President’s Page ...... John M. Ryan 2

John Marshall--The Early Years ...... William B. Spong, Jr. 4

9

Medical Malpractice Caps and the Right to a in Civil Actions ...... Robert Acosta-Lewis 11

Tax Considerations £or Personal Service Corporations After the Tax Reform Act of 1986 and the Revenue Act and Pension Protection Act of 1987 ..... William J. Day 16

25 THE BAR ASSOCIATION OFFICERS AND EXECUTIVE COMMITTEE

President President-Elect Past President John M. Ryan Thomas T. Lawson R. Gordon Smith 500 World Trade Center P.O. Box 720 One James Center Norfolk, Virginia 23510 Roanoke, Virginia 24004 Suite 800 Richmond, Virginia 23219

Chairman, Chair-Elect Secretary- Treasurer Young Lawyers Section Young Lawyers Section Robert C. Wood, III Peggy O’Neal Haines David G. Stiuford P.O. Box 958 P.O. Box 2009 P.O. Box 1122 Lynchburg, Virginia 24505 Bristol, Virginia 24203 Richmond, Virginia 23208

Executive Committee

F. Claiborne Johnston, Jr., Chairman Howard W. Martin, Jr. Thomas C. Brown, Jr. P.O. Box 1122 1640 Sovran Center 8280 Greensboro Drive Richmond, Virginia 23208 Norfolk, Virginia 23510 Suite 900 McLean, Virginia 22102

John E. Donaldson George H. Roberts, Jr. George H. Heilig, Jr. School of Law 90 North Main Street 15 Stony Point Center College of William and Mary Harrisonburg, Virginia 22801 700 Newtown Road Williamsburg, Virginia 23185 Norfolk, Virginia 23502

Allen C. Goolsby, III Thomas G. Hodges P.O. Box 1535 340 W. Monroe Street Richmond, Virginia 23212 Wytheville, Virginia 24382

Executive Director Director, Committee Activities Sue Gift Sanders , Emerson G. Spies Suite 1515, 7th & Franklin Streets School of Law 701 E. Franklin Street Richmond, Virginia 23219 Charlottesville, Virginia 22901

Articles and Other Contributions Subscription Information Membership Inquiries, Applications Contributions are welcome, but the right Subscription inquiries from libraries and and Address Changes is reserved to select material to be pub- out-of-state individuals should be directed Membership dues include the cost of lished. Publication of any article or state- to: one subscription to each member of the ment is not to be deemed an endorsement Association. of the views expressed therein by the Bess Wendell, Associate Editor The Virginia Bar Association Journal Inquiries about and applications for Association. 3849 W. Weyburn Road Association membership and changes of Material submitted for publication in Richmond, Virginia 23235 address should be sent to: the Journal should be sent to: The Virginia Bar Association Charles E. Friend, Editor Suite 1515, 7th & Franklin Bldg. The Virginia Bar Association Journal 701 E. Franklin Street Post Office Drawer H F Richmond, Virginia 23219 Williamsburg, Virginia 23187 The ldrginia Bar lssociation Journal

Volume XIV Fall 1988 Number 4

CONTENTS "

EDITORIAL BOARD John M. Ryan

Appointed Members John Marshall--The Marly Years~...... William B.Spong, Jr. . David W. Parrish, Jr. Chairman John Ma£shali~ House°is~VBA Centennial .~roje~ ’, :., Charlottesville

Vernon M. Geddy, Jr. Medicaid.Malpractice Caps. anathe Right’t0 Williamsburg Jm~ ’I’Hal in Civil Nctiohs ...... John L. Walker, Jr. Robert Acosta-I~ewis Roanoke John F. Kay, Jr. Tax Considerations fo PersOnal S trice Richmond CorporationsAfter the Tax Reform Act~0f

Ex-Officio Members John M. Ryan President Norfolk The SummerMeeting :. .... ’ ...... ~.~., .... o 26 Thomas T. Lawson Summer Meeting Programs,...... - ..... President-Elect Tournament~Winners .... - Roanoke Sponsors ...... ~..~ ...... Sue Gift Sanders Patrons ...... ° ...... -...... 35 Executive Director Newly Admitted Members ...... Richmond YLS Community Law Week..,. :. 41 Peggy O’Neal Haines YLS Chairman’s Report . ~, ...... ’. .... Chairman, Young Memorials ...... ~.~.... Lawyers Section ~ Bristol

The Virginia Bar Association Journal (ISSN 0360-3557) is published Editorial Staff quarterly by The Virginia Bar Association, Suite 1515, 7th & Franklin Building, 701 E. Franklin Street, Richmond, Virginia 23219, ds a service Charles E. Friend to the profession. Second,class postage paid at Richmond, Virginia, Editor 23232. POSTMASTER: Send address changes to the above address. Bess Castle Wendell Associate Editor Membership dues include the cost of one subscription to each member of the Robert E. Spicer, Jr. Association. Subscription price to others, $20.00 per year; single copies $5.00. Editor, Young Lawyers Contributions @1988 The Virginia Bar Association JOHN M. RYAN

SEVERALyears ago, at the instance of Bill Dolan, Robert J. Grey, Jr., a partner in Mays & Valentine, then President of the Virginia State Bar, the Virginia follows Bill Dolan as the new President of the Virgin- Commission on Women and Minorities in the Legal ia Commission on Women and Minorities in the Legal System was established as a means of bringing more System. He has served on the ABA’s Commission on women and minorities into the mainstream of bar Minorities since 1986 and is a member of the National activities. Under Dolan,s leadership the Commission Steering Committee of the Minority Counsel Demon- has become a positive force in heightening the stration Project. awareness of the organized bar as to the problems of The Virginia Commission on Women and Minori- women and minorities. ties in the Legal System brings together the aware- This past June at the State Bar meeting in Virginia ness and energy of the Virginia Women Attorneys Beach, the Commission hosted a program highlight- Association and the Old Dominion Bar Association ing an ABA sponsored pilot project designed to bring with the size and growing concern of The Virginia minority lawyers and corporate America together. Bar Association, the Virginia State Bar and the Vir- Known as The Minority Counsel Demonstration Proj- ginia Trial Lawyers Association. Representatives of ect, the program commits seventeen of the nation’s each of these organizations sit on the Commission largest corporations to assigning substantial portions and serve, collectively, to bring the Commission’s of their "outside" work to minority firms and minor- work to the attention of the bar, the judiciary and the ity lawyers, Although the project’s architect, Michi- public. gan Supreme Court Justice Dennis Archer and top The Commission’s projects have included the spon- corporate counsel from AEtna Life and Casualty and sorship of programs at the state judicial conferences Chrysler Corporation were panelists, the program designed to address judicial attitudes toward women drew little notice beyond those who were actually and minorities and a study, recently delivered to the present. I want to take this opportunity to bring to our Virginia Supreme Court, dealing with the selection membership’s attention the work of the Virginia and use of judicially appointed, quasi-judicial officers Commission on Women and Minorities arid the vital such as Commissioners of Accounts. importance of our less widely-known bar associa- Working with the ABA, the Commission also par- tions, the Old Dominion Bar Association and The Vir- ticipates in nationwide projects which benefit minor- ginia Women Attorneys Association. ity and women lawyers and, ultimately, the public. Virginia’s minority bar and women’s bar are Commission President Grey has brought the ABA’s actively pursuing the goal of opening the legal profes- Minority Counsel Demonstration Project home to Vir- sion to all. At a recent national conference in Dallas ginia. Lawyers across the nation will watch the proj- titled, "Sharing the Opportunity/Sharing the R~ ect with interest. ~vards--A National Conference to Promote Minority Where the Virginia Commission on Women and Involvement in the Legal Profession" where Justice Minorities in the Legal System is a new and innova- Archer’s Minority Counsel Demonstration Project tive factor in opening the doors to legal practice in was announced, Virginians played a significant role. Virginia, other lawyer associations have been serving Our Lieutnant Governor, L. Douglas Wilder, was a their constituencies for years. The Old Dominion Bar principal speaker; Professor Okianer C. Dark of the T. Association, the Virginia Women Attorneys Associa- C. Williams law faculty was an active participant and tion and the Virginia Association of Black Women the Richmond firm of Wilder, Gregory & Martin was Attorneys are active forces in their respective spheres. one of twenty firms throughout the nation chosen to Questions are frequently asked, "Why are there so work with the project’s "Fortune 500" participants. many bar associations? Why can’t all lawyers be in one bar association?" Generally, the question is framed in reference to either a women’s bar or a minority bar group. The answer of course is that such bar associations originated because existing bar groups were either closed or were unresponsive to the significant and rapidly growing concerns of women and minorities. Years ago when Spottswood W. Robinson, III and Oliver W. Hill were beginning their practice in Rich- mond, our state-wide associations were not seeking their active participation. Likewise, as women law- yers began to enter the law schools and seek jobs with the state’s law firms, their particular problems were not the subject of bar association attention. We are late in developing a concern for all of Virginia’s law- yers and our recent efforts to become responsive to Virginia’s minority and women lawyers do not and should not diminish the stature of minority and women’s associations. "Specialty" bars of tax lawyers, maritime lawyers and the like are seldom questioned. So also, bar groups whose specialty includes serving the interests of a particular ethnic group or gender should not draw particular scrutiny. An association whose efforts are focused on particular issues may provide far more however, that membership in The Virginia Bar Asso- in the way of tangible results than a bar that is all ciation may be central to the involvement of women things to all lawyers. The Virginia Bar Association is and minorities in the legal system and presents an engaged in a wide range of projects including sub- opportunity that should not be cast aside. stance abuse, alternative dispute resolution, appellate The VBA, representing perhaps a third of Virgin- capacity and legislative reform. It is unlikely that it ia’s licensed lawyers, offers a ready opportunity for can concentrate its efforts in areas of concern to an energetic young attorney to progress through the women attorneys with the same degree of intensity as committee and section system to a leadership posi- can the Virginia Women Attorneys Association. The tion. Its membership includes those who voluntarily Virginia State Bar, with the primary missions of devote their time and effort to improving our legal licensing and disciplining the state’s lawyers, would system. The only requirements for membership are be hard pressed to match the endeavors of the Old the payment of dues and hard work. It is an opportun- Dominion Bar Association which has dedicated itself ity to meet and work closely with leadership in the to the interests of black lawyers for forty-eight years. legal community and to gain worthwhile exposure in To this point, I have addressed primarily the Virgin- solving problems of common concern to all lawyers. ia Commission on Women and Minorities in the Legal The Virginia Bar Association actively seeks to in- System, The Virginia Bar Association, the Virginia crease the participation of women and minorities in Women Attorneys Association and the Old Dominion its activities. Bar Association and their roles in increasing the This association has assumed the responsibility of involvement of women and minorities in the legal speaking for all of Virginia’s lawyers before the system. A closely related question, as yet not ad- General Assembly and the United States Congress; to dressed, concerns increasing the involvement of wo- be effective in fulfilling that duty it needs the help of men and minorities in The Virginia Bar Association. all of Virginia’s lawyers. In the past our Association It is no doubt a problem for a minority or a woman has been viewed by many as a closed shop. We suffer attorney, who is not employed by a large firm, to bear from being stereotyped as a social bar largely made the expense of belonging to a mandatory bar, a bar up of big firm, blue-stocking, defense lawyers. I urge which represents his or her gender or ethnic concerns Virginia’s women and minority lawyers to look and, on top of that, a third, voluntary association beyond that image and to join in our effort to serve such as The Virginia Bar Association. I would argue, the public and our system of justice. WII,IJIAM B. SPONG, JR.

John Marshall--The Early Years

AMONG the Virginians who were major contribu- tenure as Chief Justice. The viewer of those portraits tors to the founding of our nation, relatively little is will see a fine looking man, mildly stern in counte- known, or has been written, about John Marshall, nance with scarcely a trace of the twinkling eyes and particularly concerning the years prior to his appoint- engaging smile that marked Marshall as a young ment as Chief Justice of the Supreme Court. soldier or a novice at the bar.4 It is difficult to picture Albert J. Beveridge’s lengthy biography: The Life the lanky, unkempt, fun loving young man of earlier of John Marshall,1 is prefaced: "Less is known of days. On the other hand, law students will have no Marshall, however, than of any of the great Ameri- difficulty in recognizing in those portraits a man cap- cans.’’2 Marshall contributed to that fact. He kept few able of leading the Supreme Court through the series personal records and wrote little about himself. The of remarkable opinions that established firmly the laconic autobiographical sketch,3 written reluctantly right of that Court, by judicial review, to test the con- by Marshall at the age of seventy-two for Justice stitutionality of state and federal laws, and interpret Joseph Story, does cover, if briefly, his years as a boy, the extent of federal powers under the new Constitu- soldier, lawyer and legislator. There are factual differ- tion. ences between Marshall’s recollections and Beve- John Marshall’s accomplishments appear more re- ridge’s research, but they do not inhibit a reader from markable after examining the meager historical facts forming certain conclusions about young John Mar- available. He was born on the frontier in what is now shall. Fauquier County, first of the fifteen children of Tho- One will see little of young Marshall in the numer- mas Marshall and Mary Randolph Keith. There was ous portraits, painted at the zenith of his remarkable no nearby school. His earliest education, outside of that supervised by his parents, came at fourteen when the boy was sent to study under Rev. Archibald Campbell in Westmoreland County.5 After a term of instruction under Mr. Campbell, young Marshall was brought home and placed under the care of another Scot, James Thompson, pastor of the local parish who resided at the Marshall home.~ It was under Mr. Thompson that Marshall began to read the Latin classics. For some time Thomas Marshall had ac- quired and borrowed books to expose his son to Eng- lish literature. It is said that young Marshall had committed to memory much of Pope’s writings by the age of twelve.7 When his tutelage under Rev. Thomp- son ended, John Marshall continued his studies with no aid but a dictionary. Thomas Marshall was among the early subscribers to the first American edition of Blackstone’s Com- mentaries. The sometimes member of the , now a county clerk, bought these law books for himself but shared them with his eldest son. The father sensed the inevitability of war with Brit- ain. The son responded by dividing his study time between Blackstone and the manual of arms. In a short time, Blackstone was placed aside and the nineteen year old John Marshall became a lieu- tenant in the Culpeper Minute Men. A position of

4 leadership at a tender age for the son of Thomas Mar- shall should not surprise. Young Marshall’s contem- poraries were unschooled country boys, skilled with the rifle but ignorant of martial arts or the political reasons behind the forthcoming war with Britain. The young lieutenant is described drilling his charges at their first muster, then lecturing them at length on British tyranny, and finally conducting competitive sports such as racing and jumping in which he excelled. A witness at that muster wrote of Marshall: "... Never did a man possess a temper more happy, or if otherwise, more subdued and better disciplined.’’8 The Culpeper Minute Men had little time for prepa- ration. They soon marched south to join Patrick Hen- ry’s abortive attempt to take back the gunpowder Governor Dunmore had removed from the powder horn at Williamsburg. From Williamsburg, Marshall and his regiment crossed the James and drew up at Great Bridge where they helped repulse Dunmore’s grenadiers and loyalists in the first battle fought on Virginia soil. Young Marshall re- mained in the area long enough to witness the burn- ing of Norfolk, and then returned home in early 1776. The return to Fauquier was short lived. Within a William B. Spong, Jr. is Dudley W. Wood- bridge Professor of Law Emeritus at the Mar- few months, both Marshall and his father traded the shall-Wythe School of Law of the College of Wil- hunting shirts of the militia for the blue uniform of liam and Mary where he served as Dean from the , and headed north to join 1976 to 1985. He attended Hampden-Sydney ’s army in . Young Marshall College and has his LL.B. degree from the Uni- fought at Brandywine and Germantown, and spent versity of Virginia. He was a graduate student the terrible winter of 1777-78 at . In the at the University of Edinburgh. midst of the misery of that encampment, Marshall’s Dean Spong has been a Partner in the Ports- good humor was a constant source of encouragement mouth firm of Cooper, Spong and Davis; has served in the Virginia House of Delegates, the for both officers and men. A fellow officer who Virginia State Senate, the United States Senate; recorded the deprivation at Valley Forge wrote of and was General Counsel, Commission on the Marshall: "He was the best tempered man I ever Organization of the Government for the Con- knew. During his sufferings at Valley Forge nothing duct of Foreign Policy. discouraged, nothing disturbed him...-9 Dean Spong was President of The Virginia At Valley Forge, John Marshall served as Deputy Bar Association in 1976. He has been a guest Judge Advocate. His earliest judicial efforts settled scholar and lecturer at numerous law schools in the United States and in Europe. disputes among officers and men. After patiently lis- tening to both sides, he reduced his findings to writ- ing. The autobiographical sketch does not mention daughters eagerly awaited the arrival of the gallant, Valley Forge. Yet the determined views later ex- young soldier. Their expectations were not met when pressed in favor of a strong central government prob- they beheld a gaunt, loose-jointed, awkward man- ably had their genesis as Marshall watched Washing- nered and disheveled fellow in a slouch hat.~° But ton’s ragged army freeze and starve while a weak Marshall’s appearance did not dim the interest of Congress failed to coordinate military and economic fourteen year old Mary Willis Ambler, an interest support from the various states. instantly reciprocated. Captain John Marshall remained with Washing- There were more officers in Virginia than soldiers ton’s army until the end of 1779, when he was ordered to follow them, and Marshall elected to enroll at the back to Virginia to await further assignment. He College of William and Mary to attend law lectures headed for Yorktown where Colonel Thomas Mar- under newly appointed Professor while shall now commanded. His father’s headquarters awaiting future military assignment. His note book were next to the home of Jacquelin Ambler whose reveals that he was somewhat distracted--one may but his motivation and timing were influenced by his ardent interest in Miss Ambler and her move to Richmond. Marshall intended to begin practice in his native Fauquier, and he qualified before its courts shortly after receiving his license. He was still in the military, however and returned to active service to help repulse the invasion of Virginia by . After Arnold retired to Portsmouth, Marshall, having no wish to continue as a supernumerary, resigned his commission in early 1781 and returned to Fauquier. Efforts to commence practice were again delayed. Cornwallis arrived in Virginia to join Arnold and the Courts were closed. Finally, late in 1781, after the surrender of Cornwal- lis at Yorktown, the courts were reopened and John Marshall, now twenty-six, began the practice of law in the provincial courts of Virginia. The following spring, he was chosen as a delegate from Fauquier to the General Assembly, a development that presaged an eventual permanent move to Richmond and the superior courts, as well as placing him nearer to Mary Ambler. In January, 1783, Marshall married his beloved Polly, a union that lasted nearly fifty years.14 He had find references to "Maria Ambler," "Polly Ambler," been appointed as a member of the Governor’s Execu- "M. Ambler," "Miss M. Ambler" and "Miss M. tive Council, but resigned in 1784 to avoid conflicts Ambler-J. Marshall.’’~1 In addition to lectures, Wythe with his law practice. He was again elected from conducted moot court and moot legislative sessions, Fauquier but continued to reside in Richmond. Mar- giving instruction in both court and parliamentary shall’s first years of practice in Richmond were mildly rules of procedure. The records of the Phi Beta Kappa remunerative. Old friends from Washington’s army Society show Marshall engaged in debate concerning came to him for legal advice. The salary and allowan- the form of government most favorable to Virginia in ces from the General Assembly helped. But the prac- June, 1780.~2 tice began to grow, as did Marshall’s reputation, after The capital of Virginia was moved to Richmond. Edmund Randolph, upon being elected Governor, Jacquelin Ambler was appointed Treasurer of Vir- referred his clients to the young lawyer from Fau- ginia and moved his family from Yorktown. The term quiet.15 at William and Mary ended on July 1, 1780, and John What was the key to John Marshall’s rapid rise to Marshall elected to end his studies. He went to Rich- leadership of the Richmond bar? William Wirt, a law- mond and obtained a license to practice law from yer and sometime literary figure, gave a significant Governor , his distant cousin and character portrayal. After an unflattering description future adversary, after meeting the requirements of of Marshall’s physical appearance, loose-jointed and the day.13 inelegant,~ Wirt wrote: "... He possesses one origi- And so the formal education of John Marshall nal and almost supernatural faculty; the faculty of ended. He had less than a year with Rev. Campbell, developing a subject by a single glance of his mind an undetermined but brief period of tutelage from and detecting at once the very point on which every James Thompson and the one term under George controversy depends ..." and "Possessing, while at Wythe. Marshall qualified to practice law with most the bar, this intellectual elevation, which enabled him of his education having been obtained from his father to look down and comprehend the whole ground at or through self-study. At twenty-four, he possessed an once, he determined and without difficulty on which orderly mind, enquiring enough to assure continued side the question might be most advantageously self study, a rich knowledge of literature and a mild approached and assailed.’’17 acquaintanceship with Latin. The young soldier had Perhaps the faculty described by Wirt was best probably thought of becoming a lawyer for some time, demonstrated in Ware v. Hylton, the test case for sev-

6 eral British debt claims in which Marshall repre- sented the Virginia debtors. His logical arguments, immediately defining the questions to be decided, are preserved in notes kept by Justice Iredell and William Tilghman.18 The British debtor appeal was Mar- shall’s only appearance before the Supreme Court. Although he lost, Marshall gained a national reputa- tion.19 In 1787, after a period devoted solely to a growing law practice, Marshall returned to the General Assem- bly, this time from Henrico, the county in which Richmond was located. Almost immediately he enter- ed into discussions regarding the future of the Con- federation. Marshall was in accord with James Madi- son and others who believed that a stronger union was necessary to achieve a more efficient federal government, and favored the call for a convention to revise the Articles of Confederation. After the work of the Philadelphia Convention was completed, Marshall resolved to support the proposed constitution, and to become a candidate for the ratifi- cation convention. Despite strong anti-federalist sen- timent among a majority of the citizens of Henrico, Marshall, whose support of ratification was well known, was elected to represent Henrico with Gover- nor Edmund Randolph.2° Observers attributed Mar- work side by side. No votes were changed. The new shall’s election to his personal popularity. Constitution was approved by a narrow margin. John The thirty-two year old Marshall was a forceful Marshall, who had already risen to prominence at the advocate for ratification. Beveridge describes him as Richmond bar, had further distinguished himself as "probably the best liked of all the members of the an advocate and orator in an historic arena. Convention" and looking, "more like a poet or an After the Constitution was adopted, Marshall hoped artist than a lawyer or statesman".21 Marshall’s to return full time to his law practice, but yielded to remarks were mostly in reply to and public wishes and continued to serve in the legislature , the leaders of the anti-Federalists, until the spring of 1791, a period when the Federalists who had attacked the provisions for direct taxation were in the minority. In 1792, John Marshall declined and the power given the President to call out the mil- to offer for re-election and entered a time when he itia. He spoke from conviction, gleaned from expe- could give undivided attention to his practice. He was rience when Washington’s struggling army had con- associated as appellate counsel by lawyers from near stantly faced defeat while an ineffective Congress and far to argue their cases before the state’s highest sought to raise money and troops. court. Marshall also developed a large practice in the John Marshall’s principal contribution to the de- newly created federal court. He became the most bate was prophetic. Following the responses to an sought after advocate in Virginia and was involved infirm who had explained the in nearly every important case being heard in the Judiciary article, Marshall calmly replied to charges Commonwealth. by Henry and Mason that a national judiciary would Fate again intervened to draw Marshall back into destroy the state courts and that concurrent jurisdic- public life. In 1795, although he had not offered as a tion for state and federal courts was not possible. candidate, Marshall was put forward, voted upon, The debate on the judiciary was pivotal and came and, in effect, drafted to return to the Virginia legisla- in the closing days of the Convention. The anti- ture. Shortly thereafter, President ap- Federalists had counted upon fear of a national court pointed John Marshall as one of three special envoys system to change votes and deny ratification without to negotiate with the mercurial Tallyrand following prior amendment. Marshall calmly explained the our proclamation of neutrality in the war between need and feasibility of the proposed federal judicial England and France. Marshall reluctantly accepted system, and how the federal and state systems could the appointment, perhaps sensing that he might

7 never return to his law practice. He had previously District Court Building in Richmond and another in the rare declined an appointment ~as Attorney General by book room of the Marshall-Wythe School of Law Library, Col- lege of William and Mary. President Washington.~ 5. It is believed that Campbell had earlier taught Thomas Marshall stood up to Tallyrand in a manner that Marshall and , and that one of John Mar- preserved the dignity and honor of the American peo- shalrs schoolmates at Rev. Campbell’s was James Monroe. ple. Upon returning from France, he was greeted and 6. A. J. Beveridge has Thompson tutoring John Marshall prior to Rev. Campbell, This is contrary to Marshall’s recollec- feted as a national hero. Marshall was offered a seat tion. Mr. Thompson went back to England for a period, and on the Supreme Court and declined. Later, he was returned to Virginia where he resumed his clerical and tutorial summoned to where Washington, the duties. It is possible that Marshall studied under Thompson before and after his termwith Rev. Campbell. man other than his father whom Marshall admired 7. A biography says that Marshall was also familiar with most, persuaded him to stand for Congress. After a Dryden, Shakespeare and Milton prior t~ leaving for Rev. brief period of congressional service, Marshall ac- Campbell’s Academy. Alan B. Magruder, John Marshall. (Bos- cepted an appointment as Secretary of State, and ton and , Houghton Mifflin, 1899) p. 7. 8. Ibid, p. 11. within a year became Chief Justice of the United 9. Ibid, p. 21. States. His performance in that capacity occupies a 10. Time and Marshall’s pleasing personality soon thawed larg~ share of American history during the first third the initial reactions to his dress and manner. "His gift of popu- of the nineteenth century.. larity was as great, it seems, among women as among men and at the domestic fireside as well as in the armed camp." Beve- It is true that less is known about John Marshall ridge, Volume 1, p. 152. than other great Americans. But. the available infor- 11. This is Beveridge’s theory. Others believe that the notes in mation reveals a constancy in the opinions of those Marshall’s book might have been taken in circumstances other who observed Marshall during his formative years. than in Wythe’s classroom. See Charles T. Cullen, "New Light on John Marshall’s Legal Education and Admission to the Through their eyes, we see a modest, fun loving Bar," American Journal of Legal History, vol. 16, 1972, 345-351. young man who was without vanity, ostentation or 12. W. and M. Q., IV, 236. guile. 13. The Governor did not administer the granting of licenses We learn that Marshall, despite a sparse formal to practice law in pre-Revolutionary Virginia. It is assumed that the process for Marshall started with a petition and letters to education, was possessed of a disciplined, logical Jefferson about character, education and experience. If such mind and the natural ability to get at the heart of a letters were satisfactory, the Governor referred the application matter. We understand his rapid rise to eminence at to two lawyers who would examine the petitioner. If the exa- the Virginia bar, and marvel at’his mastery of rh~ miners found the petitioner to be qualified, then the Governor, with the advice of his council, would grant the license. toric. We also see that the nationalism so firmly 14. Marshall’s devotion to Polly Ambler was constant. She espoused by John Marshall in later years had its became an invalid early in their marriage, and his attentive- inception around the campfires .of Washington’s ness grew with the years. struggling army. The young officer saw that defense 15. Some observers, hoping for evidence to strengthen Mar- and commerce could only be maintained by a strong shall’s limited legal training have speculated that he practiced in Randolph’s office for a period. But such has never been estab- central government, lished. The young soldier and suitor seems the most 16. Joseph C. Robert, "William Wirt, Virginian," The Vir- human of our legendary heroes. The young lawyer ginia Magazine of History and Biography, Vol. 80, no. 4, seems to have struggled constantly to escape public October 1972. 17. William Wh-t, The British Spy, pp. 178-181. office and serve only the demands of his law practice. 18. An excellent discussion of Ware v. Hylton, including notes John Marshall’s abilities were too vast to be insulated concerning Marshall’s arguments, may be found in The Papers from public service. The qualities that distinguished of John Marshall, (Chapel Hill, 1987) Vol. V, pp. 295-329. The publication of Marshall’s papers is a continuing project, spon- Marshall as a young lawyer--his natural ability to sored by the College of William and Mary in Virginia and the distill a problem and his effortless civility--carried Colonial Williamsburg Foundation. him steadily to greatness. 19. The national attention Marshall’s argument received is more impressive when one considers that Patrick Henry, James Innes and Alexander Campbell, three renowned orators, also FOOTNOTES appeared for the debtors in Ware v. Hylton. 20. Gov. Randolph had not made his position on ratification 1. Albert J. Beveridge, The Life of John Marshall (Boston: public. He had refused to sign the proposed constitution at Phil- Houghton Mifflin, 1919) 4 Vols. adelphia and it was assumed that he would oppose ratification. 2. Ibid. Vol 1, v George Washington persuaded Randolph to support ratification 3. An Autobiographical Sketch by John Marshall. (New but the Governor did not announce his position until the Con- York: Da Capo, 1973). vention had begun. Thus, anti-Federalist Henrico County was 4. Among the b~tter portraits of Chief Justice Marshall are represented at the convention by two supporters of ratification. one in the chambers of Judge Robert Merhige at the Federal 21. Beveridge, Volume 1, p. 408, 409.

8 John Marshall House is VBA Centennial Project

I’~ECOGNIZING the pre-eminent role played by the John Marshall Foundation in June, 1987. In con- former U.S. Supreme Court Chief Justice John Mar- junction with the Association for the Preservation of shall in American history, The Virginia Bar Associa- Virginia Antiquities, the Commonwealth and private tion has committed to major renovation of his Rich- citizens, the VBA, through the Foundation, has mond home as part of the Association’s Centennial assumed primary responsibility for ensuring the res- Anniversary. toration of this national landmark that was Mar- Celebrating 100 years of service to the legal profes- shall’s home for 45 years. sion and to the administration of justice in Virginia, "Since 1911, The Virginia Bar Association has been the Association took the lead in seeking to restore the a strong supporter of the John Marshall House," said Marshall residence when it supported formation of Alexandria attorney Andrew P. Miller, Foundation president. "It is fitting that the VBA membership has chosen this as a priority project for its centennial year and as a permanent memorial to the former Chief Justice."

Built by John Marshall between 1788 and 1790 to house his growing family, the substantial two-and-a- half story brick house on the corner of present-day 9th and Marshall Streets in Richmond was home to the fourth Chief Justice of the Supreme Court for nearly half a century. After Marshall’s death in 1835, the house remained in the possession of Marshall’s descendants until early in the 1900’s when it was acquired by the City of Richmond. In 1911, the Association for the Preserva- tion of Virginia Antiquities (APVA) was entrusted with the preservation of this historic home as a national monument to Marshall’s life and achieve- The foregoing information was provided to the Jour- ments. nal by J. Robert Nolley, Jr. of the John Marshall Today, the Marshall home, now a National Historic Foundation, Andrew P. Miller, Chairman. Landmark, sits in the shadow of a new modern courts

9 building--a position which has threatened its safety. household artifacts once owned by Marshall. The Sunlight has been restricted, causing water and mold objects have been returned to the site through gener- damage on interior walls. ous donations and loans by the Chief Justice’s de- The Marshall house has undergone remarkably few scendants. In their variety and scope, these artifacts changes since Marshall’s ownership. It still resem- illuminate virtually all aspects of Marshall’s life, bles its originial appearance, combining such Federal from his legal career to his family and social life. characteristics as a shallow Roman temple pediment, At the core of the collection is furniture of various and Neoclassical motifs stylish at the time of con- forms, ranging from beds, wardrobes and wash- struction with conservative Georgian elements. Inter- stands to a lady’s desk and French sewing box once ior changes to the house were carried out by Marshall owned by Marshall’s wife, Polly Ambler Marshall, during his 45-year residence there, including the and a great three-part breakfront which once again introduction of an arched opening between the north- stands in the largest room of the house. The furniture east parlor and the 9th Street entrance and the addi- is supplemented by numerous smaller objects reflect- tion of a narrow passage on the second floor. ing the activities which would have taken place in the Marshall household. Marshall’s dining table and chairs are thus set with the family’s French porcelain, silver and glassware to depict family entertainments, and card tables and a silver punch ladle suggest social activities which Marshall and his colleagues might have engaged in after one of Marshall’s famed lawyer’s dinners in the Great Hall of the house. Some objects are notable for their associations with Marshall’s career, including portions of his personal library, his portable writing desk, a French mantle clock purchased during his diplomatic mission to France in 1797, and the judicial robes he wore as Chief Justice between 1801 and 1835. Of more per- sonal significance to Marshall are his wife’s wedding gown and the silver coffeepot and sugar dish Mar- shall had commissioned from a Richmond silver- smith for his son and daughter-in-law. In order to ensure the proper setting for Marshall’s furniture and household goods, extensive research was undertaken which dictated, where possible, res- toration of the original paint colors, interior shutters and wallpaper. During one visit to Richmond, former Chief Justice Warren Burger told a member of the newly formed John Marshall Foundation that he thought the Mar- shall house was significant not only to Richmond and to Virginia, but to the entire nation. "He told me that in Washington there is a Washing- ton Monument and also a memorial to Thomas Jef- Early insurance policies covering the house helped ferson, but no major memorial to Marshall," said historians trace the modification of the property from Mary Douthat Higgins, who also serves on the board the 1790’s to the 1850’s and are also the primary of the APVA. "Marshall, he said, was of equal stature source of information regarding the outbuildings which to both. Actually, the Marshall house here in Rich- once housed many of the functions of an early 19th- mond is the only thing we have in the way of a century household, including the laundry, kitchen, memorial." stable and Marshall’s law office. The VBA began planning for more active participa- Although these outbuildings have long since dis- tion in the restoration efforts when it learned that appeared, the house itself has been painstakingly re- significant structural work would be required in order stored to its original appearance. The house now cen- ters on the diverse collection of furnishings and (continued on page 24)

10 ROBERT ACOSTA-I JEWIS

Medical Malpractice Caps and the Right to a Jury Trial in Civil Actions

I. Introduction violated the right to a jury trial in civil actions, has IN recent years many states have sought through a ramifications far beyond Virginia.1 An examination of the jury trial right in Virginia variety of mechanisms,to cap the amount recoverable in medical malpractice and other actions. See, e.g.~, reveals that the Boyd decision is p~emised upon a misunderstanding of the state constithtional right to Cal. Civ. Code § 3333.2 (Deering 1988) ($250,000 cap a jury trial, and thus calls into question the persua- on noneconomic damages); Ind. Code Ann. § 16-9.5-2- sive value of the opinion’s broad language. 2 (Burns 1987) ($500,000 cap on total damages, $100,000 cap pe~ qualified health care provider); S.D. Virginia Code § 8.01-581.15 provides: Codified Laws Ann. § 21-3-11 (1987) ($1,000,000 cap on In any verdict returned against a health care general damages, no limitation on special damages); provider in an action for malpractice where the Va. Code § 8.01-581.15 (Repl. Vol. 1984) ($1,000,000 cap act or acts of malpractice occurred on or after on total damages.) October 1, 1983, which is tried by a jury or in The proliferation of so called medical malpractice any judgment entered against a health care caps in recent years has in large part been the result provider in such an action which is tried with- of legislative determinations that escalating awards out a jury, the total amount recoverable for any injury to, or death of, a patient shall not exceed in malp~ractive actions were having a detrimental one million dollars.2 effect on the ability of the health care industry to pro- vide health care services to a state’s citizens. See, e.g., Va. Code 8.01-581.15. 1976 Va. Acts Ch. 611; 1975 Cal. Stats 2d Ex. Sess. The Virginia Constitution’s provision guaranteeing Ch.2, § 12.5(1)(b). Once erihcted, the caps have predic- a jury trial in civil actions provides simply: "That in tably been subject to a large number of constitutional controversies respecting property, and in suits between challenges. See, e.g., Fein v. Permanente Medical man and man, trial by jury is preferable to any other, Group, 38 Cal. 3d 137, 695 P.2d 665, 211 Cal. Rptr. 368 and ought to be held sacred." Va. Const. Art. I, § 11. (cap upheld, appeal dismissed, 474 U.S. 892 (1985)); Challenges to the cap on the basis of the jury trial Johnson v. St. Vincent Hosp., Inc., 273 Ind. 374, 404 guarantee arise from the contention that the right to a N.E.2d 585 (1980) (cap upheld); Pfost v. State, 713 P.2d jury trial, in addition to guaranteeing that a jury will 495 (Mont. 1985) (cap found unconstitutional); Carson resolve disputed issues of fact, also secures the right v. Maurer, 424 A.2d 825 (N.H. 1980) (cap found uncon- to have specific legal effect given to facts determined. stitutional). - Opponents of the cap argue that if liability is found, Because the constitutionality of caps is the subject the eventual award must equal the jury’s assessment of widespread debate, legal actions challenging them of damages, and that a law mandating a contrary have drawn much attention, and any opinion consid- result violates the jury trial guarantee. Unless the ering the constitutionality of one state’s cap has a jury trial provision guarantees that a specific legal significant impact in other states where there is either remedy follows from the jury’s resolution of facts, a cap in force or where the legislature is considering a opponents assert, the right to a jury trial is rendered cap. It is for this reason that the recent case ofBoyd v. meaningless, Bulala, 647 F. Supp. 781 (W.D. Va. 1986) ("Boyd"), in The purpose of this article is to examine the Virgin- which the district court concluded that Virginia’s cap ia Constitution’s jury trial guarantee in an effort to d~termine whether Virginia’s statutory limit on The author gratefully acknowledges the assistance of awards in malpractice cases infringes upon that gua- Patricia M. Schwarzschild, Member, Hunton & Wil- rantee. The article concludes that the cap does not liams, J.D., 1975, , in the prepa- infringe upon the jury trial guarantee because the ration of this article. provision guarantees the process of assessment of

11 conclusion that the jury was incorrect in its assess- ment of the facts, but rather is the legal result that follows from those facts as assessed. It is the applica- tion of law to undisputed facts, a process traditionally within the province of the court not the jury. See Forbes, 130 Va. at 260, 108 S.E. at 20. As a result, the cap does not violate the right to a trial by jury. In fact, it is likely that a legislative enactment pro- hibiting an award of damages at the conclusion of a full trial on the merits in which a jury finds for the plantiff and assesses damages, while violating other provisions of the Virginia Constitution, would not implicate the right to a jury trial, so long as the depri- vation of a remedy was based, for example, upon a legislative policy determination, and not upon a reas- sessment of facts already considered by the jury. This conclusion is based upon both a characterization of the judicial process as a series of distinct stages, with the jury trial guarantee protecting an element of the process, and not guaranteeing an end, and upon an examination of the historical underpinnings of the jury trial guarantee in Virginia.

II. The Role of the Jury in the Judicial Process Robert Acosta-Lewis received a B.A. in Phi- losophy from Randolph-Macon College and a The judicial process maintains a distinction between J.D. from the College of William and Mary, the resolution of disputed facts, in this instance the Marshall-Wythe School of Law. He is an asso- assessment of disputed damages, and the award that ciate in the Richmond office of Hunton & is available to a litigant when facts are no longer in Williams. dispute. This distinction has always been evident in both statutory and case law, see, e.g., Forbes & Co. v. S. Cotton Oil Co., 130 Va. 254, 260, 108 S.E. 15, 20 (1921), and is recognized and reinforced by a judicial facts but it does not guarantee that any eventual process comprised of distinct stages. Each stage in award will equal that assessment. The jury trial pro- the process addresses certain aspects of dispute reso- vision in Virginia’s Constitution secures two rights lution. At the fact finding stage, for example, the par- for a litigant. First, the provision guarantees that a ties present their understanding of the facts to an jury will resolve disputed facts. Forbes & Co. v. S. Cot- independent fact finder, the jury, and submit disputes ton Oil Co., 130 Va. 245, 260, 108 S.E. 15, 20 (1921). to the jury for resolution. At the remedial stage of the Second, as a necessary corrolary, the provision gua- process, on the other hand, the law is applied to facts rantees that subsequent events in the judicial process that are, for purposes of the trial, undisputed.3 will not be based upon a reassessment of the jury’s The remedial stage of the judicial process is not factual conclusions. If these two requirements are met initiated until completion of the process of fact resolu- then the jury trial guarantee imposes no additional tion, that is, the law cannot be applied to undeter- limitations or requirements upon the effect that may mined or disputed facts. At the remedial stage, the be given to facts through a legislatively delineated facts are evaluated in light of a variety of interests, remedy. including among other things, the need to compen- The application of law to facts, in this instance sate the injured party, and the demands that society through the imposition of the statutory cap, is not the place upon those who choose to enjoy its benefits. The resolution of disputed facts, and, therefore, is not a remedial stage of the judicial process injects into dis- step in the judicial process where the constitution pute resolution society’s interest in the outcome of a demands that the jury participate. In addition, a trial, and balances the sometimes competing interests court, when considering the cap in making an award, of the individual and society. A medical malpractice does not reassess the jury’s factual determinations. trial involving an application of the medical malprac- The imposition of the cap is not the result of a court’s tice cap provides a clear example of both this process,

12 and also of the rights secured by, and the limitations ent guarantees apparently mandate conflicting ends. of, the jury trial guarantee. In the case of the jury trial provision, for example, Opponents of the malpractice cap focus their atten- this approach places the guarantees of the provision tion on linking the award in a malpractice action, in direct conflict with the doctrine of separation of that results in part from application of the cap, to the powers. While opponents of the cap assert that the constitutionally protected province of the jury. If, as a jury trial guarantee requires that a jury’s assessment result of the cap, an award does not mirror the jury’s of damages equals the eventual award, the doctrine of factual assessment of damages, they assert, then the separation of powers requires that the legislature whole process, including the jury’s role in that proc- establish through laws the remedies available for cer- ess, is flawed. Because there are distinct elements in tain wrongs and that the courts follow the law the process of dispute resolution, however, an unde- enacted by the legislature. Thus when a jury trial sired result in a trial does not implicate the process as challenge is brought against the cap, a provision th.at a whole. Rather, if one disagrees with the end result of protects the fact-finding process is called upon to a certain trial, a challenge to that~result must begin assess the propriety of a legislative policy decision with identification of the factor that put the undesired concerning the effect of facts at law. imprint on the end result, and must then address that Protections afforded the judicial process by the con- factor in light of the applicabl~ constitutional protec- stitution must remain distinct in their roles to allow tions. If this process does not identify as a contributor the constitution to be interpreted in a consistent to the undesired result either a refusal to permit the manner. In the case of the jury trial provision this jury to assess facts, or a reassessment of facts pre- means that once the jury has resolved the factual dis- viously determined by a jury, then the jury trial gua- putes, the provision prohibits other factors that result rantee is not implicated. in the award of damages, such as the applicable law, To link a particular result to an abrogation of the from usurping the role of the jury by reassessing guarantee, therefore, the challenger must show a facts. The guarantee does not, however, infringe upon cause and effect relationship: That the challenged areas of the judicial process, such as the effect of facts result .can be traced either to a distortion of the judi- at law, that are the province of other constitutional cial process at the stage where the jury is constitu- guarantees. This interpretation of the jury trial provi- tionally guaranteed the power to resolve factual dis- sion is supported by an examination of the historical putes, or to a subsequent reassessment of the jury’s basis of the guarantee. factual conclusions. Because the challenged result in III. The Historical Underpinnings of the case of challeng.es to medical malpractice caps the Jury Trial Guarantee does not follow from a reassessment of the facts the necessary cause and effect relationship does not exist. The brevity of Virginia’s jury trial guarantee neces- A number of challenges are appropriate in address- sitates looking to sources, other than the provision ing the effect of caps upon facts as assessed. Substan- itself to understand its perimeters. The Vir~nia tive due process, special legislation, and equal protec- Supreme Court has provided some guidance in this tion are a few.4 The right to a jury trial is not on the area by concluding that the scope of the rights list, however, because when the cap is applied, it is secured by Article I, § 11, and the type of actions to done in a manner that leaves the process by which which the rights attach, are to be determined through facts are resolved and the facts themselves, as distin- analysis of the jury trial right existing in 1776, when guished from the effects of the facts at law, undis- the provision was adopted. Bowman v. Virginia State turbed. The operation of the cap, therefore, does not Entomologist, 128 Va. 351, 105 S.E. 141 (1920); see implicate the jury trial guarantee. also A.E.D. Howard, Commentaries on the Constitu- Challengers of the medical malpractice cap suggest tion of Virginia at 246-47 (1974). Only those rights by their arguments that the judicial process is a sin- encompassed within the right to a jury trial in 1776 gle entity, the integrity of which is dependent upon, are protected by Article I, § 11, today. Thus, Virginia’s and subject to the constraints of the jury trial guaran- medical malpractice cap does not violate the jury trial tee. From this perspective, when one does not distin- guarantee unless a historical foundation exists that guish between the various stages of the judicial proc- establishes the power of the jury to extend beyond ess, constitutional protections such as the jury trial resolving disputed facts to include the power to guarantee become guarantors of ends and not means. determine the legal effect of facts. Such a position leads inevitably to confusion as con- While the evidence is clear that the jury trial provi- stitutional provisions are forced to address matters to sion historically secured the right to have disputed which they are unsuited and unintended, and differ- issues of fact resolved by the jury, Forbes & Co. v. S.

13 Cotton Oil Co., 130 Va. 245, 260, 108 S’.E. 15, 20 (1921), would upset this syllogism by mischaracterizing a there is no historical basis for the assertion that the legal question as factual to bring it within the pro- provision secures additional rights. Challengers of vince of the jury. As the Court in Forbes .stated, " ’It the cap are correct in noting that, by necessity, part of would require very clear and positive enactment to the right to have the jury resolve disputed facts is the show that the legislature had changed the power of guarantee that the jury’s assessment will be respected tribunals administering the law, by depriving courts throughout the judicial process. This statement, how- of their judicial authority and entrusting the juries ever, must carry with it the limitation that only the with such functions.’ "Forbes, 130 Va. at 265, 108 S.E. right guaranteed in the first instance is the right gua- at 22 (quoting Meade v. Meade, 111 Va. 451, 69 S.E. ranteed to be respected. It is for this reason that a 330 (1910)). Similarly, it would require very clear evi- legislatively enacted remedy that has no bearing on dence concerning the meaning of the jury trial gua- the judicial process until after the jury has fulfilled its rantee to justify construing it in a manner that would function, and that does not question a jury’s factual in many instances prohibit the legislature from meet- determinations, although it does mandate a result ing its mandate as a representative of the people, and that does not mirror those determinations, does not that would prohibit the court from giving effect to infringe onthe rights secured by the jury trial provi- that mandate. The evidence is in fact to the contrary. sion. The Court in Forbes concluded that "[i]f there are Further evidence that the jury trial right does not no controverted facts, the law determines the rights of extend to guaranteeing that a specific legal effect will the parties. There is no need for a jury, and neither the follow from undisputed facts is found in the Virginia language nor the spirit of the Constitution guarantees Supreme Court’s conclusion in Forbes that the right a jury trial." Forbes, 130 Va. at 263, 108 S.E. at 21. to ~ jury trial should not be interpreted to usurp the This statement reflects the clear delineation of the role of the court and the legislature in the judicial roles of the court and the jury in Virginia. The appli- process. In Forbes, the Court, quoting Meade v. cation of the cap is another example of the court’s Meade, 111 Va. 451, 69 S.E. 330 (1910), noted that "[i]t duty to examine the determined facts in light of the is imbedded in our jurisprudence that the law of the law, and to apply the remedy p~ovided for by the legis- case must emanate from the court." Forbes, 130 Va. at lature. See Forbes, 130 Va. at 262, 108 S.E. at 20. 266, 108 S.E. at 22. In Pillow v. Southwest Virginia Improvement Co., To illustrate this principle, the Court noted that a 92 Va. 144, 23 S.E. 32 (1895) the Virginia Supreme court’s decision to set aside a jury’s verdict as not in Court held that: accordance with the law did not make another trial by jury necessary. A contrary conclusion would result The provision in any constitution, whether ¯ if there existed a constitutional right to have the jury State or Federal, which guarantees the right of participate in the determination of the appropriate trial by jury, must be read in the light of the circumstances under which it is adopted. Unless legal remedy applicable to undisputed facts, or if the the right of trial by jury existed at the time of application of law to fact was considered a "reas- its adoption, in the particular case, it could sessment" of the ~acts. The Court in Forbes con- hardly be contended that such a right was to be cluded, however, that having resolved disputed facts given by the Constitution[.] the jury had fulfilled its role. Pillow, 92 Va. at 149, 23 S.E. at 33. At the time of the The province of the jury is to settle questions of adoption of the Virginia Constitution, the use of the fact, and when the facts are ascertained the procedural mechanisms known as the "case stated," law determines the rights of the parties. This law is announced by the court or judge. "Every the "demurrer to the evidence," and the "special ver- judgment is the conclusion of a syllogism of dict" illustrated the role of the jury in a civil trial. which the law is the major (unexpressed) and Henderson, The Background of the Seventh Amend- the fact the minor premise. Such being under- ment, 80 Harv. L. Rev. 289, 319 (1966). Of these three, stood to be the law--and such being the fact the "case stated" is the most important in evaluating ideo consideratum est, and then follows the whether a medical malpractice cap violates the right judgment as the conclusion," to a trial by jury because it reflects clearly the delinea- Forbes, 130 Va. at 260, 108 S.E. at20 (citations omit- tion between the role of the court and the jury that ted). has always existed in’ Virginia. To give effect to the assertion that the jury trial The "case stated" was a procedural device that guarantee carries with it the right to have specific bypassed the jury when it became evident in a case legal effect given to the jury’s assessment of the facts that only uncontroverted facts remained. In such an

14 instance, the jury’s role became a mere formality. percent. The Virginia Legislature, however, found Henderson, at 305. During a trial resulting in a "case that this limit was "too much to the detriment and the stated," the jury remained present to resolve factual prejudice of the inhabitants of this country" and by disputes should one arise, but the jury’s presence at legislative decree ruled that damages in the future trial to determine the facts did not empower it in any were not to exceed fifteen percent. Henning’s Statutes way to have specific legal effect given to undisputed at Large, 1660-1682 at 243 (1823). This legislative cap facts. Id. at 305-306. Thus, the "case stated" indicates on recoverable damages was still in force shortly that historically, the jury’s sole function was to prior to the adoption of the Virginia Constitution. See resolve disputed facts. Case law in Virginia has Henning’s Statutes at Large, 1711-1736 at 274 (1820). always recognized this role for the jury. The authority of the legislature to create a remedy In Watson & Hartshorne v. Alexander, 1 Va. (1 that did not mirror the jury’s actual assessment of Wash) 340 (1794), for example, the Virginia Supreme damages was recognized in other ways. The Virgin. ia Court was ~called upon to consider how to enforce a Legislature, for example had the power to provide statutory provision that established a system for scal- statutorily for three times the damages assessed by ing a jury’s assessment of damages. While the Court the jury in certain instances. Hennings Statutes at in Watson, construing one section of the statute, held Large, 1748-1781 at 10 (1819). Presumably, the jury that a court could not examine witnesses and resolve assessed the damages, and the court then determined disputed facts to scale the damages assessed, it the legal effect of that assessment. See also Henning’s accepted the legislature’s power to enact a scale and Statutes at Large, 1779-1781 at 471-474 (1822) (legisla- recognized the court’s power and obligation to adhere tive enactment of a scale to apply to jury’s assessment to that scale. Watson, 1 Va. (1 Wash)" at 354. In to arrive at the amount to be awarded for breaches of addressing the statute the Court noted that its .man- certain contracts.) date could be met either by means of the "special ver- In 1711, the Legislature, in an effort to prevent friv- dict" or by having the court olous and vexatious suits, again exercised its power to control the award resulting from a jury’s assessment instruct the jury as to the point of scaling, sub- ject to the controul [sic] of the court as in other of damages. In the enactment, the Legislature dic- cases, in setting aside the verdict, if their opin- tated, despite the fact that the jury generally assessed ion be disregarded; or perhaps if the evidence costs, that if in a suit the jury assessed damages be heard at the trial, and a general verdict under forty shillings, the plaintiff could not recover given, the words of the law might justify the costs. The Legislature added that if costs were court in entering a judgment for a sum differ- assessed, presumably by the jury, "the judgment shall ent from that fourid b~ the jury.... be void, and shall be amended, upon motion at any time or by the court." Henning’s Statutes at Large, The Virginia Legislature has also historically exer- 1711-1736 at 357 (1820). cised its right to determine the remedy or award that The above are examples of forces in the judi~cial follows from undisputed facts. In fact, as discussed process that determine the effect given to a jury’s below, the Legislature in Virginia, prior to the adop- assessment of damages, but that do so in a manner tion of the Virginia Constitution, enacted statutory that does not reassess the facts, and, therefore, do not caps on recoveries in certain classes of cases. Because violate the right to a jury trial. Thus, at the time of the the jury trial provision secures no greater rights than adoption of the Virginia Constitution, the right to a those that existed at the time of its adoption, Pillow, jury trial did not include the right to have the jury 92 Va. at 144, 23 S.E. at 32, this fact is persuasive in decide the legal effect of its assessment.~ showing that the right to a jury trial is not violated by Finally, many established judicial and legislative a statutory cap on recovery. doctrines would be called into question by extending In 1666, for example, the First Session of the Legis- the jury trial right to include the right to have the jury lature of Virginia passed a law that specifically determine the effects of facts at law. Any doctrine limited the amount of damages recoverable to a frac- that allows a jury’s factual conclusions to trigger an tion of the possible damages assessed by the jury. The effect at law that does not mirror those factual con- 1666 Legislature addressed a situation that was sim- clusions would be vulnerable to a constitutional jury ilar to the one that faced the Legislature that passed trial challenge. Examples of such doctrines would be the medical malpractice cap. In 1666, Bills of Ex- statutes of limitation, the statute of frauds, contribu- change were increasingly being protested. The Eng- tory negligence, summary judgment and provisions lish Legislature had first capped the amount recover- able for such a protested Bill of Exchange at thirty (continued on page 24)

15 Tax Considerations for Personal Service Corporations After the Tax Reform Act of 1986 and the Revenue Act and Pension Protection Act of 1987

FOR many years professional people have incorpo- personally.4 A salesman who incorporated his selling rated their businesses in order to enjoy the tax bene- activity was treated similarly to Epperson) fits available to the corporate form of doing business. In the Tax Equity and Fiscal Responsibility Act of There have been historical challenges to these profes- 1982, Code Sec. 269A was added to the law which sions by the Internal Revenue Service. There has more clearly defined a personal service corporation. been uncertainty as to which corporations were Under the Tax Equity and Fiscal Responsibility Act deemed to be personal service corporations. There has of 1982, Code Sec. 269 A states: be~en clarification of the definition of a personal serv- if a corporation whose principal activity is ice corporation. the performance of personal services sub- The Tax Reform Act of 1986 and the Revenue Act stantially all of which are performed by and Pension Protection Act of 1987 have made sub- employee-owners for or on behalf of one stantial changes to the taxation of personal service other corporation, partner, or entity (includ- corporations. An historical perspective and some of ing related parties), is availed of for the prin- the recent tax law changes and tax planning options cipal purpose of evasion or avoidance of fed- to be considered as a result of the Tax Reform Act of eral income taxby securing for any employee- owner significant tax benefits which would. 1986 and the Revenue Act and Pension Protection Act not otherwise be available, then Internal of 1987 will be discussed in this paper. Revenue Service may allocate all income, as well as such deductions.., between the cor- Evolution of the Definition of a poration and the employee-owners involved.~ Personal Service Corporation Clearly the thrust of the Tax Equity and Fiscal Prior to December 1987, a personal service corpora- Responsibility Act of 1982 was to eliminate the incor- tion was not clearly defined in the Internal Revenue poration of employees by use of the "on behalf of one Code. Under old law, Internal Revenue Service would other corporation..." clause. Appa.rently, if personal sometimes take the position that all the income of a services were provided to more than one entity, such personal service corporation was taxable to the as a doctor performing services to the general public, shareholder. In the Borge1 case and the McGuire2 Code Sec. 269A would not apply. case, The Tax Equity and Fiscal Responsibility Act of Internal Revenue Service was successful in 1982 did define "employee-owner" as allocating all (as in McGuire) or part of the any employee who owns, on any day during personal service corporation’s income to the the taxable year, more than 10% of the out- shareholders individually on the theory that standing stock of the corporation. The owner- since they had previously performed the ship attribution rules of Code Sec. 318 also same services as individuals, they, individu- apply.... 7 ally, constituted controlled organizations to whom their respective controlled corpora- The Tax Equity and Fiscal Responsibility Act Of tion’s income should be allocated under Code 1982 never clearly defined the exact type of personal Sec. 482.3 services involved in the personal service corporation Furthermore, in Epperson, Internal Revenue Code definition. The Tax Equity and Fiscal Responsibility Sec. 482 argument was successful in allocating a doc- Act of 1982 also did not define the "substantially all tor’s personal service corporation income to the doctor services" requirement clearly.

16 The Tax Reform Act of 1986 and the Revenue Act and Pension Protection Act of 1987 have not provided significant clarification of the personal service corpo- ration definition. However regulations were issued on December 23, 1987 which provided that

a personal service corporation is a corpora- tion whose principal activities include per- formance of work in the professions of health, law, engineering (including survey- ing and mapping), architecture, accounting, actuarial science, performing arts, or con- sulting. A principal activity occurs when more than 50 percent of the corporation’s annual compensation cost is attributable to its per- sonal service activities. In addition, the services must be substan- tially performed by employee-owners. This substantial performance is realized when more than 20 percent of the corporation’s compensation cost with respect to the per- sonal services is attributable to the em- ployee-owners and more than 10 percent of the corporation’s stock is owned by em- ployee-owners,s The new definition of personal service corporations William J. Day is Attorney and Counselor at has greatly clarified which corporations are deemed Law in Cleveland, Ohio. Mr. Day is also a certified public accountant in Ohio and his to be personal service corporations by introducing practice includes counseling of professional cor- which professions are involved, by providing an porations and family owned businesses. objective test of "principal activity," and by providing He graduated cum laude from Ohio Univer- an objective test of "substantially performed by sity, receiving a MBA in Finance and JD from employee-owners." Cleveland State University.

Taxation of Personal Service Corporations Prior to the Tax Reform Act of 1986 and the Revenue Act and Pension Protection plans for corporations and unincorporated businesses Act of 1987 less than it has been in the past, starting with ERISA Prior to the Tax Reform Act of 1986 and the and working through the tax reform bills prior to the Revenue Act and Pension Protection Act of 1987, per- Tax Reform Act of 1986. However, it was not uncom- sonal service corporations were taxed like virtually mon for this type of scenario to have existed some every other C corporation. A professional person years ago: would desire to incorporate his business in order to EXAMPLE 1 enjoy the tax benefits, corporate fringe benefits, and A doctor would incorporate his medical prac- legal benefits available to corporations. Some of these tice. He would establish a qualified pension benefits are pension and profit sharing retirement plan and a qualified profit sharing plan. The plans, medical reimbursement plans, medical insur- doctor would fund the plans to the maximum ance plans, relatively low corporate income tax rates, extent allowable, 25% of compensation. The and limited liability when third party actions are doctor’s compensation is $100,000 and the par- involved. ticipating staffs compensation is $20,000. Total The tax benefits available to corporations resulting contributions of $30,000 (25% of $120,000) would be paid into the qualified plans. The doctor’s from qualified retirement plans, i.e., pension and share of the $30,000 contribution is 83.33% profit sharing plans, have traditionally been greater (100,000/120,000), or $25,000. By using slow than the benefits available to unincorporated busi- vesting schedules, the doctor could have the nesses with qualified Keogh plans. Retirement plan forfeitures created by normal staff turnover tax regulation has made the distinction between credited to his retirement account. The doctor

17 would never get less than $25,000 ~f retirement " Taxation of Personal Service Corporations benefits, and could end up with the full $30,000 in periods of high employee turnover. Subsequent to the ~ Reform Act of 1986 and the Revenue Act and Individuals are subject to a limitation on the tax Pension Protection Act of 1987 deductibility of medical expenses. Under current law, medical.expenses must’exceed 7.5% of adjusted gross The "Ihx Reform Act of 1986 and the Revenue Act income9 to become a part of individual itemized and Pension Protection Act of 1987 have not com- deductions. These medical expenses are consequently pletely eliminated all the tax and legal benefits of virtually without any tax benefit to.individuals with incorporation formerly available to personal service high incomes. corporations; however, some of the benefits have been Corporations may have-employee benefit plans significantly reduced, other benefits have been elimi- available .to its employees which pay for or reimburse nated, and significant additional complexity has medical expenses of its employees, and may also pro- been added by the new laws. vide medical insurance to its employees.10 A doctor A personal service Corporation can still have quali- who owns a personal service corporation can thereby fied pension and profit sharing plans; however, the have the corporation pay for all the doctor’s and. his law changes from ERISA through the Revenue Act family’s personal medical expenses through a medi- and Pension Protection Act of 1987 have substan- cal ~eimbarsement plan, and provide medical insur- tially limited the ability to skew benefits to an owner ance for the doctor and his family. While these plans employee. Specific requirements for "top heavy" plans limit the tilted benefit for the doctor described cannot discriminate against employees, they are able in Example 1, especially when older retirement plans to provide significant benefits to the doctor and his were integrated with Social Security. employees. A legal reason.t0 incorporate the doctor’s medical A personal service corporation can still have medi- cal reimbursement plans and medical insurance practice is to limit the doctor’s, liability for his employees’ actions. While the doctor is not protected plans under the Tax Reform Act of 1986 or the personally from malpractice liability in the corporate Revenue Act and Pension Protection Act of 1987. form of business, he may have some protection if Legal reasons for selecting incorporation of per- another employee of the personal service corporation sonal service corporations have not been changed by injures .a patient. the Tax Reform Act of 1986 or the Revenue Act and The tax rates’ for. personal service corporations Pension Protection Act of 1987. have prior to the Revenue Act and Pension Protection A further change in the taxation of personal service Act of 1987 been the same rates for any C corporation. corporations resulting from the Revenue Act and By having graduated tax rates which have typically Pension Protection Act of 1987 is that beginning Jan- been lower than the individual tax rates, personal uary 1, 1988 personal service corporations will com- pute all income tax based on the highest corporate tax service corporation owners have elected to leave some profits in the corporation (as opposed to withdrawing rate (currently 34% for 1988) with no benefit allowed those profits as coh~pensati0n) in order to enjoy the for the lower tax brackets.t1 This significant change lower tax brackets of the corporation. in law will significantly increase the. cost of retaining earnings in the corporation. EXAMPLE 2 In contrast, in 1988, C corporations which are not The doctor leaves $25,000 of taxable profits personal service corporations are taxed as follows: in his personal service corporation. The per- Corporations with taxable income below sonal service.corporation pays its income tax in the lowest corporate’tax bracket, 15%. The $335,000 are taxed at graduated rates. These doctor borrows the $25,00Ofrom the personal rates are 15% on the first $50,000 of taxable service corporation and signs a promissory in- income, 25% on taxable income over $50,000 terest’bearing note, payable to the personal but not over $75,000, and 34% on taxable service corporation in monthly installments. "income over $75,000. The two lower brackets are phased out as taxable income increases The doctor has the benefit of the use of the $25,000 while the corporation "m paying tax at from $100,000 to $335,000.12 only a 15% corporate tax rate. As the doctor EXAMPLE 3 repays the loan, he can deduct the interest Using the same facts as in Example 2, the expense on his personal tax return (prior to the ¯ doctor would have a tax disadvantage under phase out of the deductibility of personal inter- 1988 law. The personal service corporation est under the Tax Reform Act of 1986.) The doc- would pay tax at the 34% rate, while the doc, tor has his cake and eats it too. tot’s top rate would be only 28% (assuming

18 ~he is not subject to the 33% individual tax For purposes of this paragraph, any deferral rate). The interest paid by the doctor to his of income to the shareholders shall not be personal service corporation would only be treated as a business purpose. 40% deductible under the Tax Reform Act of 1986 phase out of the deductibility of per- Under prior law: sonal interest. The doctor loses a slice of his a personal service corporation adopts a tax- cake without ever e~cen tasting it. able year in the same manner as other cor- Since the maximum tax rate for individuals is cur- porations. It adopts a year on its first federal rently 28% for individuals, a tax planning alternative income tax return which conforms with its may be to pay out all earnings to employee-owners in annual accounting period.15 the form of compensation (subject, of course, to the Establishing a ~alid business purpose ~or electing a reasonable compensation limits), and loaning funds fiscal year other than the calendar year is not an easy to the corporation to meet its capital requirements. task. The specific rules will be extremely difficult" for most p~rsonal service corporations to meet. EXAMPLE 4 The doctor takes every cent of cash he can Rev Proc 74-33, 1974-2 CB 489 established out of his personal service corporation in the a procedure for allowing taxpayers to change form of compensation. The personal service accounting periods to conform to the tax- corporation gets a deduction in the 34% tax payer’s natural business year. Under Rev bracket. The doctor pays individually at the Proc 83-25 the natural business year test is 28% rate. The personal service corporation satisfied if’25% or more of the taxpayer’s needs operating capital in the future. The gross receipts for the twelve month period doctor lends the personal service corporation constituting the requested business year are: $25,000 and the personal service corporation (a) recognized in the last two months of such negotiates a promissory interest bearing period, and (b) this 25% test has been met for note, payable to the doctor in monthly install- three consecutive 12 m. onth periods. Under ments. The personal service corporation gets procedures to be prescribed by Treasury any the operating capital it needs, and deducts personal service Corporation may .adopt, re- the interest it pays the doctor in the 34% tax tain, or change to a taxable year that satis- bracket. The doctor recognizes the interest fies this "25% test," However, the following income personally at the 28% bracket. Exam- reasons will ordinarily not be sufficient to ple 4 has a higher tax cost than Example 2, establish that the business purpose require-- although both examples are similar. The dif- ment for a particular tax year has been met: ference in tax rates between the personal 1. the use of a particular year for regula- service corporation’s,old rate of 15% and the .tory or financial accounting purposes; doctor’s new tax rate of 28%, or 13%, is the 2. the hiring pattem.s of a particular busi- extra amount of tax paid to Internal Revenue ness, e.g., the fact that a firm typically hires Service. staff during certain times of the year; 3. the use of a particular year for adminis-- The Tax Reform Act of 1986 caused all personal trative ~purposes such as the admission or service corporations to change their fiscal year. to a retirement of shareholders, .promotion of. staff, and compensation or .retirement ar- calendar year.13 The Revenue Act and Pension Pro- rangements with staff or shareholders; tection Act of 1987 allows personal service corpora- 4. the fact that a particular business in- tions to retain their fiscal year if a complex procedure volUtesthe use of price lists, model year, or is followed.14 These changes will be discussed further. other items that change on an annual basis.~4

Fiscal Year Change or Retention Under the Consent "of Internal Revenue Service is not required Tax Reform Act of 1986 and the Revenue Act for a personal service corporation to change a fiscal year to a calendar year. Nothing more than indicat- and Pension Protection Act of 1987 ing the decision to change fiscal year to calendar year The Tax Reform Act of 19~6 requires most personal is in compliance with the Tax Reform Act of°1986 is service corporations to change their fiscal years to required when filing a short year tax return. calendar years. Code Sec. 441(i)(1) provides The 1987 Internal Revenue S~rvice instructions for preparation of corporate income tax retrain Form 1120 the taxable year of any personal service cor- states: poration shall be the calendar year unless the corporation establishes, to the satisfac- For tax years beginning’ afte~ 1986, pbr- tion of the Secretary, a business purpose for sonal service corporations as defined in Code having a different period for its taxable year. Sec. 441(i)(2) must adopt a calendar year.... ’ "

19 A corporation which is adopting a calendar between personal service corporations and individu- year must file a short period return for its als (34% vs. 28%), Numerous caveats are in order first taxable year beginning after 1986. These before an S election is made by a personal service taxpayers should type or legibly print at the top of the first page of the return for the first corporation, however. required tax year "F~LED UNDER SECTION 806 An S corporation cannot take a deduction for many OF THE TAX REFORM ACT OF 1986.’’Iv fringe benefits for more than 2% employee-owners which are normally associated with the corporate On December 22, 1987 Congress passed The Revenue Act and Pension Protection Act of 1987. The Revenue Act and Pension Protection Act of 1987 allows per- sonal service co~orations to elect to retain their cur- EXHIBIT A rent fiscal year, but only if subject to limitations on Personal Service Corporations deductions for payments made to employee-owners.-~s Example of Fiscal Year Retention Provisions For personal service corporations electing to retain their fiscal year, the limitation on deductions for Assumptions: payments to employee-owners is made with reference PSC is on a January 31 fiscal year to a "minimum distTibution amount." The minimum Adjusted Salaries to employee-owners distribution amount is intended to measure whether Taxable payments to employee-owners are made ratably Year ended . Income Example I Example II throughout the year, rather than deferred to after the 1/31/85 $100,000 $100,000 $100,000 close of the employee-owners’ calendar year tax 1/31/86 130,000 110,000 110,000 years.19 1/31/87 150,000 132,000 132,000 A personal service corporation which elects to $380,000 $342,000 $342,000 retain its fiscal year but does not meet the minimum distribution requirement may only deduct for that fis- 1/31/88: cal year those amounts paid to employee-owners prior Feb.:Dec.’87 $140,000 $125,000 $ 88,000 to December 31, and annualized to a 12 month period. Jan 1988 28,000 13,000 50,000 Payments in excess of the allowable deduction are not $168,000 $138,000 $138,000 lost; however, these excess payments may be carried forward to the next fiscal year and deducted then.20 Test to determine if deductions will be limited: An examPle of the personal service corporation fiscal Example I Example II year retention provisions and calculation of deduc- tion limitation are presented in attached Exhibit A. Payments made to employee-owners between beginning of fiscal year The computation of tax for the corporation’s short and December 31 $125,000 $ 88,000 tax year, if retention of the fiscal year is not elected, The minimum distTibution amount fis follows the normal provisions-for taxation of the calculated below equals $~21,000 $121,000 change in accounting period. This is done by annual- Based on the above the test is: Met Not met izing taxable income for the short period to a twelve Therefore, deductions will be limited in Example H. month equivalent, computing the tax thereon, and reducing the amount of tax so computed by the ratio Determination of minimum distribution amount: Factor A: ($132,000 / 12) multiplied by 11 = $121,000 of months in the short year divided by twelve. Accel- Factor B: ($342,000 / $380,000) multiplied by $140,000 = $126,000 erated Cost Recovery and other depreciation expense ~ust be calculated pro rata on the basis of months in The lower of factors A and B is used in the above comparison the short tax year. The amount of depreciation not with salaries paid before 12/31. Consequently, the minimum deducted in the short year is tacked on to the end of distribution amount is $121,000 (Factor A). the depreciation schedule.2~ Calculation of Deduction Limitation in Example II: Amount paid before Dec. 31 Consideration of Subchapter S Status Afte~ the $88,000 multiplied by total months in year x 12 Tax Reform Act of 1986 and the Revenue Act divided by months between Feb. i and Dec. 31 / 11 and Pension Protection Act of 1987 . Deduction allowed year-end 1/31/88 $96,000 Owners of personal service corporations are con- sidering electing Subchapter S status fo~ their corpo- The remaining $42,000 ($138,000 - $96,000) is carried over to the following year, and may be deducted then. rations in order to save the difference in tax rates

20 form of business. Some of the fringes which are not Furthermore, retirement plans for employees who are deductible by S corporations for more than 2% more than 2% shareholders are generally limited to employee-owners are: H.R. 10 Keogh plans, which are somewhat less bene- ficial than the pension and profit sharing plans ¯ group term life insurance available to a C corporation, ¯ the $5,000 death benefit exclusion - A major pitfall which could trap a C corporation ¯ accident and health plans and insurance ¯ electing S status is the "built-in gains tax" initiated and medical reimbursement plans ¯ meals and lodging furnished for the con- by the Tax Reform Act of 1986.2s If a C corporation venience of the employer electing S status has assets whose fair market value ¯ workers’ compensation .payments on be- exceed their adjusted basis as of the beginning of its half of employee-owners.22 first taxable year as an S corporation, the electing

EXHIBIT B

CHART A: Federal "lhxable Income of $50,000

Percentage of corporation’s pre-tax federal taxable income to be retained in business

1. Corporation’s federal taxable income: ...... $50,000

Computing after-tax amount available to shareholders if corporation is a C corporation

2. Federal income taxes payable by corporation based on ’88 tax rates: ...... 7,500 7,500 7,500 7,500 3. Net after-tax income of corporation (item (1) less item(2)): ...... 42,500 42,500 42,500 42,500 4. Amount to be retained in business: ...... -0- 10,000 25,000 35,000 5. Amount to be distributed to shareholders as dividends (item (3) less item (4)): ..... 42,500 32,500 17,500 7,500 6. Federal income taxes payable by shareholders on dividends if shareholders are in 28% t~x bracl~et: ...... - ..... 11,900 9,100 4,900 2,100 7. Total taxes payable by corporation and shareholders (item (2) plus item (6)): ...... 19,400 16,600 12,400 9,600 8. NET AFrER-TAx AMOUNT AVAILABLE TO SHAREHOLDERS OF C CORPORATION (ITEM (1) LESS SUM OF ITEMS (4) AND (7)): ...... 30,600 24,400 12,600 5,400

Computing after-tax amount available to shareholders if corporation is an S corporation.

9. Amount to be distributed to shareholders if corporation is an S corporation (item (1) less item (4)): ...... 50,000 40,000 25,000 15,000 10. Taxes payable by shareholders on corporation’s taxable income (28% of item (1)): ...... 14,000 14,000" 14,000 14,000 ii. NET AFtER-TAx AMOUNT AVAILABLE TO SHAREHOLDERS OF S CORPORATION (ITEM (9) LzSS ITEM (10)): ...... ~...... 36,000 26,000 11,000 1,000

Difference in after.tax amount available to shareholders

12. INCREASE OR DZCRF.ASE (IN PARENTHESES) IN A~r~R-TAx AMOUNT AVAILABLE TO SHAREHOLDERS IF CORPORATION IS AN S CORPORATION (ITEM (Ii) L~SS ITEM (8)): ...... 5,400 1,600 (1,600) (4,400)

Effect of increase in basis of stock resulting from S corporation’s retaining part of income

13. Immediate tax savings or increased taxes (in parentheses) if corporation is an S corporation (item (7) less item (10)): ...... 5,400 1,600 (1,600) (4,400) 14. Increase in basis of shareholder’s stock resulting from retained income if corporation is an S corporation: ...... 0- 10,000 25,000 35,000 15. Tax savings on sale of stock resulting from increase in basis if long-term capital gain is recognized on sale and that gain is taxed at an effective rate of 28%: ...... -0- "2,800 7,000 9,800 Present value of tax savings on sale if made 10 years after close of taxable year based on amount that would have to be invested at 9% compounded yearly (after- tax) at close of taxable year to obtain amount equal to tax savings in 10 years. (42.2% of item (15)): ...... 1,182 2,954 4,136 17. TOTAL TAX SAVINGS OR INCREASED TAXES (IN PARENTHESES) INCLUDING PRESEN~ VALUE OF TAX SAVINGS ON SALE IN 10 YEARS IF CORPORATION IS AN S CORPORATION (ITEM (13) PLUS ITEM (16)): ...... : ...... ~ ...... 5,400 2,782 1,354 (264)

21 corporation has a built,in-gain:24 If that built-in gain gain~ tax provides true double taxation. Prominent is recognized by the S corporation within ten years of examples of built-in gains assets are accounts receiv- its S election, the S corporation will pay a built-in able of cash basis personal service corporations and gains tax at the top corporate rate (currently 34%).25 appreciated land, buildings, and fixed assets. It (A special exclusion applies to certain small closely- appears that intangible assets such as patents and held corporations electing S status before 1989 with copyrights could also be built-in gains assets;: how- capital gains on property held more than six months ever, it is not clear whether or not the licensing or use which is not recognized within the first three years of of those intangibles would result in built-in gains electing S status.) The gain net of the built-in gains income. tax will be p,assed on to the S corporation’s shar~ ¯ large losses were anticipated by the per- holders and then taxed again at the shareholder’s tax sonal service corporation rate (current individual .top rate .is 28%).26 The built-i ~n ¯ substantial amounts of income is required

EXHIBIT C

CHART B: Federal "[hxable Income of $100,000 Percentage of corporation’s pre-tax f~deral taxable income to be retained in business 20~ 50°h 70~

1. Corporation’s federal taxable income: ...... $100,000 $100,000 $100,000 $100,000 Computing after-tax amount available to shareholders if corporation is a C corporation

Federal income taxes payable by corporation based on ’88 tax rates: ...... 2. 22,250 ’ 22,250 22,250 22,250 Net after:tax income of corporation (item (1) less item (2)): ...... 3. 77,750 77,750 77,750 77,750 4. Amount to be retained in business: ...... -0- 20,000 50,000 70,000 5. Amount to be distributed to shareholders as dividends (item (3) less item (4)): ..... 77,750 57,750 27,750 7,750 6. Federal income taxes payable by shareholders on dividends if shareholders are in ¯ 28% tax bracket: 21,630 16,170 .7,770 2,170 7. Total taxes payable by corporation and shareholders (item (2) plus item (6)): ...... 43,880 38,420 30,120 24,420 8. NET AFTER-TAx AMOUNT AVAILABLE TO SHAREHOLDERS oF C CORPORATION

(ITEM (1) LESS SUM OF ITEMS (4) AND (7)): : ...... 56,120 41,580 19,380 5,580

Computing after.tax amount available to shareholders if corporation is an S corporation

9. Amount to be distributed to shareholders if corporation is an S corporation (item (1) less item (4)): :: ...... 100,000 80,000 50,000 30,000 i0. Taxes payable by shareholders on corporation’s taxable income (28% of item (i)): 28,000 28,000 38,odo 28,000 11. NET AFTER-TAx AMOUNT AVAILABLE TO SHAREHOLDERS OF S CORPORATION

(ITEM (9) LESS ITEM (10)): ...... 72,000 52,000 22,000 2,000

Difference in after-tax amount available to shareholders

12. INCREASE OR DECREASE (IN PARENTHEsEs) IN AFTER TAX A~ouNT AVAILABL~

TO SHAREHOLDERS IF CORPORATION IS AN S CORPORATION (ITEM (11) LESS

ITEM (8)): ...... 15,380 10,420 2,120 (3,580)

Effect of increase in basis of stock resulting from S corporation’s retaining part of income

13. Tax savings or increased taxes (in parentheses) if corporation is an S corporation (item (7) less item (10)): ...... 15,880 10,420 2,120 (3,580) 14. Increase in basis of shareholder’s stock resulting from retained income if

corporation is an S corporation: .~ 20,000 50,000 70,000 15. ~hx savings on sale of stock resulting from increase in basis if lon~-term capital gain is recognized on sale and that gain is taxed at an effective rate of 28%: ...... ~ 5,600 14,000 19,600 16. Present value of tax savings on sale if mad~ 5 ~tears after close of taxable year based on amount that would have to be invested at 9% compounded yearly (after- tax) at close of taxable year to obtain amount equal to tax savings in 10 years.

(42.2% of item (15)): ...... ~). 2,363 5,908 8,271 17. TOTAL TAX SAVINGS INCLUDING PRESENT VALUE OF TAx SAVINGS ON SAI~ IN 10

YEARS IF CORPORATION IS AN S CORPORATION (ITEM (13) PLUS ITEM (16)): ...... 15,880 14,783 8,028 4,691

22 to be retained in the personal service corpo- sion Protection Act of 1987 (New York: The Research Institute of ration America, Inc., 1988), #408, p. 78. ¯ very high taxable income is expected by 13. Internal Revenue Code, Section 441(i) (1). the personal sevice corporation 14. Internal Revenue Code, Section 444() (2); Internal Rev- enue Code, Section 280H as added by ’87 Act #10206(c) (1). Examples of the possible tax savings available by 15. The RIA Complete Analy’sis of the ’86 Tax Reform Act using an S election are illustrated in Exhibit B and (New York: The Research Institute of America, Inc., 1986), #703, Exhibit C. 27 p. 311, 16. Ibid. This paper has discussed some of the history of the 17:"1987 Instructions for Forms 1120 and 1120-A" (Departs: taxation of personal service corporations, as well as ment of the Tzeasury: Internal Revenue Service, p. 2. some of the substantial changes which have occui,red 18. Internal Revenue Code, Section 444(c) (2); InternalRev- in the tax law as regards the taxation of personal enue Code, Section 280H as added by ’87 Act #10206(c) (1). 19. "AICPA Tax Division Fiscal Year Retention Practice service corporations: Examples and Exhibits were Aid," op. Cir., p. 9.. provided to illustrate some of these concepts. - 20: "AICPA Tax Division Fiscal Year Retention Practice Aid, op. c~t., p. 10. 21. 1988 U.S. Master Tax Guide (Chicago: Commerce Clear- ing House, In~.), #1270, p. 349. 22. William H. Hoffman and William A. Raabe, 1988 Annual FOOTNOTES Edition West’s Federal Taxation: Corporations, Partnerships, 1. Borge v. Corn, 405 F2d 673. Estates, and Trusts (St. Paul: West Publishing Co,, 1987), pp. 2. McGuire v. U.S., 2/20/69 DC-NY, affd 1/20/71 CA-2. 10-26 - 10-27. 3. 1983 Tax ~Guide (New York: The Research Institute of 23. Internal Revenue Code, Section 1374. ’America, Inc., 1982), #2711, p. 1648. 24. Internal Revenue Code, Section 1374 (d)(1)(A). 4. Ibid. 25. Internal Revenue Code, Section 1374 (d)(2) and 1374 (d) 5. Ibid. (3). 6. 1983 Tax Guide, op. cit., #2712, p. 1649. 26. Hoffman and Raabe, op. cit., p. 10-22. 7. Ibid. 27. "Deciding Whether to Elect to be an S Corporation After 8. "AICPA Tax Division Fiscal Year Retention Practice Aid" the ’86 Tax Reform Act" ((New York: The Research Institute of (New York: American Institute of Certified Public Accountants, America, Inc., 1987). Inc., 1987), p. 10. 28: "AICPA Tax Division Fiscal Year Retention Practice 9. Internal Revenue Code, Section 213(a). Aid," op. ~it., pp. 11-12. 10. Internal Revenue Code, Section 162(i) (3). 29. "Deciding Whether to Elect to be an S Corporation After 11. Internal Revenue Code, Section 11(b) as amended by ’87 the ’86 Tax Reform Act," op. cir., p. 23 Act #10224. 30. "Deciding Whether to Elect to be an S Corporation After 12. The RIA Complete Analysis of the Revenue Act and Pen- the ’86 Tax Reform Act," op. cit., p: 24.

23 John Marshall House structural engineers, and this plan includes restora- (continued from page 10) tion of the porches, essential roof repairs, correction of drainage problems, painting and repairs to the stair- well support system. In addition, improvements are slated in the care and preservation of the house’s collection of furnish- ings and Marshall memorabilia to ensure long-term protection. Fire and security systems will be rede- signed, and a case for Marshall’s judicial robes will be built with appropriate temperature and humidity con- trols. VBA President John M. Ryan acknowledged that in the wake of federal funding cutbacks, responsibil- ity for the protection of national landmarks now rests almost solely with the private sector. "I’m proud that this bar association has taken a leadership role in preserving the Marshall house as a national treasure for the house to remain open to the public. The Foun- and in ensuring that Marshall’s contributions to our dation’s board of directors has approved a five-year Constitutional government are appreciated by future restoration plan recommended by architects and generations," said Mr.Ryan.

Medical Malpractice Caps tion is... equivalent to the federal seventh amendment right." Boyd at 13. While this article will not consider in detail Judge (continued from page 16) Michael’s decision to base his opinion on both state and federal providing for treble damages or other enhanced dam- constitutional grounds, the opinion is conspicuous in its failure ages. to consider Simler v. Conner, 372 U.S. 221 (1963) in which the Supreme Court concluded that in a diversity action the right to a jury trial is always a matter of federal law. Because the stated IV. Conclusion reason for Judge Michael’s consideration of Virginia law was to Stated simply, the medical malpractice cap is no determine whether state or federal law would control, Simler would seem to render the portion of the opinion considering the more than an establishment of the perimeters of a state constitution unnecessary. Judge Michael affirmed his remedy provided by the legislature and applied by the holding in the Boyd case, including that aspect of the decision court after the jury has fullfilled its function. Further, addressing the right to a jury trial, on November 12, 1987. the imposition of the cap is not based in any way 2. § 8.01-581.15, when first enacted limited recovery to a maximum award of $750,000.00. upon a reassessment of the facts. An attempt to 3. When this article makes reference to facts as "undis- impose by way of the right to a trial by jury, the power puted," the term should be understood to be limited to the for the jury to impose its will on the legislature is not manner in which facts are presented to the court for evaluation supported by the history of the jury trial guarantee. In in light of apphcable laws. While facts often remain disputed between the parties long after litigation has ended, for purposes addition, attempts to establish the jury trial provision of trial the law treats facts as if undisputed. as providing the additional right to a litigant of hav- 4. While this Article addresses only the constitutionality of ing assessment equal award places the jury trial pro- the medical malpractice cap in light of the right to a jury trial, vision in direct conflict with those constitutional pro- the writer is of the opinion that Virginia’s cap meets all consti- tutional requirements. visions properly applicable to questions concerning 5. Legislative determinations that control the effect of a the effect of facts at law. It is clear that the medical jury’s assessment of the facts have, in fact, frequently been in malpractice cap does not violate the right to a jury force in Virginia. See, e.g., 1887 Code of Virginia § 2903; 1919 trial guaranteed by the Virginia Constitution. Code of Virginia § 5787; 1950 Code of Virginia § 8-636 (statutory provisions limiting possible recovery in wrongful death actions); Chick ~ansit Corp. v. Edenton, 170 Va. 361,196 S.E. 648 (1938); Harris v. Royer, 165 Va. 461, 182 S.E. 276 (1935); Ratcliffe v. FOOTNOTES McDonald, 123 Va. 781, 97 S.E. 307 (1918) (cases decided upon 1. The impact of the jury trial aspect of the Boyd opinion is prior wrongful death cap holding that while juries may assess increased by Judge Michael’s statement that the "right to a civil damages, the amount of the award is limited by the statutory jury provided by Article 1, Section 11 of the Virginia Constitu- cap).

24 The Summer Meeting ...... 26

Summer Meeting Programs ...... 30

Tournament Winners ...... 32

Sponsors ...... 34

Patrons ...... 35

Newly Admitted Members ...... 38

YLS Community La~ Week ...... 41

YLS Chairman’s Report ...... 43

Memorials ...... 46 The Homestead, Hot Springs, Virginia Peggy O’Neal Haines, had its own meeting recogniz- July 21-24, 1988 ing its members’ many activities. One of their new programs is the development of a Lawyers in the Arts This year’s summer meeting truly had something Directory, which has just been completed and is ready for everybody! Our centennial celebration provided for distribution. They have also completed, through educational programs, social receptions, recreational the efforts of Steve Busch and his committee, the new activities, exhibits--we even threw in cooking classds, updated film on our Supreme Court entitled This party favors, and a little rain to round out the occa-- Honorable Court. The film will be shown to visitors at sion! Once again, a good time was had by all. the U.S. Supreme Court and will also be distributed Since this was our 100th anniversary, our social nationally. reception Thursday evening, sponsored by Lawyers I will skip over our two CLE programs in this por- Title Insurance Corporation, provided some nostalgia tion of my report andgive them separate space at the as we tried to recapture some of the "good old days" end of this article. Here I’ll just say that the attend- with our Great Gatsby Party. The hardest thing dur- ance was impressive and indicative of the efforts the ing.the evening was to get everyone into the lobby for Program Committee, moderators, and panelists put the group picture! However, as you can see, it was well into the presentations. worth the effort. We heard there were some great out- During our meeting we appreciated not only the- fits left at home so we might try again next year as we support of our sponsors, who a~e mentioned individu- celebrate our 100th year at The Greenbrier. I think ally herein, but also our exhibitors. Although we Peter Welch has a lot of hats left over which would never have many at our summer meeting, we do have still fit the occasion! a few that appreciate the opportunity to be with us Friday morning, July 22nd, started off (hopefully and we were happy to have them. This year they after everyone had coffee and visited our exhibits) were: Chicago Title Insurance Company; The Michie with our first General Session of the meeting. President- Company; Montgomery Professional Underwriters, Elect Thomas T. Lawson recognized our President, and Virginia Lawyers Weekly¯ We owe additional John M. Ryan for his annual report. Mr. Ryan also thanks to W. Herbert Montgomery of Montgomery welcomed guests and recognized Ruth Barker, our Professional Underwriters for providing us with our stenographer, for 10 years of service transcribing our morning newspaper, and to Lawyers Weekly for their annual and summer meetings. At the same time, he coverage of our meeting in their next week’s paper. acknowledged the presence of several of our members Friday evening we went back to our traditional whose ancestors were among the founding fathers of black tie reception and banquet. Charles A. Hartz, Jr., our association. We have heard from sixteen lawyers Esquire, our host for the evening, representing our who are members of our association and whose sponsor, RF&P Railroad, treated us to a beautiful ancestors were either at the first meeting or pictured reception including an ice sculpture depicting our in the first photograph of our 1889 meeting at The 100th anniversary provided by The Homestead. Fol- Greenbrier. lowing the reception we again made the supreme ¯ Mr. Ryan continued with his mid-year report on our effort to get all VBA members out on the lawn for a activities by mentioning two major projects--our group picture. If you @ere there, wehope you made it study of appellate capacity, being undertaken by our because the picture was great. If you weren’t there, Judiciary Committee, and our efforts to implement we’ll give ~you another chance next year at The Hugh Patterson’s report on professionalism by .the G~eenbrier. The only thing I can say about the picture establishment of a special Committee on Profession- is--can you imagine trying to iden "~ti~y 300 people! alism. The committee is composed of members of the Believe it or not, we’re going to give it a try and hope judiciary, academia, business community, and media, that 100 years from now the then Executive Director as well as our lawyer committee members. thanks us for our efforts. The Young Lawyers Section, chaired this year by Following the reception we gathered for the ban-

26 quet. Our thanks to Larry Joseph anal Larry Furlong again this year was LOPC, Joyce, Inc., and we appre- who, on behalf of Chicago Title Insurance Company, ciate their continued support. We also appreciate the sponsored our music and beautiful decorations for the efforts of the following people who were responsible evening. During the banquet we recognized our Life for the special programs and events Which helped and Judicial Life Members. Although only six were make our meeting a success: YLS Meetings Commit- present to receive their awards, we had 31 members tee-Thomas G. Hardy, III and Nancy R. Little, Co- qualify as Life Members, and 10 new Judicial Life Chairmen, Program; David E. Constine and Nancy Members. Their names are printed in this issue of the Newton (Newnie Rogers, Co-Chairmen), Tourna- Journal. We appreciate their support over the years ments; Samuel R. Brown, II, Entertainment; and and welcome them as life members. Thomas H. Tullidge, Jr., Exhibits. Our banquet speaker for the evening was the Also, on both days we had our annual culinary Honorable Laurence H. Silberman, Uited States Cir- demonstration. We refer to these as our guests’ CLE cuit Judge, U.S. Court of Appeals for the D.C. Circuit. programs - Continuing Lega~ ENTERTAINMENT! Judge Silberman geared his remarks to one of our We were treated to excellent food and e~cen got to take. President’s top priorities for this year, lawyer profes- home the recipes and, in case you didn’t see them, sionalism. The swelling number of lawyers and each participant received a VB/~ al~ron. For those increased competition were high on his list of reasons who tasted too much of the culinary demonstrations, for unprofessional conduct by lawyers. Corporate we prodded, thanks to Marcie Slaughter, aerobics pressures and the expansion of in-house counsel also, classes each day. See, I told you, a little bit of every- Silberman said, "reduces the private lawyers’ ability thing for everybody! to remain detached in a professional way from the .The Saturday evening reception, sponsored by The market place pressures on a corporation." Judge Sil- Michie Company and our host and long-time friend, berman also felt specialization plays a large role in David W. Parrish, Jr., honored our new law school the area of professionalism. "... I cannot prove tliis," deans Randall P. Bezanson of Washington & Lee and he said, "but I nonetheless intuitively believe that the Thomas H. Jackson of the University of Virginia. We - more specialized and therefore the more narrow the welcome them to Virginia and look forward to having lawyer, the less he or she may be concerned with the them with us and to the leadership they will provide broad goals of the profession." He concluded by com- our young aspiring lawyers. During the reception we plimenting The Virginia Bar Association for its work also gave out many recreational awards--that’s a lot in this area. He said: "... If we are to retain any mea- of silver, and we congratulate the winners. sure of that precious quality that distinguished law- The report wouldn’t be complete without mention- yering from any business, it can only be through the ing our Young Lawyers’ dances both Friday and Sat- efforts of organizations such as yours." urday evenings. Fridays’ entertainment was provided Saturday we again started our meeting with our by Lan Meem and sponsored by Johnson & Higgins General Session. VBA Executive Committee Chair- of Virginia, Inc. Sattirday’s more formal dance had- man: F. Claiborne (Jay) Johnston, Jr., presided and our members ("young" and "old") dancing to the introduced Steve Busch, secretary-treasurer of the music of Black & Blue. The music Saturday was Young Lawyer’s Section, for the purpose of viewing. sponsored by Arthur Young & Company.Just looking the film This Honorable Court. The film is based upon at the pictures will tell you what a great time everyone two one-hour documentaries, and was produced by had. WETA with extensive grant fundi.ng from AmVes- I hope I haven’t forgotten anything or anybody. tor’s Financing Corporation and Srn~th,.Barney, Har- Some people I can never forget are my staff. They ris and Upman Company. We co-sponsored th.,e twenty- worked hard as always and are responsible for mak- minute version which, highlights the history of the ing it all run smoothly. My thanks to Frankie How- Court, how the Court functions in our government, ard, Torrey Shuford, Sandy Thompson and Cynthia and also how the Court functions on a daily basis. Williams. KND, my thanks to all of~you-who joined us Of course both Friday and Saturday afternoon were for the meeting. We look forward to seeing you again filled with "fun and games" as our members played in Williamsburg in January. - golf and tennis, shot skeet, etc. The winners are listed separately in this article. Our tournament sponsor --Sue Gift Sanders

28

Summer Meeting Programs

Friday, July 22, 1988 when it comes to litigation, whether it isa race or sex "The Streamlining of American Enterprise: or age discrimination case, it raises an issue of fair- The Labor and Employment Implications of ness. He suggested three factors that most companies Corporate Restructuring" consider: 1) a voluntary program with incentives for early retirement; 2) inverse seniority, last hired-first to be let go; and 3)layoff based solely on per- Moderator Clint Morse, Esquire, of Woods, Rogers formance--the most difficult to administer. Most & Hazlegrove, Roanoke, introduced the panel and companies use a combination, but the bottom line is gave a brief outline of the issue at hand. He said: "The that there is no painless way to downsize a company. topic to be disucussed is fraught with many legal Employers simply have to find a way that is sensible. questions driven by the social and economic pressures Mr. Morse noted that there is a 1987 case (Hand v. that created the issue. On one hand you have a world- National Geographic Society, 819 F.2d 824) which is wide economy which has caused American Industry probably the best, most common-sense analysis of the to respond and operate as efficiently as possible and, issues relating to voluntary reductions in force. in course of such, to reduce manpower in many of its Mr. Shanor commented that about on,quarter to operations. On the other hand, you have minorities one-half of the EEOC’s overall caseload involves and women entering the work force who are adversely cases brought under the ADEA, but 42 percent of the impacted as they have aspirations of moving up, yet commission’s monetary recovery involves ADEA are faced with a dwindling number of opportunities claims. The biggest recoveries tend to be in areas available to them." The panelists discussing this where there has been corporate downsizing or corpo- issue were: Mike Marino, a leader in our Labor and rate restructuring. The monetary stakes can be huge. ° Employment Law Section and a partner with McGuire, The ADEA comes into ~lay°in three basic areas: Woods, Battle & Boothe; Robert W. Benson, Esquire, 1) restructuring which cuts out older employees, either general attorney with AT&T, who presented the cor- intentionally or in a way that has a substantial porate viewpoint on corporate downsizing; Charles adverse impact on older employees; 2)benefits dis- Shanor, Esquire, general counsel for the Equal Em- tinctions between older employees and others (i:e. ployment O_pportunity Commission, who discussed offering severance pay when layoffs occur but exclud- the EEOC’s viewpoint on legal issues relating to cor- ing those who are pension eligible); and 3) the offer- porate downsizing; and Robert B. Fitzpatrick, Esquire, ing of early retirement incentives. The latter is the a noted labor and employment lawyer from Washing- most difficult area under ADEA because it is also a ton, D.C., who presented the plaintiffs viewpoint. social policy question. Two cases that frame the Mr. Marino point.ed out that since 1980, Ford Motor debate over early retirement incentives are the Cipri- Company has cut costs by over five billion dollars, ano case out of the second circuit and the Carlin case but in the process fifteen manufacturing plants’were out of the seventh circuit, closed, affecting thousands of employees. Since that Mr. Fitzpatrick noted that there has been tremend- time, one-third of the work force has been laid off. ous growth and change in the employment law field This ’invariably raises discrimination claims, union in the last six ~ears, and what may have been viewed claims, and bargaining issues. The one law that will as novel theories of liability a few years ago are now be used more frequently in the years ahead is the Age accepted as black-letter law. He observed that the role Discrimination in Employment Act, as the baby of lawyers in the employment law field should be as boomers turn 40 and cross over into the age group healers and problem-solvers. For corporate cl~ents,.he that is protected under the Act. There are also signifi- recsmmends havirig a "termination czar"--someone cant union and collective bargaining issues that can who~ will review the proposed termination, who can arise when one company buys out another and where look’ at the fileindependently and judge whether the there is already a union in place. The company may, termination is going to be viewed as fair. It is particu- in fact, be buying the union as well. arly important, he said, to have a "paper chain" Mr. Benson, drawing on his experience at AT&T, which supports the termination. Have progressive said that any downsizing or large lay-offs should be disciplinary procedures been followed? If so, Mr. Fitz- o planned on paper first. Downsizing spawns litigation patrick said, an employer has a better chance of win- because each employee wonders "Why me?". And ning, even before a jury.

30 Saturday, July 23, 1988 court has ruled the patient does have a cause of "Biotechnology: The Marriage of Science, action. Law and Business" Mr. Karney noted that patents are critical to the biotechnology field. He said that most start-up bio- Gary Hoffman, Esquire, of Dickstein, Shapiro and technology companies have little money or market Morin’s Vienna office, and also Chairman of our power, and they must protect their research. Intellectual Property Committee, served as moderator According to Mr. Karny, there are basically two for the program. The program touches on the new problems: 1)obtaining exclusive rights, and 2)en- areas of biotechnology we are all hearing about--new forcing those rights. The gathering litigation storm is drugs, cancer treatment, the AIDS treatment, the new most likely to develop over enforcement issues. mouse that’s been patented, new life forms--and how Mr. Washecka said the business of biotechnol0gy in the law and business will cope’ with them. Panelists the year 2000 offers significant opportunities for par- for this program were: Gordon Moore, Ph.D., cur- ticipation by the legal profession. The Commerce rently manager of research for Integrated Genetics in Department estimates, that revenues in the biotech- Massachusets; Jeff Karny, Esquire, Dickstein, Sha- nology industry could reach a hundred billion by the piro and Morin, Washington D.C. and Vienna, Va; year 2000. Perhaps not difficult to believe when you and William Washecka, Director of Entrepreneurial consider that biotechnology may be able to produce a Services/High Technology Group, .Reston, Va., and cure or control for such diseases as AIDS, cancer and John Cohrssen, Esquire, advisor to the Council on heart disease. It also affects other industries and Environmental Quality and Senior Advisor at the could also support changes in waste management ¯ National Science Foundation. and toxic waste disposal. Some small, entrepreneurial Mr. Moore talked with the group about the dramatic research ccompanies are going public, while others advances in the biological sciences that now make it are entering into agreements with larger corpora- possible for scientists to clone other organisms by tions. Attorneys have to be creative to come up with injecting the genetic code found in DNA into a host agreements that will satisfy both the small entrepre- ¯ organism. Mind boggling!! ~e said that it is now neur as well as the large company. Regulation of the technologically possible to create animal models (trans- industry may b.e problematical. Who is going to be genic animals) for such diseases as AIDS, cystic liable if there is a major problem? The government? fibrosis or cancer, which currently have no counter- The people? The company? Will our government sup- part’animals. He noted that DNA is also a powerful port or suffocate biotechnology .in the years ahead? tool in forensic medicine, which has important rami- Will biotech be a business in the year 2000? He really fications in the criminal law field. Mr. Moore stated thinks it depends on our national commitment and that the use of cloning techniques makes it theoreti- also on our ability to answer a number.of significant cally possible to create plants or animals with new and complicated questions. characteristics; for example, to create disease-resistant Mr. Cohrssen reminded the group that regulation of plants, sheep with thicker coats of wool, or larger the biotechnology industry must be based on science. pigs. How do we measure the hypothetical risks involved? Mr. Kamy discussed the regulatory issues which What risks are reasonable, bearing in mind that arise--e.g., how some of the new drugs will be regu- innovation can be slowed by too heavy a regulatory lated and by whom. For.instance, when we talk about hand? Mr. Cohrssen said that, on the international transgenic animals, are there environmental con- scene, there are countries that are much more lax in cerns about transgenic farm animals or releasing their regulatory approaches, and some countries that these organisms into the environment? And, who are supporting research much more heavily than we owns these organisms? In Moore v. University of are. In the United States,~agencies involved are the Califorriia, a man had his spleen removed, his doctor Food and D~ug Administration, the Department of then used it i~ research where he discovered a poten- Agriculture, and the Environmental Protection Agen~- tially therap,e~htic protein which could lead to the cy. In 1986 a special White House cabinet council development ~f an important new drug. The doctor working group was created that brought these var~- patented the cell line and entered into potentially’lu- ious agencies together.. This group concluded that crative licensing and consulting agreements. The there are existing statutes sufficient to regulate prod- patient sued for a piece of the action on the grounds ucts of biotechnology and to deal with the safety that he supplied the raw material. Now, an appellate issues raised. --Sue Gift Sanders

31 Tournament Winners for 1988 Summer Meeting

Tennis Golf senior Men Low Gross 36 Holes~ John Gregory Low Net 36 Holes: Kevin McCusty Winners: "James Bishop/John Walker Runners-up: Fred Landis/Ernest Geisler Low Gross 18 Holes: Bruce Matson Low Net 18 Holes: Theodore Chandler Lawrence Marshall Men’s B 2nd Low Gross 36 Holes: Women’s LOw Winners: Charles Logan/Thomas Hodges Gross 18 Holes: Laura Lee Chandler Runners-up: Donald Lee/James Thornton Women’s Low Net I8 Holes: Ellen Edmonds Men’s A Longest Drive: John Gregory Winners: Glenn Pulley/Robert Brewbaker Closest to the Pin: ¯ Henry Wolf Runners-up: M. Caldwell Butler/V. R. Shackleford Trap and Skeet Men’s Championship .., Trap (Men’s) Wifiners: William Hancock/George Whitley Championship Winner: Courtland Traver Runners-up: Stephen Robinson/David Constine Runner-up: Thomds Hardy

Women’s B Flight A Winners: Janet Alexander/Tessie Morris Winner: Thomas Martenstein Runners-up: Pamela Pulley/Prudence Montague Runner-up: Larry Joseph

Women’s A Skeet (Men’s) Winners: Katie Goolsby/Betsy Ashton Championship Winner: Michael Gartlan Runners-up: Dixie Wolf/Nellie Bishop Runner-up: Walkley Johns6n

Women’s Championship Flight A Winners: Page Dimos/Jane Schwarzschild Winner: Andrew Sanders Runners-up: Jean Watkins/Nancy Rogers Runner-up: ¯ Larry Furlong

Mixed B Trap (Women’s) Winners: Grant and Tessie Morris Winner: Temple Cabell Runners-up: Guy and Helen Tripp Runner-up: Roxanne Pratt

Mixe~ A Skeet (Women’s) Winners: Nancy Rogers and Ted Fauls Winner: Kathleen Herman Runners-up: Howard and Heather Martin Runner-up: Stuart Trope

Mixed Championship Three-Mile Run Jack Coffey Winners: Stephen Robinson and Page Dimos Winner-Men (Low Gross) Suzanne Coffey Runners-up: William Hancock/Susan Armstrong Winner-Women (Low Gross)

32

Sponsors The Executive Committee and the Membership Committee thank these firms for their strong support of the Association. Adams, Porter & Radigan ...... Arlington Hall, Monahan, Engle, Adamson, Crump & Sharp, P.C ...... Front Royal Mahan & Mitchell ...... Winchester Allen, Allen, Allen & Allen ...... Richmond Heilig, McKenry, Fraim and Lollar, P.C ...... Norfolk Bangel, Bangel & Bangel ...... Portsmouth Hodges & Campbell ...... Wytheville Bersch & Rhodes, P.C ...... Roanoke Hofl~eimer, Nusbaam, McPhaul Blankingship & Keith ...... Fairfax & Samuels ...... Norfolk Browder, Russell, Morris Hogan & Peyronnet ...... Richmond & Butcher, P.C ...... Richmond Hunton & Williams ...... Button, Yeaman & Morton ...... Culpeper Richmond, Norfolk, Fairfax CSX Corporation ...... Richmond Johnson, Ayers & Matthews ...... Roanoke Caskie & Frost, P.C ...... Lynchburg Kau_fman & Canoles, P.C ...... Norfolk Christian, Barton, Epps, Brent Knight, Dudley, Pincus, & Chappell ...... Richmond Dezern & Clarke ...... Norfolk Christian, Markham & Dolbeare ...... Richmond LeClair & Ryan ...... Richmond Clement & Wheatley ...... Danville MacKinlay & Vaiden, P.C.-.’~ ...... Norfolk Cooper & Davis, P.C ...... Portsmouth Maloney, Yeatts & Ban; P.C ...... Richmond Costello, Dickinson, Johnston, Greenlee, Mays & Valentine ...... Richmond Coleman & McLoughlin, P.C ...... Winchester McGuire, Woods, Battle & Boothe .... Richmond, Crenshaw, Ware & Johnson ...... Norfolk Fairfax, Alexandria Davies, Barrell, Will, Meade, Tate & Daniel, P.C ...... Danville Dunford~Jackson & Lewellyn, P.C .... Culpeper Mezzullo, McCandlish & Framme .... Richmond Davies, Devening & Davies ...... Lynchburg Mu|l~ns, Thomason & Harris ...... ¯ ..... Norton Diamonstein & Drucker ...... Newport News Dickstein, Shapiro , McPherson, Summers & Santos ...... Staunton & Morin ...... Wash., D,C., & Vienna Norfolk Southern Corporation ...... :...Norfolk Edmunds & Williams ...... Lynchburg Outten, Barrett and Burr ...... Emporia Florance, Gordon and Brown ...... Richmond Parvin, Wilson, Barnett Franklin, Williams and & Hopper, P.C ...... Roanoke Cowan ...... Fredericksburg Penn, Stuart, Eskridge & Jones ...... Abingdon Fray, Hudson & Clark ...... Culpeper Plunkett & Logan ...... Roanoke Famiss, Davis, Rashkind and Richmond, Fredericksburg & Potomac Saunders ...... Norfolk Railroad Company ...... Richmond Gabeler, Ward & Griggs ...... McLean Rilee, Cantor, Arkema & Gardner, Moss & Rocovich, P.C ...... Roanoke Edmonds, P.C ...... Richmond Gentry, Locke, Rakes & Moore ...... Roanoke Roberts & Ashby ...... Fredericksburg Glenn, Flippen, Feldmann & Darby ... Roanoke Roy, Forehand, Laine & Larsen, P.C ...... Chesapeake ~

34 Sponsors

Rumsey, Breeden, Hubbard, Wetherington & Melchionna ...... Roanoke Bugg & Terry ...... Irvington Ryland & Davis, P.C ...... Warsaw Wharton, Aldhizer & Weaver ...... Harrisonburg Sands, Anderson, Marks & White, Elliott & Bundy ...... Abingdon & Bristol Miller ...... Richmond Willcbx & Savage, P.C...... Norfolk Signet Bank ...... Richmond Williams, Mullen, Christian & Sovran Financial Dobbins ...... Richmond Corporation ...... Richmond, Norfolk Williams, Worrell, Kelly & Greer ...... Norfolk Thompson & McMullan ...... Richmond Woods, Rogers & Hazlegrove ...... Roanoke Timberlake, Smith, Thomas & Moses, P.C...... Staunton Wornom & Sharrett ...... Emporia Vandeventer, Black, Meredith & Young, Haskins, Mann Martin ...... Norfolk & Gregory, P.C ...... Martinsville Walton & Adams, P.C ...... McLean Zaritsky & Zaritsky ...... : ...... Fairfax

1988 Pa tro ns

E. G. Allen, Jr...... Richmond Leroy T. Canoles, Jr...... Norfolk Philip J. Bagley, HI ...... Richmond Daniel A. Carrell ...... Richmond Michael E. Barney ...... Norfolk Joseph C. Carter, Jr...... Richmond Stanley G. Barr, Jr...... Norfolk Richard H. Catlett, Jr...... Richmond Charles V. Bashara ...... Norfolk R. Harvey Chappell, Jr...... Richmond John W. Bates, III ...... Richmond George M. Cochran ...... Staunton John S. Battle, Jr...... Richmond William R. Cogar ...... Richmond Charles W. Best, Jr...... Norfolk Michael M. Collins ...... Covington David G. Blalock ...... Newport News C. Lacey Compton, Jr...... A. Hugo Blankingship, Jr...... Fairfax John J. Corson, IV ...... McLean Marvin C, Bowling, Jr...... Richmond James E. Covington, Jr...... Richmond Evans B, Brasfield ...... Richmond Robert A. Cox, Jr...... Richmond A. J. Brent ...... Richmond James S. Cremins ...... Richmond William G. Broaddus ...... Richmond Francis N. Crenshaw ...... Norfolk Thomas.C. Brown, Jr...... McLean Clifford A. Cutchins, IV ...... Richmond Robert P. Buford, Jr...... Richmond Arthur B. Davies, III ...... Lynchburg Robert L. Burrus, Jr...... ".. Richmond Norwood H. Davis, Jr...... Richmond M. Caldwell Butler ...... Roanoke Rodham T. Delk, Jr...... Smithfield Frank E. Butler, III ...... Virginia Beach Collins Denny, III ...... Richmond Royal E. Cabell, Jr...... Richmond Eva L. Dillard ...... Richmond Archibald A. Campbell ...... Wytheville John E. Donaldson ......

Williamsbur~

35 1988 Patrons

Mark S. Dray ...... Richmond L. Anthony Joseph, Jr...... Richmond Kathleen Dural ...... Richmond John F. Kay, Jr...... Richmond Homer C. Eliades ...... Hopewell M. Langhorne Keith ...... McLean A. C. Epps ...... Richmond :J. Sloan Kuykendall ...... Winchester William W. Eskridge ...... Abingdon Penelope Kyle ...... Richmond Bernard M. Fagelson ...... Alexandria Richard L. Lawrence ...... Roanoke E. Milton Farley, III ...... Washington, D.C. Thomas T. Lawson ...... Roanoke Thomas F. Farrell, H ... : ...... Alexandria William J. Lemon ...... Roanoke Ralph L. Feil ...... Charlottesville Richard H. Lewis ...... Fairfax Gilmer F. Flippin ...... Roanoke George B. Little ...... Richmond Calvin W. Fowler ...... Danville Charles M. Lollar ...... Norfolk Paul D. Fraim ...... Norfolk Michael D. Lubeley ...... Woodbridge Harry Frazier, HI ...... Richmond Robert W. Mann ...... Martinsville Barbara J. Gaden ...... Richmond Harry H. Mansbach ...... Norfolk Martin A. Gannon ...... Alexandria Thomas E. Martenstein ...... Richmond Richard D. Gary ...... Richmond Howard W. Martin, Jr...... Norfolk Stuart H. Gary ...... Vienna Henry M. Massie, Jr...... Richmond Vernon M. Geddy, Jr...... Williamsburg Michael W. Maupin ...... Richmond Allen C. Goolsby, HI ...... Richmond Alex. T. Mayo, Jr...... Norfolk George G. Grattan, IV ...... Charlottesville - J. Robert McAllister, HI ...... Arlington Jack E. Greer ...... Norfolk R. Dennis McArver ...... McLean Kossen Gregory ...... Roanoke David E. McClure ...... Winchester George H. Gromel, Jr...... Richmond William G. McClure, III ...... Richmond Virginia H. Hackney ...... Richmond Howard C. McElroy ...... Abingdon Peggy O. Haines ...... Bristol J. Edward McGolrick, Jr...... Manassas Grayson P. Hanes ...... Fairfax Walter J. McGraw ...... Richmond James A. Harper, Jr...... Richmond James R. McKenry ...... Virginia Beach W. Gibson Harris ...... Richmond Henry H. McVey, III ...... l~chmond Luther A. Harthun ...... Richmond Daniel J. Meador ...... Charlottesville Charles A. Hartz, Jr...... Richmond Leigh B. Middleditch, Jr...... Charlottesville John T. Hazel, Jr...... Fairfax Charles F. Midkiff ...... Richmond George H. Heilig, Jr...... Norfolk Andrew P. Miller ...... Arlington John B. Hemmings ...... Abingdon S. D. Roberts Moore ...... Roanoke R. Braxton Hill, III ...... Norfolk T. Justin Moore, Jr...... Richmond Waller H. Horsley ...... Richmond Thurston R. Moore ...... Richmond Joseph A. Howell, Jr...... Singer Island, FL G. Marshall Mundy ...... Roanoke James Lawrence Hutton ...... Blacksburg Alexander W. Neal, Jr...... Richmond R. Craig Jennings ...... Fairfax Thomas L. Newton, Jr...... Richmond Eino E. Jenstrom ...... Arlington Robert Terrance Ney ...... McLean F. Claiborne Johnston, Jr...... Richmond Eugene L. Nuckols ...... Pulaski ames P. Jones ...... ~ Bristol Robert C. Nusbaum ...... Norfolk

36 1988 Patrons Aubrey J. Owen ...... Winchester Emerson G. Spies ...... Charlottesville Rosewell Page, III ...... Richmond Wil]iam B. Spong, Jr...... Williamsburg Arthur Palmer, Jr...... Richmond Harold E. Starke, Jr...... Richmond Thomas C. Palmer, Jr...... Richmond James G. Steiger ...... Norfolk Robert S. Parker ...... Richmond Gregory N. Stillman ...... Norfolk Lawrence J. Pascal ...... Alexandria Bruce C. Stockburger ...... Roanoke Hugh L. Patterson ...... Norfolk Hiram A. Street ...... Grundy Robert H. Patterson, Jr...... Richmond Robert E. Stroud ...... Charlottesville John M. Peterson ...... ¯ ...... Norfolk G. R. C. Stuart ...... Abingdon Jerry M. Phillips ...... Fairfax John S. Stump ...... McLean C. Cotesworth Pinckney ...... Richmond Francis L. Summers, Jr...... Staunton Allan R. Plumley, Jr...... Fairfax Charles R. Swartz ...... Richmond Fred G. Pollard ...... Richmond James T. Tilton ...... Richmond H. R. Pollard, IV ...... Richmond Guy K. Tower ...... Norfolk Robert D. Pope ...... Richmond Anthony F. Troy ...... Richmond Robert L. Powell ...... Pearisburg Charles F. Tucker ...... Norfolk Richard C. Rakes ...... Roanoke Abram William Vandermeer, J~ ...... Richmond William R. Rakes ...... Roanoke Braden Vandeventer, Jr...... Richmond George H. Roberts, Jr...... Harrisonburg John L. Walker, ~lr...... Roanoke James C. Roberts ...... Richmond Archibald Wallace, III ...... Richmond Frank W. Rogers, Jr...... Roanoke Martin D. Walsh ...... Arlington William L. Rosbe ...... Richmond Edmund L. Walton, Jr...... McLean John M. Ryan ...... Norfolk Guilford D. Ware ...... Norfolk Richard R. Ryder ...... Richmond Thomas R. Watkins ...... Newport News Toy D. Savage, Jr...... Norfolk Hill B. Wellford, Jr...... Richmond Patricia Schwarzschfld ...... Richmond Hugh V. White, Jr...... Richmond Glenn J. Sedam, Jr...... Fairfax Kenneth Spencer White ...... Lynchburg Robert E. Sevila ...... Leesburg Anne Marie Whittemore ...... Richmond John S. Shannon ...... Norfolk Henry T. Wickham ...... Richmond David G. Shuford ...... Richmond J. F. Wilks ...... Norfolk Thomas G. Slater, Jr...... Richmond Williamsburg Alexander H. Slaughter ...... Richmond Paul L. Wilson ...... Frank M. Slayton ...... South Boston Jesse B. Wilson, HI ...... Fairfax Norman F. Slenker ...... Fairfax William T. Wilson ...... Covington Edward M. Smith ...... Arlington Arthur J. Winder ...... Virginia Beach Joseph Smith ...... Hampton John C. Wood ...... Fairfax Michael W. Smith ...... Richmond Robert C. Wood, III ...... Lynchburg R. Gordon Smith ...... Richmond David J. Wood, Jr...... Charlottesville Richard W. Smith ...... Staunton Joseph M. Wood, H ...... Charlottesville Turner T. Smith ...... Manassas Thomas S. Word, Jr...... Richmond ohnW. Snow ...... ~ Baltimore, MD R. Reid Young, Jr...... Martinsville

37 Newly Admitted Members This year the Association has changed its policy and all newly admitted members to the Virginia State Bar are automatically admitted to The Virginia Bar Association for their first year of member- ship. In addition to the 222 June admittees, the following have applied and been accepted for member- ship in The Virginia Bar Association.

Terri Gail Amernick ...... Richmond Robert Bruce Dickerson ...... McLean William Lee Anderson ...... Charlottesville Patricia Anne Dixon ...... Fairfax Jon Michael Babineau ...... Norfolk Robert Bruce Duncan ...... Washington, D.C. *John L. Bagwell ...... Grundy David E. Durrett ...... ¯ ...... Richmond *Walter R. Beales, III ...... Richmond Debora C. Embrey ...... Richmond Michael David Bednarek .... Washington, D.C. *John D. Epperly, Jr...... McLean Beth H. Berman ...... Norfolk *Barent L. Fake ...... Springfield *August Bequai ...... Vienna Jerry L. Falwell, Jr...... Lynchburg David Waller Bertoni ...... Washington, D.C. Eric H. Ferguson ...... Rocky Mount Nancy L. Betts ...... Richmond Michael F. Fink ...... Washington, D.C. *Alan M. Biddison ...... Richmond Leo Stephen Fisher ...... Arlington *Anita K. Blair ...... Sterling Margaret M. Glassman ...... McLean Alexander Hugo Blankingship, III James Bradley Gochenour .... Colonial Beach Washington, D.C. David William Go~wey ...... Washington, D.C. Bledsoe ...... Washington, D.C. Karen A. Gould ...... Richmond David P. Bohman ...... Richmond Steven D. Gravely ...... Richmond Jeffrey Fends Boothe ...... Washington, D.C. Diane Andrea Grossi ...... Haddonfield, N.J. Cynthia Ann Boretsky ...... Portsmouth Anne Carter Grove ...... Norfolk Karen Lillie Bovard ...... Washington, D.C. Melody A. Gunter ...... Richmond Jeffrey W. Breeser ...... Norfolk John F. Guyot ...... Washington, D.C. *Matthew A. Brennan, III .... Washington, D.C. Channing M. Hall, III ...... Washington, D.C. *Barry E. Bretschneider ...... Washington, D.C. Teresa S. Hanger ...... Richmond William A. Broscious ...... Richmond Susan Taylor Hansen ...... Norfolk Kathleen Glenn Burke ...... Washington, D.C. Kathleen G. Hands ...... Richmond Elizabeth Dale Burrus ...... RoanOk~ Carolyne R. Hathaway ...... Charlottesville *Benjamin Michael Butler ...... Winchester *Alan I. Herman ...... Alexandria *Bronson F. Byrd ...... Leesburg Laura Jayne Holland ...... Norfolk Douglas D. Callaway ...... Richmond *Robert P. Holmes ...... Arlington Paula S. Caplinger ...... Newport News Maureen Z. Hurley ...... Arlington James Carlsen ...... Burke Wayne Mitchell Irvin ...... Washington, D.C. *David Rust Clarke ...... Fairfax Wade A. Jacobsen ...... Charlottesville Paulus P. J. Coetser ...... Charlottesville Elizabeth A. Jex ...... Vienna John T. Cook "...... Lynchburg Frances F. Kalman ...... Richmond

*Indicates Senior Section Member. All others are Young Lawyers.

38 Newly Admitted Members

*Arthur J. Kamp ...... Newport News John M. Paris, Jr...... Norfolk *Barbara Hays Kamp ...... Newport News *Philip H. Powers ...... Vienna Thomas Kevin Kearney ...... Norfolk Richard B. Quinn ...... Washington, D.C. Joyce Ellen Kerman ...... Washington, D.C. *Carol C. Raper ...... Richmond Ann Marie Kirk ...... Chesapeake *Carol Duncan Rasnic ...... Richmond Thomas R. Klein ...... Norfolk *Julian I. Richards ...... Virginia Beach Paul F. Kling ...... Richmond John North Richardson, Jr...... Richmond *Thomas R. Knoll, Sr...... Staunton Gerald M. Ritzert ...... Fairfax Glenn Franklin Koontz ...... Washington, D.C. The Hon. Wilkes Coleman *Donna J. ~[raus ...... Falls Church Robinson (Judicial) ...... Arlington Charles C. Lacy ...... Wytheville *Mark Rollinson ...... ".. Alexandria *J. Christopher LaGow ...... Richmond Ramon Anthony Salgado .... Georgetown, DE Powell Murry Leitch, III ...... Covington Joseph P. Savage ...... San Francisco, CA Linda Joan Lewis ...... Washington, D.C. David C. Schroeder ...... Alexandria Sarah Edith Lynn ...... Washington, D.C. Kirk T. Schroeder ...... Richmond Edward M. Macon ...... Richmond David Rhodes Schultz ...... Reston *Walter A. Marston, Jr...... Richmond *John Michael Schultz ...... Washington, D.C. James C. Martin ...... Danville Laura D. Shannon ...... Washington, D.C. George L. Mason ...... Lynchburg Paul C. Skelly ...... Washington, D.C. Thomas Kelley McGowan ...... McLean *Dayton F. Slater, Jr...... Chesapeake Michael James McHugh ...... Fairfax Jeffrey Scott Smith ...... Danville Charles W. McIntyre, Jr...... Richmond Kevin Bryant Smith ...... Washington, D.C. *Pamela Rogers Melton ...... Alexandria John V. Snyder ...... Vienna Amber St. Clair Miller ...... Virginia Beach Jonnie Luane Speight ...... Covington Gary D. Miller ...... Pulaski Christoper Paul Speta ...... Alexandria *Susan Carole Minkin ...... Washington, D.C. David B. Spigle ...... Fincastle Marc E. Montalbine ...... Richmond David K. Spiro ...... Richmond Martha B. Moo ...... McLean W. Edgar Spivey ...... Norfolk *James T. Moore, III ...... Richimond Jeffrey M. Stedfast ...... Norfolk Mary G. Morris ...... Harrisonburg John Randolph Stokes ...... Norfolk Derek A. Mungo ...... Virginia Beach Margaret Mary Sweeney ...... Alexandria Anne Marie Murphy ...... McLean Christian Scott Talbot ...... Washington, D.C. *Thomas P. Murphy ...... Alexandria The Hon. Lydia Calvert *Daniel Francis O’Keefe, Jr. Taylor (Judicial) ...... Norfolk Washington, D.C. Kristine Elizabeth Taylor ...... Fairfax Faith O’Malley ...... New York, N.Y. Robert E. Thackston ...... Richmond David J. Palmer ...... Alexandria James David Villa ...... Washington, D.C.

39 Newly Admitted Members

Maria G. Vinci ...... Washington, D.C. Tara Leah Witmer ...... Washington, D.C. Elizabeth Latane Ware ...... Norfolk Lawrence Douglas Wilder, Jr...... Richmond *Martha L. Ware ...... McLean *Franklin David W01ffe ...... Washington, D.C. Cheryl D. Watson ...... Roanoke *Joyce Jackson Wood ...... Norfolk Deborah Ann Wechman ...... Lynchburg Thomas Scott Word, III ...... Staunton Elizabeth L. White ...... Richmond *Reginald R. Yancey ...... Lynchburg Cecelia Ann Wikenheiser ...... Norfolk Virginia Katherine Young ...... Norfolk Roger D. Williams ...... Harrisonburg Michael L. Zupan ...... Alexandria *The Hon. William L. Wimbish (Judicial) ...... Richmond 1988 Life Members

Samuel G. Alrich ...... Charlottesville Brockenbrough Lamb, Jr ...... Richmond Howard P. Anderson ...... Halifax Joseph A. Massie, Jr...... Winchester Alexander N. Apostolou ...... Roanoke F. Shield McCandlish ...... McLean Lorenzo L. Bean, Jr...... Arlington L. Shields Parsons, Jr...... Norfolk Frank C. Bedinger, Jr...... Boydton Fred G. Pollard ...... Richmond David G. Blalock ...... Newport News Howard ~/. Rhodes, Jr ...... Lynchburg Andrew Jackson Brent ...... Richmond Julian E. Savage ...... Richmond F. H. Conway ...... Danville Hoskins M. Sclater ...... Roanoke W. A. Dickinson ...... Cape Charles Edward M. Smith ...... Arlington James William Fletcher ...... Washington George P. Smith, Jr...... Palmyra Harry B. F. Franklin ...... Fredericksburg Turner T. Smith ...... Manassas Humes J. Franklin, Sr...... Waynesboro Emerson G. Spies ...... Charlottesville Samuel Goldb’latt ...... Norfolk David Meade White ...... Richmond Norris E. Halpern ...... Virginia Beach William L. Wilson ...... Lynchburg William W. Koontz ...... Alexandria John C. Wood ...... : ...... Fairfax George B. Kreger ...... Abingdon 1988 Judicial Life Members

Russell M. Carneal ...... Williamsburg Richard B. Kellam ...... Norfolk Robert E. Gibson ...... Chesapeake William W. May ...... Manassas Leroy E. Glass ...... Lynchburg D. Carleton Mayes ...... Dinwiddie Robert E. Hayes ...... Front Royal James H. Michael, Jr...... Charlottesville Paul A. Holstein ...... Lexington Rayner V. Snead ...... Washington

4O Yo g La ers :Section

DEBORAH K. NEWELL

Community Law Week ing the seminars, transportation of the senior citi- zens, and coordinating the seminars. The Committee THE Community Law Week Committee of the VBA is grateful to all those who assisted in the seminars. Young Lawyers Section has been very active in 1988. The topics selected included involuntary commit- Under the leadership of Jane S. Glenn of the firm of ments, Medicare and Medicaid, Social Security, phys- Gentry, Locke, Rakes & Moore, in Roanoke, Virginia, ical and mental disability, wills, trusts, estate plan- the Community Law Week Committee presented a ning and administration, a legislative update, crime series of seminars for senior citizens during Commun- prevention and consumer protection. Each seminar ity Law Week in May and also sponsored the "Ask-A- selected four or five topics as follows: Lawyer" television program which was broadcast on Norfolk- Tucker House (William R. Van Buren, III, May .8, 1988. Ms. Glenn has chaired the Committee Esquire, Coordinator) since 1986 and is responsible for developing the senior citizen seminars. Ms. Glenn stated, "We have a grow- Issues of Concern to Senior Citizens in the Norfolk ing population of senior citizens in our communities Area- Reverend Joseph N. Green, Jr., Vice Mayor confronted with varied and numerous legal issues. We of the City of Norfolk. wanted Community Law Week to be of service to the Consumer Rights - Doris L. Edmonds, Esquire community and the senior citizens are often ignored, Social Security - Kathleen Dring, Esquire so we decided that they would be the perfect recipients Wills, Joint Accounts, Powers of Attorney- J. Hume of our Committee’s programs." Ms. Glenn’s decision Taylor, Jr., Esquire to have senior citizen seminars around the state was Roanoke - Emanuel Weslayan Church (Jane S. "on target." The seminars were well-attended and Glenn, Esquire, Coordinator) appreciatied by the communities in which they were Involuntary Commitments - John Molumphy, Esquire held. The lawyers participating in the seminars Medicare and Medicaid - Betty Pullen, Congressman believed that the seminars were of assistance to the Olin’s Staff senior citizens and enhanced the reputation of law- Physical and Mental Disability- Madelene V. Young, yers in these communities. Esquire Wills and Estates - Ray Byrd, Esquire I. The Seminars Richmond - Imperial Plaza (Robert B. Delano, Jr., There were four seminars for senior citizens pre- Esquire, Coordinator) sented by the Committee. These seminars took place in Norfolk, Roanoke, Richmond and Harrisonburg. Legislative Update - Honorable E. Hatcher Cren- Young Lawyers participated as seminar coordinators shaw, Jr., Virginia House of Delegates and seminar speakers at each location. The seminar Social Security - Barbara A. Ziony, Esquire coordinators received information concerning the top- Wills, Trusts, Guardians, and Powers of Attorney - ics of interest to senior citizens from local community Malcolm P. Fridell, Esquire service organizations such as the League of Older Medicare and Medicaid- James W. Speer, Esquire Americans in Roanoke, the Capitol Area Agency on Aging in Richmond and the Valley Program for Ms. Glenn indicated that the Roanoke audience Aging Services, Inc. in Harrisonburg. These com- was especially interested in involuntary commitment; munity service organizations assisted with advertis- Robert B. Delano of Sands, Anderson, Marks & Miller

41 in Richmond stated that the audience in Richmond Barton, Epps, Brent & ChapPell in Richmond. The was enthusiastic about the legislative update pre- hour-long program received over one hundred tele- sented by the Honorable E. Hatcher Crenshaw, Jr., phone inquiries on topics such as probate, bank- and had many questions concerning Medicare and ruptcy, employer/employee relations, trespass, pater- Medicaid. Mr. Delano further mentioned that the nity, impeaching a judge and attorney’s fees. audience was grateful to the Virginia State Bar ~or supplying the audience with information concerning III. Future Programs their senior citizen handbook published by the Virgin- ia State Bar. Mayor Roy West attended part of the The Community Law Week Committee plans to Richmond seminar and spoke with members of the expand the senior citizen seminars by scheduling audience. more seminars in more locations. The Committee The seminars received publicity and press cover- hopes to have a seminar in the far western portion of age, including radio and television announcements in Virginia, Northern Virginia and have two or more several locations. seminars in Virginia’s larger communities at varied locations and times in an effort to provide informa- II. Ask-A-Lawyer tional services to more members of each community. The Community Law Week Committee sponsored The young lawyers participating in the seminars the "Ask-A-Lawyer" television program which broad- agreed that the seminars were timeworthy and had cast on May 8, 1988. Michael H. Gladstone of Mays & positive, lasting effects on the community and the Valentine in Richmond coordinated the program, perception of lawyers in the community. The growing choosing four panelists to field viewer questions. The group of senior citizens in our communities will cer- four panelists were Soloman Van Meter of Gentry, tainly welcome and appreciate the Committee’s efforts. Locke, Rakes & Moore in Roanoke, Julianna Grey The Committee will also continue to present the Fahrbach of the Public Defenders Office in Roanoke, "Ask-A-Lawyer" television program. This program Robert B. Delano, Jr., of Sands, Anderson, Marks & continues to be well-received and of service to the Miller in Richmond and Erin Sheehey of Christian, community, o -

42 PEGGY O’NEAL HAINES

ABA Award of Achievement Honors

I HAVE the pleasure of reporting that the Young Lawyers Section won two first place honors in the American Bar Association Award of Achievement competition held in conjunction with the annual ABA meeting in Toronto, Canada on August 3 and 4, 1988. The Section won first prize, among states in its di- vision, in both the Comprehensive Competition and Peggy O’Neal Haines is with the Bristol office the Single Project: Service to the Public Competition. of Penn, Stuart, Eskridge & Jones. Mrs. Haines The Comprehensive Award means that the Sec- received her B.A. in English and Political Science tion’s total program was judged to be the best in the from Virginia Polytechnic Institute and State University in 1973 and a J.D. from the Univer- country among groups of its size. The Single Project: sity of Virginia School of Law in 1976. Service to the Public Award was for the "Constitu- tional Comments" series which the Section produced in celebration of the Bicentennial of the U.S. Consti- tution. The "Constitutional Comments" are radio and "Seniors Seminars" television public service announcements featuring For the first time this year, the Community Law prominent Virginians narrating outstanding mo- Week Committee presented a series of seminars for ments in the development of the United States Con- senior citizens dealing with legal issues of interest to stitution. Craig Wood of Charlottesville chaired the them. Among the topics addressed were Social Secur- Section’s Law and Citizenship Studies Committee in ity, Medicare and Medicaid, physical and mental 1987 and orchestrated the development of the "Con- incapacity, wills, trusts, living wills, powers of attor- stitutional Comments." Mike Cole of Richmond as- ney, involuntary commitment, and consumer issues. sumed chairmanship of that Committee in 1988 and The "Seniors Seminars" were held on May 3 and May continued the good work that Craig began. The 5 in Roanoke, Harrisonburg, Richmond and Norfolk. eighth and final Constitutional Comment has just In addition to the attorneys who spoke to each group, been completed. The announcements feature Chief the Committee also secured the participation of legis- Justice Carrico, U.S. Senators Warner and Trible, lators and their staff members to give the attendees Governors Godwin, Holton and Baliles, Lt. Governor information about government programs. Jane Glenn Wilder and Attorney General Terry. My congratula- of Roanoke, chairman of the Community Law Week tions to all the committee chairmen who deserve the Committee, reports that all the Seminars were well credit for the Section’s having received this recogni- attended, and, in light of this year’s success, the tion from the ABA; these honors are a direct result of Committee is planning on expanding the Seminars their hard work and dedication to service to the public next year to other locations around the State. The and service to the bar. Special thanks to Kurt Krueger Committee coordinated its efforts with the League of of Charlottesville for his monumental efforts in com- Older Americans and the Richmond Area Agency on piling the Section’s application and in insuring that Aging. all rules were complied with and all deadlines met. As part of the Community Law Week celebration,

43 on May 8, 1988, the Committee again sponsored the ident Associate Program on the United States Su- "Ask-A-Lawyer" television program, with Mike Glad- preme Court. Jeff Nuechterlei~ of Washington is the stone of Richmond having responsibility for this part Section’s representative for this project, and has met of the week’s activities. Solly Van Meter, Julie Fahr- with the Program Coordinator of the Smithsonian to bach, Chip Delano, and Erin Sheehey served as panel- begin organizational work. The Program is scheduled ists for the television program. They received more to start in January, 1989, and the participants will than 100 telephone calls during the show’s one-hour meet once a week for eight weeks. Jeff has also been broadcast. asked by the Smithsonian to serve as informal advi- Jane and her Committee are ~to be commended on sor to the director of the course. The course is open to their fine efforts in maintaining and continuing to the general public as well as attorneys, and Associa- expand the Section’s activities for Community Law tion members in Northern Virginia will soon be Week. receiving registration materials and informational literature about the Program. A distinguished faculty Town Hall Meeting is being assembled, and we are proud to work with the Smithsonian in presenting the course. On July 12, 1988, the Roanoke Town Hall Commit- tee sponsored a public forum entitled "Flood Control: People, Pr6perty and Politics.". The program was Bar Exam Hospitality broadcast live over public television station WBRA. The Membership Committee under the guidance of After openihg remarks were made by a panel of Alison McKee and Jackie Stone is always looking for government officials, businessmen, and concerned new ways to attract members to the Association and citizens, representatives of the media were given an recently undertook a pilot project that met with great opportunity to ask questions of the panelists, and success. With the help of Matt Broughton of Roanoke, then the phone lines were opened to the general public on July 25, 1988, the Committee sponsored a hospital- so that their opinions could be voiced. The topic of ity table fo~ the cahdidates taking th~ Virginia Bar flood control is one of great importance to the Roa- examination in Roanoke.oMatt and other young law- noke Valley, and the Committee, chaired by. Matt yers in Roanoke set up information desks at three Broughton, provided a valuable service to the.people local hotels and provided complimentary snacks and of Roanoke in presenting the program. I attended the soft drinks, as well as maps and information about broadcast and was impressed at the overwhelming the Roanoke area to the bar examinees. They also response of the public; dozens of calls had to be turned stood ready to lend moral support as needed. Local away due to time constraints. It was apparent that businesses donated the snacks ~nd maps, and the Matt and his Committee had putin long hours to Roanoke Valley Legal Secretaries Association pro- insure that the program was successful. vided assistdnce in keeping the hosp~itality tables Town Hall Meetings are being planned this fall for staffed. The project was much appreciated by the Norfolk and Richmond. examinees, and the MembErship Committee has recommended that it be continued at all future bar Supreme Court Film exams. We believe that it will provide yet another way The film on the United States Supreme Court, "This of reaching new lawyers and increasing their interest Honorable Court," has been completed and was in the activities of the Assoication. shown at the Association’s summer meeting at The The Membership Committee of the Section has also Homestead. Those of you who saw the film there can been coordinating its activities closely with the Mem-. bership Committee of the Association. A jbint meet- attest to its high quality and educational value. Steve ing of the two committees was held in June, and they Busch has devoted manyhours to this project over ~he last two years, and we appreciate his persistence brainstormed new ideas for increasing membership. At present, a new membership brochure and a mem- in seeing the project through to completion. The film, bership directory are being developed, and the com- co-sponsored by the Section and public television sta- tion WETA of Washington, D:C., will be shown at the mittees are considering ways to encourage minority Supreme Court Visitors’ Center, and we have received participation and judicial participation in the Associ- permission from the Supreme Court to distribute the ation’s activities. film to educational organizations as well. As a consequence of our involvement in the Supreme Literacy Committee Court film, the Section has been asked by the Smith- The Literacy Committee, co-chaired by Jim Ballowe sonian Institution to co-sponsor the Institution’s Res- of Washington and George Wickham of Richmond, has been quite active since its inception in March. Earley of Norfolk, resigned their chairmanships; The Committee has obtained attorney coordinators in Hobie, because of a change in jobs and Mark, because the twelve "literacy regions," as designated by the of his new responsibilities as state senator. Ken Wills Virginia Literacy Foundation. The Committee con- of Norfolk will succeed Mark as chairman of the tinues to work closely with the Foundation to address Criminal Law and Corrections Committee, and John the legal needs the Foundation identifies as most Cook of Lynchburg will assume Hobie’s job as chair- pressing for its affiliate organizations. On September man of the Pre-Law Counseling Committee. Addi- 12 and 13, a Committee representative spoke to the tionally, a Town Hall Meeting Committee has been State Library Conference in Richmond about obtain- established in Norfolk and Alfred "Ran" Randolph, ing tax-exempt status for literacy groups. The Com- Jr. is undertaking the leadership of that new commit- mittee is also working on the production .of a low tee. As mentioned previously in this report, Jeff vocabulary legal publication for distribution to per- Nuechterlein of Washington is chairing our new sons undergoing literacy tutoring. Judicial Studies Committee.

Bridge-the-Gap Seminars Nominating Committee Rob Jackson, chairman of the Bridge-the-Gap Semi- On August 15, 1988, the Nominating Committe met nar Committee, has announced that the Bridge-the- and unanimously selected Stephen D. Busch of Rich- Gap Seminars will be held on October 21 and October mond as the nominee for Chairman-Elect of the Sec- 22 in CharlotteSville and Newport News and on tion and William R. Van Buren, III of Norfolk as the October 27 and October 28 in Abingdon, Northern nominee for Secretary-Treasurer. Any additional nom- Virginia, Richmond, Roanoke and Virginia Beach. inations should be sent toTed Ellett, Chairman of the At these seminars, the revised and updated version Nominating Committee, at 555 13th Street, N.W., of The Virginia Lawyer handbook will be made Washington, D.C. 20004-1109. Nominations may also available. This year, Mike Falzone and his committee be made in person at the Fall Meeting of the Execu- have revised the chapters on antitrust, domestic rela- tive Council which will be held at Wintergreen on tions, habeas corpus, labor-management relations, October 1, 1988 at 10:00 a.m. After that meeting, in civil actions-courts of record, defending the criminal accordance with the Section’s bylaws, officer nomina- case, landlord-tenant, and patent, trademark, and tions will be closed. copyright law. Also, The Virginia Lawyer will have a The Nominating Committee will meet again after new look and will be published in two volumes. the Fall Meeting to consider candidates for the Sec- tion’s Executive Committee. Anyone interested in New Committee Chairmen serving on the Executive Committee should contact I also want to announce that the Executive Council me or Ted Ellett. The election of officers and members has added four new members since my last report to of the Executive Committee will take place at the you. Unfortunately, two of our long-time committee Association’s annual meeting in Williamsburg " in chairmen, Hobie Claiborne of Richmond and Mark January.

45 The Association notes with deepest regrets the passing of the following members:

William Carol Baskett ...... 1931-1988

Langhorne Jones ...... 1902-1988 Judicial lJife Member

Thomas W. Phillips ...... 1900-1988 Life Member

Arthur J. Winder . 1903-1988 Life Member The Virginia Bar Association Membership Application OBJECTIVES: The Association was incorporated and shall exist "for the purpose of cultivating and advancing the science of jurisprudence, promoting relbrm in the law and in judicial procedure, fac!litating the administration of justice in this state, and upholding and elevating the standard of honor, integrity, and courtesy in the legal profession."

Name: Title First Middle Last Suffix

First or Call Name for badge: Spouse’s Name:

Firm Name:

Business Address:

Business Telephone:

Home Address:

Home Telephone:

Date of Birth: Sex: Social Security No.:

State & Date Admitted to Bar: Congressional District:

Law School: Date of Graduation:

Primary Area of Practice: Secondary Area of Practice:.

Have you previously been a member of The Virginia Bar Association? [] Yes [] No

Membership Dues (Check appropriate category)

[] $o New Member--New admittees to the Virginia State Bar who have not previously practiced law (calendar year of admission only).

[] $10 Student--Third year law students or any Virginia law school graduate awaiting admission to the bar, not more than two years since graduation. [] $80 Regular Member--Yearly dues for all regular members. [] $200 Patron Member--Special support members of VBA (Includes regular $80 dues) [] $40 Faculty Member--Full-time law school faculty of Virginia law school. [] $0 Judicial Member--Any federal, state or local court judge in Virginia. [] $0 Life Member--Members who have reached the age of 70 years and also been a member of The Virginia Bar Association for 40 consecutive years.

VBA Sections -- All Section Dues $15 -- ~Check appropriate area if interested)

[] Business [] Domestic Relations [] Real Estate

[] Taxation [] Wills, Trusts & Estates [] Labor Relations & Employment Law

TOTAL AMOUNT ENCLOSED (Add Membership Dues and Section Dues)

(continued on back)

47 Application (continued)

Lobbying is an important function of The VBA. We would appreciate your assisting us by listing any legislators whom you would feel comfortable contacting regarding legislation of interest to the Association.

Legislative Contacts: Legislative District -- Senate: House:

It is my understanding that once admitted to membership in this Association, any member whose license to practice law is suspended or revoked or surrendered after a complaint has been made as to professional conduct shall thereby automatically be expelled from this Association. If admitted as an active member, I agree to abide by the provisions of the Constitution and By-Laws of the Association and the Virginia Code of Professional Responsibility. I hereby certify that the information given is true and correct.

Date: Applicant’s Signature:

VBA USE ONLY: Date Admitted: Authorized by:

Verified Entr~ on Records I LTR ML Cert.

48