Friday, October 10, 2008
Posted by Alan Childress
The official AK Branchflower report is just out and linked here. Lost in all the legal verbiage and important findings will be this isolated event I note below. It is one of those Doh! moments we have all had in our lives, and I can only imagine seeing Sarah Palin's immediate reaction. Whatever your politics, and whether or not you agree with the report's finding that the motive to push the firing of Trooper Mike Wooten was not the sole factor in his boss's (Walt Monegan's) firing, consider this delicious moment of oops (page 71):
Finally, the record contains evidence that Governor Palin lost confidence in Commissioner Monegan when, on the eve of the 2008 annual Police Memorial Day ceremony, he sent her a photograph to sign and present at that event, but failed to realize it was actually a photograph of Trooper Michael Wooten.
OMG. Either Walt has a vicious and really funny sense of humor, wanted to incite First Dude Todd into a frenzy, wanted to get fired, or made a big mistake which he soon heard about. I suspect the latter but thought you would want to know about this non-reported scene.
I saw on Leno one time -- or was it Letterman? -- his asking Carrie Fisher didn't she think his next night's guest Liz Taylor was just great? Silence, then Carrie deadpanned: No, she broke up my mom and my dad. As Southwest Airlines would ask: Want to get away?
Posted by Jeff Lipshaw
I was working away this morning and trying not to look at the Dow when a thought struck me. Back when I was fighting the governance wars from the inside, arguing from the board's standpoint why having poison pills and classified boards made sense (at least in the right hands), there were several studies done linking good governance to share performance, the most famous being the Gompers/Metrick/Ishii study. I was not (and am not) statistician enough to know if the study was good; all I can say is that my intuition was and is that things like technology, cost productivity, barriers to entry, business savvy, and things like that would have a lot more to do with share price than whether there was a poison pill or the shareholders had the right to call a meeting. Moreover, I'm not sure how you would factor out those differences among companies other than to say it all evens out in a big enough sample. As I said, I'm not statistician enough to do the work myself.
What occurred to me was the question whether, if I had a portfolio of the "best governed" companies on October 9, 2007, at the very height of the stock market, and kept that portfolio unchanged for one year, how would it do? Given that I performed this little empirical study from the laptop in my den, don't have the individual governance scores on any survey (CGC from ISS, or whatever GovernanceMetrics puts out), and couldn't do the regressions and correlations even if I did (but I did leave a phone message for Bill Henderson), I simply went to the website of IR Global Rankings, and took the thirty companies it ranked best in corporate governance practices (listed below the fold), found their historical closing stock prices on Yahoo! Finance for each of October 9, 2007 and October 9, 2008, assumed a portfolio of one share of each, and looked at how the portfolio performed. (Other methodology disclosures also below the fold).
Here are the results:
Decline in "good governance" portfolio: 50%
Decline in S&P500 Index Fund 42%
Decline in NYSE Composite Index Fund 43%
Decline in Dow Jones Industrial Average 39%
Within the good governance portfolio, every stock declined. The best performers were Bayer AG (17% decline), Procter & Gamble (12% decline), and Global Payments (11% decline). The worst performers were ICA (93% decline), Wachovia (93% decline), Banco BPI (71% decline), and Life Time Fitness (70% decline). (I did not check to see if these numbers were adjusted for splits, but I assume so.)
But you'd still be better in index funds than picking stocks based on the IR Global Rankings of good governance practices.
A very interesting hearing officer report just filed in Arizona directs that ethics charges be dismissed in a case where the attorney had been charged with violating ethics rules and state statutes "by taking liens against client's real property to secure her attorney's fees in three [marriage] dissolution matters..." In each matter, she had consulted with her law partner and then husband in arranging the liens. After attempts to reach a consent disposition of the disciplinary charges failed, the lawyer denied the misconduct and a merits hearing was held.
The evidence established that all three clients had difficulty keeping current on their bills and that the lawyer was faced with either withdrawing or trying to get security for her fees. The bar claimed that the liens violated the business transactions with client rule; the attorney contended that the matters were governed by a different rule that permitted liens "authorized by law."
The attorney called as her expert witness the former (and long time) Director of Lawyer Ethics for the State Bar, who testified that she had advised bar members that such liens were permissible. The hearing officer noted that "while it is true that [the attorney] may not have spoken to [the former Director] and received advice from her, and further that there is a disclaimer regarding advice from Ethics Counsel, that's not the point. The point is that for years the State Bar has told attorneys that these liens are permissible." The bar thus had an obligation to make the legal community aware of its interpretation of the rules. The attorney had been "open, forthright and candid about her actions, and she made her decisions after consulting with more senior and more experienced members of the bar and making reasonable efforts to check the rules to assure that liens were allowable."
I assume that the bar may (but should not) seek a review of the dismissal. They might not in light of the hearing officer's observation that "why [the attorney's] partner and then husband was not similarly charged was never explained." (Mike Frisch)
An Illinois hearing board has recommended that an attorney convicted on three occasions of driving under the influence be suspended for one year and until further court order. The Administrator had the attorney submit to a medical/mental health evaluation that led to the key finding with respect to sanction:
Dr. Jeckel, an experienced psychiatrist (Adm. Ex. 6), testified that he was asked by the ARDC to conduct a psychological evaluation of the Respondent. Dr. Jeckel reviewed various documents and met with the Respondent for one and one-half hours in November 2007. The Respondent was also given a psychological test in January 2008. Dr. Jeckel stated that the Respondent's cooperation in regard to the evaluation was unsatisfactory. For example, the Respondent was not a good historian, he was cantankerous, and he declined to provide the names of individuals for Dr. Jeckel to contact. At the time of the psychological testing in January 2008, the Respondent was argumentative, denigrated the process, and revealed a deficiency in his mental state. For example, he was unable to correctly identify the date or the day of the week.
Dr. Jeckel voiced the opinion that the Respondent has alcohol induced-dementia and is severely impaired. He further stated that it is "hard to imagine" that the Respondent can practice law in an appropriate manner. Dr. Jeckel also noted that the Respondent has continued to use alcohol and has not taken any steps to obtain necessary treatment.
Dr. Jeckel recommended the following treatment for the RESPONDENT: abstention from the use of alcohol; placement in a detoxification facility for one to two months, where he could be carefully watched; treatment on an outpatient basis for at least six months to a year; and then re-examination.
One of most frustrating matters I have ever handled involved a lawyer who had similar issues and had violated ethical duties to his clients, which apparently did not occur here. The frustration came in trying to persuade the disciplinary system to consider this type of evidence at all. (Mike Frisch)
Thursday, October 9, 2008
[by Bill Henderson, cross-posted to ELS Blog]
Law schools are part of a production function for entry level lawyers. Therefore, if law schools alter their admissions practices, the character and complexion of the law school applicant pool can shift in significant ways. On the input side, the data are crystal clear: over the last 15 years, the rankings arms race has pushed U.S. law schools toward a pure numbers approach to admissions. The more interesting question, however, is whether prestige-conscious law firms are now, inadvertently, experiencing any fallout. First the data.
Law schools operate in an environment of supply and demand and are famously counter-cyclical. When Silicon Valley was booming in the late 90s, law school applicants plummeted. When the economy faltered in the early 90s or after 9/11, applicants spiked. Therefore, to examine how admissions practices have changed over time, it is important to pay attention to the underlying applicant pool. Below are trend lines for median LSAT scores by USNWR rank for 1994 and 2007, which reflect classes that entered in the fall of 1993 and 2006 respectively. During those two admissions cycles, the number of applicants was virtually identical: 89,600 (class entering fall 1993) and 88,700 (class entering fall 2006).
Obviously the blue line (2007) is higher than the orange line (1994). In fact, despite slightly fewer law school applicants, the average median LSAT increased by 2.18 points (std. dev. of 1.99). For the record, only three schools fell out of Tier 1 between 1994 and 2007. And it cannot be explained by the ABA policy shift that instructs law schools to no longer average LSAT scores when reporting 25th, 50th, and 75th percentile figures, thus slightly pumping up the volume of high LSAT scores. That change was not enacted until the summer of 2006.
Here is the same analysis for UGPA (1994 data came from the Princeton Review, 2007 from the ABA):
Although we might chock some of the higher UPGAs (avg. of +.17, std. dev. of +.12) on grade inflation between 1994 and 2007, it is likely that schools were also trying to maximize this number. More after the jump ... .
The New York Appellate Division for the Third Judicial Department denied the application for bar admission of a 41 year old attorney, admitted in Colorado, who has had a longstanding problem with alcohol and chemical abuse. The applicant had both a criminal and bar discipline record in Colorado, the most recent bar action resulted in reinstatement with conditions in 2005. The court commended the applicant's progress with his substance abuse problems and indicated that admission may be appropriate upon his unconditional reinstatement in Colorado, where the conditions were imposed for a five year period. (Mike Frisch)
A criminal conviction against an attorney and his law firm was reversed on grounds of insufficient evidence by the New York Appellate Division for the Second Judicial Department. The convictions involved charges of a scheme to fraud and filing false instruments in connection with personal injury claims. The court concluded:
The People failed to prove that the defendants obtained property from any person by means of "a systematic ongoing course of conduct with intent to defraud." The only proof as to any discrete sums of money and/or property obtained from anyone, other than of transfers and payments to and from the defendants themselves, was testimony from three injured accident victims that they received "settlements," apparently from insurance companies, or payments from the defendant Law Offices of Silverman & Taylor (hereinafter S & T). However, there is no proof that this money was obtained by false or fraudulent pretenses.
In fact, all of these accident victims testified at trial that they were involved in real accidents and suffered property damage and/or pain and suffering as a result thereof. Thus, there was a prima facie legitimate basis for the insurers to make those payments. The People did not challenge the legitimacy of the accidents.
Five accident victims testified at trial as to their visits to various medical clinics, individual chiropractors, therapists, and acupuncturists. Although the People's expert witness, physiatrist Philip Harris, testified that, in his opinion, some of the care provided was excessive or unnecessary, neither he nor anyone else provided proof as to any amounts paid for that care, let alone how much of it was excessive or even unwarranted. Harris also admitted that there can be reasonable disagreements as to the treatments and or tests that were warranted. Crucially, he refused to comment as to whether or not any of the accident victims who testified were or were not injured and/or whether or not they needed at least some of the treatment provided. In short, there was no testimony that "property with a value in excess of one thousand dollars" was obtained "from more than one person by false or fraudulent pretenses, representations or promises," let alone proof of an intent to defraud.
The evidence was also insufficient as to the four counts of offering a false instrument for filing in the first degree (see Penal Law § 175.35). Those counts charged that, on four different dates, and "knowing that a written instrument, namely a retainer statement, contained a false statement and false information, and with the intent to defraud the state and any political subdivision, public authority, and public benefit corporation of the state, [the defendants] offered and presented it to a public office, namely, the New York State Office of Court Administration (OCA) with the knowledge and belief that it would be filed with, registered and recorded in, and otherwise become a part of the records of OCA" [emphasis added].
The Washington State Supreme Court imposed a suspension of one year followed by probation for two years in a bar discipline matter that arose from two earlier bar proceedings. One of the earlier cases involved the lawyer's billing practices; the other involved the operation of his escrow account. The charges here related to the bar's demand for additional information regarding the lawyer's billings and violation of probation conditions. The lawyer had failed to cooperate until the bar sought an interim suspension.
The court rejected the following contention:
In connection with his challenges to the findings, Mr. Poole contends that when proving facts through circumstantial evidence, the WSBA must disprove all reasonable alternative theories offered by the attorney, and he contends this did not occur here. He challenges conclusion of law 70, which rejects the premise that when an allegation of misconduct is supported only by circumstantial evidence, the WSBA must exclude or disprove alternative theories opposed by the attorney. Rather, the conclusion says, the WSBA "need only produce facts from which only one reasonable conclusion may be inferred[...]" This is a correct statement of the law.
The court rejected the suggestion that the attorney had a privacy right in his client billing records that trumped the bar's information demands. Rather, the information sought was relevant to the bar investigation into his billing practices and the ongoing supervision of his disciplinary probation. The court also found that the attorney had intended to not cooperate with the bar, rejecting his argument that his conduct was grounded in a good faith challenge to the bar's authority to obtain the bills.
There was evidence of bipolar disorder but no finding that the condition had caused the misconduct. Thus, the court gave "little weight" to the condition as a mitigating factor.
If you professional responsibility professors out there are looking for a recent case that would educate students in the nature of bar discipline, this case has a lot to offer. It's worth a close read. (Mike Frisch)
An attorney who had been convicted of misconduct in office while serving in the state senate was ordered reinstated to the practice of law by the Wisconsin Supreme Court. The conviction was described as follows by the court:
The criminal charges alleged that between December 2000 and April 2002, Attorney Burke, while serving in public office as a senator, intentionally supervised and oversaw extensive work of state employees performing acts to further his campaign for attorney general, using resources of the State of
Wisconsin over which Attorney Burke had authority to control in his public office. Id.On October 5, 2005, pursuant to a plea agreement with the State, Attorney Burke entered a guilty plea to one count of misconduct in public office, a Class E felony, and one count of obstructing an officer, a Class A misdemeanor.
The court found that extensive character evidence supported the referee's favorable recommendation as to present fitness` to practice. (Mike Frisch)
An attorney who had represented the Episcopal Bishop of Montana in connection with sexual misconduct charges involving an adult parishioner was censured by order of the Tennessee Supreme Court. The attorney had met the Bishop when they both served on the board of an entity that was devoted to assisting persons recovering from substance abuse. The terms of the engagement were disputed, with the Bishop contending that the fee was $1 plus expenses. The lawyer claimed to have sent a retainer agreement letter setting forth a contingent fee, which the client claimed he had not received. The court credited the lawyer's version.
The charges involved the handling of a settlement check. The lawyer was found entitled to the fee he had taken in light of the court's resolution of the fee agreement issue. Thus, he was not culpable of conversion or failure to return an unearned fee. However, the lawyer had placed an unauthorized endorsement on the check in order to deposit it in his`escrow account. The court found that this conduct did not amount to forgery. The court rejected a suspension sanction in favor of a public censure. (Mike Frisch)
Wednesday, October 8, 2008
An attorney had represented in a client in a series of matters relating to divorce and child support. While a motion for new trial was pending in the divorce action, the attorney drafted a will for the client that bequeathed $1,000 to the client's minor children and all remaining property to the lawyer, who was appointed to be the personal representative of the estate upon the death of the client. The will was witnessed by the lawyer's paralegal and an employee of a tenant, and notarized by the lawyer's legal assistant. The lawyer later drafted a will that cured the conflict of interest.
The lawyer admitted violation of the rule that prohibits drafted a client's will that makes the lawyer a beneficiary. However, according to the report of an Arizona hearing officer, "Respondent's intent in drafting the first will was not to personally inherit [the client's] property, but to use it for the benefit of [the client's] children..." Thus, the officer finds that a public censure with one year of probation is the appropriate sanction. The lawyer must also obtain and either listen to or review a DVD entitled "The Seven Deadly Sins of Conflict" within 90 days.
Also, the opposing client testified in the bar proceeding in opposition to the agreed disposition in the matter as unduly lenient. (Mike Frisch)
WSAW.com reports that:
Tuesday, October 7, 2008
The Oklahoma Supreme Court rejected a proposed two year suspension of an attorney who had neglected a client matter and misrepresented facts to the client and the bar association. The court majority concluded that a suspension of three months was appropriate in light of the following mitigation:
We agree with respondent's contention that the panel's recommended suspension for two years and one day is too harsh under these circumstances. Respondent has been a member of the Oklahoma Bar Association since 1974 and has no history of disciplinary action. It is undisputed that at the time in question respondent was in very poor health. He had suffered a heart attack and afterwards he was hospitalized, unable to work and suffered short-term memory loss. He was divorced in 2004 shortly before he voluntarily closed his practice and left Oklahoma in May 2004. He remains in poor health. He has coronary artery disease and a congenital heart valve deformity which requires medication and causes him to tire easily, and he also has resulting problems with hemorrhaging blood vessels in his eye. It is likely he will never practice again and never return to Oklahoma due to worsening health conditions.
A dissent finds the sanction overly harsh and would impose a private reprimand:
Bar discipline is never intended to be punitive. There are three primary purposes of bar discipline: 1) to protect the public, legal profession, and judiciary from the dangers of professional misconduct; 2) to maintain the public's confidence in the legal profession; and 3) to generally and specifically deter attorneys from engaging in similar misconduct in the future. Because the respondent no longer practices law, the discipline recommended cannot serve the first purpose of bar discipline, nor can the discipline serve the purpose of specific deterrence. Given the many pertinent mitigating circumstances, it will do little to serve the second and third purposes of bar discipline to so harshly discipline the attorney.
On appeal of the denial of a motion to disqualify counsel, the New York Appellate Division for the First Judicial Department held that the trial court had properly denied the request:
In order to disqualify the firm representing plaintiff in this breach of contract action, defendant had to demonstrate an attorney-client relationship between the firm and plaintiff's principal, and the existence of a conflict of interest between plaintiff and its principal in connection with the matter being litigated (see DR 5-105 [22 NYCRR § 1200.24]). Defendant's evidence, consisting of a hearsay internet report, an informal e-mail and a breakfast meeting, was insufficient to establish any separate attorney-client relationship between the firm and plaintiff's principal.
Posted by Alan Childress
A reader [and scholar on law and policy in China], Ethan Michelson, sent us this announcement (thanks) and the link:
Jerome Hall Postdoctoral Fellowship at Indiana University-Bloomington
The Indiana University Center for Law, Society, and Culture will appoint up to three post-doctoral fellows per year beginning with the 2009-10 academic year. We invite applications from scholars of law, the humanities, or social sciences working in the field of sociolegal studies. Pre-tenure scholars, recently awarded PhDs, and those with equivalent professional degrees are encouraged to apply. Advanced graduate students may also apply, but evidence of completion of the doctoral degree or its equivalent is required before beginning the fellowship.
Fellows will devote a full academic year to research and writing in furtherance of a major scholarly project, and will receive a stipend plus a research allowance, health insurance, other benefits, and workspace at Indiana Law. They will conduct research at Indiana University and participate in the activities of the Center, which include an annual symposium, a colloquia series, and regular workshops and lectures.
Not a legal profession case, but somewhat reminiscent of the movie Poltergeist, is a decision issued today from the Maryland Court of Special Appeals. The developer of a residential subdivision found a "small, very old cemetery" on one of the lots. The developer took steps to hide the discovery, and built and sold a house on the lot without disclosing to the purchasers. The headstones were intentionally removed and discarded. The initial purchasers sold the property and the new owners learned of the cemetery years later. They sued the developer for fraudulent concealment. On appeal from the trial court's dismissal, the court held that the duty not to fraudulently conceal the presence of the cemetery on the property extended to secondary purchasers. (Mike Frisch)
The Colorado Presiding Disciplinary Judge approved a conditional admission and imposed a 60 day suspension, stayed in its entirety in favor of two years probation, of an attorney who had testified falsely in a criminal trial. The attorney had claimed a Ph.D. in psychology when, in fact, the degree had not yet been awarded. "The [false] testimony was not material to the remainer of her testimony." (Mike Frisch)
A two year suspension was imposed by the Pennsylvania Supreme Court in a bar discipline matter where the accused attorney's retained counsel withdrew the week before the hearing. Substitute counsel was not retained and the lawyer represented himself. Because no answer was filed, charges of unauthorized practice while on inactive status, commingling and conversion, and failure to respond to the bar investigation were deemed admitted.
The attorney testified in mitigation that he had had surgery for diverticulitis that had resulted in addiction to painkillers, resulting in the misconduct. Although he further testified (and the Disciplinary Board accepted) that he had not taken prescription medication for over a year, he did not offer expert or other testimony on the linkage between his condition and the violations. Thus, the board held: "The evidence put forth by [the lawyer] is not sufficiently weighty to meet his burden of proof [under the court's seminal mitigation precedent]." (Mike Frisch)
The North Carolina Court of Appeals affirmed the dismissal of a slander lawsuit brought against an attorney and his firm under the following facts:
In November 2006, defendant approached Bobby Bracken (“Bracken”), a potential witness in the action originally filed 8 September 2005, while he was eating breakfast in a public place, and either asked Bracken, “Did you hear that [plaintiff] got run out of town for drugs?” or stated, “[Plaintiff] got run out of town for drugs.” Plaintiff filed the instant action on 11 May 2007, alleging defendants (defendant, and his law firm, through the doctrine of respondeat superior) had defamed (slandered) plaintiff through defendant's remarks to Bracken; had intentionally inflicted emotional distress; and had acted negligently...
The court found that the allegations were insufficient to sustain the claim:
Upon these allegations in plaintiff's complaint, we hold that the trial court did not err in dismissing plaintiff's defamation suit, as plaintiff's own evidence is that defendant approached Bracken as a witness, in an attempt to gather evidence for an ongoing suit. Regardless of the accuracy of the alleged statement, we hold that it was not “so palpably irrelevant to the subject matter of the controversy that no reasonable man can doubt its irrelevancy or impropriety[,]” and it was “so related to the subject matter of the controversy that it may [have] become the subject of inquiry [e.g., plaintiff's credibility. See N.C. R. Evid., Rule 609.] in the course of the trial,” and thus, “the rule of absolute privilege is controlling.” (citations omitted)
The Connecticut Appellate Court affirmed the grant of summary judgment in a legal malpractice case, holding that the plaintiff was collaterally estopped from litigating the issue of whether the lawyer's conduct had caused harm. The lawyer had been retained to defend a murder charge. The defendant claimed innocence. The lawyer presented a theory of self-defense to prosecutors without the client's authority and pressured him to plead to manslaughter, which he eventually did. The client got 20 years and filed the malpractice suit. About six months later, the client sought habeas corpus relif, claiming actual innocence.
A 29 day hearing was held on the petition. The trial judge concluded that the lawyer provided improper assistance, had misled the client on the terms of the plea bargain and sent the client a letter "replete with misstatements." Nonetheless, the trial judge found that the client had failed to demonstrate prejudice and was not entitled to relief.
Here, the court upheld the trial court's finding that the prejudice component of the malpractice claim was "indistinguishable" from the finding of the habeas court: "The plaintiff provides no authority and engages in no analysis demonstrating that even if the prior determination of the issue of prejudice were legally flawed, this, alone, would strip the prior determination of its preclusive effect." (Mike Frisch)