that the traffic stop was not objectively reasonable because North Carolina law only required one working brake light. The North Carolina Supreme Court reversed and held that when an officer’s mistake of the law is reasonable, it may give rise to the “reasonable suspicion” required for a warrantless search of a vehicle under the Fourth Amendment. That North Carolina Supreme Court sent the case back to the state Court of Appeals.

The North Carolina Court of Appeals found no error in the trial court’s judgment. A dissenting judge, however, stated that the North Carolina Supreme Court’s ruling created “fundamental unfairness” because it held citizens to the traditional rule that “ignorance of the law is no excuse” while allowing police to be ignorant of the law. Based on this dissent, Heien again appealed to the North Carolina Supreme Court which rejected Heien’s appeal.


Does a police officer’s mistake of law provide the individualized reasonable suspicion that the Fourth Amendment requires to justify a traffic stop?


Heien v. North Carolina – Oral Argument

Go to:



Ignorance Is No Excuse For Wrongdoing…Unless You’re A Cop

Thursday, December 18th, 2014


U.S. Supreme Court deals another blow to Bill of Rights.


“[I]f the individual is no longer to be sovereign, if the police can pick him up whenever they do not like the cut of his jib, if they can ‘seize’ and ‘search’ him in their discretion, we enter a new regime.”—U.S. Supreme Court Justice William O. Douglas, dissenting in Terry v. Ohio (1968)

With Orwellian irony, the U.S. Supreme Court chose December 15, National Bill of Rights Day, to deliver its crushing blow to the Fourth Amendment. Although the courts have historically held that ignorance of the law is not an excuse for breaking the law, in its 8-1 ruling in Heien v. State of North Carolina, the Supreme Court gave police in America one more ready excuse to routinely violate the laws of the land–this time under the guise of ignorance.

The Heien case, which started with an improper traffic stop based on a police officer’s ignorance of the law and ended with an unlawful search, seizure, and arrest, was supposed to ensure that ignorance of the law did not become a ready excuse for government officials to routinely violate the law.

It failed to do so.

In failing to enforce the Constitution, the Court gave police the go-ahead to justify a laundry list of misconduct, from police shootings of unarmed citizens to SWAT team raids, roadside strip searches, and the tasering of vulnerable individuals with paltry excuses such as “they looked suspicious” and “she wouldn’t obey our orders.”

When police handcuffed, strip-searched, and arrested a disabled man for no reason other than he sounded incoherent, it was chalked up as a mistake. Gordon Goines, a 37-year-old disabled man suffering from a Lou Gehrigs-type disease, was “diagnosed” by police and an unlicensed mental health screener as having “mental health issues,” apparently because of his slurred speech and unsteady gait, and subsequently handcuffed, strip searched, and locked up for five days in a mental health facility against his will and with no access to family and friends. This was done despite the fact that police had no probable cause to believe that Goines had committed any crime or was a danger to himself or others; nor did they have any other legitimate lawful reason to seize, arrest, or detain him. When Goines was finally released, police made no attempt to rectify their “mistake.”

“I didn’t know it was against the law” was the excuse police used to justify their repeated tasering of Malaika Brooks. Eight-months pregnant and on her way to drop her son off at school, Brooks was repeatedly tasered by Seattle police during a routine traffic stop simply because she refused to sign a speeding ticket. The cops who tasered the pregnant woman insisted they weren’t aware that repeated electro-shocks qualified as constitutionally excessive and unreasonable force. The Supreme Court gave the cops a “get out of jail” card.

“I thought he was reaching for a gun.” That was the excuse given when a police officer repeatedly shot 70-year-old Bobby Canipe during a traffic stop. The cop saw the man reaching for his cane and, believing the cane to be a rifle and fearing for his life, opened fire.  Police excused the shooting as “unfortunate” but “appropriate.”

“He was resisting arrest.” That was the rationale behind Eric Garner’s death. Garner, placed in a chokehold by police for allegedly resisting their attempts to arrest him for selling loose cigarettes, screamed “I can’t breathe” repeatedly, until he breathed his last breath. A grand jury ruled there was no “reasonable cause” to charge the arresting officer with Garner’s death.

And then you have the Heien case, which, while far less traumatic than Eric Garner’s chokehold death, was no less egregious in its defiance of the rule of law.

In April 2009, a police officer stopped Nicholas Heien’s car, allegedly over a faulty brake light, and, during the course of the stop and subsequent search, found a sandwich bag’s worth of cocaine. In North Carolina, where the traffic stop took place, it’s not actually illegal to have only one working brake light. However, Heien—the owner of the vehicle—didn’t know that and allowed the search, which turned up drugs, and resulted in Heien’s arrest. When the legitimacy of the traffic stop was challenged in court, the arresting officer claimed ignorance–and the courts deemed it a “reasonable mistake.”

I’m not sure which is worse: law enforcement officials who know nothing about the laws they have sworn to uphold, support, and defend, or a constitutionally illiterate citizenry so clueless about their rights that they don’t even know when those rights are being violated.

This much I do know, however: going forward, it will be that much easier for police officers to write off misconduct as a “reasonable” mistake.

Understanding this, Justice Sotomayor, the Court’s lone dissenter, warned that the court’s ruling “means further eroding the Fourth Amendment’s protection of civil liberties in a context where that protection has already been worn down.” Sotomayor continues:

Giving officers license to effect seizures so long as they can attach to their reasonable view of the facts some reasonable legal interpretation (or misinterpretation) that suggests a law has been violated significantly expands this authority. One wonders how a citizen seeking to be law-abiding and to structure his or her behavior to avoid these invasive, frightening, and humiliating encounters could do so.

There’s no need to wonder because there is no way to avoid these invasive, frightening, and humiliating encounters, not as long as the courts continue to excuse ignorance and sanction abuses on the part of the police.

Whether it’s police officers breaking through people’s front doors and shooting them dead in their homes or strip searching innocent motorists on the side of the road, these instances of abuse are continually validated by a judicial system that kowtows to virtually every police demand, no matter how unjust and no matter how in opposition to the Constitution.

Indeed, as I point out in my book A Government of Wolves: The Emerging American Police State, the police and other government agents have, with the general blessing of the courts, already been given the authority to probe, poke, pinch, taser, search, seize, strip, and generally manhandle anyone they see fit in almost any circumstance.

Just consider the Court’s pro-police state rulings in recent years:

In Plumhoff v. Rickard, the Court declared that police officers can use lethal force in car chases without fear of lawsuits. In Navarette v. California, the Court declared that police officers can stop cars based only on “anonymous” tips.  This ruling came on the heels of a ruling by the Tenth Circuit Court of Appeals in U.S. v. Westhoven that driving too carefully with a rigid posture, taking a scenic route, and having acne are sufficient reasons for a police officer to suspect you of doing something illegal, detain you, search your car, and arrest you—even if you’ve done nothing illegal to warrant the stop in the first place.

In Maryland v. King, a divided Court determined that police can forcibly take your DNA, whether or not you’ve been convicted of a crime. The Supreme Court’s ruling in Arizona v. United States allows police to stop, search, question, and profile citizens and non-citizens alike. And in an effort to make life easier for “overworked” jail officials, the Court ruled in Florence v. Burlington that police can subject Americans to virtual strip searches, no matter the “offense.”

In an 8-1 ruling in Kentucky v. King, the Supreme Court placed their trust in the discretion of police officers, rather than in the dictates of the Constitution, when they gave police greater leeway to break into homes without a warrant, even if it’s the wrong home. In Hiibel v. Sixth Judicial District Court of the State of Nevada, a majority of the high court agreed that it’s a crime to not identify yourself when a policeman asks your name.

And now we’ve got Heien v. North Carolina, which gives the police a green light to keep doing more of the same without fear of recrimination. Clearly, the present justices of the Supreme Court have forgotten that the Constitution, as Justice Douglas long ago recognized, “is not neutral. It was designed to take the government off the backs of people.”

Given the turbulence of our age—with its police overreachmilitary training drills on American soildomestic surveillanceprofit-driven prisonsasset forfeiture schemes, wrongful convictions, and corporate corruption—it’s not difficult to predict that this latest Supreme Court ruling will open the door to even greater police abuses.

We’ve got two choices: we can give up now and resign ourselves to a world in which police shootings, chokeholds, taserings, raids, thefts, and strip searches are written off as justifiable, reasonable, or appropriate; OR we can push back—nonviolently—against the police state and against all of the agencies, entities, and individuals who march in lockstep with the police state.

As for those still deluded enough to believe they’re living the American dream—where the government represents the people, where the people are equal in the eyes of the law, where the courts are arbiters of justice, where the police are keepers of the peace, and where the law is applied equally as a means of protecting the rights of the people—it’s time to wake up.

We no longer have a representative government, a rule of law, or justice. Liberty has fallen to legalism. Freedom has fallen to fascism. Justice has become jaded, jaundiced, and just plain unjust.

The dream has turned into a nightmare.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

SCOTUS backs NC Supreme Court about traffic officer’s mistake about the law

Tuesday, December 16th, 2014

Posted by  @JH_Tucker on Mon, Dec 15, 2014 at 7:12 PM

The U.S. Supreme Court today affirmed the validity of traffic stops made by officers who administer them based on a mistaken understanding of the law—provided the mistake was reasonable.

The case, Heien v. North Carolina, originated in Surry County, when an interdiction officer pulled over a car with a broken taillight, mistakenly believing that the law required two functioning taillights when in fact it did not. The officer, who searched the car, discovered cocaine, and the motorist was charged and convicted with drug trafficking. The N.C. Court of Appeals reversed the ruling, but the N.C. Supreme Court reversed it back. The U.S. Supreme Court heard oral arguments on the case in October.

The Supreme Court justices sided with the State in an 8-1 split, with Justice Sonia Sotomayor voicing the lone dissent. In his majority opinion, Chief Justice John Roberts wrote that because the officer’s mistake of the law was reasonable, it did not violate the motorist’s 4th Amendment rights.

“To be reasonable is not be perfect, and so the Fourth Amendment allows for some mistakes on the part of government officials, giving them ‘fair leeway for enforcing the law in the community’s protection,’ ” Roberts wrote.

The notion that the law “is definite and knowable sits at the foundation of our legal system,” Sotomayor said in her dissenting opinion. ”And it is courts, not officers, that are in the best position to interpret the laws.”

Andrew Beshear won’t disclose his work for companies that run afoul of attorney general

Sunday, December 14th, 2014



jcheves@herald-leader.comDecember 13, 2014 Updated 11 hours ago

Andrew Beshear




FRANKFORT — In early 2010, scores of homeowners complained to Kentucky Attorney General Jack Conway about official-looking letters sent by a Miami company, Home Service USA, urging them to provide their bank account numbers and insure their water lines for $59.88 a year.

“Indication is given at the top of the page that this mailing is from the State of Kentucky,” a manager at Boyle County’s Parksville Water District wrote to Conway. “The wording below the customer’s address implies the customer is required to have this insurance and must do so by Feb. 1, 2010. Some have indicated to us they understood they had no choice but to sign up for this insurance.”

To resolve the matter, Conway’s office cut a deal with Andrew Beshear, the lawyer for Home Service USA who is now seeking to replace Conway.

The company did not admit to false trade practices, but it agreed to pay $7,500 in fines and costs and adjusted its sales pitch to clarify that it’s not a government agency and its product is optional. Still, complaints continued, alleging deceptive marketing and poor service, but the attorney general took no further action.

“I believe it is clear that Home Service USA intended to accurately portray itself and its services,” Beshear wrote to the attorney general as they finalized the February 2010 settlement.

Beshear, the son of Gov. Steve Beshear, practices “attorney general defense” at Stites & Harbison in Louisville, helping companies that have run afoul of the state’s top law-enforcement officer. He’s also the only declared candidate for attorney general in 2015.

Although Andrew Beshear wants voters to make him responsible for protecting Kentuckians from civil and criminal offenses, the Democratic candidate won’t discuss his legal work or identify any of the clients he has represented before the attorney general.

“Under the Rules of Professional Conduct published by the Kentucky Supreme Court, identifying clients in this situation could constitute a legal ethics violation that could result in sanctions,” Andrew Beshear’s campaign manager, Jared Smith, wrote in an email to the Herald-Leader last week. Andrew Beshear himself did not return calls seeking comment.

However, Stites & Harbison publicly identifies 53 of its corporate and government clients on its website. Some of those clients, such as OxyContin manufacturer Purdue Pharma, have battled Kentucky’s attorney general in court. Stites & Harbison has represented Purdue Pharma against Kentucky’s pending claim that it illegally marketed its painkiller and caused an opioid addiction epidemic.

Smith referred questions about client disclosure to one of Beshear’s campaign backers, retired state trial judge Stan Billingsley of Carrollton, who runs a law blog. In an interview, Billingsley said Kentucky lawyers can identify their clients with the clients’ permission. The Supreme Court rule states: “In the absence of the client’s informed consent, the lawyer must not reveal information relating to the representation.”

“The rule clearly has exceptions in it, and as long as he follows the rules of those exceptions, then he should have no trouble with the (Kentucky Bar Association) on it,” Billingsley said.

‘Voters should insist’

Any lawyer running for attorney general should expect questions about his clients, particularly with cases involving the attorney general’s office, said attorney Jon Fleischaker, chairman of the First Amendment and Media Practice Group at the Louisville law office of Dinsmore & Shohl.

“It’s perfectly legitimate to demand that sort of information from a candidate who is seeking to enforce the laws of the commonwealth, because you want to know where their allegiances lie,” said Fleischaker, who helped draft Kentucky’s open government laws and often represents the Kentucky Press Association and other news organizations.

“It’s what I would call a political obligation, to let people know what you’ve been doing before you ask for their vote — what you’ve been doing and who you’ve been doing it for,” Fleischaker said. “Voters should insist on it.”

The Herald-Leader obtained information about the Home Service USA case from two sources: the “miscellaneous file” at Franklin Circuit Court, where a paper copy of the settlement is shelved but the case isn’t listed in the court’s public computer database, and documents from a Kentucky Open Records Act request to the attorney general’s office. Andrew Beshear’s role as defense lawyer was disclosed in both.

But the attorney general’s office refused the Herald-Leader’s request to release all of its correspondence with Andrew Beshear from recent years, calling that request “overly broad in nature.”

‘Most favorable … rulings’

Without disclosure by Andrew Beshear or the attorney general’s office, voters next year won’t have much information about the candidate’s activities in Frankfort. Many of his cases are resolved outside the courtroom, leaving none of the public paper trail produced by a lawsuit or criminal prosecution.

On the Stites & Harbison website, Andrew Beshear is identified as one of the firm’s two “practice leaders,” along with Richard Vance, in “antitrust, consumer protection and attorney general defense.” The firm does not identify its specific clients on the website, but it says the practice leaders’ cases include:

■ “Ongoing representation of international pharmaceutical companies … In these cases, the attorney general has sued manufacturers alleging conspiracy to inflate reported drug prices and thereby defraud state Medicaid programs. Stites & Harbison served as lead counsel in what has become one of the most favorable … rulings in the country.”

■ “Numerous successful pre-suit negotiations and mediations with Kentucky’s attorney general concerning alleged statewide deceptive advertising.”

■ “Achieving dismissal of antitrust counts against a state contractor accused of employing unfair trade practices.”

■ “Successfully representing Kentucky banks in defending and blocking acquisitions involving competitive issues.”

■ “Achieving a successful preemption defense of a Kentucky attorney general ‘Do Not Call’ civil penalty action against a national bank.”

Andrew Beshear also represented Boardwalk Pipeline Partners as it unsuccessfully fought in Frankfort for the right to invoke eminent domain powers and build a natural gas liquids pipeline across private property against landowners’ wishes.

Andrew Beshear last year spoke for the company at the Kentucky Public Service Commission, the utility-regulating agency whose three commissioners are appointed by his father, the governor. After much debate and a Franklin Circuit Court ruling against the proposed Bluegrass Pipeline, plans for the project were suspended in April.
Read more here:


May a lawyer call another lawyer unethical? Spate of inquiries spurs ethics opinion

Friday, December 12th, 2014

POSTED DEC 08, 2014 06:15 AM CST


Image from Shutterstock.

Is it unethical for a lawyer to label another lawyer unethical? The Iowa State Bar Association has received so many inquiries about the issue that its Ethics and Practice Guidelines Committee addressed the topic.

“The purpose of this ‘back to basics’ opinion,” the committee said, “is to give the bar a closer focus on the line and the ability to discern real unethical behavior from that which merely reflects professional differences.” The ABA/BNA Lawyers’ Manual on Professional Conduct has this report.

According to the ethics opinion, issued Oct. 24, allegations of unethical conduct are serious. A lawyer who knows another lawyer has violated the ethics rules is required to inform the state’s lawyer disciplinary board. “The rule is mandatory, not discretionary,” the opinion says.

Allegations that another lawyer has engaged in dishonesty, fraud, deceit, or misrepresentation are serious, because such conduct is a violation of the ethics rules, according to the opinion. “Consequently these allegations should never be made to obtain a tactical advantage or to coerce action,” the opinion says.

Some lawyers try to avoid the duty to report by warning opposing counsel of the “potential” for an ethics violation. When the warning is issued as a threat, or to influence the opposing counsel to act a certain way, the lawyer is violating Iowa Supreme Court rules calling for courtesy and discouraging uncivil, abrasive and abusive conduct, the opinion says.

The Iowa opinion points to a 1994 opinion by the ABA’s Standing Committee on Ethics and Professional Responsibility. It advised that a lawyer can’t threaten an ethics complaint as a bargaining point in a civil case when the alleged misconduct raises a substantial question about honesty, trustworthiness or fitness as a lawyer. In such circumstances, the ABA opinion said, the lawyer is ethically required to report such misconduct. The opinion also said such threats are improper if the alleged misconduct is unrelated to the civil claim; is not well-founded; or has the effect of embarrassing, delaying or burdening the opposing counsel.

According to the Lawyers’ Manual, the reporting duty in Iowa’s ethics rule is broader than the ABA model ethics rule, which limits the reporting duty to ethics violations that raise a serious question about the lawyer’s honesty, trustworthiness or fitness to practice.

US Corporations Are Using A Supreme Court Ruling To Fend Off Human Rights Abuse Lawsuits

Friday, December 12th, 2014



  • DEC. 12, 2014, 2:21 AM

WASHINGTON (Reuters) – A landmark U.S. Supreme Court decision in 2013 that made it all but impossible to sue foreign companies in U.S. courts for alleged roles in overseas human rights abuses is proving to be a boon for U.S. firms too, court documents show.

In the roughly year and a half since the ruling in Kiobel v. Royal Dutch Petroleum Co, U.S. companies such as Chiquita Brands International Inc, IBM Corp and Ford Motor Co have successfully invoked the Supreme Court’s reasoning to fend off lawsuits alleging they were involved in human rights abuses in South Africa, Colombia and elsewhere.

In the seven cases involving U.S. companies that federal appeals courts have decided since the Supreme Court rulings, corporate defendants have won five, according to a Reuters review of the court documents. Only one ruling was an outright win for plaintiffs.

A similar pattern has played out in lower courts, with judges citing the Kiobel decision in favor of defendants in seven of eight human rights cases involving U.S. companies that have been decided since the ruling

With rulings tending to favor companies, human rights lawyers are thinking twice before filing new lawsuits. The Reuters review shows only one new human rights lawsuit filed against a U.S. company since the ruling came down in April 2013. In the 1990s and 2000s, up to half a dozen cases were filed every year against U.S. or foreign corporations.

Paul Hoffman, a leading Venice, California-based human rights lawyer who argued Kiobel for the plaintiffs, said he has been fighting to keep his existing cases alive rather than planning new ones. He has been presenting legal arguments explaining why the Supreme Court decision does not mean his lawsuits should be dismissed.

“People are waiting to see what the landscape is going to look like,” he said.

Lawyers on both sides of the issue say the Supreme Court might yet have to take another case to clarify exactly when U.S. companies can be sued.


In the Kiobel case, the court unanimously threw out a lawsuit by 12 people from Nigeria that accused British and Dutch-based Royal Dutch Shell Plc of aiding state-sponsored torture and murder.

The court said the law under which the Nigerians brought the case, the 1789 Alien Tort Statute, was presumed to cover only violations of international law occurring in the United States. Violations elsewhere, Chief Justice John Roberts wrote, must “touch and concern” U.S. territory “with sufficient force to displace the presumption.”

Before the Kiobel ruling in April 2013, the law had been the primary vehicle for bringing human rights cases for more than 30 years, not just in the United States but globally.

“Human rights litigators have lost a significant weapon,” said John Bellinger, a Washington-based lawyer at the Arnold & Porter law firm who has played a prominent role advocating for corporate defendants. Bellinger was the top legal adviser to the U.S. State Department under President George W. Bush when it filed briefs in various cases arguing that the scope of the law should be pared back.


The Supreme Court ruling means human rights lawyers now have to look more seriously at alternative ways to seek redress for alleged abuses.

Human rights lawyers can sue multinational companies in other countries, which has happened in Canada, the United Kingdom, and a handful of other countries, but that option is usually only viable if the defendant is based in one of those countries. Bringing suit in a developing country where alleged violations occurred is often less appealing to plaintiffs, as such countries often have troubled judicial systems.

In theory, some of the major cases against U.S. companies filed before the Supreme Court ruling could go ahead on other grounds because the lawsuits cite other legal claims.

There is also the possibility that alleged human rights victims could sue companies in U.S. state courts, under common law theories of wrongdoing such as assault and battery. But that too has its drawbacks for plaintiffs, including a shorter window in which to file lawsuits, which are often based on alleged conduct that doesn’t come to light until years after it occurs.

Also, lawyers on both sides say such cases would lack the headline-grabbing punch of a case filed under the Alien Tort Statute alleging human rights violations.

A limited number of Alien Tort Statute cases could still move forward in the United States even under the new restrictive interpretation.

In the one clear victory for plaintiffs since the Supreme Court ruling, an appeals court in Virginia said in June that Iraqi nationals who complained of mistreatment at Abu Ghraib prison near Baghdad could sue a subsidiary of U.S.-based CACI International Inc, a military contractor that worked at the site.

Judge Barbara Keenan wrote that the plaintiffs had alleged sufficient connection to the United States to “require a different result than that reached in Kiobel.”

(Reporting by Lawrence Hurley; Editing by Amy Stevens and Ross Colvin)

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Court Overturns Insider-Trading Convictions, a Blow to Justice Department

Thursday, December 11th, 2014


Judges Narrow Definition of Insider Trading, Say Prosecutors Took Too Broad a View in Wall Street Crackdown



Updated Dec. 10, 2014 7:18 p.m. ET

In a blow to the Justice Department’s Wall Street crackdown, a federal appeals court overturned two insider-trading convictions and ruled it isn’t always illegal to buy or sell stocks using inside information.

The ruling raised the bar for prosecutors on a crime that is already hard to prove, and it will likely limit the types of cases the government can pursue.

Specifically, the three-judge panel of the Second U.S. Circuit Court of Appeals said prosecutors must prove traders knew that the person who provided an inside tip gained some sort of tangible reward for doing so. The judges also said it may be legal to trade on inside information, even if it gives an investor an unfair advantage in the markets, as long as the tipper didn’t commit an illegal breach of his or her duty.

Judge Barrington D. Parker said the Supreme Court had rejected the notion that insider-trading law prohibits all trading using confidential information, writing that, “although the government might like the law to be different,” not every instance of financial unfairness constitutes fraud.

The ruling is a disappointing denouement for prosecutors winding down their recent run of insider-trading cases, a closely watched effort that has featured charges against high-level traders at some of the country’s biggest hedge funds. The push sent a chill through Wall Street trading rooms and landed Manhattan U.S. Attorney Preet Bharara on the cover of Time magazine.

The unanimous decision overturned the December 2012 convictions of former hedge-fund traders Todd Newman and Anthony Chiasson in New York federal court. The judges said prosecutors have been too aggressive in their interpretation of the law.

Marc Powers, a partner at law firm Baker & Hostetler LLP, said the U.S. attorney and the Securities and Exchange Commission “have been pushing the boundaries of the law and the facts in insider-trading cases, beyond fairness and reason.”

“The Second Circuit appears now to be setting the government straight,” he said. Baker & Hostetler wasn’t involved in the matter before the court.

In the case at hand, jurors deliberated for two days before finding Messrs. Newman and Chiasson guilty of using confidential information to make $72 million trading on stock in technology companies Dell Inc. and Nvidia Corp. The pair hadn’t received the information directly. Instead, the tips they got were passed through a network of investor-relations representatives and analysts before reaching analysts who worked for the two men.

The appeals-court panel ruled that, in order to be found guilty of insider trading, a defendant must know a tip was illegally disclosed in exchange for a reward of “some consequence.” The court also dismissed prosecutors’ contention that career advice or friendship constituted a reward, saying that, under that logic, “practically anything would qualify.”

The U.S. attorney’s office had planned to retry the cases if they lost the appeal, according to people familiar with the matter. But the court dismissed the indictments altogether, which prevents a retrial. In a statement, Mr. Bharara said his office was considering options for further appeals.

“Today’s decision by the Court of Appeals interprets the securities laws in a way that will limit the ability to prosecute people who trade on leaked inside information,” Mr. Bharara said.

A common view of insider trading is of a plugged-in trader using a confidential tip to make lucrative trades. But the legal reality is more nuanced. Courts have long held that tippers must violate a duty of some sort in disclosing material nonpublic information, and the trader needs to know that that’s the case.

At issue in the appeal was whether the trial judge made an error in telling the jurors in Messrs. Newman and Chiasson’s trial that it was enough for the government to show that the men knew the information was disclosed in breach of a fiduciary duty and not necessarily in exchange for a reward.

The appeals court said that instruction was wrong, clarifying that the trader also needs to know that the tipper benefited tangibly from breaching the duty, something that might not apply to a person who trades on a tip from an old classmate, for instance.

On Wednesday, a lawyer for Mr. Chiasson praised the opinion. “Today’s decision is a resounding victory for the rule of law and for Anthony Chiasson personally,” Gregory Morvillo said in a statement. Stephen Fishbein and John Nathanson, lawyers for Mr. Newman, said the “vindication comes after four years of unnecessary prosecution including a trial in which the Second Circuit held that the wrong legal standard was applied.”

The office of Judge Richard J. Sullivan, who presided over the trial, declined to comment.

Legal observers said the decision could also provide grounds to overturn the marquee conviction of a former SAC Capital portfolio manager Michael Steinberg. The confidant of SAC founder Steven A. Cohen was found guilty of trading using confidential information that reached him via a chain of analysts and traders, and he plans to appeal his conviction on similar grounds. A spokesman for SAC Capital, now known as Point72 Asset Management, declined to comment.

The ruling won’t affect the overwhelming majority of insider-trading convictions in the past five years. Prosecutors relied on a handful of cooperators to testify against Messrs. Newman and Chiasson. Legal experts said the cooperators, who all pleaded guilty, could seek to withdraw their pleas in the wake of the ruling but would face a steep climb in doing so.

Lawyers also don’t expect the highest-profile convictions by Mr. Bharara’s office—including the convictions of Raj Rajaratnam, former Galleon Group hedge-fund manager; or Rajat Gupta, the former Goldman Sachs Group Inc. director who provided Mr. Rajaratnam with information—to be jeopardized by the decision.

“We note that the government has not cited, nor have we found, a single case in which tippees as remote as Newman and Chiasson have been held criminally liable for insider trading,” Judge Parker wrote.

David Ganek, who co-founded the hedge fund Level Global with Mr. Chiasson, said Wednesday’s opinion called into question the government’s entire probe into the fund, which shut down after 2010 raids by the Federal Bureau of Investigation. Mr. Newman’s hedge fund, Diamondback Capital, was also raided and wound down operations in 2012.

This isn’t the first time the courts have rebuked prosecutors for overreaching in insider-trading cases. Rudolph Giuliani was criticized by lawyers and some on Wall Street for pushing the boundaries of insider-trading cases in the late 1980s, after two Kidder Peabody employees were arrested only to see the charges dropped. Later, the Second Circuit court threw out the conviction by Mr. Giuliani’s office of investment manager John Mulheren, who was accused of a stock-manipulation scheme.

David Miller, a former New York federal prosecutor who handled multiple insider-trading cases, said the most significant consequence of the ruling is that it will make it particularly difficult to go after people who allegedly traded using inside information but were one or more layers removed from the source. Messrs. Newman, Chiasson and Steinberg fall under that category.

“The bottom line is this is going to have a major effect on downstream tippee investigations and prosecutions,” said Mr. Miller, who is now a partner at Morgan, Lewis & Bockius LLP. “If the tippee doesn’t even know of the tipper, how can you prove they knew there was a benefit?”

Mr. Bharara’s team had enjoyed a nearly untarnished winning streak since he took office in 2009, securing 89 convictions.

The appeals court not-so-subtly suggested that the Justice Department has strayed too far from the real villains. “Recent insider trading prosecutions,” the Second Circuit said, “are increasingly targeted at remote tippees many levels removed from corporate insiders.”

—Michael Rothfeld and Susan Pulliam contributed to this article

Write to Christopher M. Matthews at



Tuesday, December 9th, 2014



136 S.W.3d 455

The Honorable Samuel T. WRIGHT, Presiding Judge, Letcher Circuit Court, Appellee and
Meryl Adams and Roger Fields Real Parties in Interest.

No. 2003-SC-0023-MR.

Supreme Court of Kentucky.

June 17, 2004.

[136 S.W.3d 456]

Michael J. Schmitt, Porter, Schmitt, Jones & Banks, Paintsville, Counsel for Appellant.

Samuel T. Wright, Judge, Letcher Circuit Court, Whitesburg, Counsel for Appellee.

Daniel F. Dotson, Whitesburg, Counsel for Real Party in Interest, Meryl E. Adams.

Deborah Lewis Bailey, Engle & Lewis, Hazard, Counsel for Real Party in Interest, Roger Fields.


        LAMBERT, Chief Justice.

Appellant, Kentucky Farm Bureau Mutual INSURANCE COMPANY (“Farm Bureau”), appeals to this Court from the Court of Appeals’ denial of its petition for writ of prohibition or mandamus. In the petition, Farm Bureau sought to vacate the Mediation Order entered by the Letcher Circuit Court on April 15, 2002 REQUIRING written disclosure of the extent of settlement authority prior to mediation and directing

[136 S.W.3d 457]

mandatory fines, costs, and penalties if the claims were settled following the conclusion of the mediation. This Court hereby grants a limited writ striking the language of the trial court mediation order mandating sanctions if the case is settled after the conclusion of mediation.

This case arose from a motor vehicle accident where Roger Fields hit Meryl Adams who in turn hit an oncoming vehicle driven by Timothy Wright. The accident occurred in the dark morning hours of December 14, 2001, when Adams was trying to turn left onto a side road from a two-lane U.S. Highway. Fields, who hit Adams from the rear, said that he could not see the Adams vehicle because neither the taillights nor the turn signal were working. Fields and Adams were both insured by Farm Bureau. Wright, the oncoming driver who was struck by Adams, filed a civil action for damages against both Fields and Adams for the alleged negligence of both parties.1 Adams filed a civil action for damages against Fields and Farm Bureau claiming that Fields was negligent in causing the accident, and that Farm Bureau violated the Unfair Claims Settlement Practices Act.2

In March 2002, the trial court ordered the cases consolidated, and on April 15, 2002, the trial court ordered the consolidated cases to mediation in October 2002. The mediation order provided in part, as follows:

The parties and an adjustor of their insurers, if any, with full authority to settle shall attend a mediation conference. Full authority is defined as Plaintiff’s last demand or the extent of coverage, whichever is less. The full authority of any representative of an insurer shall be documented in writing prior to the commencement of the mediation. No telephone calls to seek additional authority are permitted. The mediation shall be held at the convenience of all parties and the mediator. Only the Court or the mediator may alter the terms of the time limits herein. The parties shall use their best efforts to resolve all issues. If a party fails to appear at a duly noticed mediation conference without good cause or fails to comply with this order in any manner, the Court may impose sanctions including, but not limited to, an award OF ATTORNEY’S fees and other costs against the party failing to comply.


If the case is settled after the conclusion of the mediation then additional costs, fines and penalties will be imposed for the disruption of the courts [sic] schedule and resources due to the parties [sic] failure to give timely or adequate work and consideration to this aspect of the case.

On April 24, 2002, Adams filed a motion to alter, amend or vacate the mediation order, and on April 29, 2002, Fields also filed a motion to alter, amend or vacate THE ORDER. The motions were filed on grounds that the trial court was without authority to order mediation and that the order improperly authorized imposition of sanctions. When the trial court had not ruled on the motion by September 16, 2002, Farm Bureau took action by contacting the Circuit Court Clerk and attempting to schedule a hearing regarding the pending motions to alter, amend or vacate the order. On September 19, 2002, Farm Bureau filed a motion to vacate the order

[136 S.W.3d 458]

because a hearing could not be scheduled prior to the mediation date due to the UNAVAILABILITY of the trial judge, and on that same date (September 19, 2002), the trial court overruled the previously filed motions to alter, amend or vacate the mediation order.

On October 1, 2002, Farm Bureau filed the instant petition for writ of prohibition or mandamus in the Court of Appeals. On December 11, 2002, the Court of Appeals denied the petition and held that “Petitioner has failed to make the threshold showing of irreparable harm and lack of an adequate remedy by appeal.” It relied on James v. Shadoan.3

Farm Bureau argues that the trial court is without authority to order mediation. It recognizes that CR 16(1)(f) grants the trial judge discretion to direct the parties to appear for conference to ADDRESS ”[s]uch other matters as may aid in the disposition of the action.” Yet it contends that the trial court was still without authority and acted outside its jurisdiction when it ordered the parties to mediation. Moreover, Farm Bureau contends that this type of order is not within the trial court’s inherent power even though there is no constitutional provision, statute, or Supreme Court rule expressly prohibiting such an order. Farm Bureau declares that the mediation order is not consistent with the Model Mediation Rules adopted by the Supreme Court of Kentucky.

Finally, Farm Bureau argues that the sanctions that will be imposed if it settles a claim following the mediation are improper leaving it with a “more illusory than real” remedy by appeal. It posits that providing a written declaration of the authorized settlement amount for its bad faith claim is a great injustice and nullifies the effect of the bifurcation of the cases.4 It declares that the “theoretical right to appeal, in reality, is not adequate to protect the interests of the defendant [Farm Bureau] under these circumstances.”

This matter is before this Court pursuant to CR 76.36(7)(a) allowing a matter of right appeal in original actions filed in the Court of Appeals. Writs of prohibition and writs of mandamus are extraordinary remedies and are reluctantly granted.5 A petitioner must show that the court is acting outside its jurisdiction or acting erroneously within its jurisdiction, and when the court is acting within its jurisdiction, the petitioner must show that it has no adequate remedy by appeal and it will suffer an irreparable injury if relief is not granted.6

With respect to the issue of trial court jurisdiction, “it has generally been recognized that courts (even without express authority given by the constitution, statute, or rule of a supreme court of a state) have inherent power to prescribe rules to regulate their PROCEEDINGS and to facilitate the administration of justice.”7 Additionally, “[t]he control over this inherent judicial power … is exclusively within the constitutional realm of the courts.”8 Moreover, CR 16(1)(f) appears to grant express authority to order mediation. For these reasons, the trial court was well

[136 S.W.3d 459]

within its jurisdiction to do what it deemed reasonably necessary to “aid in the disposition of the action”9 and to order the parties to mediation.

While a trial court order to mediate does not generally justify the extraordinary relief of a writ of prohibition, THE ORDER under review does REQUIRE relief of a limited nature on grounds of irreparable harm and lack of an adequate remedy by appeal. The order contains a provision that is troubling. It states in part, “if the case is settled after the conclusion of the mediation then additional costs, fines and penalties will be imposed for the disruption of the courts ….” Although Farm Bureau concedes that it may have a remedy by appeal, relief under this rule is appropriate due to the risk a party would have to encounter to ripen the issue for appellate review. Under the trial court’s order, parties who settled after the conclusion of mediation, despite a belief in their right to do so, would be required to face mandatory fines and penalties, a route most reasonable parties would avoid. We conclude that the post-mediation settlement provision imposing additional costs, fines and penalties exceeds trial court discretion and results in irreparable harm without an adequate remedy by appeal. This conclusion eliminates the need to address whether the provision runs afoul of the Model Mediation Rules or the parties’ constitutional rights. Accordingly, a limited writ of prohibition will be granted and the trial court will be prohibited from enforcing the following language in its mediation order:

If the case is settled after the conclusion of the mediation then additional costs, fines and penalties will be imposed for the disruption of the courts [sic] SCHEDULE and resources due to the parties [sic] failure to give timely or adequate work and consideration to this aspect of the case.

The final issue we must address is that portion of the trial court’s mediation order requiring the appearance of the parties and their adjustor at the mediation conference “with full authority to settle.” The order provides, “Full authority is defined as plaintiff’s last demand or the extent of coverage, whichever is less.” Some have interpreted this language to require an insurer to pay plaintiff’s last demand or the extent of its coverage, whichever is less. We reject this interpretation. The language used does not mean that parties must actually settle; that the insurer must pay plaintiff’s last demand, or its policy limit; or that it abandon its good faith belief in the settlement value of the case, if any. The order merely requires the appearance of parties with “full authority to settle” to prevent the pernicious practice of negotiations by “an agent without authority.” If mediation is to accomplish its intended purpose, and if the mediation conference is to be the main event, there must be participation by persons possessed of immediate decision-making authority. The process is irreparably harmed if final settlement authority rests elsewhere.

The order under review contains no language that forces the insurer to pay or forces the plaintiff to accept any settlement and should not be interpreted as to require such actions. The order merely requires that the parties participate in a mediation conference ordered by the court and that those persons involved be cloaked with “full authority to settle.” This Court has adopted Model Mediation Rules and henceforth all Mediation Orders should be in conformity with those rules. Requiring mediation participants to have full authority

[136 S.W.3d 460]

to settle does not violate our Rules; rather allowing mediation to take place without parties possessing full authority to reach an agreement is the real violation. In accordance with the language of the order under review, the parties are free to mediate, AGREE on a settlement, or disagree and proceed to trial.

For the foregoing reasons, the Court of Appeals’ denial of the petition for a writ of prohibition is affirmed in part and reversed in part, and this cause is remanded to the trial court for further consistent proceedings.


All concur.



1. Farm Bureau states that this case settled prior to the filing of the petition for writ of prohibition.

2. KRS 304.12-230(6), (7), and (8).

3. Ky., 58 S.W.3d 884 (2001).

4. The trial court bifurcated the bad faith claim against Farm Bureau asserted by Adams.

5. Bender v. Eaton, Ky., 343 S.W.2d 799, 800 (1961).

6. Id. at 800-01.

7. Craft v. Commonwealth, Ky., 343 S.W.2d 150, 151 (1961).

8. Smothers v. Lewis, Ky., 672 S.W.2d 62, 64 (1984).

9. CR 16(1)(f).


Attorneys who are candidates for public are forbidden by Supreme Court Rules to release names of current or former clients to the media.

Monday, December 8th, 2014

SCR 3.130(1.6) Confidentiality of information

Supreme Court Commentary



(1) This Rule governs the disclosure by a lawyer of information relating to the representation of a client during the lawyer’s representation of the client. See Rule 1.18 for the lawyer’s duties with respect to information provided to the lawyer by a prospective client, Rule 1.9(c)(2) for the lawyer’s duty not to reveal information relating to the lawyer’s prior representation of a former client and Rules 1.8(b) and 1.9(c)(1) for the lawyer’s duties with respect to the use of such information to the disadvantage of clients and former clients.

(2) A fundamental principle in the client-lawyer relationship is that, in the absence of the client’s informed consent, the lawyer must not reveal information relating to the representation. See Rule 1.0(e) for the definition of informed consent. This contributes to the trust that is the hallmark of the client-lawyer relationship. The client is thereby encouraged to seek legal assistance and to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter. The lawyer needs this information to represent the client effectively and, if necessary, to advise the client to refrain from wrongful conduct. Almost without exception, clients come to lawyers in order to determine their rights and what is, in the complex of laws and regulations, deemed to be legal and correct. Based upon experience, lawyers know that almost all clients follow the advice given, and the law is upheld.

(3) The principle of client-lawyer confidentiality is given effect by related bodies of law: the attorney-client privilege, the work product doctrine and the rule of confidentiality established in professional ethics. The attorney-client privilege and work-product doctrine apply in judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client. The rule of client-lawyer confidentiality applies in situations other than those where evidence is sought from the lawyer through compulsion of law. The confidentiality rule, for example, applies not only to matters communicated in confidence by the client but also to all information relating to the representation, whatever its source. A lawyer may not disclose such information except as authorized or required by the Rules of Professional Conduct or other law. See also Scope.

(4) Paragraph (a) prohibits a lawyer from revealing information relating to the representation of a client. This prohibition also applies to disclosures by a lawyer that do not in themselves reveal protected information but could reasonably lead to the discovery of such information by a third person. A lawyer’s use of a hypothetical to discuss issues relating to the representation is permissible so long as there is no reasonable likelihood that the listener will be able to ascertain the identity of the client or the situation involved.

Authorized Disclosure

(5) Except to the extent that the client’s instructions or special circumstances limit that authority, a lawyer is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation. In some situations, for example, a lawyer may be impliedly authorized to admit a fact that cannot properly be disputed or, to make a disclosure that facilitates a satisfactory conclusion to a matter. Lawyers in a firm may, in the course of the firm’s practice, disclose to each other information relating to a client of the firm, unless the client has instructed that particular information be confined to specified lawyers.

Disclosure Adverse to Client

(6) Although the public interest is usually best served by a strict rule requiring lawyers to preserve the confidentiality of information relating to the representation of their clients, the confidentiality rule is subject to limited exceptions. Paragraph (b)(1), recognizes the overriding value of life and physical integrity and permits disclosure reasonably necessary to prevent reasonably certain death or substantial bodily harm. Such harm is reasonably certain to occur if it will be suffered imminently or if there is a present and substantial threat that a person will suffer such harm at a later date if the lawyer fails to take action necessary to eliminate the threat. Thus, a lawyer who knows that a client has accidentally discharged toxic waste into a town’s water supply may reveal this information to the authorities if there is a present and substantial risk that a person who drinks the water will contract a life-threatening or debilitating disease and the lawyer’s disclosure is necessary to eliminate the threat or reduce the number of victims.

(7) A lawyer’s confidentiality obligations do not preclude a lawyer from securing confidential legal advice about the lawyer’s personal responsibility to comply with these Rules. In most situations, disclosing information to secure such advice will be impliedly authorized for the lawyer to carry out the representation. Even when the disclosure is not impliedly authorized, paragraph (b) (4) permits such disclosure because of the importance of a lawyer’s compliance with the Rules of Professional Conduct. SCR 3.530, Advisory opinion – informal and formal, authorizes a lawyer to request an advisory opinion from the requester’s Supreme Court District Committee member regarding ethics and unauthorized practice of law questions. The question may be submitted in writing or by telephone using the KBA Ethics Hotline. Communications between the requester and any District Committee member or Ethics Committee member are granted confidentiality by SCR 3.530 and are permitted disclosure by paragraph (b)(4).

(8) Where a legal claim or disciplinary charge alleges complicity of the lawyer in a client’s conduct or other misconduct of the lawyer involving representation of the client, the lawyer may respond to the extent the lawyer reasonably believes necessary to establish a defense. The same is true with respect to a claim involving the conduct or representation of a former client. Such a charge can arise in a civil, criminal, disciplinary or other proceeding and can be based on a wrong allegedly committed by the lawyer against the client or on a wrong alleged by a third person, for example, a person claiming to have been defrauded by the lawyer and client acting together. The lawyer’s right to respond arises when an assertion of such complicity has been made. Paragraph (b)(5) does not require the lawyer to await the commencement of an action or proceeding that charges such complicity, so that the defense may be established by responding directly to a third party who has made such an assertion. Lawyers may also report incidents of potential malpractice that have not ripened into a client claim to a lawyer’s liability insurer for legal advice and to comply with policy reporting requirements provided the report is made on a confidential basis and protected by the attorney-client privilege. The right to defend also applies, of course, where a proceeding has been commenced.

(9) A lawyer entitled to a fee is permitted by paragraph (b)(5) to prove the services rendered in an action to collect it. This aspect of the Rule expresses the principle that the beneficiary of a fiduciary relationship may not exploit it to the detriment of the fiduciary.

(10) Other law may require that a lawyer disclose information about a client. Whether such a law supersedes Rule 1.6 is a question of law beyond the scope of these Rules. When disclosure of information relating to the representation appears to be required by other law, the lawyer must discuss the matter with the client to the extent required by Rule 1.4. If, however, the other law supersedes this Rule and requires disclosure, paragraph (b)(6) permits the lawyer to make such disclosures as are necessary to comply with the law.

(11) A lawyer may be ordered to reveal information relating to the representation of a client by a court or by another tribunal or governmental entity claiming authority pursuant to other law to compel the disclosure. Absent informed consent of the client to do otherwise, the lawyer should assert on behalf of the client all nonfrivolous claims that the order is not authorized by other law or that the information sought is protected against disclosure by the attorney-client privilege or other applicable law. In the event of an adverse ruling, the lawyer must consult with the client about the possibility of appeal to the extent required by Rule 1.4. Unless review is sought, however, paragraph (b)(6) permits the lawyer to comply with the court’s order.

(12) Paragraph (b) permits disclosure only to the extent the lawyer reasonably believes the disclosure is necessary to accomplish one of the purposes specified. Where practicable, the lawyer should first seek to persuade the client to take suitable action to obviate the need for disclosure. In any case, a disclosure adverse to the client’s interest should be no greater than the lawyer reasonably believes necessary to accomplish the purpose. If the disclosure will be made in connection with a judicial proceeding, the disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it and appropriate protective orders or other arrangements should be sought by the lawyer to the fullest extent practicable.

(13) Paragraph (b) permits but does not require the disclosure of information relating to a client’s representation to accomplish the purposes specified in paragraphs (b)(1) through (b)(6). In exercising the discretion conferred by this Rule, the lawyer may consider such factors as the nature of the lawyer’s relationship with the client and with those who might be injured by the client, the lawyer’s own involvement in the transaction and factors that may extenuate the conduct in question. A lawyer’s decision not to disclose as permitted by paragraph (b) does not violate this Rule. Disclosure may be required, however, by other Rules. Some Rules require disclosure only if such disclosure would be permitted by paragraph (b). See Rules 1.2(d), 4.1(b), 8.1 and 8.3. Rule 3.3, on the other hand, requires disclosure in some circumstances regardless of whether such disclosure is permitted by this Rule. See Rule 3.3(c).

Acting Competently to Preserve Confidentiality

(14) A lawyer must act competently to safeguard information relating to the representation of a client against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or who are subject to the lawyer’s supervision. See Rules 1.1, 5.1 and 5.3.

(15) When transmitting a communication that includes information relating to the representation of a client, the lawyer must take reasonable precautions to prevent the information from coming into the hands of unintended recipients. This duty, however, does not require that the lawyer use special security measures if the method of communication affords a reasonable expectation of privacy. Special circumstances, however, may warrant special precautions. Factors to be considered in determining the reasonableness of the lawyer’s expectation of confidentiality include the sensitivity of the information and the extent to which the privacy of the communication is protected by law or by a confidentiality agreement. A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to the use of a means of communication that would otherwise be prohibited by this Rule.

Former Client

(16) The duty of confidentiality continues after the client-lawyer relationship has terminated. See Rule 1.9(c)(2). See Rule 1.9(c)(1) for the prohibition against using such information to the disadvantage of the former client.



Supreme Court of Kentucky to hear arguments Dec. 10-11 in Frankfort

Monday, December 8th, 2014


Press Release Date: Friday, December 05, 2014
Contact Information: Susan Stokley Clary
Supreme Court Clerk

The Supreme Court of Kentucky will hear oral arguments in cases that originated in Franklin, Jefferson, Lawrence, Oldham and Pendleton counties when it convenes Dec. 10-11 in Frankfort. Proceedings are open to the public and will take place in the Supreme Court Courtroom on the second floor of the state Capitol at 700 Capitol Ave. in Frankfort.

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

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

View Case Briefs at

WEDNESDAY, DEC. 10, 2014


Summary: “Criminal Law. KRS 514.040. Theft By Deception. Adoption. Birth Mother Living Expenses. Issues include whether the trial court correctly refused to dismiss theft by deception charges against birth parents who solicited and accepted living expenses from prospective adoptive parents without disclosing that they had already accepted living expenses from an adoption agency representing other prospective adoptive parents.”

Discretionary Review granted 04-9-2014
Lawrence Circuit Court, Judge John David Preston

Attorneys for Appellant: William Bryan Jones and Perry Thomas Ryan
Attorneys for Appellees: Roy Alyette Durham, II and Karen Shuff Maurer


2013-SC-000824-DG (Cross Motion)

Summary: “Criminal Law. Jury Use of Evidence. Issues include the propriety of a jury’s use of the prosecutor’s laptop to replay audiotape of a drug transaction admitted into evidence as an exhibit.”

Discretionary Review granted 12-11-13 and 3-12-14 (Cross)
Pendleton Circuit Court, Judge Jay Delaney

Attorney for Appellant/Cross-Appellee: Gregory C. Fuchs
Attorney for Appellee/Cross-Appellant: Brandon Neil Jewell


Summary: “Criminal Law. Postincarceration Supervision. Issues include whether a defendant who made a plea bargain with the Commonwealth’s Attorney to not revoke his postincarceration supervision is entitled to the benefit of that bargain even though KRS 532.043(5) gives full authority to the Parole Board to make that determination.”

Discretionary Review granted 12/11/2013
Oldham Circuit Court, Judge Karen A. Conrad

Attorney for Appellant: Aaron Reed Baker
Attorney for Appellee: John C. Cummings

THURSDAY, DEC. 11, 2014


Summary: “Trespass. Damages. Issues include the proper measure of damages for removal of underground limestone absent reduction in the fair market value of the real estate.”

Discretionary Review granted 06-11-2014
Franklin Circuit Court, Judge Thomas D. Wingate

Attorneys for Appellant: Robert W. Kellerman and Sarah Jackson Bishop
Attorney for Appellees: J. Robert Lyons, Jr.


Summary: “Writ of Prohibition. KRS 186.574(6), Drive Safe Louisville (DSL). KRS 24.175(3), Imposition of court costs. RCr 8.04.”

Transfer Granted 04-17-2014
Jefferson Circuit Court, Judge Judith E. McDonald-Burkman

Attorneys for Appellant: Virginia Hamilton Snell, Deborah H. Patterson, and Sara Christine Veeneman
Attorneys for Appellees: Michael J. O’Connell, David A Sexton, and James Bruce Miller


Summary: “Criminal Law. KRS 508.140. Stalking. RCr 10.04. Post-Verdict Juror Statements. Issues include: (1) whether the elements of the stalking statute are met where the victim does not fear for her own safety, but does fear for the safety of others; (2) whether jurors’ post-verdict comments suggesting that they may have misinterpreted the instructions are admissible to impeach the verdict.”

Discretionary Review granted 2-12-14
Jefferson Circuit Court, Judge Mary M. Shaw

Attorneys for Appellant: Daniel T. Goyette and Bruce P. Hackett
Attorney for Appellee: William Robert Long, Jr.

Court Blocks Florida Governor’s Bid To Drug Test Welfare Applicants

Monday, December 8th, 2014


Posted by  at 10:42 PM on December 6, 2014Ending Marijuana Prohibition




By Phillip Smith

Florida Governor Rick Scott’s (R) drug testing crusade hit yet another roadblock Wednesday as a federal appeals court upheld a lower court’s ruling that his plan to make welfare applicants submit to mandatory, suspicionless drug tests was unconstitutional.

As other Republican governors — most notably Scott Walker in Wisconsin and Paul LePage in Maine — did in this year’s election campaign, Rick Scott made drug testing a key campaign promise in his 2010 election campaign. The following year, the Republican-dominated state legislature acceded to Scott’s request and passed a welfare drug testing law.

Welfare applicants weren’t the only target of Scott’s drug testing push. He also sought to impose random, suspicionless drug testing on state employees through an executive order. But that was struck down by the federal courts as violating the Fourth Amendment’s proscription against unreasonable searches and seizures. The US Supreme Court denied his appeal of that ruling in August.

And now, the second prong of Scott’s drug testing thrust has been struck down. The decision came in Lebron v. Florida Department of Children and Families, in which Navy veteran, college student, and single father Luis Lebron filed for food stamp assistance, but was denied after he refused to undergo a drug test. Supported by the ACLU of Florida and the Florida Justice Institute, Lebron sued to have the law overturned.

Citing a lengthy history of federal court precedents, Lebron’s legal team argued that like the random, suspicionless drug testing of state workers, the mandatory, suspicionless drug testing of welfare applicants violated the Constitution’s protections against unreasonable searches and seizures. US District Court Judge Mary Scriven agreed, ruling in 2011 that the policy was unconstitutional.

The never-say-die Scott appealed that decision. The 11th Circuit Court of Appeals in Atlanta held a hearing on the case on November 20. It then took less than two weeks to reach its decision.

The bipartisan panel of federal judges ruled unanimously that the state of Florida had failed to provide any evidence that there was a strong government need to strip welfare applicants of constitutional protections.

“We have no reason to think impoverished individuals are necessarily and inherently prone to drug use, or, for that matter, are more prone to drug use than the general population,” Judge Stanley Marcus wrote for the court. “The State has presented no evidence demonstrating that drug testing saves a significant portion of TANF funds that could otherwise be spent on drugs,” he added, pointing to a 2000 state study that found welfare applicants were less likely to use drugs than the general population and noting that in the three months the drug testing program was in effect, only 2.76% of applicants tested positive.

“In the final analysis, the warrantless, suspicionless urinalysis drug testing of every Florida TANF applicant as a mandatory requirement for receiving Temporary Cash Assistance offends the Fourth Amendment. On this record, the State has not demonstrated a substantial special need to carry out the suspicionless search — we see no concrete danger, only generalized public interests,” Marcus wrote.

Marcus also noted that “citizens do not abandon all hope of privacy by applying for government assistance” and that “by virtue of poverty, TANF applicants are not stripped of their legitimate expectations of privacy.” Having to urinate in a cup in front of another person “intrudes upon expectations of privacy that society has long recognized as reasonable,” he added.

Nor were the judges buying the state’s argument that welfare applicants effectively waived their constitutional rights by consenting to drug tests as a condition of receiving benefits or that the state had a “special need” to protect the children of drug-using welfare applicants.

“[T]he State cannot use consent of the kind exacted here — where it is made a condition of receiving government benefits — to wholly replace the special needs balancing analysis,” the court held. “We respect the State’s overarching and laudable desire to promote work, protect families, and conserve resources. But, above all else, we must enforce the Constitution and the limits it places on government. If we are to give meaning to the Fourth Amendment’s prohibition on blanket government searches, we must — and we do — hold that [the welfare drug testing law] crosses the constitutional line.”

While, given a solid line of federal court setbacks for the law, the 11th Circuit’s decision was not exactly a surprise, advocates pronounced themselves well-pleased.

“The 11th Circuit has affirmed that the 4th Amendment applies to everyone, even those applying for government assistance, said Florida Justice Institute executive director Randall Berg. “The same rationale for requiring suspicionless drug tests of TANF recipients could be used to require suspicionless searches for any kind of government benefit, whether it is social security, farm subsidies, or student scholarships. Today, the court has rejected that rationale, drawing a clear line that will keep us from going down that slippery slope.”

“We are very pleased by the Court’s opinion, which once again makes clear that the US Constitution forbids the State of Florida from subjecting ordinary private citizens to invasive and unwarranted searches,” said ACLU of Florida associate legal director Maria Kayanan.

“This is a resounding affirmation of the values that the Fourth Amendment of the U.S. Constitution protects — that none of us can be forced to submit to invasive and humiliating searches at the whim of the government, and that the Constitution protects the poor and the wealthy alike,” she continued. “The Court has once again confirmed what we argued all along: that the state of Florida cannot treat an entire class of people like suspected criminals simply because they’ve asked the State for temporary assistance.”

While the federal courts have been clear that, with limited exceptions, mandatory, suspicionless drug testing violates the Constitution, Republican governors and legislators in other states have responded by passing public benefits drug testing laws that can pass constitutional muster by first establishing some sort of “reasonable suspicion” before requiring drug testing. According to the National Council of State Legislatures, at least 11 states have done so.

The results have not been particularly impressive. In Kansas, only 20 people have been tested in the first four months the law has been in effect; four failed the drug test. Next door in Missouri, the state is spending $336,000 a year on its welfare drug testing. It has tested 655 people; 69 failed the drug test. But 711 others refused to take it. In Utah, a year after it passed a 2012 welfare drug testing law, the state had spent $30,000 to drug test applicants, but only came up with 12 who tested positive. In Tennessee, where a similar law went into effect this year, the state has tested 800 applicants, with only one person testing positive.

But whether public benefits drug testing programs actually either save states money by reducing welfare rolls or help families by encouraging recipients to go straight is probably not as important to politicians as the political calculus behind them. With its coded appeal to racial and class hostilities wrapped in a guise of caring and fiscal responsibility, it’s a red meat issue for the Republican base.

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Other Views: Once upon a time, the Supreme Court upheld civil rights

Monday, December 8th, 2014

Posted: Sunday, December 7, 2014 12:06 am

By Orson Aguilar/TNS Fourm

Fifty years ago, on Dec. 14, 1964, the U.S. Supreme Court unanimously rejected a legal challenge to the Civil Rights Act of 1964, making possible half a century of progress toward fairness and justice.

It’s hard to picture the current justices doing the same.

The case was called Heart of Atlanta Motel v. U.S. A motel owner in Georgia wanted to keep discriminating against black patrons, arguing the Constitution did not allow the federal government to prohibit private discrimination.

Back in 1883, the court had indeed said the federal government had no such authority. And Barry Goldwater, the 1964 Republican presidential nominee, was a strong advocate for the view that the Civil Rights Act was unconstitutional.

Had the motel succeeded, the law would have been toast, and the history of the last 50 years would have been radically different. We might well still have businesses with “Whites Only” signs in parts of the country.

Happily, the Supreme Court unanimously upheld the law, stating unequivocally the federal government does indeed have the power to protect Americans from discrimination.

Would the current high court do the same? Probably not.

Last year, the Supreme Court gutted the other key pillar of civil rights protections, the Voting Rights Act.

“Our country has changed,” wrote Chief Justice John Roberts for the court majority. The law, he said, was “based on 40-year-old facts having no logical relationship to the present day.”

In short, Roberts and colleagues held that because the Voting Rights Act had worked, it was no longer constitutional.

The same argument could easily be made against the Civil Rights Act today.

After all, “Whites Only” signs have disappeared, right? Segregated lunch counters and drinking fountains are historical relics, so why should the feds be able to dictate private behavior based on old facts “having no logical relationship to the present day”? Because discrimination still exists, even if its more overt manifestations have faded. We still live in a country with profound racial inequities, and the notion of a colorblind America is a myth.

The aftermath of the Supreme Court’s ruling to gut the Voting Rights Act provides proof. More than half of the jurisdictions that used to have to get federal approval for changes in voting rules — because they had a history of discriminating against minority voters — rushed to pass new restrictions on voting. Ample evidence shows that these restrictions disproportionately hurt the poor and voters of color.

Fifty years ago, the U.S. Supreme Court was a beacon of hope for those who had the least in this country. Sadly, those days seem to be over.

Orson Aguilar is executive director of The Greenlining Institute. He wrote this for Progressive Media Project, a source of liberal commentary on domestic and international issues; it is affiliated with The Progressive magazine

Colorado DUI case sent to U.S. Supreme Court, focuses on blood tests

Monday, December 8th, 2014

By Jordan Steffan


The Denver Post

POSTED:   12/07/2014 08:29:14 PM MST


When Jack Schaufele cruised into the busy intersection during rush hour and slammed into an oncoming car, his blood-alcohol level was nearly three times the legal limit.

But a jury may never know there was alcohol in his system.

Arapahoe County prosecutors have asked the U.S. Supreme Court to overturn a decision by a state judge and the Colorado Supreme Court, which found that because the officer did not try to obtain a warrant before she ordered a blood draw on Schaufele, the results may not be presented as evidence. Thirteen other states filed a petition asking the U.S. Supreme Court to pick up the case.

If the high court takes up the case, their decision will have national implications. Granting the prosecutors’ request will make it easier for authorities to take blood samples without a judge’s approval in suspected DUI cases. Without a change in the law, blood tests that reveal drivers were above the legal limit — but were taken without a warrant — will continue to be excluded from trials.

“The question is when there are exceptions to search and seizure without a judge looking over the police officer’s shoulder,” said David Beller, president of the Colorado Criminal Defense Bar, who is not connected to the case.

Daubert Decisions Not Just for District Courts Anymore

Saturday, December 6th, 2014

posted on: Friday, December 5, 2014

There is a new gatekeeper in town. Or perhaps 179 of them.

Earlier this month, the U.S. Supreme Court refused to grant certiorari and hear an appeal challenging a federal court’s ruling with regard toDaubert motions, effectively permitting the expansion of the power to decide expert witness admissibility to the Circuit Court.

The effects of this case (or rather, the lack thereof with respect to the U.S. Supreme Court’s involvement) could impact overall litigation strategy when attorneys are engaged in Daubert disputes and increase the overall scrutiny of expert witness qualifications and methodologies.

In the long-lasting asbestos wrongful-death case of Estate of Henry Barabin v. AstenJohnson, Inc., the 9th U.S. Circuit Court of Appeals found that a Washington District Court erred by failing to conduct a properDaubert hearing to determine the admissibility of two of plaintiff’s experts. This decision and rationale have been well documented over the years, including earlier posts in BullsEye:  No Daubert Hearing Equals $10 Million Error in 9th Circuit  and Lack of Daubert Hearing Cancels $9.4 Million Verdict.

The determination that the District Court failed to fulfill its gatekeeper role in permitting or preventing the experts’ testimony at trial was simple enough. A three-judge 9th Circuit panel came to this conclusion in 2012, and then an en banc (or “full court”) 9th Circuit Court made the same decision this January, basically saying that the District Court judge erroneously punted the court’s procedural responsibilities to the jury by not conducting a full Daubert inquiry and by allowing both experts to testify, albeit with restrictions.

The January decision by the en banc Circuit Court also made a significant reversal of itself with regard to its own abilities to make Daubertdecisions. With Judge N. Randy Smith authoring the 27-page decision, the 9th Circuit Court now says that it, too, can examine the credentials of an expert witness to determine his or her admissibility, so long as the District Court’s record is sufficient for the Circuit Court to do so.

“After the dust of Daubert had settled, we held that an erroneous admission of expert testimony, absent a showing the error was harmless, requires a new trial. See Mukhtar, 299 F. 3d at 1066- 67. To the extent Mukhtar requires anything more, it is overruled,” Judge Smith writes.

“[The Defendants/Appellants] contend that a reviewing court should have the authority to make Daubert findings based on the record established by the District Court. We agree and overrule Mukhtar to the extent that it required that Daubert findings always be made by the District Court. See Mukhtar, 299 F.3d at 1066 n.12. If the reviewing court decides the record is sufficient to determine whether expert testimony is relevant and reliable, it may make such findings.”

To support its decision, the Circuit Court cites a U.S. Supreme Court case from 2000 that grants “reviewing courts” the power to direct judgment as a matter of law if the court “determines that evidence (would be inadmissible) at trial and that the remaining, properly admitted evidence is insufficient to constitute a submissible case.” Weisgram v. Marley Co., 528 U.S. 440, 446-47 (2000).

However, this is not synonymous with saying that Circuit Courts can now be Daubert gatekeepers – perhaps guarding “the gate” after the first gate was either unlocked improperly or left open entirely. Furthermore, and completely out of the realm of Weisgram, would also be the case when the gate was unduly locked when it should perhaps been left open.

In the hypothetical case of a District Court judge erring in his or her prohibition of an expert witness from testifying at trial, then it is conceivable that the record could still be sufficient to allow the Circuit Court to declare such expert to have passed the Daubert test and therefore be admissible. In this situation, the case would be sent back down for retrial, one would presume – with the District Court being bound by the 9th Circuit’s so-called Daubert “hearing.”

Until Barabin, the Daubert test, at least as it applies federally, was for the exclusive use of the District Court. Post-Barbin, it became a test and tool for the 9th Circuit Court to use as well. This month, perhaps most importantly, the U.S. Supreme Court has basically consented to such expansion of power by its denial of cert to such appeal.

The 9th Circuit Court is largely considered to be one of the most powerful and most influential courts in America. Its jurisdiction includes California, Oregon, Washington, Idaho, Montana, Arizona, Alaska, and Hawaii. Now, in the federal District Courts of all these states, lawyers and litigants beware – especially plaintiffs, for there is now a second gatekeeper holding a Daubert key to expert admissibility.

Thompson, Esq. is an assistant general counsel and writing professor at Niagara University. He has a degree in journalism from the University of Colorado and a law degree from Brooklyn Law School. Admitted to the New York bar in 2005, he previously worked at a Fifth Avenue law firm where he specialized in in-court litigation. Lured back to the dying newspaper industry in 2007, Thompson worked as legal editor of the historic Brooklyn Daily Eagle, where he remained for nearly five years. In 2012, Thompson returned to his hometown of Buffalo and lives…




Saturday, December 6th, 2014


Dec. 5, 2014

Judge Norbert Nadel admitted he had a “tremendous temptation” not to incarcerate Judge Tracie Hunter after her criminal conviction, but believed he had to because she was an elected official who broke the law — a combination Nadel called “a double whammy.”

“Without the dilemma of the double whammy, (Hunter’s service to her church and community) would absolutely have guaranteed probation,” Nadel said.

Nadel sat through Hunter’s five-week trail — six weeks if you count jury deliberations — and heard evidence that doomed Hunter, a controversial Juvenile Court judge indicted in February for having an improper interest in a public contract for trying to help her Juvenile Court employee brother after he was fired for punching a teen inmate.

“The evidence showed that the criminal conduct of Tracie Hunter has dealt a very serious blow to the public confidence of our judicial system and there’s no question about that,” Nadel said.

Hunter, Nadel said, took an oath as judge to uphold the laws of Ohio. Instead, he said she used her judgeship to commit nepotism, deny public access to the courtroom over which she provided, improper judicial temperament and tardiness in making decisions in her cases that often delayed attempts to have children adopted or placed in long-term foster care.

The sentence of six months in the Hamilton County Justice Center imposed by Nadel could have been much worse. She faced a maximum prison sentence 0of 1 1/2 years but Nadel said he was lenient on her partly because of the “public humiliation” Hunter already has experienced.


In addition, Nadel ordered Hunter to be placed on probation for one year but gave her a Christmas gift by not taking her into custody immediately, allowing her to report Dec. 29 to begin serving her jail term.

“To God be the glory,” Hunter told The Enquirer as she left court. “You have now convicted an innocent person.”

That sentence came after three hours of Hunter bringing 18 witnesses to speak about her character. Each said she was a kind, loving person who, as a pastor, thrived in helping others, especially in their times of trouble.

Those witnesses were talking about Tracie Hunter the pastor. Nadel sentenced Tracie Hunter, the criminal.

“I’m disappointed. I’m not shocked,” Hunter’s attorney, Clyde Bennett II, said of the sentence. “It will not stand.”

Even before Friday’s hearing started, Bennett filed a motion seeking to have any incarceration of Hunter delayed.

“We need time to prepare to allow Judge Hunter out on appeal,” Bennett said.

Nadel will rule on that early next week.

Hunter’s troubles aren’t over.

In addition to the single count for which she was convicted, a mistrial was declared on eight other charges. Bennett expects Special Prosecutors Merlyn Shiverdecker and R. Scott Croswell III to seek to have Hunter stand trial again for them. They carry a maximum prison sentence of more than 10 years.

She also faces, after her felony conviction, possible discipline by the Ohio Supreme Court that could include revoking her law license.

The sentence ends a tumultuous year for Hunter and a controversy-filled four years since she ran for judge.

She was indicted and suspended in January after she was accused of backdating and forging documents to help defense attorneys and using a county-owned credit card to pay her personal legal bills.

Hunter, 48, ran as a Democrat for judge in 2010, beating the Democrat-endorsed challenger in a primary. She initially lost the election but sued, saying some votes weren’t counted. She won the suit, the votes were counted and Hunter won the eleection by 74 votes.

She battled with The Enquirer over access to the public courtroom and documents, with the Public Defender over her delay in resolving adoption cases, with the prosecutors, appeals court and Ohio Supreme Court.

Hunter’s prosecution cost taxpayers more than $400,000

North American Stainless to Make $5 Million Investment in Ghent Facility

Saturday, December 6th, 2014

North American Stainless to Make $5 Million Investment in Ghent Facility

Press Release Date: Friday, December 05, 2014
Contact Information: Kerri Richardson
Terry Sebastian

Investment the result of Governor’s trip to Spain

FRANKFORT, Ky. – Gov. Steve Beshear today announced that North America Stainless (NAS) plans to expand its facility in Carroll County.

NAS will invest $5 million to add a fourth steel slitter line. The expansion, which is the company’s 10th since it began operations in Kentucky in 1990, will also include the addition of 15 new jobs at the Ghent plant.

“North American Stainless and its parent company, Acerinox, S.A., continue to make substantial investments in Kentucky,” said Gov. Beshear. “This announcement demonstrates the company’s continued confidence in our workforce and business climate. We want to thank NAS for investing in Kentucky, and I look forward to working with the company to create even more success.”

Construction on the slitter line will begin in January 2015 and is expected to be completed in early 2016. Slitting is the process of cutting large rolls of steel into more narrow rolls. The stainless steel is used in a variety of products, including appliances, automotive, plumbing, general manufacturing and the food service industry.

NAS is a subsidiary of Acerinox, S.A., headquartered in Madrid, Spain. To date, the company has invested more than $2.5 billion in its Carroll County facility, making it the largest Spanish industrial investment in the U.S. NAS, which also is the largest, fully integrated stainless steel producer in the nation, has more than 1,350 employees.

During a trip to Europe, Gov. Beshear met with Acerinox at its headquarters in Madrid to discuss energy policies and future investments. The meeting played a pivotal role in the company’s decision to expand in the Commonwealth.

“Our parent company, Acerinox, S.A., with its worldwide operations, has choices on where to invest,” said Cristobal Fuentes, president and CEO of North American Stainless. “We appreciate the Governor meeting with the executives of Acerinox, S.A. in Madrid and are very pleased that our parent company has again demonstrated its confidence in our employees, Kentucky and Carroll County by authorizing this investment. I know that with the continued support of Acerinox, S.A., Kentucky and the county that our employees will continue to compete globally.”

Foreign direct investment has played an important role in boosting Kentucky’s economy. Last year, nearly 40 percent of all capital investment and a third of new jobs announced in the manufacturing, service and technology industries were a result of foreign-owned enterprises.

Steel also continues to be a big driver of Kentucky’s economy. The industry accounts for more than $1.4 billion in GDP and employs more than 4,000 people statewide.

“North America Stainless means so much to our community, so this latest announcement is truly great news,” said Rep. Rick Rand, of Bedford. “I want to thank its leaders for taking this step and adding these jobs, and I want to thank Gov. Beshear and his administration for working with the company to help make all of this possible. It speaks volumes about the quality of workforce we have here. It truly is second-to-none.”

“I am extremely pleased that NAS is continuing to expand its presence and creating even more jobs in Carroll County,” said Sen. Paul Hornback, of Shelbyville. “This is a vote of confidence in the citizens of this area who make up the NAS workforce. It also shows that Kentucky is working not only to attract new industry, but even more importantly, recognizes and values the industries that have already deeply invested in our state and our people.”

“With the support of our county and the Commonwealth over the last 25 years, we have seen the payroll of NAS grow from a few hundred to 1,350,” said Carroll County Judge-Executive Harold “Shorty” Tomlinson. “This new investment means even more good-paying jobs. I thank Gov. Beshear for promoting the expansion. I also want to thank NAS and Acerinox, S.A. for their confidence in our workforce and for supporting our community projects and local charities.”

A detailed community profile for Ghent (Carroll County) can be viewed here.

Information on Kentucky’s economic development efforts and programs is available at Fans of the Cabinet for Economic Development can also join the discussion on Facebook or follow on Twitter. Watch the Cabinet’s “This is My Kentucky” video on YouTube.


AG Conway Announces $3.8 Million Multistate Settlement with Sirius XM Radio

Friday, December 5th, 2014


Press Release Date: Thursday, December 04, 2014
Contact Information: Daniel Kemp
Deputy Communications Director
502-696-5659 (office)

FRANKFORT, Ky. - Attorney General Jack Conway and his Office of Consumer Protection, along with the attorneys general of 44 other states and the District of Columbia, have resolved consumer protection claims alleging that Sirius XM Radio Inc. engaged in misleading advertising and billing practices.

Kentucky’s Assurance of Voluntary Compliance (AVC) in the multistate agreement was approved this morning by the Franklin Circuit Court.  The AVC requires the company to provide a complaint resolution and restitution program for eligible consumers to resolve certain consumer claims, to make significant changes to its business practices, and to pay $3.8 million to the states.  The Commonwealth of Kentucky received $65,480.96 for its participation in the settlement.

The attorneys general allege that Sirius XM engaged in misleading, unfair, and deceptive acts or practices in violation of state consumer protection laws. The states’ investigation focused on consumer complaints about difficulty canceling contracts, unhonored cancellation requests and misrepresentations about cancelling or not renewing Sirius XM service, automatic renewal of contracts without notice or consent, unauthorized fees, higher and unanticipated rates after a low introductory rate, and failure to provide timely refunds.

The AVC requires Sirius XM to change its business practices.  Specifically, the company agrees to:

• Clearly and conspicuously disclose all terms and conditions at the point of sale, such as billing frequency, term length, automatic renewal date, and cancellation policy.
• Make no misrepresentations about the available plans in advertisements.
• Provide advance notice via mail or email about upcoming automatic renewals for plans lasting longer than six months.
• Revise the cancellation procedures to make it easier for consumers to cancel.
• Prohibit incentive compensation for customer service representatives based solely on “saves,” or retaining current customers who attempt to cancel.

“Companies that utilize deceptive and unfair business practices to take advantage of consumers and violate Kentucky’s consumer protection laws will be held accountable,” Attorney General Conway said.  “I am pleased that we have reached today’s agreement requiring Sirius XM Radio to make significant changes to its business practices and return money that is rightfully owed to consumers.  I encourage any Kentucky consumers who are eligible for a refund to submit a claim through the restitution program.”

Consumers have until May 1, 2015, to file a complaint to be considered for restitution.  In order to be considered, consumers must file a complaint about issues addressed by the AVC, concerning conduct from July 28, 2008, to Dec. 4, 2014, and involving an identifiable loss that has not been previously resolved.

To file a complaint, consumers can contact Sirius XM directly with their complaints.  Complaints can be mailed to P.O. Box 33059, Detroit, MI 48232 or submitted online at

Kentucky consumers can also submit complaints by visiting Attorney General Conway’s website at or by calling the Attorney General’s Office of Consumer Protection at (502) 696-5389 to request a form.

Complaints previously filed, but which remain unresolved, may also be submitted for reconsideration under the restitution program.

You can follow Attorney General Conway on Twitter @kyoag, visit the Attorney General’s Facebook page or view videos on our YouTube channel.

Man accused of slaying prominent Somerset attorney might rely on insanity defense

Thursday, December 4th, 2014

BY BILL ESTEP December 3, 2014

Clinton D. Inabnitt’s attorney filed notice Tuesday of the potential insanity defense.

At a hearing Tuesday, a psychiatrist testified that Inabnitt, 40, is schizophrenic and delusional, but refuses to take medication to deal with his mental illness.

Inabnitt is charged with murder in the June 27 slaying of Mark Stanziano, 57.

Inabnitt, who lived in an apartment across the street from Stanziano’s office in downtown Somerset, is charged with ambushing the attorney as he arrived for work, walking into the street and shooting Stanziano several times.

There were a number of witnesses, including a Pulaski County sheriff’s detective who ordered Inabnitt to put down his gun after the shooting. Inabnitt complied and the detective handcuffed him.

Inabnitt told police he heard voices and had been bothered by persistent ringing in his ears, and that he had received a message through the local newspaper telling him to kill Stanziano.

Dr. Amy Trivette, a psychiatrist from the Kentucky Correctional Psychiatric Center, said at a hearing Tuesday that Inabnitt is not currently competent to stand trial, said the prosecutor, Commonwealth’s Attorney Eddy Montgomery.

That does not mean Inabnitt won’t be tried, however.

Circuit Judge David Tapp authorized the center to treat Inabnitt with anti-psychotic drugs, against his will if necessary.

Trivette had said in a letter before the hearing that such treatment would decrease Inabnitt’s symptoms and improve the likelihood he would be competent to stand trial later.

Inabnitt’s attorney, Richard B. Leary, said he opposed involuntarily medicating Inabnitt. One concern is that the medication could compromise Inabnitt’s ability to participate in his defense, Leary said.

The issue of competency deals with whether a defendant is capable of assisting in his or her defense. That is a different issue than insanity, which deals with whether a person was rational enough to knowingly commit a crime.

Tapp put off further action in the case for 60 days to allow time to treat Inabnitt.
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