NEW YORK STATE BAR ASSOCIATION JournalJournalMARCH/APRIL 2003 | VOL. 75 | NO. 3

DISCLOSINGDISCLOSING CLIENTCLIENT WRONGDOINGWRONGDOING

Inside Insurance Rehabilitation Impeaching Witnesses Property Condition Disclosure Act Russia Revives Jury Trials BOARD OF EDITORS ONTENTS Howard F. Angione C Editor-in-Chief Queens e-mail: [email protected] Recent News Events Illustrate Ethical Dilemmas Rose Mary Bailly Associated With a “Difficult” Organizational Client Albany Louis P. DiLorenzo 8 Willard H. DaSilva Garden City Litigators Must Prepare for Risk That Insurers May Louis P. DiLorenzo Go into Rehabilitation or Liquidation Syracuse Margaret J. Gillis and John P. Calareso, Jr. Philip H. Dixon 20 Albany Lesley Friedman CLE Insights: Evidence – Effective Techniques For New York City Impeaching Witnesses Judith S. Kaye Walter L. Meagher, Jr. 28 New York City John B. Nesbitt First Court Case to Interpret Property Condition Lyons Disclosure Act Holds Sellers Not Liable Eugene E. Peckham Karl B. Holtzschue Binghamton 31 Sanford J. Schlesinger New York City Russia in Transition – Sharing Legal System Objectives Richard N. Winfield As Russia Revives Trial by Jury New York City Patricia D. Marks, Mark W. Bennett, Bret Puscheck and Eugene C. Gerhart Ronald Reinstein 36 Editor Emeritus Binghamton

Daniel J. McMahon Managing Editor Albany e-mail: [email protected] D EPARTMENTS Philip C. Weis President’s Message ______5 Crossword Puzzle ______52 Associate Editor Attorney Professionalism Forum ____ 44 by J. David Eldridge Oceanside Lawyer’s Bookshelf______46 Index to Advertisers ______53 EDITORIAL OFFICES by Thomas F. Liotti Classified Notices ______54 One Elk Street Point of View ______48 New Members Welcomed ______56 Albany, NY 12207 (518) 463-3200 by Alvin D. Lurie 2002-2003 Officers ______63 FAX (518) 463-8844 Language Tips ______51 The Legal Writer ______64 by Gertrude Block by Gerald Lebovits ADVERTISING REPRESENTATIVE Network Publications Sheri Fuller 10155 York Road, Suite 205 Crestridge Corporate Center O N T HE C OVER Hunt Valley, MD 21030 (410) 628-5760 A referee calls time out on this month’s cover, a symbol of the decision an attorney e-mail: [email protected] may need to make when dealing with a client poised to do the “wrong thing.” (See page 8.) ON THE WORLD WIDE WEB: http://www.nysba.org Cover Design by Lori Herzing.

The Journal welcomes articles from members of the legal profession on subjects of interest to New York State lawyers. Views expressed in articles or letters published are the authors’ only and are not to be attributed to the Journal, its editors or the Association unless expressly so stated. Authors are responsible for the correctness of all cita- tions and quotations. Contact the editor-in-chief or managing editor for submission guidelines. Material accepted by the Association may be published or made available through print, film, electronically and/or other media. Copyright © 2003 by the New York State Bar Association. The Journal (ISSN 1529-3769), official publication of the New York State Bar Association, One Elk Street, Albany, NY 12207, is issued nine times each year, as follows: January, February, March/April, May, June, July/August, Sep- tember, October, November/December. Single copies $18. Periodical postage paid at Albany, NY and additional mailing offices. POSTMASTER: Send address changes per USPS edict to: One Elk Street, Albany, NY 12207. Journal | March/April 2003 3 have been inspired by the legisla- are no easy issues, no simple solu- tive advocacy and related actions RESIDENT S tions, and no paths without hurdles Iof our state’s first woman admit- P ’ or forks in the road. ted to the bar, Kate Stoneman, as I ESSAGE These facts of life are demon- prepare to participate in Albany Law M strated by developments in mid- School’s program in her honor in late March regarding our persistent ef- March. Recalling her work in the forts to obtain legislation that would 1880s for legislation to allow women raise the dismally low assigned to participate in school elections, she counsel rates for indigent criminal commented, “I think it is called lob- defendants and in Family Court mat- bying now, but in those days it was ters. These considerations also are the simplest thing in the world to get evident in the current debates about inside the brass rail. We had the ‘run’ proposed changes in the tort system, of the two houses and were allowed another topic of our long-time effort to come and go as we pleased.” to ensure that the process is fair to all She applied her advocacy skills concerned. again when, after passing the bar The governor’s budget plan calls exam, she was turned down for ad- for establishment of an Indigent mission to the bar based on the male Legal Services Fund and an increase terminology of the statute. As she in the assigned counsel hourly rates, told the story, facing the pending ad- from the outmoded levels of $40 for journment of the Legislature, she work in court and $25 outside the marshaled the support of educators courtroom, to $75 for felony and and persons prominent in govern- Family Court matters and $60 for ment to remedy this situation. A bill LORRAINE POWER THARP misdemeanors. The revenue for these was quickly prepared, which passed increases is to be derived from vari- the Senate and Assembly in just a Legislative ous fee increases and an increase in few days with “hardly a dissenting the biennial attorney registration (an vote.” The afternoon upon securing Advocacy additional $50 every two years). The this vote, she visited Governor Hill – critical importance of updating the accompanied by state and city representatives and the assigned counsel rates is recognized and can be simply press – and obtained his signature on the amendment. stated. As I told legislators in my testimony at budget The governor also happened to be the president of the hearings on February 24: State Bar Association (no one told me that dual role was These rates, which have remained unchanged since possible!). Within three days, she successfully reapplied 1986 have had a devastating adverse impact on the for admission. We are indebted, indeed, to the savvy practice of criminal defense law and the nature of rep- Ms. Stoneman for this seminal achievement. resentation afforded to indigents. Many experienced at- This vignette of legislative action drew my keen in- torneys no longer can afford to handle assigned counsel cases and have left state court panels to accept federal terest, not only in relation to our current efforts to assure court assigned counsel work, the rate for which rose to equity and opportunity in the profession, but also as $90 per hour in 2002. Consequently, because of dwin- background to our work to ensure that our message is dling numbers, attorneys handling “state” assigned effectively heard in today’s legislative process, above counsel matters now face an ever-increasing caseload, the cacophony of competing concerns and complexities. coupled with a decline in experienced practitioners. Ul- We need also to ensure that the necessary actions for jus- timately the rights of those unable to pay for legal ser- tice are taken even in the wake of these difficult eco- vices are not properly protected. Too often indigent per- sons in need of an attorney in criminal or Family Court nomic conditions. matters are denied access to justice because of the crisis In the past year, I have written and spoken to you in our assigned counsel system. about the concrete steps that we are taking to strengthen our legislative advocacy, coordinating with an increased This critical need also was reflected in a case brought presence in the media and public forums to promote un- by the New York County Lawyers’ Association, a co- derstanding of the issues and how these have an impact sponsor of the assigned counsel plan in New York City, on the citizens of our state. With the expertise of our Lorraine Power Tharp can be reached at Whiteman members from all practice areas and perspectives, we Osterman & Hanna, One Commerce Plaza, Albany, continue to strive to be a voice of reason. Today, there New York 12260, or by e-mail at [email protected].

Journal | March/April 2003 5 PRESIDENT’S MESSAGE for changes in the tort system were heating up in Wash- ington and Albany. Here, too, with our diverse mem- in the February 5 decision of Supreme Court Justice Lu- bership reflecting all perspectives, we have worked over cindo Suarez directing assigned counsel rates of $90 in the years to be a voice of reason, calling for constructive 1 the City. changes where needed and fair to all parties, but cau- On this, the 40th anniversary of Gideon v. Wain- tioning against the wholesale dismantling or erosion of 2 wright, we remember the words of the Supreme Court the civil justice process in matters of liability. Consistent in that landmark decision: “. . . in our adversary system with House of Delegates’ action for many years, we of criminal justice, any person haled into court, who is spoke in opposition to the federal Health Act of 2003, too poor to hire a lawyer, cannot be assured a fair trial contending that authority for medical liability laws unless counsel is provided for him. . . . The right of one should continue to reside with the states. Let me share charged with crime to counsel may not be deemed fun- this with you: damental and essential to fair trials in some countries, but it is in ours.” We also think about the observations This would be an appropriate moment to take an objec- of the New York State Court of Appeals 38 years ago in tive look at the tort laws of New York. It is, after all, no 3 secret that the U.S. Chamber of Commerce and its local People v. Witenski that “the right of counsel must be counterpart, the Business Council of New York, have made ‘meaningful and effective’ in criminal courts on made bringing about major changes in the tort laws one every level.” Also on our minds is the extensive work of of their top priorities. The New York State Legislature members of the profession in striving to provide such currently has before it bills that would, if enacted, sub- counsel under the strains of a system stretched beyond stantially alter tort rights and defenses. Not surpris- comprehension and the concerted efforts of our Associ- ingly, practicing lawyers across New York have repeat- ation in seeking a regularized governmental funding edly expressed to me their concerns about these source to truly realize the intentions of the courts in attempts to change the tort laws. these decisions. That paragraph was in former President Jim Moore’s In my testimony to the Legislature, I reiterated that President’s Message in the Bar Journal from April 1999. the cost for this counsel for the indigent is a societal re- The more things change, the more they stay the same. sponsibility, and spoke in support of the governor’s pro- Our efforts will vigorously continue to assure that the posed establishment of an Indigent Legal Services Fund justice system is accessible, fair and responsive to the as a permanent funding source. My testimony urged needs of all. that the rates for counsel be set at constitutionally ac- ceptable levels to ensure provision of adequate counsel. 1. See Daniel Wise, Suarez Raises Rates for Assigned Counsel As developments unfold, we will continue to examine Faults Pataki, Lawmakers for Failing to Act, N.Y.L.J. Feb. 6, and address proposals for resolution. 2003, p. 1, col. 4. As I gave this testimony to lawmakers, debate on 2. 372 U.S. 335, 344 (1963). proposals from medical, insurance and business entities 3. 15 N.Y.2d 392, 395, 259 N.Y.S.2d 413 (1965).

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6 Journal | March/April 2003 Recent News Events Illustrate Ethical Dilemmas Associated With A “Difficult” Organizational Client

BY LOUIS P. D ILORENZO

ne of the most difficult situations a lawyer can Understanding Who the Client Is face is the possession of information revealing Because various ethical obligations typically spring Othat a client is about to do, or has done, some- from the formation of an attorney-client relationship, it thing that is “wrong,” particularly if it is something that is initially important to understand when such a rela- will harm others or is criminal. Recent events in the tionship is formed and, especially in the organizational business world involving Enron and others make it context, with whom it is formed. clear that these situations arise not only in the stereo- Traditionally, an attorney-client relationship arises typical cases (e.g., criminal defense), but also in repre- when a person manifests to a lawyer an intent to obtain senting organizational clients, whether they be corpora- legal services from a lawyer and that lawyer either man- tions, labor organizations or various types of business ifests consent to provide the services or fails to manifest entities. a lack of consent to do so, and the lawyer knows or rea- Suppose you learn that your corporate client (or, sonably should know that the person is relying on the more accurately, a “constituent” – officer, employee, lawyer to provide those services.2 Generally, the cre- agent – of your corporate client) is about to dump toxic ation of an attorney-client relationship is determined by waste into a local waterway, or is about to hide from the reasonable expectation of the putative client and not FDA authorities some potentially adverse effects of a by the lawyer’s intent. new drug it is testing, or is misstating its financial con- Once it is determined that an attorney-client relation- dition on soon-to-be released public disclosure docu- ship exists, the identity of the client in an individual ments. As that organization’s counsel – in-house or out- context is readily apparent. In an organizational context, side – what can you do? What must you do? however, it is easier to lose sight of the client’s identity. When dealing with these “difficult” clients – those An organization only operates through its individual who either refuse to do “right” or who affirmatively do agents, thus often causing lawyers to treat those indi- “wrong” – we may always choose (and sometimes may viduals as their “client.” For ethical purposes, however, be required) to attempt to persuade them to act differ- an entity theory is generally applied, which means that ently or even to withdraw from their representation (in the client is the organization, and not the individuals hopes of either influencing their behavior or making us who act on its behalf. Thus, for example, the New York feel “better”).1 But many times we will be unsatisfied Code of Professional Responsibility (“Code”), in its Eth- with that outcome because our various efforts, includ- ical Considerations, explicitly provides that a lawyer ing withdrawal, simply will not influence the wrongful employed or retained by a corporation or similar entity conduct. Is there anything else we can do? Or must do? owes allegiance to the entity and not to any shareholder, What ethical issues arise when we have a corporate or other organizational client (or individuals within that organization) that has embarked, or is about to embark, LOUIS P. D ILORENZO, a member of on a wrong path that may cause harm, whether it be to Bond, Schoeneck & King, PLLC in others associated with the organization, the organiza- Syracuse, serves on the Journal’s Board tion itself or innocent third parties? of Editors. He is a fellow of the Ameri- This article explores some of the ethical issues raised can College of Labor and Employment when an organizational client or its members appear Lawyers and a former chair of the poised to do the “wrong” thing. To help place some of NYSBA Labor Relations Committee. A graduate of Syracuse University, he re this discussion in context as the relevant ethical rules are ceived his J.D. from the State Univer- discussed, consider the hypothetical in the box accom- sity of New York at Buffalo. panying this article.

8 Journal | March/April 2003 director, officer, employee, representative or other per- son connected with the entity.3 Similarly, the Restate- A Hypothetical Situation ment provides: By representing the organization, a lawyer does not L has been outside counsel to ABC Food Process- thereby also form a client-lawyer relationship with all ing Co. for many years. In that role she has worked or any individuals employed by it or who direct its op- closely with VP, the company’s vice-president for erations or who have an ownership or other beneficial operations. In fact, VP has been L’s only contact at 4 interest in it, such as its shareholders. the company over the years. In the hypothetical, then, L’s client clearly is ABC Food Recently, a batch of food distributed by the com- Processing Co., and not VP. pany was the subject of an FDA-ordered recall. The recall was caused by both a mislabeling problem and The Duty to Maintain a minor spoilage problem. (The latter is capable of Confidences and Secrets causing a minor adverse reaction – some nausea and Why is the identity of the client so important? The vomiting – in a few highly sensitive individuals, but hallmark of an attorney’s ethical obligations is the duty nothing more.) to maintain the confidences and secrets of her “clients.” The company had 120 days to complete the recall. DR 4-101(B) of the Code states that a lawyer shall not Now, 125 days later, L has been advised by VP that knowingly: he never complied with the recall order (he had (1) reveal a confidence or secret of a client; made a business determination that the cost of com- pliance was simply too great given the relatively (2) use a confidence or secret of a client to the disad- minor good to be served by a recall). Failure to abide vantage of the client; or by the recall order, if detected, is not criminal but (3) use a confidence or secret of a client for the advan- will give rise to fines and penalties. tage of the lawyer or of a third person, unless the client consents after full disclosure.5 do in light of her knowledge about the spoilage, the fail- Confidences and secrets, for these purposes, are ure to recall and the possible risk of harm to others? broadly defined. While “confidences” refer to informa- tion protected by the attorney-client privilege, “secrets” Protecting the Organization From Itself refer to any other information gained in the professional Organizations, of course, “act” through others (“con- relationship that the client has asked to be held inviolate stituents”), such as officers, directors, employees or or the disclosure of which would be embarrassing or other agents. Consequently, when an organization en- would likely be detrimental to the client.6 gages in misconduct, it is because one of these individ- Consequently, the hurdle a lawyer faces when con- uals is engaging in that misconduct. What can an attor- fronted with organizational wrongdoing and the desire ney do to protect an organizational client from the to avoid, mitigate or rectify the consequences of that misdeeds of those very individuals who purport to act wrongdoing, is the duty of confidentiality; because, in on its behalf? virtually all cases, knowledge of that wrongdoing, past DR 5-109(B) addresses this situation in some detail: or future, will constitute a client confidence or secret. If a lawyer for an organization knows that an officer, Certainly in the hypothetical, L’s knowledge that ABC employee or other person associated with the organiza- did not abide by the recall order is at least a secret (and tion is engaged in action, intends to act or refuses to act may be a confidence). in a matter related to the representation that is a viola- tion of a legal obligation to the organization, or a viola- Disclosing Organizational Wrongdoing tion of law that reasonably might be imputed to the or- A natural reaction to discovering that an organiza- ganization, and is likely to result in substantial injury to the organization, the lawyer shall proceed as is reason- tional client (or one of its constituents) is about to en- ably necessary in the best interest of the organization. gage in conduct that will cause harm to itself or another, In determining how to proceed, the lawyer shall give or has already engaged in conduct that may continue to due consideration to the seriousness of the violation cause harm, is to attempt to prevent that conduct or to and its consequences, the scope and nature of the mitigate or rectify the harm. The ethical issues in such a lawyer’s representation, the responsibility in the orga- situation focus on whether, at one extreme, a lawyer for nization and the apparent motivation of the person in- such a client is under any obligation to take any action volved, the policies of the organization concerning such matters and any other relevant considerations. Any or, at the other extreme, is even permitted to take cor- measures taken shall be designed to minimize disrup- rective action, in the face of the duty to maintain client tion of the organization and the risk of revealing infor- confidentiality. In the hypothetical, what can, or must, L mation relating to the representation to persons outside

Journal | March/April 2003 9 the organization. Such measures may include, among nization as a result of the violation, (iii) the scope and others: nature of the lawyer’s representation, (iv) the responsi- 1. Asking reconsideration of the matter; bility in the organization and the apparent motivation of the person whose conduct or refusal to act is in issue, 2. Advising that a separate legal opinion on the matter be sought for presentation to appropriate authority in (v) the policies of the organization concerning the mat- the organization; and ter and (vi) any other relevant considerations. But in the end, the action taken must be designed to minimize dis- 3. Referring the matter to higher authority in the orga- ruption of the organization and the risk of revealing in- nization, including, if warranted by the seriousness of the matter, referral to the highest authority that can act formation to persons outside the organization. in behalf of the organization as determined by applica- The Disciplinary Rule also lists a number of measures ble law. that an attorney confronted with this situation should consider: (1) asking for reconsideration of the decision Although some have expressed concern that DR 5-109 at hand; (2) advising that a separate legal opinion be ob- requires an attorney to “monitor” and even to act dis- tained for presentation to the appropriate authorities loyally toward an organizational client, the scope of this within the organization; and Disciplinary Rule is actually (3) referring the matter to a quite limited. higher authority within the First, the rule imposes a Permitting at least some extra- organization including, if duty on the lawyer only in organizational disclosure, when warranted by the circum- circumstances where she stances, to the highest au- “knows” that a covered form in the best interests of the thority which can act in be- of misconduct is occurring or organization, was specifically half of the organization (e.g., is about to occur.7 considered, and rejected, during its board of directors). Some Second, the misconduct commentators have inter- must be both related to the the Model Rules debates. preted this last proviso as not lawyer’s representation and requiring a lawyer to make involve (i) a violation of an disclosure to corporate share- officer’s, employee’s or other person’s legal obligation holders, since they generally are not the highest author- to the organization or (ii) a violation of law that reason- ity “which can act in behalf of the organization.”8 ably might be imputed to the organization. DR 5-109 What is the attorney’s recourse if pursuing the matter does not require disclosure if the misconduct is unre- up the organizational chain of command is not success- lated to the lawyer’s representation or if the misconduct ful? Under New York’s Disciplinary Rule, the lawyer’s is simply “wrongful” conduct, but not otherwise a vio- only recourse is (permissive) resignation: lation of a legal obligation owed to the organization or a violation of law that could be imputed to the organiza- If despite the lawyer’s efforts in accordance with DR 5- tion. 109, the highest authority that can act on behalf of the Third, a lawyer is required to make a disclosure organization insists upon action, or a refusal to act, that is clearly a violation of law and is likely to result in a under this provision only if the misconduct is likely to substantial injury to the organization, the lawyer may result in “substantial” injury to the organization. resign in accordance with DR 2-110.9 Thus, in fact, the circumstances are quite limited in which an attorney is required to act to protect an orga- Significantly, the Disciplinary Rule makes no provi- nizational client, in effect, from itself. sion for the disclosure of the misconduct outside the or- ganization. Thus there is no basis, at least under this In addition, DR 5-109 narrowly defines the action rule, for a lawyer to report an organizational client to that a lawyer is required to undertake in these circum- the “authorities” to prevent the wrongdoing or to mini- stances. In recognition of the entity theory of represen- mize the effects of misconduct. This Disciplinary Rule’s tation, the lawyer is commanded to proceed “as is rea- counterpart under the ABA’s Model Rules of Profes- sonably necessary in the best interest of the sional Conduct (on which the Disciplinary Rule is mod- organization.” Thus, clearly, the interests of the various eled), Rule 1.13(c), similarly contains no provision for officers, directors and other employees with whom the going outside the confines of the organization itself.10 lawyer has dealt over time are irrelevant; the lawyer’s Permitting at least some extra-organizational disclosure, conduct must be governed by what is in the best inter- when in the best interests of the organization, was ests of the organizational client. The rule sets out a num- specifically considered, and rejected, during the Model ber of considerations that should guide the lawyer in Rule debates.11 Nonetheless, at least four states have determining how to proceed: (i) the seriousness of the violation, (ii) the consequences likely to befall the orga- CONTINUED ON PAGE 12

10 Journal | March/April 2003 CONTINUED FROM PAGE 10 Protecting Third Parties From the Client adopted a variation of this rule that permits (but does After considering the lawyer’s obligations when the not require) disclosure to authorities outside the organi- wrongful conduct poses a harm to the organization it- zation where the organization’s highest authority has self (i.e., liability for failing to comply with a recall acted to further the personal or financial interests of that order), the next question is: What rules apply when the authority (which are in conflict with the organization’s organization’s actions pose harm to others? What effect, interests) and such disclosure is necessary to protect the if any, does it have that a failure to follow through on the interests of the organization.12 recall may cause some, albeit minor, harm to con- sumers? What if the spoilage issue was sufficiently seri- Consequently, the lawyer’s obligation to protect the ous that if enough of the product was consumed over a organization from itself is somewhat limited. In the hy- long enough period, the health consequences were far pothetical, L would have no duty to act on her informa- more serious, perhaps even tion since VP’s conduct is not fatal? Since L’s knowledge (of likely to cause “substantial both the spoilage and the fail- injury” to the company. Section 307 of Sarbanes-Oxley ure to recall) is likely to con- Notwithstanding that L stitute either a confidence or might not be required to act, grants authority to the SEC to secret, the analysis must is she permitted to do some- impose standards of conduct begin with DR 4-101, which thing? For example, is she al- prohibits disclosure of such lowed to seek out the com- applicable to securities lawyers. information, except (as rele- pany’s president and advise vant to this discussion): her of what has happened, in (1) when permitted under Disciplinary Rules or re- hopes that she might still be able to rectify it? One quired by law or court order; would think that the answer is, or should be, “yes.” (2) when the disclosure is of a client’s intention to However, some commentators have read this provision commit a crime and the information is necessary to pre- to be so restrictive that it not only fails to require an or- vent the crime; or ganization’s attorney to “blow the whistle” within the organization unless all of the conditions of DR 5-109 (3) the disclosure is implicit in the lawyer’s with- have been met, it also prohibits a lawyer from choosing drawing a written or oral opinion or representation pre- to do so.13 Thus, under this interpretation, L in the hy- viously given by the lawyer, which is believed by the pothetical would actually be prohibited from reporting lawyer still to be relied upon by a third person, where VP up the corporate ladder because the absence of a rea- the lawyer has discovered that the opinion or represen- sonable basis to believe that this misconduct will cause tation was based on materially inaccurate information or is being used to further a crime or fraud. “substantial injury” takes it outside the scope of DR 5-109.14 This interpretation appears to unduly restrict a Disclosures required by the rules or law Although lawyer’s interaction with its organizational client. the Code clearly prohibits a lawyer from counseling or assisting a client in illegal or fraudulent conduct,16 it re- While it may be fair to say that, in the hypothetical, ally does not authorize the disclosure of wrongful client the rule does not require the attorney to “blow the whis- conduct to third parties (including the authorities) ex- tle” even within the organization, to suggest that the cept in the most extreme circumstances. For example, lawyer would not be permitted to do so is unwarranted. DR 7-102 provides that a lawyer who learns that a client, There should not be any confidentiality concerns pre- in the course of the lawyer’s representation, has perpe- venting intra-organizational disclosure in these circum- trated a fraud upon a third party or a tribunal, must stances, because by definition any confidential informa- promptly call upon the client to rectify the fraud and if tion the lawyer has “belongs” to its organizational the client refuses or is unable to do so, the lawyer is ob- client; disclosing that information to those higher up the ligated to reveal the fraud, except when that information corporate ladder would appear to be nothing more than is protected as a confidence or secret. Since, in virtually disclosing a client confidence to the client. Given that all cases, this will be the case, this is a Rule without any both the Code and the Model Rules recognize that significant import.17 lawyers often serve in the broad role of counselor to a As noted, New York’s Code permits a lawyer to dis- 15 client, it would seem entirely appropriate for L in our close client confidences when required by law to do so.18 hypothetical to at least express her opinion to the com- Consequently, a lawyer who is required to disclose in- pany’s president that the vice-president’s actions, even formation by court order may do so without violating if not likely to result in “substantial injury,” nonetheless the Code of Professional Responsibility. are not in the best interests of the company. CONTINUED ON PAGE 14

12 Journal | March/April 2003 CONTINUED FROM PAGE 12 from the CLO, the attorney must report evidence of a Although not applicable to our hypothetical, of inter- material violation up-the-ladder to the issuer’s audit est to all lawyers representing public companies is the committee, or to another committee of independent di- recent enactment of the Sarbanes-Oxley Act of 2002, also rectors if the issuer does not have an audit committee. If known as the Public Company Accounting Reform and the issuer does not have an audit committee or another Investor Protection Act of 2002. Its primary purpose is to committee of independent directors, the attorney must protect investors by improv- then report to the issuer’s full board. In the event the re- ing the accuracy and reliabil- porting attorney reasonably ity of corporate disclosures believes reporting evidence made pursuant to the securi- An in-house and outside lawyer of a material violation to the ties laws. CLO and CEO would be fu- may use any contemporaneous tile, the attorney may report Section 307 of Sarbanes- directly to the appropriate Oxley grants authority to the records he or she creates committee or full board. Securities and Exchange to defend against charges Commission (SEC or the (d) An issuer may, but is “Commission”) to impose of attorney misconduct. not required to, establish a standards of conduct applic- qualified legal compliance able to securities lawyers. On committee (QLCC) to investi- November 21, 2002, the SEC published for public com- gate reports of material violations made by attorneys. A ment proposed rules prescribing minimum standards of QLCC must consist of at least one member of the is- conduct for attorneys appearing and practicing before suer’s audit committee and at least two independent the Commission. After soliciting and considering com- members of the issuer’s board. A reporting attorney or a ments from interested parties, the SEC adopted final CLO to whom a report has been made may, as an alter- rules to implement Section 307 of the act on January 23, native to reporting to an issuer’s appropriate committee 2003.19 The following, which are intended to supersede or board of directors, report evidence of a material vio- any contrary state ethics rule, are some of the highlights lation to the QLCC. of the final rules: (e) An in house and outside lawyer may use any con- (a) Both in-house and outside lawyers must report to temporaneous records he or she creates to defend the issuer’s chief legal officer (CLO) or to both the is- against charges of attorney misconduct. Furthermore, suer’s CLO and chief executive officer (CEO) any “evi- an attorney may reveal confidential information to the dence of a material violation” of federal or state security extent necessary to prevent the commission of an illegal laws, material breach of fiduciary duty arising under act which the attorney reasonably believes will result ei- federal or state law, or a similar material violation of any ther in perpetration of a fraud upon the SEC or in sub- federal or state law. Thus, an attorney’s reporting oblig- stantial injury to the financial or property interests of ation is triggered under the final rule only when he or the issuer or investors. An attorney may also disclose she has “credible evidence, based upon which it would confidential information to rectify an issuer’s material be unreasonable, under the circumstances, for a prudent violations when such actions have been advanced by and competent attorney not to conclude that it is rea- the issuer’s use of the attorney’s services. sonably likely that a material violation has occurred, is (f) The final rules provide for civil penalties and occurring, or is about to occur.”20 remedies, and for discipline such as censure or being (b) When presented with a report of a possible mate- temporarily or permanently denied the privilege of rial violation, the CLO must investigate. A CLO who practicing or appearing before the Commission. The reasonably concludes that there has been no material vi- final rules do not provide for criminal sanctions or pri- olation must notify the reporting attorney of this con- vate causes of action. clusion. Conversely, if a CLO concludes that a material The final rules adopted by the SEC, prescribing stan- violation has occurred, is occurring or is about to occur, dards of professional conduct for attorneys appearing the CLO must insure that the issuer implements appro- and practicing before the Commission, do not include a priate remedial measures and/or sanctions, including number of provisions that existed in the proposed rules any appropriate disclosures. The CLO is also required to originally issued for public comment. Most notably, the report up-the-ladder, within the issuer and to the re- final rules do not require an attorney dealing with on- porting attorney, the remedial measures that have been going or future violations to file a “noisy withdrawal” taken in response to the material violation. notice with the SEC, disclosing that he or she is with- (c) If the reporting attorney does not receive, within drawing from the representation of an issuer and disaf- a reasonable time, an appropriate response to the report CONTINUED ON PAGE 16

14 Journal | March/April 2003 CONTINUED FROM PAGE 14 learned of it, it was past conduct. Thus, she had no firming opinions, documents or other SEC filings that knowledge of an “intention” to commit a crime in the the attorney believes are materially false or misleading. future. The fact that the effects of this action will occur Although the proposed “noisy withdrawal” provisions prospectively, and may be serious to some, does not jus- required an attorney to notify the SEC only that he or tify disclosure. she was withdrawing for “professional considerations,” As narrow as this exception is, the rule is even nar- the proposal drew numerous comments and substantial rower in other jurisdictions. For example, the ABA criticism since it effectively ensured that the Commis- Model Rule provides that disclosure of confidential sion was aware there was problem. client information is permissible only to prevent a “client” (no one else) from committing a criminal act Despite the fact that the final rules issued by the SEC that the lawyer believes is “likely” to result in “immi- on January 29, 2003, do not include “noisy withdrawal” nent” death or substantial provisions, the Commission bodily harm.22 Disclosure is has not foreclosed the possi- not permitted to stop all fu- bility that similar provisions Noticeably absent from the Model ture criminal activity, only may be released under Sec- Rules formulation is any exception that which entails death or tion 307 of the Act. Indeed, substantial bodily harm. on the very day the final to prevent crimes involving, even rules regarding attorney pro- substantial, financial injury. Noticeably absent from fessional conduct were is- the Model Rules formula- sued, the SEC released for tion is any exception to pre- additional public comments proposed rules requiring a vent crimes involving, even substantial, financial injury. reporting attorney to withdraw upon failure to receive Thus, an attorney with possession of client confidences revealing a clear scheme to wreak financial havoc on the an appropriate response to reported evidence of a mate- world, for example, must sit quietly by (assuming she is rial violation.21 Also, as an alternative to the “noisy not able to persuade her client to act otherwise). In ad- withdrawal,” the SEC proposed and solicited comments dition, the requirement that death or bodily harm be on a procedure requiring an issuer to disclose an attor- “imminent” is extremely narrow. Consequently, under ney’s withdrawal. The comment period applicable to the Model Rules (unlike New York’s Code), even if L these modified “noisy withdrawal” proposals expires was aware of an advance plan to ignore the recall and after April 7, 2003. that conduct was criminal, she would not be entitled to In the hypothetical, there is no legal requirement that disclose ABC’s failure because this conduct carries no L disclose this information, even to protect others, so “imminent” threat of harm, even if it might eventually this exception to confidentiality is of no relevance. prove dangerous and even fatal. Criminal conduct Although DR 4-101 permits disclo- Adding to the restrictiveness of the Model Rules is sure of an intention to commit a crime (whether by a the fact that the scope of confidential client information client or someone else) this too is a very narrowly drawn under these rules is broader than under New York’s exception to client confidentiality. Code. In New York, a confidence is information pro- First, this portion of DR 4-101 does not require dis- tected by the attorney-client privilege and a secret is any closure under any circumstances, it merely permits it. other information “gained in the professional relation- No matter how heinous, how imminent, how certain the ship,” and then only if the client has requested that it be crime, the Code simply does not require disclosure. Sec- held inviolate or the disclosure of it would be embar- ond, DR 4-101 permits disclosure only to the limited ex- rassing or detrimental to the client.23 Under the Model tent necessary to prevent the crime. Third, this excep- Rules, however, confidential client information is all in- tion to confidentiality is triggered only by an intention formation “relating to the representation of a client.”24 to commit a crime in the future. There is no provision for Thus it does not matter where or how the information is even the permissive disclosure of a past crime, no mat- acquired (even information acquired before or after the ter the circumstance and even if the effects of that past representation can be “confidential” under this stan- act are continuing. Finally, the rule permits disclosure dard), nor does it matter whether the client has asked only if the conduct in question is actually a “crime.” that the information be kept confidential or that its dis- Other wrongful conduct, no matter how harmful, can- closure would be embarrassing or harmful to the not be disclosed if it entails a client confidence or secret. client.25 In the hypothetical, this exception does not permit L Although most states generally have adopted the to act to protect others from the potential health risks Model Rules, on this particular issue a majority of states posed by the spoiled food. Even assuming VP’s decision have retained the formulation that appears in New to ignore the recall order was a crime, by the time L York’s DR 4-101, giving attorneys greater discretion to

16 Journal | March/April 2003 act to protect others.26 And a few states have gone even even lawyers) may perceive as the “greater good.” As further, mandating the disclosure of client confidences lawyers, it is important that we understand both when to prevent certain types of crimes.27 the rules of confidentiality permit and when they re- As a result of the Ethics 2000 Report commissioned by quire us to disclose confidential information. While we the ABA, Model Rule 1.6 has been modified somewhat. would all like to do our part to protect others from Under the new formulation (awaiting adoption by indi- wrongful conduct, in most instances our overriding vidual states), disclosure of confidential client informa- commitment to maintain client confidences and secrets tion is permitted to prevent “reasonably certain death or must govern. substantial bodily harm,” as opposed to the former stan- 1. Withdrawal must be in accordance with the The dard requiring “imminent” death or bodily harm. Inter- Lawyer’s Code of Professional Responsibility, Discipli- estingly, although the Ethics 2000 Commission also rec- nary Rule 2-110 (DR) provides: ommended permitting disclosure of client confidences to B. Mandatory withdrawal. prevent a client from committing a crime or fraud that is A lawyer representing a client before a tribunal, reasonably certain to result in substantial injury to the fi- with its permission if required by its rules, shall nancial interest or property of another or to mitigate or withdraw from employment, and a lawyer repre- rectify such injury, thereby bringing the Model Rules senting a client in other matters shall withdraw into conformity with the position of the Restatement, the from employment, if: ABA’s House of Delegates rejected that change. 1. The lawyer knows or it is obvious that the client is bringing the legal action, conducting the defense, Again turning to the hypothetical, neither New or asserting a position in the litigation, or is other- York’s Code nor the Model Rules would require or even wise having steps taken, merely for the purpose of permit L to disclose confidential client information out- harassing or maliciously injuring any person. side the organization to protect the safety of consumers. 2. The lawyer knows or it is obvious that continued Withdrawing the lawyer’s own representations employment will result in violation of a Discipli- nary Rule. DR 4-101(C)(5) permits a lawyer to withdraw an oral or 3. The lawyer’s mental or physical condition ren- written representation or opinion he has given on behalf ders it unreasonably difficult to carry out the em- of a client to a third party, if he believes it is still being ployment effectively. relied upon by a third party and it is based on materially 4. The lawyer is discharged by his or her client. inaccurate information or is being used to further a C. Permissive withdrawal. crime or fraud, even if in doing so he implicitly discloses a client confidence or secret. Except as stated in DR 2-110(A), a lawyer may with- draw from representing a client if withdrawal can This, too, is a fairly narrowly drawn exception to con- be accomplished without material adverse effect on fidentiality. It does not authorize the explicit disclosure the interests of the client, or if: of confidential information; it merely permits a lawyer 1. The client: to withdraw a representation or opinion which he has a. Insists upon presenting a claim or defense that is given even if doing so implicitly suggests client wrong- not warranted under existing law and cannot be doing. Even then, this “noisy withdrawal” is only per- supported by good faith argument for an extension, mitted when the prior representation or opinion is still modification, or reversal of existing law. being relied upon by a third party. Thus, for example, b. Persists in a course of action involving the this provision allows a lawyer who has prepared a writ- lawyer’s services that the lawyer reasonably be- ten opinion to investors on behalf of a client for use in lieves is criminal or fraudulent. securing financing to “pull” that opinion if she has c. Insists that the lawyer pursue a course of conduct learned that it was based on false information provided which is illegal or prohibited under the Disciplinary Rules. by the client, even if by doing so the lawyer is effectively d. By other conduct renders it unreasonably diffi- disclosing to those investors that there is something cult for the lawyer to carry out employment effec- “wrong.” Of course, once the investment funds have tively. been obtained, the lawyer may no longer have any au- e. Insists, in a matter not pending before a tribunal, thority to act because the investors’ reliance on the that the lawyer engaged in conduct which is con- (mis)representation may be over. trary to the judgment and advice of the lawyer but not prohibited under the Disciplinary Rules. Conclusion f. Deliberately disregards an agreement or obliga- The maintenance of client confidentiality is a corner- tion to the lawyer as to expenses or fees. stone of the attorney-client relationship. The policy rea- g. Has used the lawyer’s services to perpetrate a sons supporting it are both numerous and well-known. crime or fraud. But there are occasions when the requirements of confi- 2. The lawyer’s continued employment is likely to dentiality conflict with what the general public (and result in a violation of a Disciplinary Rule.

Journal | March/April 2003 17 3. The lawyer’s inability to work with co-counsel in- his or her employees or associates against an accu- dicates that the best interests of the client likely will sation of wrongful conduct. be served by withdrawal. 5. Confidences or secrets to the extent implicit in 4. The lawyer’s mental or physical condition ren- withdrawing a written or oral opinion or represen- ders it difficult for the lawyer to carry out the em- tation previously given by the lawyer and believed ployment effectively. by the lawyer still to be relied upon by a third per- 5. The lawyer’s client knowingly and freely assents son where the lawyer has discovered that the opin- to termination of the employment. ion or representation was based on materially inac- curate information or is being used to further a 6. The lawyer believes in good faith, in a proceeding crime or fraud. pending before a tribunal, that the tribunal will find the existence of other good cause for withdrawal. In somewhat different terms, the ABA Model Rules of Professional Conduct, Rule 1.6(b), n. 8, provide that a 2. Restatement (Third) of the Law Governing Lawyers § 14 lawyer may reveal information relating to the representa- (2001); see Westinghouse Electric Corp. v. Kerr-McGee Corp., tion of a client to the extent the lawyer reasonably be- 580 F.2d 1311 (7th Cir.), cert. denied, 439 U.S. 455 (1978). lieves necessary: 3. EC 5-18; see NYSBA Common Professional Ethics, Formal 1. to prevent reasonably certain death or substantial Opinion 743 (2001) (recognizing generally that the lawyer’s bodily harm; client is the union, and not the union’s members). 2. to secure legal advice about the lawyer’s compli- 4. Restatement (Third) of the Law Governing Lawyers § 96 ance with these Rules; cmt. b. Of course, a lawyer, by her words or actions, may take on the representation of one or more individuals as- 3. to establish a claim or defense on behalf of the sociated with an entity client (e.g., officers, directors, em- lawyer in a controversy between the lawyer and the ployees), but that can create its own conflict problems. client, to establish a defense to a criminal charge or The Code recognizes that lawyer’s current representation civil claim against the lawyer based upon conduct of both an organization and its officers may be permissi- in which the client was involved, or respond to ble, but only where the lawyer is convinced that differing allegations in any proceeding concerning the interests are not present. This is due to the fact that in the lawyer’s representation of the client; or context of concurrent representation, the attorney owes 4. to comply with other law or a court order. the same duty of allegiance to the organizational officer as she does to the organization. Thus, both clients are en- 6. See DR 4-101(A). The definition of confidential informa- titled to representation free of conflicting interests. See EC tion in the Model Rules is broader. It includes “informa- 5-18. tion relating to representation of a client.” Model Rule 1.6. Thus, it does not matter from where or even when Relatedly, where the potential for conflict exists, an attor- the lawyer learns of the information so long as it relates ney has an obligation to make sure that an individual act- to the representation, nor does it matter whether the ing on behalf of an organization understands that the client has asked that the information be kept confidential lawyer’s relationship is with the entity and not with that or that its disclosure would be either embarrassing or of the individual. DR 5-109 specifically mandates that detrimental to the client. when a lawyer employed or retained by an organization is dealing with the organization’s directors, officers, em- 7. Note that this Rule is not permissive, rather it imposes an ployees, members, shareholders, or other constituents, affirmative obligation to “proceed as is reasonably neces- and it appears that the organization’s interests may differ from sary in the best interest of the organization.” While it those of the constituents with whom the lawyer is dealing, the does not mandate a particular course of action in every lawyer must explain that she is the lawyer for the organi- case, it does nonetheless mandate action. zation and not for any of the constituents. The Restate- Even in the absence of such a Rule, however, the failure ment (Third) of the Law Governing Lawyers § 14, cmt. f, of a lawyer to act to protect the best interests of the orga- similarly provides that nization in these types of circumstances would likely sub- the lawyer must clarify whom the lawyer intends to ject the attorney to liability for a breach of his or her fidu- represent when the lawyer knows or reasonably ciary duty to the organization anyway. See, e.g., FDIC v. should know that, contrary to the lawyer’s own in- Clark, 978 F.2d 1541 (10th Cir. 1992) and In re American tentions, a person, individually, or agents of an en- Continental Corp., 794 F. Supp. 1424 (D. Ariz. 1992), two of tity, on behalf of the entity, reasonably rely on the several cases to come out of the savings and loan scan- lawyer to provide legal services to that person or dals of the late 1980s. See also Hazard & Hodes, The Law entity. of Lawyering, § 4.8 (3d. ed. 2001). 5. Limited exceptions to this obligation are recognized in 8. George C. Harris, Taking the Entity Theory Seriously: New York. For example, DR 4-101(C) states that a lawyer Lawyer Liability for Failure to Prevent Harm to Organiza- may reveal: tional Clients Through Disclosure of Constituent Wrongdoing, 11 Geo. J. Legal Ethics, 597, 605 (1998). 1. Confidences or secrets with the consent of the client, but only after a full disclosure. 9. DR 5-109(C). Of course, there may be circumstances in which the lawyer is required to withdraw from continued 2. Confidences or secrets when permitted to do so representation, such as where the lawyer’s continued under the Disciplinary Rules or when required by representation of the client will assist it in committing a law or court order. fraud or illegal act. See DR 2-110. 3. The intention of a client to commit a crime and 10. See Hazard & Hodes, The Law of Lawyering § 17.12; but the information necessary to prevent the crime. see Restatement (Third) of the Law Governing Lawyers 4. Confidences or secrets necessary to establish or § 96 RN (in which the Reporters express their view, collect the lawyer’s fee or to defend the lawyer or CONTINUED ON PAGE 43

18 Journal | March/April 2003 Litigators Must Prepare for Risk That Insurers May Go Into Rehabilitation or Liquidation

BY MARGARET J. GILLIS AND JOHN P. C ALARESO, JR.

hat do you do if you represent a plaintiff An order of liquidation may be obtained on the same about to go to trial against a defendant whose basis as an order of rehabilitation.5 As in rehabilitation, insurer goes into rehabilitation? What do you the superintendent takes possession of the property of W 6 do if you represent a corporate defendant in a case with the insurer. However, under an order of liquidation the very serious exposure, and your client’s excess carrier superintendent is also vested (by operation of law) with goes into liquidation? If your client has a judgment title to all property, contracts, and rights of action of the against a carrier in liquidation, will the New York State insurer.7 As part of the superintendent’s role as liquida- Property and Casualty Fund pay your client the full tor, he or she is to give notice to all creditors of the in- amount of the judgment? surance company to present their claims.8 The superin- Many litigators have dealt with these issues recently tendent then identifies which claims are allowable, as a result of the rehabilitation and liquidation proceed- quantifies those claims, and makes an equitable distrib- ings concerning the Reliance Insurance Companies. ution of the assets among them.9 The superintendent, as Other insurance companies have followed in Reliance’s liquidator, may also reinsure the policy obligations of path, and yet more may follow as a result of the severe the insurer and/or cancel all insurance policies and re- losses from the September 11 tragedy and the recent turn premiums to the former insured.10 slowdown in the economy. This article outlines the ba- If the insurance company experiencing financial dif- sics a litigator needs to know about the rehabilitation ficulty is not a New York domiciliary, then New York’s and liquidation process in New York, discusses the role superintendent and courts do not have jurisdiction to played by the Property/Casualty Insurance Security apply for and order rehabilitation or liquidation. How- Fund and its limitations, and concludes by using the Re- ever, they are not without recourse. When an out-of- liance rehabilitation and liquidation as a framework for state insurance company meets the requirements of discussing some problems litigators may confront. Defining the Terms MARGARET J. GILLIS, a member of New York Insurance Law § 7402 sets forth the Whiteman, Osterman & Hanna, LLP grounds on which the superintendent of the New York in Albany, litigates in a variety of State Insurance Department may support an application areas. A graduate of Skidmore Col- to the court for an order of rehabilitation against a do- lege, she received her J.D. from Case 1 mestic insurer. According to section 7403(a), an order of Western Reserve University Law rehabilitation “shall direct the superintendent . . . as re- School. habilitator, . . . to take possession of the property of [an] insurer and to conduct the business thereof, and to take such steps toward the removal of the causes and condi- tions which have made such proceeding necessary as JOHN P. C ALARESO, JR. is an associate the court shall direct.”2 in the litigation group of Whiteman, If the rehabilitation is successful, the superintendent Osterman & Hanna, LLP in Albany. may apply to the court for an order terminating the re- He is a graduate of the College of the habilitation and permitting the insurer to resume pos- Holy Cross and received his J.D. from the Columbus School of Law at the session of its property and conduct of its business.3 If Catholic University of America. the efforts to rehabilitate the business of the insurer be- come “futile,” the superintendent is authorized to apply for an order of liquidation.4

20 Journal | March/April 2003 § 7402 the superintendent, under authority granted from the Fund for each of those three suits, or are all under §§ 7406 and 7407, may apply for an order grant- three considered the insured’s total “claim” against the ing the superintendent authority to conserve the assets policy, thus limiting the insured to $1 million of cover- of the foreign or alien insurer in the state and/or grant- age for all the litigation? ing the superintendent ancillary liquidation authority As of the writing of this article, it appears that ques- over the insurer. Under an order of conservation or an- tion has not yet been answered by the courts in New cillary liquidation the superintendent takes possession York. Resolution of claims in the Reliance liquidation of, and conserves, any property of the insurer located may provide the answer. The obvious lesson for litiga- 11 within the state of New York. This is designed to pro- tors is that, even assuming all the procedural require- 12 tect the interests of those insured in the state of New ments of presenting a judgment or other claim to the York from a complete loss if the out-of-state insurer un- Fund can be met, the Fund cannot be considered a sure dergoes a complete liquidation of its business. source of recovery.20 Consequently, if your litigation Rehabilitation, liquidation, and conservation or ancil- strategy (as counsel for a plaintiff, co-defendant, or lary liquidation are the primary tools available to the su- third-party plaintiff) included recovery from an insur- perintendent. Enforcement of orders of rehabilitation, ance company (either directly or by way of indemnifi- liquidation, and conservation is carried out by the su- cation of an insured) which goes into rehabilitation or perintendent with the support of the Liquidation Bu- liquidation, you will need to factor in the possibility of reau of the New York State Insurance Department. The delay from a stay, determine whether it is in your Liquidation Bureau is a separate office of the New York client’s interest to oppose the stay, and adjust your strat- State Insurance Department under the jurisdiction of egy to identify or emphasize other sources of recovery. the superintendent. It is charged with the day-to-day mission of rehabilitating, liquidating, or conserving the The Impact of a Rehabilitation assets of companies put into the superintendent’s con- Or Liquidation on Pending Litigation trol by the court. To this end, the Liquidation Bureau An order of rehabilitation, primary or ancillary liqui- maintains and makes publicly available listings of do- dation, or conservation typically includes two types of mestic rehabilitation, liquidation, and conservation pro- provisions which affect pending litigation. First, as ceedings.13 noted above, an order of rehabilitation typically gives Property/Casualty Insurance Security Fund the rehabilitator possession of the insurer’s property, in- Claims still unpaid after the assets of an insolvent, cluding claims and suits against others. In a liquidation authorized14 insurer are distributed may be paid by the the liquidator is given both possession and title to that Property/Casualty Insurance Security Fund (the property. Consequently, whether an insurance com- “Fund”).15 There are, however, limits on the moneys pany’s claims as a plaintiff will go forward depends on available from the Fund. the rehabilitator’s or liquidator’s evaluation of whether The procedural limitations on payments from the continuing the suit will be in the best interests of the in- fund are similar to the limitations on recovery from the surer or its insolvent estate. insolvent insurer’s assets. That is, having a judgment in In the Reliance proceeding, which began as a rehabil- your client’s favor does not automatically qualify for itation, the rehabilitation order gave possession of all as- payment; only an “allowed” claim, for which a proper sets to the rehabilitator, who directed all litigation coun- proof of claim is timely filed, is eligible for payment.16 sel representing Reliance as a plaintiff with a claim (or Payment from the fund may not exceed the limit of lia- defendant with a counterclaim) involving more than bility provided for in the insurance policy,17 and is $50,000 to provide a recommendation as to whether to capped at a maximum of $1 million per claim.18 continue. Under these circumstances many litigators For the Fund’s purposes, a claim is defined as “a who were facing immediate discovery or other dead- claim of a policyholder or assured within the coverage lines appropriately advised the court and opposing of the policy, wherein such person suffered loss or dam- counsel that they lacked authority to go forward, that age under the coverage of the policy or where such per- they needed authority from the rehabilitator, and thus son has paid an injured party claim, subject to allowance obtained extensions until they received the necessary of such policyholder claim [under Article 74].”19 This direction. raises a question of what the maximum available pay- The second type of provision affecting pending liti- ment is to an insured who has multiple “claims” made gation is, of course, a stay of claims against the insurer against it, all of which are covered by a single policy. For and its insureds. For example, the stay provision in the example, if the insured has claims made against it in rehabilitation order issued by Pennsylvania’s Court of three lawsuits, and all are covered by a single policy Common Pleas in the Reliance proceeding provided as with a $5 million limit, may the insured seek $1 million follows:

Journal | March/April 2003 21 All actions currently pending against Reliance in the bond was assigned to a bank (“Barclays”) as security for Courts of the Commonwealth of Pennsylvania or else- a Barclays loan to the partnership. When the partners where are hereby stayed. All actions currently pending began to default on their obligations, Barclays began to in the Courts of the Commonwealth of Pennsylvania or call on Mutual to pay the defaulting partner’s shares elsewhere against an insured of Reliance are stayed for 60 days or such additional time as the Rehabilitator under the bond. Mutual made some payments, then de- may request. This Order shall not preclude any action clared a “moratorium” on payments and commenced an from proceeding prior to the expiration of 60 days pro- action against the individual limited partners to recover vided that the Rehabilitator and the parties to any such amounts already paid to Barclays and other amounts 21 pending actions have so agreed to proceed. Barclays claimed were due. When Barclays intervened That provision, like many rehabilitation stays before it, in the action, alleging a superior claim to Mutual’s (for immediately raised the following questions, among oth- the assets of the defaulting partners), Mutual argued ers: First, were New York courts bound by the “or else- Barclays claims were subject to the stay. where” provision? Second, to The court disagreed, finding that there would be no the extent the stay was effec- direct threat to Mutual’s as- tive in New York, did it apply sets and the rehabilitation, to both primary and excess Courts have refused to apply unless and until Barclays ob- insureds? the stay when allowing the action tained a judgment in the ac- The reach of a foreign tion. The court also observed state court’s stay A stay is- to go forward will not threaten that it “would not be in the sued as part of a rehabilita- interests of judicial economy tion or liquidation order in a the rehabilitation. to allow Mutual Fire’s claim foreign state is not automati- to go forward without at the cally binding on the New same time adjudicating the York courts. A stay in a liquidation order is not binding rights of Barclays. Issuance of a stay will only lead to unless New York and the state whose court issues the piecemeal litigation and the waste of the courts’ and 26 order are reciprocal states under the Uniform Insurance parties’ resources that accompanies it.” Liquidation Act22 (UILA). In cases where the UILA reci- In Dougherty v. Town of North Hempstead Board of Zon- 27 procity does not govern, if there is a dispute between ing Appeals, the Second Circuit followed a similar no- the parties regarding whether the stay should be hon- immediate-harm-to-the-insurer’s-assets approach. In ored in an action pending in New York, a New York Dougherty, plaintiff appealed the district court’s dis- state court will apply a comity analysis. A federal court missal of his claim that the defendant zoning board and sitting in New York will look at principles of both other town officials had violated his constitutional comity and the abstention doctrine.23 To some extent, rights in denying his application for a building permit. the deck is stacked in the favor of the rehabilitator in Defendants were Reliance insureds, and defense coun- such situations, because there are compelling policy rea- sel had been retained by Reliance. The Second Circuit sons to honor the stay, such as ensuring that all denied the defendants’ motion for a stay because claimants, policyholders, and creditors are bound by the [t]he motion came when the issues on appeal had been same rules and procedures, that none receives preferen- fully briefed, oral argument was only days away, and tial results by rushing to obtain and execute on a judg- the impact on Reliance’s assets occasioned by our going ment, and that the rehabilitator’s efforts to resolve the ahead with oral argument appear[s] to be de minimis. insurer’s financial issues are not distracted by defend- In addition, the 90-day period requested by the Penn- 24 sylvania court [in its October 3, 2000 liquidation order] ing multiple suits in multiple jurisdictions. has since expired. Under the circumstances, we decline Nonetheless, courts have refused to apply the stay to grant defendants’ motion. Upon remand, any request when allowing the action to go forward will not for a further stay should be brought to the attention of 28 threaten the rehabilitation. In Mutual Fire, Marine & In- the district court. 25 land Ins. Co. v. Adler, for example, the U.S. District Given its comments about the expiration of the stay Court for the Southern District of New York refused to in the Pennsylvania court’s liquidation order, it appears honor a stay issued in a Pennsylvania court’s rehabilita- that the Second Circuit panel deciding the Dougherty tion order, because permitting the action to go forward case was unaware of the initial 120-day stay in the De- did not involve a direct threat to the insurer’s assets and cember 14, 2001, ancillary order issued in the Reliance therefore its rehabilitation. matter by the New York Supreme Court (which was In the Adler case, the insurance company in rehabili- later extended an additional 120 days). In a district court tation (“Mutual”) had issued a bond as security for the decision two weeks before the Dougherty decision, Re- debts certain limited partners owed a partnership. The liance Insurance Co. v. Six Star, Inc., the U.S. District Court

22 Journal | March/April 2003 for the Southern District of New York was aware of the of liability that an insolvent . . . insurer owed to [the ancillary order, and found it to be one of the bases for party].” . . . It is difficult to see what discovery would be honoring the stay.29 in aid of if, as the state with jurisdiction over Reliance’s assets and liquidation has determined, all claims for In Six Star one of the Reliance Insurance Companies distributions from Reliance are required to be pursued (“Reliance”) had commenced an action against Six Star through a state claims process.31 and other defendants, seeking a declaratory judgment concerning the respective rights and obligations of Re- Finally, the court observed that it had no jurisdiction to review or overturn the state court order containing liance and Six Star under a particular insurance policy. 32 Defendants counter-claimed for similar relief, as well as the stay and ruled that “in the interests of comity” it for damages for breach of contract and misrepresenta- would maintain the matter on its “suspense” calendar. tion. After the Pennsylvania liquidation order and New The court also directed the liquidator and/or ancillary York ancillary order were entered, the Six Star defen- receiver to inform the court and all parties as to whether dants argued that they should be permitted to proceed they wished to pursue the claims Reliance had asserted with their counterclaims, at least through discovery. in the action. Although the defendants’ position would seem to be From defendant-counterclaimant Six Star’s perspec- supported by the analysis in the Adler and Dougherty de- tive, discovery undoubtedly would have been in aid of cisions (i.e., proceeding with discovery would not create presenting its claim in the liquidation proceeding. As a “direct” threat to the assets of the Reliance estate), the discussed in more detail in the final section of this court did not see it that way. The court first noted that article, a contingent claim like Six Star’s counterclaim pursuant to the McCarran-Ferguson Act30 the states had would need to meet several tests before it could be an al- “primary responsibility” for regulating the insurance in- lowed claim entitled to payment. One of those tests is dustry. The court then reasoned as follows: sufficient proof so that it may be reasonably inferred that Six Star would be able to obtain judgment upon its “[W]ith the McCarran-Ferguson Act stating congres- cause of action against Reliance. Discovery may have sional policy that insurance regulation is up to the improved that proof substantially. states, it is difficult to understand how . . . [a party] can maintain that a federal court should entertain a lawsuit Moreover, the Six Star court stayed the counterclaims where it will have to decide the amount and existence while giving Reliance’s liquidator the option of going

Journal | March/April 2003 23 forward in the action with Reliance’s claims as a plain- Making a case that such a stay should apply to an in- tiff. If the liquidator proceeds with Reliance’s claims, it sured with only excess coverage is much more difficult would seem that a ruling similar to that in the Adler de- than when primary coverage is implicated. First, and cision would be appropriate. That is, if the liquidator most obviously, excess coverage is generally not trig- was to be involved in the liti- gered until primary coverage gation in the Southern Dis- is tendered or exhausted. In trict in an effort to collect as- addition, the rehabilitator or sets of the Reliance estate, the Making a case that a stay should liquidator, standing in the liquidator’s attention and ef- apply to an insured with only shoes of the insurer, may forts were already going to be have coverage disclaimer op- focused on that litigation and excess coverage is much more portunities that do not ripen distracted to some extent difficult than when primary until the primary coverage is from the liquidation. Further- exhausted. For example, al- more, as in Adler, there coverage is implicated. though Insurance Law § 3420 would be no direct threat to requires an insurer to dis- Reliance’s assets and the liq- claim coverage “as soon as is uidation, unless and until Six Star obtained a judgment reasonably possible,” courts have held that an excess in- against Reliance in the action. surer’s “reasonable time” to disclaim coverage does not Even assuming that analysis would succeed with a begin to run until the primary coverage limits (or poli- 34 court, however, there are other considerations for a liti- cyholder’s retained limit) have been exhausted. Con- gator who is trying to determine whether to press ahead sequently, in most instances, the lawsuit will not be at a in court in the face of a stay ordered as part of a liqui- stage at which a threat to the excess insurer’s estate is dation. The Reliance Liquidation Order, for example, concrete enough to convince a court to refrain from pro- provided claimants with a significant incentive to honor ceeding with the action. the stay by providing that: Furthermore, in cases where the client’s exposure could reasonably be expected to exceed its primary cov- Any person that fails to honor a stay ordered by this erage and a stay would be in the client’s interest, the Court or violates any provision of this Order, where such person has a claim against Reliance, shall have question of whether to pursue the stay also involves tac- their claim subordinated to all other claims in the same tical issues, such as whether it is an appropriate time to class, with no payment being made with respect to such disclose to an adversary that defense counsel perceives claim until all others in the same class have been paid the case to present that significant a risk. in full, in addition to any other remedies available at 33 In the Reliance Insurance proceeding, the question law or in equity. was ultimately resolved by New York’s ancillary Order, Consequently, a litigator who wins the battle over the which stated that the stay applied to actions and pro- stay may lose the war in the sense that even if the client ceedings in which Reliance obtains the proof needed to support a proof of claim, is obligated to defend a party insured or any other per- and the proof of claim is timely filed and the claim al- sons it is legally obligated to defend by virtue of its in- lowed, payment of the claim may be reduced or elimi- surance contract and in any other actions being de- nated by subordination. Thus, a litigator whose strategy fended by a primary or other underlying insurer where includes recovery from an insurance company (either such primary or underlying insurer has tendered or of- fered its full policy limits or where said policy limits directly or through a judgment against the insurance have been exhausted by payment of the underlying in- company’s insured) that goes into rehabilitation or liq- surer’s aggregate and [Reliance] is the next excess or uidation must carefully evaluate the risks and benefits umbrella layer of insurance.35 of continuing to pursue the litigation and (obviously) must develop an alternate strategy for recovery from The Claims Process different sources. In a Liquidation Proceeding Are excess insureds covered by the stay? Rehabil- Attorneys litigating for or against insurers and/or itation and liquidation orders staying litigation against their insureds will likely know of a liquidation the insurer and its insureds often contain only general promptly, because the liquidator will seek to impose the language of the type noted earlier (in the stay in the Re- stay against all adverse claims in the litigation. In order liance rehabilitation proceeding) and do not distinguish to protect (and try to collect) those claims, the claimant between insureds with primary coverage and insureds will have to timely file a proof of claim and the claim with only excess coverage from the insolvent insurer. must be “allowed.”36

24 Journal | March/April 2003 The principal concern is knowing when the proof of ample, some claimants who filed a proof of claim claim has to be filed and how. Under Insurance Law against Reliance in New York (in the ancillary proceed- § 7432(b): “Where a liquidation, rehabilitation or con- ing) have had their claims forwarded to the liquidator in servation order has been entered . . . against an insurer Pennsylvania and received confirmation that the claim . . . [t]he superintendent shall notify all persons who will be paid. The risk of this approach, of course, is that may have claims against such insurer as disclosed by its if you do not manage to intuit what (beyond the statu- books and records, to present the same to him within tory minimum)40 the liquidator will require as to form the time as fixed.” That notice must specify the last day and sufficient proof, the claim may be denied. Further- for filing proofs of claim, which will be four months more, the pre-notice claim approach will not assist a after the entry of the liquidation order unless otherwise client who needs time to gather the information neces- specified by that order.37 sary to prove the claim. Theoretically, this requirement will trigger a notifica- The alternative to pre-notice filing is, of course, to tion from the superintendent to all potential claimants, stay on top of the notice process. Make sure your client including individuals involved in litigation with the is on the liquidator’s or receiver’s list by taking the af- company or its insureds. However, the notice require- firmative step of notifying him or her in writing. In ad- ment is limited to those individuals with claims “as dis- dition, notices are commonly published in a newspaper. closed by [the insurer’s] books and records.38 Further- (For example, the liquidation order in the Reliance pro- more, the manner of the notice is not uniformly ceeding provides that the notice will be published in the prescribed and is left to the discretion of the court.39 Fi- Wall Street Journal.) Identify the newspaper(s) which nally, there is no assurance that the form of notification will carry the notice and track that information. selected will actually reach counsel or the client. These Assuming you have received the notice and the nec- are but a few of the practical concerns raised by the no- essary information concerning the procedures and tice requirements of the Insurance Law, particularly in deadlines for filing the proof of claim, the next step is to complex rehabilitations and liquidations like the Re- identify the information needed for the proof of claim. liance proceeding. The statutory minimum in New York is that the claim One practical way to avoid these problems is to file must be presented in the form of a written statement, the proof of claim without waiting for the notice. For ex- setting forth the claim, the consideration therefor, any

Journal | March/April 2003 25 securities held therefor, any payments made thereon, members; its failure to complete organization and obtain and verification that the payment claimed is justly owed a license within one year of incorporation; the failure to 41 remove from office any officer or director found to be a by the insurer to the claimant. If the claim is based dishonest or untrustworthy person; or if it has had an oc- upon a written instrument, then the claimant must also currence of an authorized control level event or a manda- submit a copy of the instrument.42 Needless to say, the tory control level event. N.Y. Insurance Law § 7402 (“Ins. claim must be properly filed, in accordance with the Law”). 2. Ins. Law § 7403(a). procedures identified by the liquidator, on or before the 43 3. Ins. Law § 7403(d). The code also allows for any inter- deadline. ested person to apply for an order terminating the reha- Before a claimant can recover from the assets of an in- bilitation upon due notice to the superintendent. Id. solvent insurer or from the Property/Casualty Insur- 4. Ins. Law § 7403(c). ance Security Fund, a claim must be “allowed” by the 5. Ins. Law § 7404 authorizes the superintendent to apply for liquidation on any of the grounds listed in § 7402(a) court. For a claim to be “allowed” it must have become through § 7402(o). Ins. Law § 7404; see supra note 1 and 44 absolute rather than contingent. Insurance Law accompanying text. § 7433(c) provides, “No contingent claim shall share in 6. Ins. Law § 7405(a). a distribution of assets . . . [unless] . . . it becomes ab- 7. Ins. Law § 7405(b). solute against the insurer on or before the last day fixed 8. Ins. Law § 7405(a). for filing of proofs of claim, or there is a surplus and the 9. The process for equitable distribution of an insurer’s fund is set forth in Ins. Law § 7405(f). liquidation is thereafter conducted upon the basis that 10. Ins. Law § 7405(c). 45 such insurer is solvent.” This raises an obvious con- 11. An example of such an order, the December 14, 2001 Order cern for the attorney who is mid-way through a lawsuit appointing New York’s Superintendent of Insurance as against an insurer or insured when the insurer goes into Ancillary Receiver in the Reliance liquidation, issued by rehabilitation or liquidation. The claim at that point can the New York Supreme Court for New York County, is available on NYSBA’s Web Site at http://www.nysba.org hardly be said to be absolute. /barjournal/InsurersRehabilitationorder. New York’s Insurance Law addresses this concern by 12. When the term “insured” is used hereafter in this article, providing that any person who has a cause of action it refers to an insured to whom the insurer owes, as a against the insured of an insurer with an order of reha- minimum, a duty to defend in the litigation at issue. bilitation or liquidation against it has the right to file a 13. These lists are available on the Internet at http:// claim even though that claim is contingent.46 Such a www.ins.state.ny.us/liquid1.htm or by calling the Liqui- dation Bureau. may claim be allowed 14. Parties with claims against insolvent insurers who are in- (A) if it may be reasonably inferred from the proof pre- corporated in foreign states and over whose assets the sented that such person would be able to obtain a judg- New York State Superintendent of Insurance has not ob- tained possession through an ancillary order may face ju- ment upon such cause of action against such insured; risdictional hurdles in trying to pursue the foreign state’s (B) if such person shall furnish suitable proof, unless guaranty association in a New York court. In Certain Un- the court for good cause shown shall otherwise direct, derwriters at Lloyd’s, London v. Foster Wheeler Corp, 192 that no further valid claims against such insurer arising Misc. 2d 468, 746 N.Y.S.2d 776 (Sup. Ct., N.Y. Co. 2002), out of his cause of action other than those already pre- for example, a group of insurers commenced a declara- sented can be made; and (C) if the total liability of such tory action in state Supreme Court for a determination of insurer to all claimants arising out of the same act of its the obligations of various insurers to indemnify defen- insured shall be no greater than its total liability would dant Foster Wheeler Corp. for certain asbestos-related in- be were it not in liquidation, rehabilitation or conserva- juries. The defendants in the action included various in- tion.47 surance companies who allegedly issued liability policies to Foster Wheeler, and the two New Jersey guaranty as- 1. An insurer may be ordered into rehabilitation based sociations authorized to pay covered claims against the upon: insolvency; refusal to submit records for inspec- insolvent defendant insurers. Plaintiffs argued that tion; failure or refusal to comply with an order of the su- Supreme Court had personal jurisdiction over the guar- perintendent to make good an impairment of its capital anty associations because they stood in the shoes of the or minimum surplus; transferring or attempting to trans- insolvent insurers, and to the extent jurisdiction existed fer substantially its entire property or business by con- over the insurers it extended as well to the guaranty asso- tract of reinsurance or otherwise; a finding that further ciations. transactions would be hazardous to its policyholders, The court disagreed and dismissed for lack of personal creditors, or the public; willful violation of its charter or jurisdiction. The court first noted that “although a guar- any law; an officer’s refusal to be examined under oath anty association stands in the shoes of an insurer for concerning its affairs; its failure to satisfy the require- some purposes, the extent of the association’s liability ‘is ments for incorporation; its failure to do business for a strictly limited to statutorily defined “covered claims” period of one year; its commencement of voluntary liqui- and therefore its obligations are not necessarily coexten- dation or dissolution; the fact that it has been the subject sive with the insolvent insurer.’” The court then held that of an application for the appointment of a receiver, plaintiffs had to establish the minimum contacts neces- trustee, custodian, or sequestrator; its consent to such an sary to invoke New York’s long-arm statute over a non- order through a majority of its directors, shareholders, or resident defendant. It further ruled that establishing

26 Journal | March/April 2003 those contacts required plaintiffs to show that the N.J. the insurer’s domiciliary state or in ancillary liquida- guaranty associations took action “purposefully directed” tion/receivership proceedings. States which have enacted toward New York. The court held that the negotiation the UILA, such as Illinois and New York, are “reciprocal” and brokering of the insurance in New York, for a New states. See G.C. Murphy Co. v. Reserve Ins. Co., 54 N.Y.2d York insured (Foster Wheeler), were insufficient contacts 69, 444 N.Y.S.2d 592 (1981). to meet that burden and dismissed the case. Id. at 471; see 32. Reliance Ins. Co., 2002 U.S. Dist. LEXIS 3530, at *3. Unlike Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass’n, 715 F. the Order of Rehabilitation, the Order of Liquidation in Supp. 94 (S.D.N.Y. 1989), aff’d on other grounds, 896 F.2d the Reliance Insurance proceeding specifically requested 674 (2d Cir. 1990); Frialator v. Guar. Fund Mgmt. Servs., 155 comity: Misc. 2d 953, 590 N.Y.S.2d 989 (Sup. Ct., Erie Co. 1992). With respect to suits and other proceedings in 15. Ins. Law § 7603(a)(1). which Reliance is obligated to defend a party, pend- 16. See Ins. Law § 7603(a)(1). How a claim becomes “al- ing outside the Commonwealth of Pennsylvania lowed” is discussed in the last section of this article. and in federal courts of the United States, this Order 17. Ins. Law § 7608(c). constitutes the request of this Court for comity in 18. Ins. Law § 7603(b)(2). the imposition of a 90-day stay by such courts or tri- 19. Ins. Law § 7602(i). bunals, and that those courts afford this order def- 20. In addition to the statutory limits on recovery, there is the erence by reason of this Court’s responsibility for practical problem of how much money the Fund has and supervisory authority over the rehabilitation of available. In the Reliance liquidation, for example, it is Reliance, as vested in this Court by the Pennsylva- not clear how much money will be available to pay nia Legislature. claims under primary policies, much less excess policies. A copy of the entire Order can be obtained from the 21. Koken v. Reliance Ins. Co., No. 269 M.D. 2001 (Pa. Commw. Pennsylvania Department of Insurance’s Web site by Ct., Order dated May 29, 2001, ¶ 22). Paragraph 20 of the going to http://www.insurance.state.pa.us and clicking Order similarly enjoined institution or further prosecu- on “Order of Liquidation.” See Koken v. Reliance Ins. Co., tion of any action against Reliance or the rehabilitator, 784 A.2d 209 (Pa. 2001) in which the Commonwealth “obtaining preferences, judgments, attachments garnish- Court of Pennsylvania listed suits around the country for ments or liens, including obtaining collateral in any liti- which it was expressly requesting a stay. gation, mediation or arbitration involving Reliance, the 33. See Reliance Liquidation Order, dated October 3, 2001, rehabilitator, or Reliance’s assets or property,” levying ¶ 23. A copy of this Order may be obtained as set forth any execution, and making assessments against Reliance supra in note 32. or offsetting them against any amounts otherwise 34. Gardner v. Ryder Truck Rental, Inc., 261 A.D.2d 505, 690 payable to Reliance. N.Y.S.2d 614 (2d Dep’t 1999). 22. See Ins. Law §§ 7408–7415. 35. In re Ancillary Receivership of Reliance Ins. Co., Index No. 23. Some federal courts outside New York have held that the 405987/01 (Order dated Dec. 14, 2001, ¶ 7). McCarran-Ferguson Act pre-empts in this area and that a 36. Ins. Law § 7433. federal court does not have jurisdiction over a case sub- 37. Ins. Law § 7432(b). ject to state court rehabilitation or liquidation proceed- 38. Id. ings. See, e.g., Munich Am. Reinsurance Co. v. Crawford, 141 F.3d 585 (5th Cir.), cert. denied, 525 U.S. 1016 (1998) (state 39. Id. insurance regulatory proceeding precluded federal court 40. See Ins. Law § 7433(a). from ordering arbitration under the Federal Arbitration 41. Ins. Law § 7433(a)(1). Act because such an order would violate the provision in 42. Ins. Law § 7433(a)(2). the McCarran-Ferguson Act stating that no Act of Con- gress is to be construed to invalidate, impair, or super- 43. An exception to the proof of claim requirement exists for sede any state law regulating insurance, unless the fed- all persons whose name appears on the books and eral law specifically relates to the business of insurance); records of the insurance company as policyholders or Davister Corp. v. United Republic Life Ins. Co., 152 F.3d 1277 claimants. The superintendent is required to make a list (10th Cir. 1998), cert. denied, 525 U.S. 1177 (1999). Neither of each such person within 30 days after the last date set the U.S. Court of Appeals nor the district courts within it for filing claims. Any person who appears on the list is appear to have followed this preemption analysis, and deemed to have duly filed proof of claim. Ins. Law have instead upheld stays on the bases of comity and ab- § 7433(b)(2). The plain risk of waiting to determine stention. whether a claimant is on that list is that if the claimant is not, the time for filing a proof of claim is already well 24. See, e.g., Twin City Bank v. Mutual Fire, Marine & Inland past. Proofs of claim filed after four months (or the time Ins. Co., 646 F. Supp. 1139 (S.D.N.Y. 1986), aff’d, 812 F.2d period specified in the notice) will not share in the distri- 713 (2d Cir. 1987). bution of the insurer’s assets until all “allowed” claims 25. 726 F. Supp. 478 (S.D.N.Y. 1989). have been paid. Ins. Law § 7432(c). 26. Id. at 484. 44. Ins. Law § 7433(d)(1). 27. 282 F.3d 83 (2d Cir. 2002). 28. Id. at 92 n.8. 45. Ins. Law § 7433(c). This provision should not be taken as 29. Reliance Ins. Co. v. Six Star, Inc., No. 01 Civ. 2165, 2002 U.S. encouragement to pursue litigation to judgment during Dist. LEXIS 3530 (S.D.N.Y. Mar. 5, 2002). this period. Ins. Law § 7433(d)(3) provides that a judg- ment against an insured rendered after the date of entry 30. 15 U.S.C. §§ 1011–1015. of the rehabilitation or liquidation may not be considered 31. Reliance Ins. Co., No. 01 Civ. 2165, 2002 U.S. Dist. LEXIS as evidence of liability or damages. 3530, at *7–*8. See UILA, Ins. Law §§ 7408–7415. As noted earlier, the UILA requires all claims against an insurer 46. Ins. Law § 7433(d)(1). placed in liquidation in a reciprocal state be filed in either 47. Ins. Law § 7433(d)(2).

Journal | March/April 2003 27 CLE Insights: Evidence Effective Techniques For Impeaching Witnesses

EDITOR’S NOTE: With this issue the Journal introduces an anticipated series of articles reflecting insights and information developed for Continuing Legal Education presentations by members throughout the state. The outlines will be edited to permit publication in a more condensed format than the normal CLE presen- tation. Endnotes will be provided for new concepts and authorities, but well-established principles will not be documented in detail. BY WALTER L. MEAGHER, JR.

mpeachment of one or more witnesses may very well The Collateral Matter Rule dictate the outcome of a trial, and it is therefore vital “Intrinsic” impeachment takes the form of challeng- Ifor the litigator to remember some of the basic con- ing witnesses through the use of their own testimony. cepts that underlie this central trial technique. However, a witness may also be asked (assuming a good-faith basis exists to do so) about prior bad or im- Although a witness swears or affirms to tell the truth, moral acts. If the answer of the witness is a denial of witness credibility is deemed always to be in issue, and such act, however, the question arises as to whether a witness is therefore subject to impeachment – that is, other “extrinsic” evidence may be introduced to dis- the witness’s testimony may be discredited, usually credit the answer and prove that the bad act occurred. achieved by means of cross-examination. Essentially, one is probing the knowledge or subjective feelings pos- In general, it may not be. Although cross-examination sessed by the witness that may affect that person’s abil- is permitted regarding a collateral or immaterial matter ity or desire to tell the truth. concerning which the witness has testified, the inquiry is concluded by the answer – the so-called “collateral Accordingly, the examiner may strive (1) to have the matter” rule. The trial court has the discretion to prop- witness acknowledge facts about his or her background erly restrict inquiry into such collateral matters.1 and/or prior acts that bear upon credibility, (2) to elicit There are important exceptions, however. Where the prior statements or conduct that contradict current testi- evidence is also relevant to prove or disprove a substan- mony and (3) to develop any interest, bias, or prejudice tive fact at issue in the case, or would demonstrate a mo- that might motivate the witness and thereby vitiate his tive to falsify testimony concerning a material issue, or or her testimony. Some of these relate to or suggest that would demonstrate a lack of opportunity or ability to a witness is not competent to testify, while others cast observe and remember events, then the extrinsic evi- doubt on the trustworthiness of the testimony being of- dence should not be excluded by the collateral matter fered or are a combination of both. By accomplishing rule. Put somewhat differently, if the extrinsic evidence some or all of the foregoing, the examiner may demon- has relevance independent of a device designed to dis- strate the inherent probability that the testimony is false. credit the witness generally, it does not violate the col- As a caveat, it should be remembered that the mere lateral matter rule and should be admitted.2 For exam- fact that a witness has been impeached does not require the jury to disbelieve the testimony. What may sound or appear to be a complete discrediting of the witness may WALTER L. MEAGHER, JR. is a partner in be viewed by the trier of fact as merely a faulty recollec- the firm of Hancock & Estabrook, LLP, tion of certain aspects of an event, susceptible of repair Syracuse, NY. This article is adapted by rehabilitation of the witness on redirect. It would be from a seminar entitled A Primer on the unusual case where variances do not exist between Evidence in the Courtroom, given in Fall trial testimony and, for example, what may have been 2002, as sponsored by the Trial Lawyers Section and the Committee said at an EBT. Small discrepancies are probably not on Continuing Legal Education of the worth dwelling on, as the trier of fact likely will not at- New York State Bar Association. tach much weight to them.

28 Journal | March/April 2003 ple, if an automobile accident plaintiff has given testi- What happens if a witness admits to the inconsis- mony at trial and/or at a pretrial deposition that he had tency, but attempts to minimize it? Such admission not been drinking before the accident, a contradictory does not serve to terminate further questions. In that laboratory record should not be excluded. case, the trial court should permit the examiner to go Another way around the collateral matter rule exists beyond a mere recitation of the prior inconsistent testi- when the witness volunteers collateral information on mony (for example, by simply reading relevant por- direct examination. This issue is discussed by the Court tions of a prior EBT). of Appeals in Halloran v. Virginia Chemicals, Inc.3 In this On a related note, efforts that rely on pretrial deposi- products liability case, the principal issue was why a tion testimony enjoy a statutory basis in CPLR can of Freon exploded. The plaintiff testified on direct 3117(a)(1)–(3). Counsel should furnish a copy of the that his regular practice in heating the cans was to im- transcript of such deposition and all other transcripts to merse them in a coffee tin of warm tap water. On cross- the court in advance. At trial, counsel should identify examination, he denied ever using an immersion coil the date the witness was deposed and the fact that the for heating Freon cans. The defendant then offered a witness was represented by counsel, and then refer to witness prepared to testify that he had seen the plaintiff the page and line number (affording time for opposing on previous occasions using an immersion coil to heat counsel and the court to locate the section referred to). Freon. The trial court sustained an objection that ex- Counsel should pose the question as to whether the wit- trinsic evidence could not be used to impeach the plain- ness remembers the particular question found at the tiff’s denial. The Court of Appeals ordered a new trial line, and then remind the witness that the answer he after judgment for the plaintiff, stating that even if the gave contradicts what he had testified to at the depos- witness’s testimony were not admissible as evidence of tion. This is, of course, the foundation for admission of a habit, the plaintiff had “opened the door” on the issue the impeachment evidence, and a variation may be used by his denial, and it thereby became material to the for any other writing, including the pleadings or affi- case. davits in the case. Fertile areas for possible use are the plaintiff’s bill of particulars and a notice of claim in a Bias, Prejudice or Interest case in which one had to be served. Witnesses are often consciously or subconsciously bi- ased concerning a party or the matter in issue. A witness may, for example, believe that jury verdicts are exces- sive and thus be inclined to favor the defendant, irre- spective of the particular matter at hand. Some biases are more obvious: a family member testifying in an ac- tion in which another family member is a party, a busi- ness partner testifying on behalf of another partner, or a fired former employee testifying on behalf of a plaintiff suing the former employer. In addition, such hostility or interest would provide the witness with a motive to falsify testimony. This may be proved by extrinsic evidence, inasmuch as a motive to falsify is not deemed to be collateral.4 Inconsistent Statements or Conduct Generally, pointing out prior statements or conduct that contradict present trial testimony is considered to be the most effective form of impeachment. If the prior inconsistencies relate to a material issue, they may be proved by extrinsic evidence; if they pertain to a collat- eral matter, then they still might be established upon cross-examination, but are subject to the collateral mat- ter rule (i.e., the examiner is stuck with the answer). Fur- ther, a witness who has been confronted with a prior in- consistency is entitled to explain its occurrence (for example, that a statement made at the hospital was given while the witness was in a confused state).

Journal | March/April 2003 29 Prior Convictions as its witness and wants to introduce a prior contradic- Or Acts of Moral Turpitude tory statement, not made under oath or in writing, the Convictions of recent vintage, particularly those for a plaintiff may do so, because the limitation does not felony or for an act involving moral turpitude, are ad- apply to a party. missible.5 Those that are remote in time will probably A witness’s, as distinguished from a party’s, prior in- be excluded as being more prejudicial than probative. consistent written statement, or statement made under Arrests or fines imposed for oath, has no probative value. traffic infractions or viola- It merely affects the witness’s tion of ordinances are inad- A witness’s answers are not credibility. As an example, missible. For purposes of im- assume that the plaintiff is peachment, a witness may binding on the party who calls the required to prove notice of a not be asked whether she defective condition. The was or is currently under in- witness, and may be contradicted plaintiff calls the janitor em- dictment for a particular by other evidence in the case. ployed by the defendant. On crime, unless it were for the direct examination the wit- same matter to which testi- ness is asked whether prior mony was being given. to the accident he had Prior conviction for a crime may also be proved by knowledge that the step was broken. His testimony is the introduction into evidence of a certificate of convic- that he did not have such knowledge. He is then shown tion. This should always be secured before the witness a statement that he had signed in which he states that he is examined on the subject of such conviction. did, in fact, know of the defective condition for several The Second Department recently considered the weeks prior to the accident. The witness, however, per- issue of cross-examination as it relates to wrongful acts. sists in his denial. Under those circumstances the writ- In Platovsky v. City of New York,6 the court held that ten statement would be admissible, but only for the pur- cross-examination regarding whether a stabbing victim pose of attacking the witness’s credibility and not for had improperly kept a public document was proper in any evidentiary value. If the plaintiff has no other proof his personal injury action, as such an act would have of notice, he will have failed to make out a prima facie some tendency to demonstrate moral turpitude. The ex- case. tent to which an act is deemed to exhibit moral turpi- Finally, the Pattern Jury Instructions provide a rich tude, and thus to be relevant to credibility, is a matter of source for brush-ups in this area. Among them are in- trial court discretion. If a particular effort should be un- terested witnesses (1:91), however, non-party witnesses successful upon objection, an offer of proof should be where there has been an admission of evidence for a considered. limited purpose (1:66) and Falsus in Uno (1:22). Impeaching One’s Own Witness 1. See Bevilacqua v. City of Niagara Falls, 66 A.D.2d 988, 411 The general rule is that you cannot attack the credi- N.Y.S.2d 779 (4th Dep’t 1978). bility of your own witness. By calling the witness you 2. See Feldsberg v. Nitschke, 49 N.Y.2d 636, 427 N.Y.S.2d 751 are deemed to have vouched for his or her credibility. (1980). However, a witness’s answers are not binding on the 3. 41 N.Y.2d 386, 392, 393 N.Y.S.2d 341 (1977). party who calls the witness, and may be contradicted by other evidence in the case.7 CPLR 4514 addresses im- 4. See People v Ashner, 190 A.D.2d 238, 597 N.Y.S.2d 975 (2d peachment of a witness by a prior inconsistent state- Dep’t 1993). ment. It states: 5. See CPLR 4513. 6. 275 A.D.2d 699, 713 N.Y.S.2d 358 (2d Dep’t 2000). In addition to impeachment in the manner permitted by common law, any party may introduce proof that 7. Carlisle v. Norris, 215 N.Y. 400 (1915). any witness has made a prior statement inconsistent 8. See Ryan v. Dwyer, 33 A.D.2d 878, 307 N.Y.S.2d 565 (4th with his testimony if the statement was made in a writ- Dep’t 1969). ing subscribed by him or was made under oath. It is well established, however, that a witness or the party for whom he or she was sworn may produce evi- dence in denial or explanation of the impeaching state- ments.8 Accordingly, if the plaintiff calls the defendant

30 Journal | March/April 2003 First Court Case to Interpret Property Condition Disclosure Act Holds Sellers Not Liable

BY KARL B. HOLTZSCHUE

n the first published case on the Property Condition The statutory PCDS form does not ask about “mater- Disclosure Act (PCDA),1 a Civil Court judge in Rich- ial defects” in a swimming pool, the critical issue in this Imond County2 has held that sellers who provided the case and one of the few items not included in the buyers with the required statement were not liable lengthy list of “Mechanical Systems & Services” covered under the act or under common law fraud because they in questions 26 through 47. That omission forced the were not proven at trial to have actual knowledge of a purchasers in this case to claim that rot should have defect in the premises. been disclosed under question 20, which asks, “Is there any rot or water damage to the structure or structures?” Facts Proven at Trial The sellers gave the purchasers a Property Condition Right Result, But Wrong Reasons Disclosure Statement (PCDS) answering “unknown” to The sellers were sued for improper completion of the question 20 about rot or water damage to structures. In PCDS. After a trial, the judge, on his own motion, also all, the sellers answered “unknown” to 30 of the 48 considered a possible claim for common law fraud. The questions. purchasers lost on both causes of action. The result is The purchasers hired an inspector to look at the correct on these facts under both the PCDA and the structures, but that inspection did not include an in- common law, but the reasoning of the opinion and ground swimming pool that was placed mostly above analysis of the PCDA is faulty in many respects. The ground. An adjustment was made in the purchase price opinion does not cite a single case or article – on the to reflect that the deck around the pool was not in good PCDA, caveat emptor or other issues – except for two 3 condition. When the deck was removed after the clos- paraphrased quotations from Shakespeare. ing, rot that could be seen on the main supports and The following discussion is presented in an attempt body of the pool was deemed so severe that if it was left to provide an interpretation of the statute by one who 4 untreated the pool would collapse. A contractor found actively participated in its enactment, with references new patches around the bottom of pool to prevent the to relevant books, articles and cases. liner from pushing out. Debris under the deck obscured The result is surely correct under RPL § 465(2), be- the rot, but if the deck had been removed the rot would cause the PCDA provides a remedy against sellers who have been visible. provide a PCDS only if the sellers had actual knowledge and willfully defaulted by lying when the sellers said The judge found after a trial that the sellers did not “unknown” on the PCDS. The purchasers did not prove have constructive knowledge of the condition. The exis- that the sellers had actual knowledge of facts contra- tence of the rot was not easily discoverable upon rea- sonable observation. The judge found that the evidence supported the sellers’ claim that they did not have ac- KARL B. HOLTZSCHUE is a real estate tual knowledge of the condition of the pool because it practitioner in Manhattan. He is an was not visible before they filled out the PCDS. It was adjunct professor at Fordham Law not clear that the rot was patent, that is, discoverable School and a member of the executive upon reasonable inspection by the sellers or the pur- committee of the NYSBA’s Real Prop- chasers. No evidence was introduced regarding prior re- erty Law Section, where he serves as pairs, so the purchaser failed to prove that the sellers the co-chair of the Title and Transfer Committee. A graduate of Dartmouth had actual or constructive knowledge due to prior College, he received his LL.B from Co- work. The sellers had rented the premises for nine years lumbia University School of Law. before 1999.

Journal | March/April 2003 31 dicting their statement in the PCDS, so the purchasers Analysis of PCDA Remedies properly lost the case. The opinion correctly states that the purchasers were The result is also correct under a common law fraud not entitled to the $500 credit under RPL § 465(1), be- theory. The purchasers could also sue for common law cause that remedy only applies if the seller fails to de- fraud for a willful misrepresentation made in the PCDS, liver the PCDS in a timely manner. Here, the sellers pro- but they would win only if vided a timely statement, the sellers had actual knowl- and the remedy provided edge (and, under the case The claim of misrepresentation under that section by its terms does not apply. law, the purchasers did not in the PCDS alone will not fail to use means available to The only other remedy them to discover the defect). support a cause of action expressly provided in the The purchasers did not prove PCDA is under RPL § 465(2), that the sellers had actual for breach of contract. which states that a seller who knowledge. The defect was provides a PCDS shall be li- not patent, it was latent. To be able for actual damages for a liable for a latent defect, the sellers had to have actual willful failure to perform the requirements of the PCDA, knowledge (here they had none) and a duty to speak in addition to any other existing equitable or statutory (none shown here). The sellers could not be liable for a remedies. In an attempt to interpret the PCDA, the negligent misrepresentation, because the sellers did not judge looked at other consumer protection legislation, have constructive knowledge either. Neither the sellers such as the statute on home improvement contracts that 5 provides a private action for fraud and an injunction ac- nor the purchasers had the means to discover the rot. 7 Consequently, the purchasers also properly lost on com- tion by the state attorney general. As a result of this mon law fraud. comparison, the judge stated he did not find that the PCDA provides a specific right of action to the pur- Mistakes by the Purchasers chaser for “a breach of the Disclosure form” (the PCDS). The purchasers in this case made two fatal mistakes. Consequently, he held that the purchasers had no cause First and foremost, they failed to have the inspector of action under the PCDA, saying that RPL § 465(2) has who inspected the house also inspect the swimming a “nebulous legal effect,” fails to create a right of action pool (although it is unclear whether an inspector had for improper completion, is unclear and is therefore un- 8 the duty to look behind the debris under the deck). Hav- enforceable. ing a knowledgeable professional inspect all aspects of The judge states that it was not clear to him what RPL 9 the residence should be the first priority in buying a § 465(2) means. He asks what does “requirements of home. Trying to get the seller to disclose observable de- this article” mean? Does it mean “truthful completion” fects should be a secondary effort. of the PCDS? It clearly does mean that (as well as timely delivery). The essential requirements are (1) that the Second, the purchasers should have tried to add the seller reveal its actual knowledge in response to the swimming pool to the list of equipment covered by the questions and (2) that the seller is responsible only for PCDS (or add a representation to that effect in the con- willful failure to comply. Accordingly, the seller is not re- tract) and made that disclosure survive the closing. The sponsible for “constructive” knowledge (knowledge sellers’ attorney probably would have resisted the dis- that a reasonable seller should have known in the cir- closure and strongly advised against survival. Survival- cumstances). That test was proposed in the original leg- of-condition representations that can be inspected is islation, but was deliberately deleted from the final rightly not customary in residential sales. The purchaser statute.10 A constructive knowledge test was thought to has the duty to get the property inspected. be too much of a trap for the unwary seller. Under the On the other hand, in my opinion (and that of Pro- same approach, the seller is liable only for a willful fail- fessor Prosser), requiring disclosure by the seller of de- ure, not a negligent one. Intentional misrepresentation, fects that are not discoverable by a reasonable inspec- such as outright lying, is actionable under the PCDA; tion by the purchaser would be appropriate and fair. negligent misrepresentation is not. Unfortunately, such a disclosure requirement has been For example, if it could be shown that the sellers in expressly rejected by New York case law.6 One of the this case had in the past received a proposal to repair the main virtues of the PCDA is that it provides some re- swimming pool (and had not had the repair done),11 the dress for this shortcoming in the New York law of purchasers might have argued that the sellers had con- caveat emptor. structive knowledge of the defect even if the sellers

32 Journal | March/April 2003 claimed they forgot about the proposal and denied hav- The judge rightly noted that nothing in the PCDA re- ing actual knowledge at the time they delivered the quired that information in the PCDS be included in the PCDS. Would Question 20 about “rot” in structures contract of sale. The PCDA merely requires that the (which does not expressly refer to swimming pools) PCDS be “attached” to the contract. The PCDS and the have reminded the sellers of the repair proposal? Did contract are separate documents.15 Consequently, the the repair proposal refer to “rot”?12 This clearly raises a claim of misrepresentation in the PCDS alone will not question of credibility as to the sellers’ actual knowl- support a cause of action for breach of contract. But a edge at the moment of signing the PCDS. But if the sell- misstatement in a PCDS can support a claim of fraudu- ers are believed by the trier of fact, the statute provides lent misrepresentation under the common law. If the no remedy to the purchasers. In that case, the sellers did sellers lied on the PCDS about their actual knowledge of not have actual knowledge and were not in willful de- the misstatement, they could be sued for fraud. fault of the requirement to disclose. It should be re- Would constructive knowledge support a fraud membered that the stated purpose of the statute is to aid claim? It could as a theoretical matter, but the claim has in the inspection process, not to set a trap for unwary almost never been made in recent caveat emptor cases, and unsophisticated sellers using a “constructive” and the real hurdle in New York is to show that the knowledge mechanism and vaguely worded questions. seller had a duty to disclose the defect.16 The judge The sellers in this case tried to protect themselves by rightly points out, I think, that the PCDA does not elim- answering “unknown” to 30 of the 48 questions. The inate a common law cause of action based on construc- judge rightly observed that an “unknown” answer tive knowledge. By contrast, as discussed above, the should trigger a duty on the purchasers to inquire about PCDA does give the seller a defense to an action under the subject matter, especially where, as in this case, the the PCDA based on constructive knowledge. sellers answered “unknown” to most of the questions. A purchaser who accepts a PCDS with “unknown” an- Merger Clauses Do Not swers should be on notice that the subject matter should Protect Against Fraud be inspected. Such a purchaser does not waive claims The judge states that any rights of the purchasers for defects; the purchaser can sue and win if the seller is under the PCDA were merged in the contract and proven to have lied about not knowing. This can be would not survive execution of the contract, based on shown by evidence that the seller had actual knowledge the standard NYSBA contract “as is” clause disclaiming of the defect (e.g., by a prior report on the condition by a contractor or proof of active concealment or partial disclosure). Claims of partial disclosure may well in- crease when a PCDS is given. In this case, however, the sellers answered “un- known” many times and still got sued and had to pay to defend a litigation. The judge rightly asked why a sell- ers’ attorney would ever advise the clients to give a PCDS and expose themselves to litigation when they could decline to do so and just give a $500 credit at the closing. Many attorneys who have attended my lectures on the PCDA have come to the same conclusion.13 This case should increase their numbers. Analysis of Common Law Fraud Action After finding no cause of action under the PCDA, the judge, on his own motion, analyzed whether the evi- dence provided at trial would support a cause of action for “breach of contract” [sic] or common law fraud. The judge rightly noted that delivery of a PCDS provides purchasers with a document that can be used against sellers in a common law suit for fraud or negligent mis- representation. Thus, the PCDS gives purchasers an ad- vantage in subsequent litigation. Moreover, the PCDA expressly states that it does not “limit any existing legal cause of action or remedy at law, in statute or in eq- uity.”14

Journal | March/April 2003 33 reliance on prior statements as to condition and the Real Property Transfer Tax and HUD-1 standard merger clause as to all prior understandings.17 By way of dictum, the judge offered his opinion that While he was correct in observing that nothing in the the state and city are entitled to collect transfer taxes on PCDA indicates that a PCDS disclosure is intended to the original sale price, not on the price reduced by the survive, he failed to take note of the many New York $500 credit, because the credit is only given at the clos- cases holding that such merger clauses do not prevent a ing. I did not initially read the statute that way, but, as a fraud claim.18 Consequently, a fraud action based on a savvy title insurance company attorney observed when PCDS misrepresentation is still available after contract I raised the question: “As to the state transfer tax, it is a signing and after the closing. two-dollar problem.”19 While this is an error in the Two different title compa- holding, it should not change If there is no PCDS, the purchaser nies have since reported that the result, because no fraud the state takes the same posi- was proven in this case. must prove a misrepresentation tion as the judge. So, the logi- The limitation to actual amounting to fraud that is made cal advice is: pay the two dol- damages in RPL § 465(2) lars. It is wiser to finesse this eliminates all other cate- other than in the PCDS. issue than to even think gories of damages under the about risking a contest on it. PCDA, but does not limit It then follows that the $500 damages under a common law fraud suit. The judge credit should be shown on the HUD-1 Settlement State- also rightly observed that the PCDA does not preclude ment as a reduction in the amount due the seller in a line a suit for specific performance. in section 500. Because the purchasers did not prove that the sellers had actual knowledge of the latent defect in this case, 1. Real Property Law §§ 460–467 (RPL). the judge rightly held that the purchasers should lose 2. Malach v. Chuang, N.Y.L.J., Jan. 10, 2003, p. 23, col. 1 (Civ. under a common law fraud theory. Ct., Richmond Co.). Analysis of $500 Credit Remedy 3. The opinion opens with an allusion to Hamlet: “To Dis- close or not to Disclose: that is the question: / Whether The judge also did an analysis of RPL § 465(1), which ’tis nobler to complete the form, suffer possible litigation requires that a seller who fails to provide a PCDS prior and expose one’s fortune, / Or keepeth quiet and forfeit to the signing by the buyer of a binding contract of sale the $500?” It concludes with an adaptation of lines from must give to the buyer at the closing a credit of $500 Macbeth: “It is a law / Drafted by a legislature, full of against the agreed-upon purchase price. In this case, the sound and fury. / Achieving almost nothing.” sellers did provide the PCDS in a timely manner, so they 4. This author has studied and written on caveat emptor for will not be required to give the credit. many years and participated in the enactment of the As dictum, the judge stated that the requirement of a PCDA. See Holtzschue on Real Estate Contracts § 2.2.11 (PLI); New York Practice Guide: Real Estate § 2.11[5]; $500 credit at closing would be enforceable. He also cor- Warren’s Weed New York Real Property, “Caveat Emp- rectly observed that a “willful failure” under the PCDA tor” (analyzing over 130 cases); Holtzschue, Disclosure does not refer to a refusal to provide a $500 credit at Act: The New $500 Credit Option in Real Property Law, closing. RPL § 465(1) makes no reference to any reason N.Y.L.J., Nov. 13, 2002, p. 5. col. 2; Holtzschue, Property why the PCDS is not delivered as required, whether Condition Disclosure Act Enacted, 30 N.Y. Real Prop. L.J. 15 (Winter 2002); Holtzschue, Caveat Emptor Ain’t What It willful or otherwise. Any failure to deliver results in the Used to Be: New Developments, Trends and Practice Tips, 25 $500 credit. N.Y. Real Prop. L.J. 3 (Winter 1997). It is not true that the seller gets no relief from litiga- 5. If the purchasers could have proven that the sellers knew tion by giving the credit. Giving the credit and denying of the defect and lied about it, the purchasers could have the purchaser a PCDS deprives the purchaser of a docu- won because they were not shown in this case to have the ment to use in litigation that could establish a written means to discover it themselves. That purchasers must misrepresentation. If there is no such document, the use means available despite misrepresentation by sellers purchaser must prove a misrepresentation amounting is firmly established in the New York cases. Danann Re- alty Corp. v. Harris, 5 N.Y.2d 317, 184 N.Y.S.2d 599 (1959). to fraud that is made other than in the PCDS. In the great majority of cases the purchaser has been As the judge observed, the PCDA makes no express found to have the means available. Holtzschue on Real provision of redress for a seller’s refusal to give the $500 Estate Contracts § 2.2.11.1.3. credit at closing. It logically follows, however, that a 6. Stambovsky v. Ackley, 169 A.D.2d 254, 572 N.Y.S.2d 672 purchaser who does not receive the credit can sue for it (1st Dep’t 1991) (which discussed and expressly rejected after the closing as a breach of the statute. the Prosser rule). See texts cited, supra, note 4.

34 Journal | March/April 2003 7. General Business Law §§ 772, 774. 8. The use of “may” in the PCDS form, RPL § 462(2), which is meant merely to inform the purchaser, does not cast doubt on the mandatory language of the remedy section of the statute. The judge suggested that the PCDA must be redrafted to achieve the stated purpose of consumer protection. The author believes that the statute is suffi- ciently clear to be enforceable. Anyone who participated in the original legislative process would probably not welcome a redrafting attempt. 9. RPL § 465(2) provides: Any seller who provides a property condition dis- closure statement . . . shall be liable only for a will- ful failure to perform the requirements of this arti- cle. For such a willful failure, the seller shall be liable for the actual damages suffered by the buyer in addition to any other existing equitable or statu- tory remedy. 10. Holtzschue, Property Condition Disclosure Act Enacted, 30 N.Y. Real Prop. L.J. 15 (Winter 2002). 11. Neither of which was proven in this case, as the judge noted. 12. One of the problems with this case is that the purchaser was trying to tie the general question about rot in struc- tures to the defective condition of the swimming pool. If there had been a question about material damage to the swimming pool, the purchasers might have had an easier case. 13. Holtzschue, Disclosure Act: The New $500 Credit Option in Real Property Law, N.Y.L.J., Nov. 13, 2002, p. 5, col. 2. For a contrary prior view that this author believes to be incor- rect, see Krieger, Property Condition Disclosure Act: Another Interpretation, N.Y.L.J., June 27, 2002, p. 4, col. 4. 14. RPL § 467. 15. It is conceivable that a PCDS could be expressly incorpo- rated by reference in the contract of sale. Such a move should be rejected by sellers, to prevent a breach of con- tract claim (including application of the six-year contract statute of limitations). 16. Extremely few New York cases have held that the seller has a duty to disclose defects. Compare one of the few, Young v. Keith, 112 A.D.2d 625, 492 N.Y.S.2d 489 (3d Dep’t 1985) (failure to disclose serious disrepair of water and sewer systems held to be concealment of material fact with intent to defraud) with Venezia v. Coldwell Banker Sammis Realty, 270 A.D.2d 480, 704 N.Y.S.2d 663 (2d Dep’t 2000) (seller had no duty to speak about contamination of groundwater, even where seller was plaintiff in class ac- tion against the polluter!). See texts cited, supra, note 4. 17. NYSBA Residential Contract of Sale paragraphs 12 and 28, respectively. See Malach v. Chuang, N.Y.L.J., Jan. 10, 2003, p. 23, col. 1 (Civ. Ct., Richmond Co.). 18. See, e.g., Bridger v. Goldsmith, 143 N.Y. 424, 38 N.E. 458 (1894) (party who perpetrates fraud may not contract for immunity). 19. The rate of the New York State Real Estate Transfer Tax is $2 per $500 of consideration. Tax Law § 1402(a). The rate of the New York City transfer tax on one- to three-family houses is 1% (in this case, $5), where the price is $500,000 or less (1.425% if more). Tax Law § 1201(b)(2), (4).

Journal | March/April 2003 35 Russia in Transition Sharing Legal System Objectives As Russia Revives Trial by Jury

BY PATRICIA D. MARKS

ast year, a team of criminal justice professionals several regions of Russia. Effective in July 2003, the traveled to Velikiy Novgorod and Pskov to share Criminal Procedure Code of the Russian Federation has Linformation about jury trials. The teams included a required most regions to have jury trials in serious crim- County Court judge, Supreme Court justice, police in- inal cases. To serve as a juror in Russia, a person must be vestigator, commissioner of jurors, prosecutor and pri- a citizen and voter between the ages of 25 and 75. The vate defense attorneys. The members of the New York code requires a jury consisting of 12 jurors and two al- teams were joined by a Connecticut team of judges and ternates. Jurors have three hours to reach a unanimous lawyers. Each of us came from different backgrounds verdict. If one is not reached within that time, a major- and experiences to discuss information about jury trials ity vote is sufficient to convict. The courts made no dis- in the United States and our understanding of how jury tinction between a conviction reached by a unanimous trials would be implemented in these regions in Russia. decision and a verdict obtained by a majority vote. We came away with so much more. We had made For Russia the implementation of trial by jury was an new friends despite the barriers of language and cul- important step in promoting citizen involvement in ture. We had new colleagues with whom we could share government. Jury trial would fulfill certain basic pur- experiences and advice. We hoped we had been able to poses: involve citizens in the decision of factual issues in dispel the notion that Americans come over to Russia to criminal cases; ensure that the verdicts of citizen juries tell them that we do it better than any one else. All we could do is bring people together, describe our best practices and learn about theirs. PATRICIA D. MARKS is a Monroe County Court judge and serves as supervising judge for the Criminal Courts in Jury Trial Revival in Russia the Seventh Judicial District. She is a member of the Russia had resurrected its jury trial system in 1993 Rochester team of the Russian American Rule of Law and conducted jury trials on an experimental basis in Consortium. Defenders Are Cautiously Hopeful BY MARK W. BENNETT

s Russian courts begin jury trials after nearly a of the czarist legal system. Indeed, the Bolshevik revo- century without them, Russian criminal defense lutionaries often requested jury trials when they were Aattorneys are hopeful that they will finally get to jailed prior to 1917. Jury trials were subsequently elimi- argue their cases free from the heavy hand of the cen- nated in Russia in 1922. tralized system that prevailed since the early days of the Despite their early success, jury trials also came Soviet Union. The prospect of pitching their cases to a under fire during this first iteration. One case encapsu- jury of peers, with a presumption of innocence and the lated this disaffection. In 1878, a revolutionary named prosecutor carrying the burden of proof, gives defense Vera Zasulich shot and killed a governor in the czar’s attorneys reason to be optimistic. They also have plenty government, then confessed to the murder. Despite her of reasons to think it will not be easy, however. confession, the prosecutor, hoping to make an example History of Jury Trials in Russia Jury trials were first established during the Russian MARK W. BENNETT is a litigation attorney with Nixon legal reforms of 1864, and became a prominent feature Peabody LLP in Rochester.

36 Journal | March/April 2003 are rendered fairly, impartially and in accordance with law; and ensure that the work of citizen juries is subject “Selling” Jury Trials to Judges to meaningful judicial review without depriving juries BY THOMAS A. STANDER of the power to make independent decisions on the is- sues presented for their determination. Although the Russian judges were warm and won- As implemented, the code dramatically altered the derfully friendly to us, we quickly learned that the con- role of the judge and prosecutors. Under the former sys- cept of jury trials was not one that they would be quick tem, all cases were judge trials often with two lay asses- to embrace. The judges had a number of concerns. sors. The judge’s previous role was more akin to that of One of the first questions we were asked as we dis- the prosecutor, and the prosecutor was more passive in cussed the jury process was “what do we (as judges) do presenting witnesses. The verdict was a majority opin- if the jury gets it wrong.” The traditional role of the judge as prosecutor and as a defender of the public was diffi- ion of the judge and two lay assessors who were re- cult for them to balance with the notion that the jury ferred to as “nodders,” reflecting the widely held belief would be the final decision maker. They also worried that the lay assessors always nodded in agreement with about the perception of justice if a greater percentage of the judge’s decision. defendants began to go free. With the advent of the new code, a number of So how did we “sell” the concept of jury trials to our changes have been introduced, including trial by jury Russian counterparts? We couldn’t say they are cheaper for serious crimes in all regions. Such trials had been or faster or perhaps even better (at least from the Rus- held on an experimental basis for several years in sians’ point of view). So why have jury trials? Moscow and eight other provinces. We tapped into the To foster democracy in Russia, we argued, the Russian information from that experiment by inviting Judge people must not only be shown that they have a voice in Alexander Kozlov from Moscow to be a presenter at our electing the legislature and the executive branch, they program. He had extensive experience with jury trials in must also feel they are part of the judicial branch. Only Moscow. His contribution was enormous and very well by being part of the judicial process do the people un- received by the other judges. derstand the role of the judge in society, and only by par- As we met with different judges and administrators on ticipation do people believe they are getting justice. a preliminary trip last May, we became aware that there To this same purpose, we reasoned, the prosecution were many concerns about the introduction of jury trials: and police will be held to a higher standard. In due • Why jury trials? – the present system works well. course, I believe, the process will also give prosecution • The jury trial system will not be efficient. and police a level of respect that has been absent in an era when their fairness has been suspect. • In the early stages of jury trials there was a high rate of acquittals, e.g., 37% in Moscow; how can we THOMAS A. STANDER is the presiding justice of the avoid that? Commercial Division of the Supreme Court in Monroe County and a former village judge in Fairport, N.Y. CONTINUED ON PAGE 38 of Zasulich, elected to pursue a jury trial. The prosecu- December 2001, the Duma passed a new Criminal Pro- tor misinterpreted the depth of anti-czarist sentiment, cedure Code extending the right to a jury trial to citizens however, and the jury acquitted Zasulich. The case was in all Russian regions beginning in January 2003. Jury promptly used by those opposed to jury trials as a shin- trials are to be available in all cases involving “serious ing example of why ordinary citizens could not be crimes” – that is, all crimes for which the potential sen- trusted to decide important cases correctly. tence is 10 years or more. Under the Soviet (and post-Soviet) system, criminal Optimism Tempered by Challenges trials were held before either a judge sitting alone or a A jury trial provides, at least in theory, many new judge and two citizens known as “lay assessors,” more ways for a Russian defense attorney to present the commonly referred to as “nodders” – apparently be- client’s case. Instead of presenting evidence and argu- cause they either always nodded their agreement with ment to an unreceptive government-staffed bench, a the judge, or nodded off for lack of active participation criminal defendant is now able to play to the more sym- in the proceedings. Defense lawyers were severely lim- pathetic citizens of the jury, who are more willing to ited in presenting their case, and it showed in the results hold the prosecutor to a strict burden of proof. The de- – only 0.5% of criminal defendants were acquitted. fense attorney also benefits from a tendency toward In 1993, two years after the collapse of the Soviet more strict preclusion of inadmissible evidence than in Union, the Russian legislature (the Duma) brought criminal jury trials back to nine of Russia’s 89 regions. In CONTINUED ON PAGE 38

Journal | March/April 2003 37 CONTINUED FROM PAGE 37 and similarities of the American and Russian jury trial • Our role as judges changes – we are less powerful systems. We described the American system at each and less active. stage and contrasted it with the Russian system as we • Prosecutors cannot be as passive and need to prepare understood it. The most interesting difference in the and be ready to introduce evidence that is admissible. Russian justice system is the role that victims of a crime • Jurors will not attend when summoned. have in the trial. The code grants them an active role in • How can we permit jurors to risk losing a job while selecting the jury, calling witnesses, questioning wit- serving on a jury trial? nesses and making statements to the jury. • How do we provide security for jurors to prevent As Judge Kozlov described the jury selection process, them from being tainted or threatened in any way? we were struck by the similarities to our system in the • How do we keep jurors from hearing or seeing United States. We found that the preliminary charge to something that might affect their ability to serve? the jury after the jury selection is so similar that we • How will we develop the types of facilities that are could share comments and experiences. needed to accommodate jurors? We did some role-playing exercises in jury selection We adapted the seminars to address the issues that and demonstrated the manner in which a jury would be the participants had identified. selected. We also offered an exercise for the judges in When we returned in September, the number of par- preparing the written questions submitted to the jury ticipants had expanded to 49, including the American based upon the crime scene fact pattern presented in a teams from Rochester and Connecticut. We were video and in written materials for the seminar. pleased to be joined by a defense attorney, Alexander We explored a demonstration of an eyewitness in the Ivanov, from Moscow. He had extensive jury trial expe- context of the crime scene scenario and learned about rience and interjected information throughout the semi- examination, leading questions and the manner in nar that was helpful. which such examinations should be conducted. The Comparing Russian and U.S. guidance we received from Judge Kozlov was to keep Jury Trial Systems the questions simple. Leading questions could not be The first segment of the seminars addressed each asked by either the prosecution or the defense. As a mat- stage of a jury trial. We commented on the differences ter of style and procedure, Judge Kozlov would limit the

CONTINUED FROM PAGE 37 tirely on the investigative dossier (also known as the “protokol”). Thus, even when exculpatory evidence is bench trials. Further, in a Russian jury trial, a defendant available to the defense attorney, if it is not in the pro- can waive any self-incriminating statement, and the tokol, it is excluded from consideration by the jury. And prosecution is thereafter prohibited from mentioning it because the content of the protokol is determined in the at trial. discretion of the judge at the preliminary hearing, the Given these changes in the system, defense attorneys Russian judge continues to have a great amount of con- are understandably more optimistic about presenting trol over the strength of the defense case. their cases. Indeed, with an acquittal rate that jumped It is in these matters of discretion, and in view of the from less than 1% to more than 25% during the early lack of reasonable appeal mechanisms from preliminary years of the jury trial experiment, defense attorneys decisions of discretion, that defendants and defense at- have reason for optimism. This optimism has also led torneys find reason to be discouraged. As several de- defense attorneys to think about attempting the “no fense attorneys stated at the May seminar, there is not holds barred” advocacy style typical in the United much a defense attorney can do if the judge is biased States, where defense lawyers will attempt almost any against either the defendant or his attorney, and uses his tactic, including playing to the racial or ethnic biases of or her discretionary powers to act on that bias. Thus, the jury, to win acquittal for their client. while jury trials offer a promise of opportunity for de- The optimism is tempered, however, by a realistic fendants to freely and fairly present their cases, defense sense of the challenges defendants still face. The new attorneys worry that this promise will never fully be re- code has brought many changes that provide a more alized. even playing field for criminal defendants, but many Russian defense lawyers also face constraints of pub- obstacles remain. lic sentiment. There is a worry that pressing the jury In a Russian criminal proceeding, the preliminary trial system too far will lead to public sentiment against hearing is held by the judge, and his or her decisions on jury trials, and will lead ultimately to their repeal by the introduction and suppression of evidence are based en- Duma. Unlike the United States, which has a strong con-

38 Journal | March/April 2003 manner in which questions were posed and would in- charge and whether that arose out of the same acts. It terrupt without objection to guide the questioning. appeared that charges arising out of the same act would Evidentiary aspects of a trial appear to be done by be put into a single question regarding the occurrence of protocol, by admission of documents, by motions. The the event and then apparently what would be compara- number of fact witnesses would be limited. Investiga- ble to a culpable mental state and finally attendant cir- tors, generally, did not testify. Many evidentiary issues cumstances. appeared to be handled pre-trial by a preliminary ruling Judge Kozlov described the detailed instructions that of court. he gives regarding how the jurors should proceed through the written statements or verdict sheets. He de- Preparing the Charge for the Jury scribed how, if the answer to the first question is “no,” We discussed how Judge Kozlov would prepare his that the event did not occur, that would be the end of charge, including what he would communicate to deliberations and the jury would report a verdict of ac- lawyers regarding the preparation of the charge. He quittal. Something needs to be recorded on the verdict noted that one of the keys to preparing the charge to the sheet, however, so the foreperson is required to record jury were the written questions. It is important to keep the verdict, and verify the verdict. The court must then the questions simple, in a format that the jury can un- review the verdict sheet to determine that it is complete derstand, and focused on the issues to be resolved by and correct. Once the verdict is announced in the court, the trial. the verdict is final. Objections need to be raised by coun- We described for him the process by which we pre- sel prior to the verdict being announced in open court. pare the elements of the charge and use an order identi- fying the act of the actus reus first, the culpable mental The Future of Jury Trials in Russia state or mens rea second and attendant circumstances in Russia is committed to the integration of jury trials the remaining elements. He saw the Russian method as into their justice system. We hope to continue the similar in that he would prepare the questions in the process of exchange with our Russian counterparts, to same manner. share our experiences and learn from them as well. We With multiple defendants, it appeared he would pro- look forward to continuing the exchange process in our vide multiple sets of written questions for the jury. With work through the Russian American Rule of Law Con- respect to multiple charges, it would depend on the sortium and the Open World project. stitutional history as the basis of the public’s belief in the States. One thing is certain, however: Russian defense jury system, Russians are less sure that ordinary citizens counsel are entering a new and exciting challenge, and can be trusted to properly determine the guilt or inno- are eager to do what they can to grow into and expand cence of an accused, or that defendants who “appear” their role as jury trial advocates. guilty can be acquitted on a procedural technicality. Many Russians point to the tactics of defense lawyers in the trial of O.J. Simpson, and the willingness of the jury to acquit Simpson, as a great weak- ness in the American jury trial system. If Russian defense lawyers push advo- cacy tactics too far too fast, it could put the system in danger of collapse. State of Flux The evolution of defense lawyers in the new Russian jury trial system re- mains unclear. Although Russian de- fense counsel will be freed from some restraints and have opportunities to advocate for their clients unimagin- able in the former Soviet justice sys- tem, the jury trial system and public sentiment continue to constrain coun- sel in ways not found in the United

Journal | March/April 2003 39 Similarities and Differences In the Roles of Prosecutors

BY BRET PUSCHECK

fter our trip to Saint Petersburg to exchange con- tributable to the inquisitorial trial model predominant cepts with Russian counterparts, I came away in Russia during the moratorium on the right to trial by Aimpressed that a universal truth exists among jury between 1922 and 1993. The inquisitorial model prosecutors. That truth is that, as representatives of the had, as its centerpiece, a judge who served as the ac- sovereign, the interest in a criminal prosecution is not in cuser rather than as an objective manager of legal pro- winning a case but in assuring that justice is served. cedure. In practical terms, the role of the Russian prosecutor Typically, the procurator simply turned over to the is most similar to that of the American prosecutor in re- court investigative reports referred to as the “protocol” spect to investigative responsibilities, but quite dissimi- and provided the judge with a list of witnesses. The lar in respect to the prosecutor’s role in presenting a judge decided which witnesses were to be called. The case at trial. witnesses were instructed to provide testimony in nar- The Russian Criminal Code provides a concise de- rative form, after which the procurator, the defense ad- scription of each of the participants in a criminal pro- vocate and the judge asked questions. ceeding, which naturally includes By contrast, the U.S. practice of the prosecutor or “procurator.” filing omnibus motions on behalf The procurator is authorized to of criminal defendants results in carry out criminal prosecutions pretrial hearings to address is- on behalf of the government and sues such as suppression of phys- to oversee the procedural activi- ical evidence, statements by the ties of investigative agencies. The defendant and out-of-court iden- code describes the procurator’s in- tification procedures, before evi- vestigative authority quite specifi- dence is presented to a jury. cally, defining relationships with Often, a great deal of strategy various investigative agencies and goes into a prosecutor’s decision setting forth the prosecutor’s abil- about how to conduct these pre- ity to make charging decisions, trial hearings. A prosecutor may approve indictments and forward wish to limit pretrial testimony to criminal cases to court. The ability reduce the potential for impeach- of the Russian procurator to initi- ment of witnesses with prior in- ate criminal prosecutions, deter- consistent statements at trial. Be- mine whether to charge an indi- cause of these considerations, a vidual with a crime and at what decision to adopt a case for pros- The historic emblem for the city of Velikiy Nov- level, and to reduce or terminate gorod, this crest appears above the judges' benches ecution involves a thorough re- charges is thus generally akin to in both the city and oblast (regional) courts. view of the circumstances of the the authority of American prose- arrest and an evaluation of the cutors. admissibility of evidence. There is, however, no grand jury system to provide Although the admissibility of evidence is settled for an additional level of review by a public body. An in- the Russian prosecutor at a pretrial hearing, the hearing vestigative agency that disputes a charging decision is much less formal, akin to an offer of proof. Once evi- may ask for review by a “higher” procurator, but after dentiary matters are resolved before trial, specific items review by this “higher” procurator, the decision to of physical evidence are admitted during trial along the charge is absolute. lines of a stipulation. Rarely, if ever, are technical police At the litigation stage, the difference from what is typically seen in the United States is most certainly at- BRET PUSCHECK is assistant U.S. attorney in Rochester, NY.

40 Journal | March/April 2003 witnesses allowed to testify, even if they have discov- doubt, but Russia does not require a unanimous jury ered important items of physical evidence. verdict. Jurors deliberate for no more than three hours. Another major distinction is the Russian practice that A unanimous verdict ends the case before the three- gives the victim of the crime the right to be heard at trial hour limit, but if a unanimous verdict is not reached, the and to be represented by counsel, who can play an ac- jury is polled and a simple majority (7 to 5) is sufficient tive role in the proceeding. A civil claim is often adjudi- for conviction. An even split or less results in an acquit- cated as part of the criminal trial. This scenario has the tal. potential to create problems for the prosecutor, who re- In the final analysis, the role of the Russian prosecu- tains no authority over the questions the victim’s attor- tor is similar to that of the American prosecutor with re- ney asks or the trial tactics the attorney uses. In the same spect to investigative responsibilities, but dissimilar vein, it certainly may become more difficult to protect a with respect to the role of the procurator in presenting a defendant’s right to an objective trial, where a victim’s case at the pretrial stage and at trial. Given expansion of advocates delve into the havoc wreaked upon their the right to trial by jury, however, the role of the procu- clients beyond issues material and relevant to a criminal rator must necessarily evolve into a more active one in adjudication. terms of trial presentation, and thus it may eventually The burden of proof on the prosecutor in both the resemble more closely the role of the prosecutor in U.S. and Russian systems is proof beyond a reasonable American courtrooms. “Watchers” Observe Crime Scenes

BY RONALD REINSTEIN

he Novgorod police and prosecutors describe the find two people to fulfill this requirement, he said, the Russian approach to juries as “a new system with entire case runs the risk of being dismissed by the court. Tnew challenges.” Some view it as just another bar- Without watchers, the case can be lost, even if every rier to justice and yet another avenue to corruption other detail has been performed impeccably. In their re- through bribes or intimidation. Organized crime has gion, which encompasses large, uninhabited areas, im- reached high levels in contemporary Russia, an appar- partial civilian observers can be in short supply, espe- ent reason for their concerns. Others see the new frame- cially with little advance notice. He said they have had work as a chance to finally have an active role in their to go as far as an hour away to find two people to ac- government and its functions. The varied opinions are company them. Watchers are not legally obligated to all valid from their own perspectives. participate, he noted, and their assistance is purely vol- The Novgorod jury system would be unusual, untary. viewed through the lens of the U.S. justice system. Russ- CONTINUED ON PAGE 42 ian police officers do not operate on the basis of trust. RONALD REINSTEIN is an investigator with the homicide This is not surprising, given that they work in the squad of the Rochester Police Department. shadow of the era of Stalin’s Secret Police. One manifestation of this is the requirement that two private citizens, called “watchers,” be present while crime scenes are being investigated. Whether the scene is at a remote location or in an apartment building in the center of the city, these two people watch the police to make sure that nothing is planted or moved. It is a relic of the old Soviet way, guaranteeing the integrity of a crime scene. During the middle of a dinner, Deputy Prose- cutor Sergi Shahnazam notified me that he had been informed of a murder. I was invited to ac- company him and his partner to the scene. En route, he briefed me about their policies and pro- Left to right: Igor Shukoff, Anastasiya Demkiv-Naumchenkova, Patricia D. cedures, including the watchers. If they cannot Marks, Ronald Reinstein, Natella Ivova, Bret Puscheck

Journal | March/April 2003 41 Best Practices in Jury Management: Comparing Russia and New York

BY CHARLES G. PERREAUD

In New York, our approach to jury management bolts of a new system. In both Novgorod and Pskov, has focused on a strong set of management objec- resources or the lack of them seem to be a critical fac- tives, also described as best practices, that define the tor. Russian judges who visited Rochester in 2001 climate and culture of the process. The jury reform consistently commented about our level of bud- efforts of Chief Judge Kaye have resulted in legisla- getary support and their lack of it. tive reform and strong judicial and administrative We try to devote great effort to issues involving support for the jury system. Some key elements respect of jurors’ time, the commitment to the insti- have been: tution and the continuous improvement of public • Budgetary support. trust and confidence in the jury system. • The ability to implement change. Russians have a history of a belief in planning • Commitment to the jury as an institution. and appear to have embraced training. Planning on • Developing public trust and confidence. a grand scale was one of the strongest suits of the So- viet system, and I sense it has not been abandoned. The key element to both the New York jury re- Court officials and judges seem to be a mix of both forms and the Russian system at this point is fund- veterans and younger people with great enthusiasm ing. About 25 years ago, New York instituted unified to make jury reform succeed. court budgeting and centralized operational func- I believe that the Russian jury system will grow tions, unified non-judicial employees under a and become a strong institution. The Russians ap- statewide classification and salary plan, and estab- pear to have the talent to plan for acceptance of the lished a strong central administration with regional jury system, together with the legislative and judi- district administrative judges and non-judicial ad- cial support to move ahead. Once the resources are ministrators. In Russia, it appears that judicial re- in place, they will be able to reach out to their citi- gions or departments have strong planning in place, zens and establish public trust and confidence. Such but it is unclear how the administrative structure, a climate and culture of best practices can then help salaries, benefits and related components are similar the jury system evolve from being an experiment to between regions. an institution with a strong foundation and the abil- In Russia we met with administrators who are fo- ity to flourish. cusing on building facilities, building jury court- rooms, implementing administrative systems for CHARLES G. PERREAUD is commissioner of jurors in payroll and personnel, and tackling the nuts and Monroe County.

When we arrived, I saw several officers standing out- from the time he arrived until the prosecution of the sus- side an eight-story apartment building. On the stairs pect, including forensic evaluation and interviews of just outside the top-floor apartment was the partially any witnesses and suspects. clad body of a woman in her fifties. Three officers were While this was all occurring, he was called to speak present, with a male civilian and a female civilian iden- with one of the officers. He returned looking disgusted. tified as the two watchers. The two watchers stood in He said one of the watchers had simply walked away the middle of the crime scene taking no apparent, active and gone back into his apartment, a seemingly innocu- role, observing what was unfolding as the deputy pros- ous event that had put his case in jeopardy. The watch- ecutor took charge. He reviewed what had been done, ers are not required to stay, nor can one demand that then requested several additional tasks regarding the they do so. Later I asked him what pressing need had processing of the scene. He took me through the scene, dragged the watcher away. He responded, “He had a explaining what had been done and what else he had potato in the oven and he needed to get it out.” He ordered. His role at that point was more a detective than shook his head as we surveyed the scene. “This is an ob- a prosecutor. All parties at the scene answered to him vious obstacle, as you see. Even though we are moving and questioned nothing he requested. He explained that ahead in the system we are constantly dragged back in he would be in charge of everything that transpired time, always by our own means.”

42 Journal | March/April 2003 ETHICAL DILEMMAS WITH A “DIFFICULT” ORGANIZATIONAL CLIENT In Section 67, the Restatement permits the disclosure of CONTINUED FROM PAGE 18 confidential information when the lawyer reasonably be- lieves that the disclosure is necessary to prevent a crime which they acknowledge was not incorporated into either or fraud, provided the crime or fraud threatens “substan- Restatement § 96 or its Comment, that there is nothing in tial financial loss,” the loss has not yet occurred, it is the Rule 1.13 (and presumably by analogy DR 5-109) which client who intends to commit the crime or fraud (person- precludes a controlled disclosure of confidential informa- ally or through a third person), and the client has em- tion outside the organization in limited circumstances ployed or is employing the lawyer’s services in the mat- (i.e., the wrongdoing is clear, the injury to the client orga- ter in which the crime or fraud is committed. In addition, nization is substantial, and disclosure would clearly be in disclosure is permitted even if the crime or fraud has al- the best interest of the organization), provided that dis- ready occurred if the disclosure is necessary to prevent, closure is limited to only that which is reasonably neces- rectify or mitigate the loss. sary to protect the organization. 27. Twenty-seven states, and the Model Code, permit the dis- 11. See Hazard & Hodes, The Law of Lawyering § 17.12; closure of client confidences in order to prevent any fu- Stephen Gillers, Model Rule 1.13(c) Gives the Wrong Answer ture crime, two states (Florida and Virginia) mandate dis- to the Question of Corporate Counsel Disclosure, 1 Geo. J. closure to prevent any crime, and 20 states and the Model Legal Ethics 289 (1987). Rules do not permit disclosure to prevent just any crime. 12. See Maryland Rules of Professional Conduct, Rule 1.13(c); On the other hand, 37 states and both the Model Rules Mich. Rules of Professional Conduct, Rule 1.13(c) ; N.H. and the Model Code permit disclosure to prevent death or Rules of Professional Conduct, Rule 1.13(c); and N.J. injury (under various circumstances, e.g., imminent, rea- Rules of Professional Conduct, Rule 1.13(c). sonably certain, etc.), while 11 states require such disclo- 13. Hazard & Hodes, The Law of Lawyering § 17.11. sures, and one state (California) does not permit disclo- 14. Id. at Illustration 17-6. In a variation on this illustration, sure even in those circumstances. Thirty-six states and the these same commentators recognize that if the refusal to Model Code permit disclosure to prevent criminal fraud, comply with the recall order were to constitute a “crime,” four states (Florida, New Jersey, Virginia and Wisconsin) the lawyer would have no choice but to demand that the require disclosure to prevent criminal fraud, and nine vice-president reconsider his decision and, if that did not states and the Model Rules do not permit disclosure to result in a change in action, report this conduct to higher prevent criminal fraud. Finally, 38 states and the Model authorities within the organization, because a criminal rules and Model Code do not permit disclosure of client matter “must normally be considered per se ‘substan- confidences to prevent non-criminal fraud; nine states permit such disclosures; and two states (New Jersey and tial.’” Id. at Illustration 17-7. Wisconsin) require such disclosures. For a state-by-state 15. EC 7-8; Model Rules of Professional Conduct 2.1. listing, see Morgan & Rotunda, 2003 Selected Standards 16. DR 7-102(A). on Professional Responsibility, App. A (following Model 17. See, e.g., NYSBA Op. 674 (1994). Rules of Professional Conduct) (prepared by Attorneys’ 18. DR 4-101; see Model Rule 1.6. Liability Assurance Society, Inc.). 19. See Implementation of Standards for Professional Con- duct for Attorneys, 68 Fed. Reg. 6296 (Feb. 6, 2003) (to be codified at 17 C.F.R. pt. 205). 20. 68 Fed. Reg. at 6301. 21. See Implementation of Standards of Professional Conduct 30% Off CLE for Attorneys, 68 Fed. Reg. 6324 (proposed Feb. 6, 2003) Free Top Legal Publications (to be codified at 17 C.F.R. pt. 205). Free Online Research 22. Rules of Professional Conduct 1.6. The scope of the Section and Committee Memberships lawyer’s duty to maintain confidentiality in the face of Exclusive Discounts harm to others was one of the most hotly contested pro- Renew your membership visions during the adoption of the original Model Rules at www.nysba.org or call 518.463.3200. of Professional Conduct. See generally George L. Harris, Taking the Entity Theory Seriously: Lawyer Liability for Fail- 5 Reasons to Renew ure to Prevent Harm to Organizational Clients Through Dis- closure of Constituent Wrongdoing, 11 Geo. J. Legal Ethics 597, 599 n.2. At one point, a draft of the Model Rules called for mandatory disclosure of client confidence and secrets in order to prevent physical harm or injury, but that was rejected. Id. 23. DR 4-101(A). 24. Model Rule 1.6(a). 25. See Model Rule 1.6, Comment. 26. The Restatement (Third) of the Law Governing Lawyers deals with this issue in two distinct sections. In the first, MAKE IT YOUR OWN. Section 66, it provides that a lawyer may disclose confi- dential client information when the lawyer reasonably be- lieves that the disclosure is necessary to prevent reason- ably certain death or serious bodily harm to a person. Thus, unlike the Model Rules, this permits disclosure even if the client is not the person about to commit the criminal NEW YORK STATE BAR ASSOCIATION act and even if that act is not likely to result in “imminent” RENEWwww.nysba.org TODAY! (just “reasonably certain”) death or bodily harm.

Journal | March/April 2003 43 ATTORNEY PROFESSIONALISM FORUM

To the Forum: what to do. In this case, it sounds as if I am a lawyer who has developed a what you decide may have an impact This column is made possible certain reputation for having expertise not only on the profession, but on your through the efforts of the NYSBA’s in legal ethics, and represent other at- own self-esteem as well. Committee on Attorney Professional- torneys with disciplinary problems or First, and perhaps foremost, you are ism, and is intended to stimulate ethical concerns. Now I’ve got a prob- not obligated to accept the proposed thought and discussion on the subject lem of my own. Recently, I was con- representation. Other than with court- of attorney professionalism. The sulted by a personal injury lawyer who appointed representation or represen- views expressed are those of the au- has had an offer to participate in a tation of unpopular clients who cannot thors, and not those of the Attorney group lawyer advertising program for find another lawyer, an attorney is Professionalism Committee or the NYSBA. They are not official opinions which O.J. Simpson is a speaker. under no moral or professional obliga- on ethical or professional matters, nor She wanted to know whether her tion to accept any particular employ- should they be cited as such. participation in the program was eth- ment. And here, another factor may be The Attorney Professionalism ical and, if not, whether her participa- at work that militates against a volun- Committee welcomes these articles tion could be tailored so that it could tary engagement. If your distaste for and invites the membership to send in be made ethical. As a business matter O.J. Simpson’s endorsement of per- comments or alternate views to the re- she is very interested, because she be- sonal injury attorneys is so great that sponses printed below, as well as ad- lieves (rightly or wrongly) that O.J.’s you cannot exercise impartial legal ditional questions and answers to be endorsement will help her obtain judgment on behalf of your prospec- considered for future columns. Send clients in minority communities, tive client, you may have a conflict of your comments or your own ques- where she is trying to develop a client interest; and absent the client’s consent tions to: NYSBA, One Elk Street, Al- base. However, she does not want to after full disclosure, you must decline bany, NY 12207, Attn: Attorney Pro- run afoul of any disciplinary rule or the representation (See DR 5-101(A)). fessionalism Forum, or by e-mail to her local Grievance Committee. However, if your feelings are not so [email protected]. I reviewed the proposed TV adver- strong as to rise to the level of a conflict tisements at her request. They cur- of interest, you should bear in mind rently contain some misleading state- that, as an ethical matter, attorneys are ward, or even slow it down. Indeed, ments that would have to be changed not “responsible” for the views of their your presence may be more beneficial or removed altogether in order to clients. Just as criminal defense attor- than your absence, because another avoid disciplinary problems. But even neys should not be viewed as morally lawyer might not bring your ethical if they are changed, I am concerned accountable for the acts of those they expertise or professionalism concerns about my own representation of this represent, you are not endorsing the to the table. Thus, an opportunity attorney becoming public, since some moral appropriateness of these ads might be lost to shape the thinking of lawyers might think I had helped a should your potential client participate your prospective client concerning the client engage in what they would con- in the program, against your advice. issues presented by the ads. Ethical sider (and I would agree) to be un- On the other hand, even without a Consideration 7-8 is very instructive in seemly advertising that damages the clear conflict of interest you simply this regard. Among other things, it tells image of lawyers as a whole. Given my may decide, as a matter of your own us that a lawyer should advise not concerns, can I take on the representa- moral or professional views, that you only on the legal issues, but also on the tion? Should I? do not want to lend your assistance to effect each legal alternative may have Sincerely, this enterprise by advising a client — and that the lawyer may emphasize Ethicist with an Ethical Dilemma who clearly wants to participate. the moral aspects of the client’s deci- There is yet another factor to con- sion-making. Dear Ethicist: sider. Before recoiling from what is What this means is that is it would Even a doctor can have trouble di- personally and professionally distaste- be more than just ethically permissible agnosing his own symptoms. ful, bear in mind that your potential to advise your client of your own con- There is no clear-cut answer to your client will surely find another lawyer cerns; it would be wholly consistent question. At most, I can give you some to take on the representation. There- with a guiding Ethical Consideration. issues to think about—but, as with so fore, do not believe that by declining So long as you respect your prospec- many ethical questions containing the representation you can prevent the tive client’s right to disagree and to shades of gray, only you can decide advertising program from going for- make the ultimate determination, ex-

44 Journal | March/April 2003 pressing your own views on this mat- motion so that I could go on a previ- sonal health. She declined to specify ter would be carrying out the highest ously-scheduled family vacation. No the health problem. I was angry that I ideals of the profession. trial date had been set, and I therefore had to make personal sacrifices be- —The Forum, by didn’t see a problem. However, after cause of my adversary’s intransigence; James M. Altman (purportedly) consulting with her I was suspicious of the bona fides of her Bryan Cave LLP client, my adversary called me back health problem; and I was inclined to New York City and advised that although she would repay her lack of civility in kind. On have been willing to agree to the ad- the other hand, there was still no QUESTION FOR NEXT ATTORNEY journment, her client refused to give scheduled trial date in the case and no PROFESSIONALISM FORUM: his consent. demonstrable prejudice to my client by To the Forum: As it turned out, I was still able to the requested adjournment. Ulti- I am a litigator who practices with a join my family for the vacation, but not mately, I gave consent, but I feel more small firm. I am involved in a federal without working nights and weekends than a bit used. This is likely to come case in which my relationship with my in order to comply with the motion up again—if not with her, then with adversary, a partner in a large, national schedule. Not long after this incident, someone else—so my question is this: firm, has taken a turn for the worse. I the same lawyer telephoned me to re- What were my professional obliga- requested her consent to a two-week quest an adjournment of another mo- tions to my adversary? adjournment of a summary judgment tion in the case, based on her own per- Steamed in Syracuse

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Journal | March/April 2003 45 Although steroids have not caused tions? Steroids will increase muscle any known psychiatric disorders such mass; they will not make you grow LAWYER’S as psychoses and hallucinations or, for taller. This is not Miracle Grow; it will OOKSHELF that matter, documented ill medical ef- not affect bone. B fects, they have ratcheted up male ag- In any event, for lawyers it is a mat- gression and produced hair on the ter of how much time you wish to backs of some women who use them. Legal Muscle, by Rick Collins, Esq.; spend in front of the mirror versus in While steroids are ruled out of most the courtroom. Even if you need your Legal Muscle Publishing, Inc., East organized sports programs because of steroid-ingested clients to carry your Meadow, N.Y., 2002, 433 pages, $49.95. concerns that their use would unnatu- bags for you, Collins’ book will assist Reviewed by Thomas F. Liotti. rally skew athletic achievement and you in defending or, heaven forbid, egal Muscle is a book for lawyers give users a big advantage over non- prosecuting these cases. Steroids may and lay people alike, written by a users, there is a larger and larger seg- be a wave of the future, promising bet- Lformer prosecutor turned defense ment of the population undergoing a ter health for all of us rather than the attorney. Rick Collins, a body-builder metamorphosis in the underground, Reefer Madness image suggested by the himself for more than 20 years, has making the rest of us look almost pe- Drug Enforcement Administration, written the definitive work, a veritable tite (hah, fat chance!). Compare, for ex- among others. Collins’ book, like Gul- bible in the legal and drug industry on ample, the adipose-laden, endomor- liver’s Travels, has lifted us out of the the possession, sale and use of phic physique of Babe “the King of world of Lilliput and brought us to steroids. Swat” Ruth with the mesomorphic Brobdenagg. But this time, instead of The value of a book with this infor- physiques of today’s sluggers. Is it just showing us the imperfections of the mation is illustrated by a recent article coincidence that during the 70 years or human body, he has given us enor- in the New York Times, which reported so that it took to break the Babe’s mous, huge and big, very big, insights that prescriptions for anabolic steroids record, steroid use has been on the into steroid use that will greatly bene- have “soared in recent years, to 1.5 mil- rise? Now it seems that one or more fit the human condition now and for lion in 2001 from 806,000 in 1997, ac- athletes are capable of surpassing the generations to come. cording to IMS Health, a company that Babe’s record nearly every season. Collins has consulted on and been monitors drug sales,” although it is In any event, Mr. Collins has con- involved in more than 1,000 steroid “impossible to know how much is vincingly and authoritatively shown cases worldwide. If these drug cases being taken for legitimate medical that the use of steroids coupled with are a cottage industry, then Collins needs.”1 proper exercise – to wit, large amounts owns the cottage. His book provides all of weight lifting – can lead to better But why so much interest in of the essentials for any lawyer or health. Ninety-seven-pound weak- steroids when they are barred in the “musclehead” – the term applied to lings are a thing of the past. A new United States except by prescription? bodybuilders. Do these drugs produce generation of Americans is ready to Perhaps a recent quote from the HBO deleterious side effects? They are al- take names and kick butt. television series “Six Feet Under” ready being used to counter the ill ef- President Bush should take heed, gives the rationale, to wit: “Men Are fects of chemotherapy, but many also aerobic sports such as running will the New Women.” That’s not to sound believe that the drugs possess the po- help cardiovascular conditioning, but sexist or pejorative or to suggest that tential to produce super humans and to not improve strength beyond Lilliput- the taking of high dosages of steroids – either stop or curtail the aging process. ian status. For that, “yah he vil need a/k/a testosterone, the male hormone Bodybuilders have been popping iron, yah, big veights.” Steroids are – reflects a narcissism that is harmless. steroids for almost 50 years. It is past moving Americans away from their It does suggest, though, a national pre- time that more scientific research be televisions and putting them into done, particularly by world health or- occupation by men with looking ever gymnasiums. No one has yet to deter- so “beautilicious.” ganizations, to determine whether the mine that steroids will increase our in- ingestion of these drugs is really worth Apparently the Department of Jus- telligence. For that, we will have to worrying about or if we should simply tice feels that there are too many await Mr. Collins’ next book. But what end the black market by allowing for Arnold Schwartzeneger wanna-bes do we do in the meantime? Ingest personal use. No matter what, there out there ingesting higher and higher steroids and lift? Feed them to our in- will be many of us who prefer to re- quantities of steroids, readily available credibly shrinking older generation; main hopeless couch potatoes than in Mexico and under the counter or by give them with impunity to those who show off the new physiques or more mail and Internet order here in the are HIV-positive or those with osteo- United States. porosis and other degenerative condi- CONTINUED ON PAGE 53

46 Journal | March/April 2003 NEW! BESTSELLERS Fall ‘02/Winter ‘03 FROM THE Business, Corporate, Tax Limited Liability Companies NYSBA General Practice Monograph This practical guide, written by Michele A. San- BOOKSTORE tucci, enables the practitioner to navigate the Limited Liability Company Law with ease and confidence. You will benefit from numerous forms, practice tips and appendixes. (PN: General Practice NYSBA’s Residential Real 4124/Member $55/List $70) Attorney Escrow Accounts— Estate Forms Discover how easy it is to electronically produce General Practice Rules, Regulations and 200 different residential real estate forms—for Related Topics both downstate and upstate transactions—with Pitfalls of Practice, 2nd Ed. This book comprehensively covers the most this automated set of forms. 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BY ALVIN D. LURIE axes have not been popular with sizeable portion of the Fortune 500, utives for having employed an elegant mankind since the beginning of and other highly successful corpora- tax shelter designed by the company’s Trecorded civilization. “To tax and tions, their executives and other very auditor, Ernst & Young, to eliminate to please, no more than to love and be high net worth individuals do not taxes on almost $300 million of ordi- wise,” said Burke, “is not given to think civilization is worth the price. nary income on the gains they realized men.” How else explain the rapidly growing on exercising stock options. The One may presume we have had tax proliferation of “abusive” tax shelters “shocked” reaction of the board of di- shelters as long as there have been employed by would-be taxpayers most rectors to this gaming of the system taxes – not all abusive, to be sure. What able to pay (“would be,” that is, but for cannot help but remind one of Claude can be more benign, if not blessed, the tax shelters they have used) who Raines’s “I’m shocked, shocked” retort than the parsonage allowance? When have exempted themselves from de- to being informed of the corruption in the disciple Luke coined his admoni- claring the full amount of their pre- Casablanca (the movie). For the record, tion, “Woe unto you, lawyers,” he was sumptive income and resultant tax lia- E&Y stands by its advice, and the IRS probably not scolding them for their bilities? is just in the investigation phase. But it 3 involvement in tax shelters; but that In one recent case, American Home is not hard to foresee litigation be- may have been because in biblical Products (now Wyeth), paid a $7 mil- tween the two dismissed executives times, and for many centuries since, lion fee to the promoter of the scheme, and the Sprint auditors, and perhaps the connection between lawyers and plus $4.5 million to tax-indifferent for- other professional firms implicated in tax shelters was a carefully kept secret. eign partners necessary to its accom- the development and/or blessing of No more. An intrepid chairman of plishment, as well as other heavy the program. the Tax Section of the American Bar transaction costs, rather than pay a Association didn’t mince words when, capital gain tax on $605 million of gain; Several decisions in speaking to the Ways and Means Com- the scheme had enabled it to offset the January 2003 will gains by claiming a comparable mittee about the aggressive use of tax further strengthen products to reduce tax liabilities, he amount of paper losses, while actually incurring only $8 million of real losses. the hand of the called “the linchpin of these transac- IRS Commissioner. tions[,] the opinion of the professional The mechanism was to create a part- tax advisor.”1 Putting a finer point on nership with a foreign partner not sub- it, another chairman of that body ject to U.S. taxation (hence “tax indif- It is axiomatic that no one is obliged called it an “ethical failing – the lack of ferent”), for the purpose of engaging in to pay more than his fair share of taxes. professionalism – that is clearly a fac- a series of securities purchases and Another great jurist, Learned Hand, tor in the tax shelter problem.”2 sales allowing the partnership to claim said it better than anyone else: a massive tax gain that was allocated Can there be any doubt that Bittker to the foreign partner, and a massive Any one may so arrange his affairs and Eustice, in their classic Federal In- tax loss assigned to the U.S. corpora- that his taxes shall be as low as pos- come Taxation of Corporations and Share- tion. To put this in context, that sible. He is not bound to choose that holders, writing of business transac- pattern that will best pay the Trea- “American” company, which in its tions cast to mask their true substance, sury. There is not even a patriotic most recent quarter alone reported net were of a similar mind when they cau- duty to increase one’s taxes. income of more than $1.57 billion, de- tioned that “the lawyer’s passion for nied the U.S. Treasury almost $212 mil- Little could the learned judge have technical analysis of the statutory lan- lion by hiding income in a shelter so known what mischief his words would guage should always be diluted by flimsy it couldn’t stand up against a lead to more than a half century later, distrust of a result that is too good to knock on the door. inducing a later judge to observe that be true”? As these lines are being written, a “the freedom to ‘arrange one’s affairs’ What Price Civilization new kind of morality play has been does not include the right to engage in If “taxes are what we pay for a civi- playing out in the boardroom of a financial fantasies.” The corollary of lized society,” as the great jurist giant company: the directors of Sprint paying no more than one’s share is Holmes put it, one must infer that a have summarily fired its two top exec- paying no less, as Hand himself made

48 Journal | March/April 2003 clear in deciding the famous Gregory4 ance in high places through schemes mand admiration for their ingenuity case – probably the seminal tax shelter too clever by half. Such reports also af- no less than condemnation for their decision – against the taxpayer. fect adversely “the attitude of some abuse of the system, “tangled webs The paired precepts – pay no more taxpayers toward their tax-paying re- weaved to deceive,” in the poet’s but pay no less – are the foundation sponsibilities,” in the words of a recent phrase. Thomas Pynchon used a stones on which a sound tax system tax shelter report by the New York phrase in Gravity’s Rainbow that has at- must rest. They are flouted by these State Bar Association Tax Section, in- tached itself improbably to one of my transactions, when tens of thousands ducing a copy-cat mentality (“if every- synapses: “transmogrify common air of taxpayers less able to pay are one is doing it, why shouldn’t I?”). into diamonds through Cataclysmic obliged to pay more than their share to Shelters have been with us from the Carbon Dioxide Reduction.” He make up the amount by which the beginnings of the income tax, usually wasn’t talking about tax shelters; but shelter-seeking taxpayers have paid at the command of Congress. Indeed, doesn’t the changing of air to dia- less than their fair share. pension plans have been dubbed “the monds speak to the process of con- That did not actually happen in the quintessential tax shelter,” with no pe- structing tax gems out of thin air? As American Home Products case, but jorative connotations. The clergyman’s far as I know there is no such thing as only because the appeals court re- parsonage allowance provides shelter cataclysmic carbon dioxide reduction; versed the holding of the trial court in two senses of the word, as does the but tell me what is a Bond & Option that would have allowed achievement homeowner’s mortgage deduction. Sales Strategy, the proper name of the of the sought-after tax avoidance. The But as shelter is found by inventive tax BOSS shelter discussed in the next central proposition relied on by the planners within and between the inter- paragraph? And what is one to make court was the so-called Business Pur- stices of sections of the Tax Code, in of Currency Options Bring Reward Al- pose Doctrine, which, as applied to places not considered by the Congress, ternatives, a scheme marketed under this case, meant that an entity such as a or in words of a tax statute taken out of the name COBRA, which is now the partnership injected into a transaction context, that is the beginning of the subject of a suit brought against Ernst for no non-tax business purpose drift towards designer shelters. As & Young, its closely affiliated law firm would not be recognized for tax pur- Judge Hand wrote, Congress cannot be McKee Nelson, and two outside law poses. There have, however, been thought to have covered every transac- firms who supplied some of the design countless cases where the shedding of tion whose “facts answer the dictio- and supporting legal opinions, plain- one’s fair tax burden has been success- nary definitions of each term used in tiffs’ complaint sounding in almost fully accomplished because the IRS the statutory definition.” Nevertheless, every deadly sin imaginable (includ- did not catch up with the scheme arguing for the transaction’s sanction ing racketeering)? Then there is the (sworn secrecy is an important cur- from the literal words of the statute is even more brazenly named COSS, rency demanded of participants by the legitimate planning, and has won which I understand stands for Com- promoters of many abusive tax many a day in court. pensatory Option Sale Shelter (“shel- arrangements), or, if it does, the Com- Tangled Webs Weaved ter” right there in the title!). misioner’s determination is over- My focus here is not tax planning An exemplar of the art of the shelter turned in court. per se, that is, the arrangement of one’s designer – at once brilliant in its con- struction, bold in its reach, facile in its Not Just the Principle . . . business or investment affairs in a way to pay the least taxes consistent with handling of intricate tax concepts, but It’s Very Personal the economic and business realities, flawed at least as much in its naiveté as That is a proper prism through but rather the aggressive marketing of in its unconscionability – was mar- which to view the nature of the abu- elegant, convoluted avoidance tech- keted by PriceWaterhouse Coopers as sive tax shelter problem. It affects us all niques to taxpayers – more often than the BOSS. It consisted of a series of in a very personal way, because our tax not corporations and very high net contrived steps enabling taxpayers to liabilities will be affected by the inabil- worth individuals – for the sole pur- claim losses for liabilities they never ity of the system to collect taxes when pose of earning outsized fees, on the really assumed and capital outlays that they are due. It also affects the tax sys- extraction of a commitment of confi- they in fact recovered, founded on a tem, which rests heavily on the will- dentiality from the prospect so as to stretched reading of basis rules and the ingness of taxpayers generally to vol- protect the exclusive and repetitive deconstruction of the transaction into untarily self-assess themselves. And commercial use of the avoidance strat- discrete parts each of which, taken that, in turn, depends upon the per- egy by its designer (and, of course, to alone, technically passed muster under ception that the system is fair and prevent its detection and dismantling a particular Tax Code section, but evenly enforced. by the IRS). which taken together artificially in- These perceptions can only survive The shelter patterns have been flated the tax basis by exploiting the so many public reports of tax avoid- many and varied, constructs that de- unforeseen interaction of separate tax

Journal | March/April 2003 49 rules. The IRS killed it with a “caveat a test case that would, by agreement A more personal question for the emptor” press release. among the taxpayers, determine their lawyer is what protection will be avail- For a time the IRS was over- respective tax liabilities; and, of course, able to the protector, i.e., the opinion whelmed, if not overmatched, by the the court denied the deductions. The writer, against recourse not only by the plethora of such schemes that ran problem was that the IRS trial attorney government, but by disgruntled tax- across the entire spectrum of tax law – was so determined to win a favorable payers who relied on the opinion? As income tax, gift and estate tax, pension result that he bought the testimony of the luncheon speaker, the chief counsel and welfare benefit law, and charitable two of the participants, offering to re- presumably did not want to spoil his entities. The IRS responded with a duce their tax assessments by the hosts’ lunches with such unappetizing stream of regulations and rulings de- amount of their attorneys’ fees in re- speculations. As one who paid for his signed to drive “potentially abusive turn for their testimony regarding the own lunch that afternoon, I am under tax shelters” into the sunlight, by iden- artificiality of the scheme. Of course, he no such constraints. tifying particular transactions that it concealed from the trial court the set- deemed especially suspect, and forcing tlement with the witnesses. The appel- ALVIN D. LURIE, chairman of the NYSBA’s Special Committee on Pen- their registration, disclosure as part of late court was so outraged by what it sion Simplification, has a private called a “fraud upon the court” that it taxpayers’ returns, and the mainte- practice in New Rochelle. Earlier, he nance of lists of participants by orga- imposed on the IRS itself the sanction was an assistant commissioner of the nizers and sellers. Early in 2002 the of providing to every one of the tax- Internal Revenue Service for em- Treasury issued its “Enforcement Pro- payers whose liability was affected by ployee plans and exempt organiza- posals for Abusive Tax Avoidance the decision in the test case the same re- tions. Transactions,” and, by the time these sult as the IRS had granted to the “co- lines are in print, it will have issued its operative” witnesses (perhaps the first 1. Stefan Tucker, March 10, 1999. latest “final” regulations, a compre- tax shelter in which the IRS itself was 2. Letter from Paul J. Sax, to Sen. Moynihan (Mar. 21, 2000). hensive set of requirements that complicit).8 The case is proof that there 3. Boca Investorings P’ship v. U.S., 314 should go a long way toward taming can be such a thing as too zealous a F.3d 625 (D.C. Cir. 2003). the beast. pursuit of tax shelters by the IRS. 4. Gregory v. U.S., 187 F.2d 101 (2d Cir. A January to Remember Punishment Befitting the Crimes 1951). 5. Merrill Lynch & Co. v. Comm’r, 2003 Several decisions in January 2003 If the IRS attorneys in that case U.S. Tax Ct. LEXIS 3, 120 T.C. No. 3 will further strengthen the hand of the went over the line, other, higher IRS of- (2003). IRS Commissioner, two of which coin- ficials in recent weeks have made clear 6. Boca, 314 F.3d 625. cidentally went against Merrill Lynch, the government’s determination to 7. Dixon v. Comm’r, 90 T.C. 237 (1988). a principal purveyor of tax structured squelch what is seen as an assault on 8. Dixon v. Comm’r, 316 F.3d 1041 (9th strategies. One, a decision by the Tax the integrity of the tax system. We will Cir. 2003). Court struck down a tactic that vener- “not be gentle,” said veteran IRS tax able house devised for its own use to specialist Richard Wickersham, in ad- manufacture an overstatement of basis dressing an employee benefits seminar by a mere $400 million that would in Los Angeles. Beyond just tax penal- MEMBERSHIP have achieved more than $30 million ties, he warned, “there is a criminal of tax savings.5 (The decision is, of side.” TOTALS course, appealable.) The other deci- The chief counsel of the IRS, B. John sion, which is described above, went Williams, in a speech to the Tax Section against American Home Products, an of the NYSBA, given at the Annual NEW REGULAR MEMBERS M/L client, which was looking to Meeting this past January, reminded 1/1/03 - 3/17/03 ______1,769 avoid a capital gain tax of some $212 lawyers, those working in government NEW LAW STUDENT MEMBERS million.6 and those in private and corporate 1/1/03 - 3/17/03 ______342 A third decision this past January is practice, that we are all officers of the quite bizarre. It is not a tax shelter deci- court, with the sanctions and responsi- TOTAL REGULAR MEMBERS AS OF sion as such, but it did grow out of a bilities that implies. He also urged his 3/17/03 ______67,753 very crude tax shelter scheme, de- listeners not to write penalty-protect- TOTAL LAW STUDENT MEMBERS AS signed and administered by a Hon- ing opinions. He did not need to point OF 3/17/03______4,820 olulu businessman, Kersting, that al- out that protection for the client might most 2,000 taxpayers bought into, as a not be there when push came to shove, TOTAL MEMBERSHIP AS OF way to claim entirely artificial interest even against the imposition of fraud 3/17/03 ______72,573 deductions.7 The issue was decided in penalties.

50 Journal | March/April 2003 This definition mirrors Webster’s Third, Your response, therefore, applies but adds the sense of putting some- strictly to American English, not to the LANGUAGE thing into “effective operation.” English spoken on the other side of the As synonyms of approve, from Latin pond.” TIPS “approbare”: “ad” (“to”) plus “pro- My thanks to Ms. Ross for her valu- bare” (“to test”), Webster’s lists sanction able comment. My response, however, and endorse, defining approve as “to was to the reader’s question, whether B Y G ERTRUDE B LOCK judge and find commendable,” “to ex- “take” or “make” was idiomatic Amer- press, often formally, agreement with ican English. As George Bernard Shaw uestion: What is the “generally and support of.” Words & Phrases once said, “England and America are accepted usage” of the words agrees, quoting from Western Hospital two countries separated by a common accept, adopt, approve, and ratify, Q Ass’n v. Industrial Accident Board,5: “to language.” when these words are used by a cor- regard or comment upon as worthy of porate board of directors reviewing acceptance, commendation, or favor- GERTRUDE BLOCK is lecturer emerita at minutes or acting upon a committee able attention; to form or express fa- the University of Florida College of report? vorable judgment concerning.” Law. She is the author of Effective Answer: To respond like a lawyer, Legal Writing (Foundation Press) and Black’s includes ratify as a synonym “It depends.” In lay usage, accept came co-author of Judicial Opinion Writing of approve, defining approve as “to con- into Middle English as “accepten” (American Bar Association). firm, ratify, sanction, or consent to (from Latin “acceptare,” through some act or thing done by another.”6 1. Black’s Law Dictionary 12 (6th ed. French accepter”). The modern Eng- However, the lay meaning of ratify dis- 1990). lish meaning is “to receive with con- tinguishes it from approve; Webster’s 2. 131 S.E.2d 640, 642 (Ga. Ct. App. 1963). sent, to take without protest, to en- says that ratify extends permission to a dure, or to tolerate.” The verb future act while Black’s definition lim- 3. Black’s Law Dictionary 49 (6th ed. “receive” is listed as a synonym. 1990). its ratify as “to authorize or otherwise 4. 18 N.W.2d 804, 808 (Iowa 1945). But Black’s Law Dictionary says that approve retroactively, an agreement or 5. 6 P.2d 845, 848 (Idaho 1931). to accept “[m]eans something more conduct.” 6. Black’s Law Dictionary 102 (6th ed. than to receive.” It includes the mean- Words & Phrases seems to concur 1990). ings “to adopt, to agree to carry out with the lay definition of ratify, as au- 7. 373 P.2d 940, 942 (Colo. 1962). provisions, to keep and retain.”1 Words thorizing an act that occurs in the fu- & Phrases quotes from McIntyre v. Zac- ture, as well as one that has already oc- Lac Paint & Lacquer Corp.,2 which says curred. It quotes from Nunnally v. that in general, [accept] means to re- Hilderman,7 which distinguishes ceive with favor, to assent or agree to, “adoption” from “ratification”: “Ratifi- moving? to embrace [or] to adopt.” cation is adoption and confirmation by let us know. Webster’s Third says that adopt one person with knowledge of all ma- (Latin “adoptare,” through Middle terial facts, of an act or contract per- Notify OCA and NYSBA of any French “adopter”) means “to take by formed . . . in his behalf by another changes to your address or other record free choice into a close relationship not who at the time assumed without au- information as soon as possible! thority to act as his agent.” Thus ratifi- previously existing,” and “approve” is NYS Office of Court Administration a synonym. cation includes the authority to ap- Attorney Registration Unit Legal definitions, however, are prove and accept a previously PO BOX 2806 more precise. Black’s says that adopt, unauthorized act. Church Street Station besides having the meaning “mak[ing] New York, New York 10008 From the Mailbag 212.428.2800 - tel [something] one’s own (property or In the July/August “Language 212.428.2804 - fax act),” has an additional meaning, Tips,” a lawyer based in Spain asked [email protected] - email “putt[ing] into effective operation,” for whether one “makes” or “takes” a de- example, in the case of a constitution, cision. The answer was that “to make a New York State Bar Association constitutional amendment, ordinance, decision” is idiomatic. However, MIS Department 3 One Elk Street court rule, or by-law. reader Donna Ross writes, “Having Albany, NY 12207 Words & Phrases quotes Wolf v. lived in Europe for many years, I 518.463.3200 - tel 4 Lutheran Mutual Life Insurance Co. say- would venture that not only in Spain 518.487.5579 - fax ing that adopt means “to take or receive but in the U.K. generally, one “takes” a [email protected] - email as one’s own what is not so naturally.” decision (Spanish tomar una decision).

Journal | March/April 2003 51 CROSSWORD PUZZLE

With this issue, the Journal introduces the first in an anticipated series of crossword puzzles with a legal theme. The puzzles are being prepared by J. David Eldridge, a partner at Pachman, Pachman & Eldridge, P.C., in Com- mack, NY. A gradute of Hofstra University, he received his J.D. from Touro Law School. Answers to this puzzle will be printed in the next issue.

   

  
















   



  

 
  

  

   

    

 

 




   

 



 


  

 



 





The Barrister, by J. David Eldridge

Across 21 Lat. And 39 Rigid interpretation of statute 1 Average greatest point on shore touched 23 Vehicle barring debt collection in bank- 41 Maker of a check by ocean ruptcy 47 Device to dispense with an action prior 7 A structure or use not in compliance with 27 Taking of private property by state for to serving responsive pleadings zoning but allowed because it predates public use 48 To copy in final draft code 28 A writ commanding law enforcement to 51 Protected individual specifically desig- 10 Lat. According to law arrest a person and bring him before nated in an insurance policy magistrate 13 Remedy preserving status quo during de- 52 To ratify, uphold and approve, i.e., the termination of parties’ rights under lease 29 Lat. No one; no man truth 14 A burden or load 30 To confer as being deserved or merited 53 A thief 15 A lease granting the right to extract pe- 31 First draft of legal instrument in civil law 57 Pecuniary compensation or indemnity re- troleum products from land 33 Lat. A sailor covered in court 16 Absence of opportunity for sexual inter- 36 Clause prohibiting action against provi- 58 Goods identical with others of the same course between husband and wife sions of a will kind or nature

52 Journal | March/April 2003 59 Old English, Jurisdiction of a manor 6 Failure to exercise reasonable care 43 Ancient Roman law passed without con- court 8 Result when guilty as charged sent of the people 60 In old records, a native place 9 Federal law of 1882 punishing polygamy 44 Special proceeding to review administra- tive determination 61 An employment contract requiring em- 11 Fit for sale ployee to promise not to join a union 45 Old English. An inn licensed for the en- 12 Type of zoning based on district-and-use 62 To relinquish or surrender tertainment of strangers 17 Law passed after the fact 64 To render void and of no effect 46 A professional licensed to practice law 18 Government’s inducement to commit a 49 Landmark case requiring federal courts 66 Our equals crime for the purpose of prosecution to apply local state law 67 Specific power of courts established in 19 Standard rules of accounting Marbury v. Madison 50 The inducement to a contract 20 The running of a prescribed period of 54 Property pledged as security for a debt 68 Lat. A loan for consumption upon agree- time to its end ment that like kind will be returned 55 A basic law which determines the consti- 22 Common-law action against finder of tution of a government, state or nation, 69 Naphtalite who assisted Moses in the lost goods wrongfully converted for an- and regulates the manner of its exercise wilderness other’s use 56 Lat. “and the following”: Abbr. 70 Local governmental unit 24 To transfer to another 63 Applicant for relief from court 72 Procedural device to dispose of case 25 Lat. Of its own kind or class when facts are not disputed 65 A meeting of voters nominating dele- 26 How a lawyer should never act gates for office 32 To put out or eject Down 71 An emergency remedy of brief duration 34 Code governing non-criminal procedures to maintain status quo 2 External manifestation of will 35 To have good legal title 3 Spoken 37 Court order arresting judicial proceeding 4 Ascertainment of that which was previ- 38 Lat. Theft ously unknown 40 Financial arrangement between group 5 Power of the court to decide issue based where the last one surviving wins all upon control over subject matter and parties 42 The state of being unable to pay debts as they become due

LAWYER’S BOOKSHELF major publishing house, but he has CONTINUED FROM PAGE 46 opened the door, and it is predicted that the demand for this book will far assertive personalities that high doses exceed the supply. Once that happens, of testosterone may afford us. major publishers and writers will Rick Collins has an inspiring, un- come to the fore. Predictably, and re- orthodox style of writing which com- member you heard it here first, that bines his athleticism and his expertise will soon happen. in the law. In this well-stocked, single volume, paperback, 8 1/2“ x 11” mod- THOMAS F. L IOTTI is the chair of the ule, he has given us 433 pages of the NYSBA Criminal Justice Section and laws of anabolic steroids in all states co-author of Village, Town and District and the federal government, a glossary Courts of New York (West Group of terms, an index and an entire chap- 1995–Present). He is also a former ter entitled “The Real Dangers Re- NCAA All-American, Olympic Trials vealed.” Aside from learning about participant and head swimming this esoteric subject, in reading Collins’ coach of the U.S. Merchant Marine book you may become more health Academy at Kings Point. conscious, or at least develop a knowl- edge of cutting-edge health and legal 1. See Gina Kolata, Jere Longman, Tim points. It is not heavy lifting, but it Weiner & Timothy Egan, With No may change your life in or outside of Answers on Risks, Steroid Users Still Say ‘Yes,’ N.Y. Times, Dec. 2, 2002 at the courtroom. Unfortunately, the only 1, A19. negative in Collins’ book is that he has been compelled to self-publish it. That may limit the market from that of a

Journal | March/April 2003 53 Steve Yeh-fung Chung Simon A. Fitzpatrick Bethany Henderson Susanna Y. Chung Christian Adrian Fletcher Steven L. Henderson Nicholas G. Cifuni Jason Seth Fletcher Jehanne E. Henry NEW Alex S. Cohen Anthony Victor Flint Elodie Sylvie Herbel Eric Scott Cohen Patrik S. Florencio Leslie Hermanson MEMBERS Pamela Cortnay Cohen Jason I. Flynn Richard Hernandez Wayne Nathan Cohen Jennifer I. Foss Julie Herzog Susan Elizabeth Cohig Christopher C. Fowler Cherise C. Hewitt WELCOMED Victor Cole Leah S. Frank Alexandra L. Hill James Peabody Colgate Simon John Fraser Sabrina Hillson-Chosed Mark Christian Colon Douglas Kenji Freeman Jennifer Karen Hirsh Brian Lawrence Condon Michael A. Freeman Hal E. Hisey FIRST DISTRICT Barbara Anne Berte Alice Lorraine Lisa Jean Fried Alison Honlee Ho Sarah Abate Yamuna Bhaskaran Connaughton Sallie Fried Ellen A. Hochberg Heather Eve Abelson Christie Marie Bird Mark Lincoln Connelly Jennifer Taylor Friedland Timothy Michael Hofer Philip Moss Abelson Gennaro Bizzarro Benjamin P. Cooper Bruce R. Friedrich Taylor M. Hoffman Richard H. Abend Justin Barnet Blackhall Michael C. Cormack Christopher Alan Frigon Stephen Anthony Michael J. Ackerman Jason M. Blatt Charles A. Corwin Steven K. Fukuda Hofmann John A. Adamo Neil R. Blecher Bradley P. Cost Ingrid Natalie Fuquen Raymond John Holst Mark Thompson Adams Brian Allen Bloom Meagan Eileen Costello Ari Gal Ellen Hopkins Motunrola Bisayo Afolabi Kevin Matthew Bloss John Day Cottingham Bina Manu Galal Hayden M. Horowitz Suneet Krishna Agarwal Benny B. Bobker Duane A. Cranston Daniela Teresa Gallo Robyn Paula Horowitz Candice D. Aiken Kristin Marie Boggiano Pablo E. Crosa Ashish Dinesh Gandhi Rawle G. Howard Thomas Erol Akyali William Dean Boggs Joel M. Cullin Kiera Susan Gans Charles Hyde Michael Joseph Albano Harlyn David Bohensky Kevin P. Cummins Raphael Lev Garfield George Eli Hykal Mary F. Alestra Raymond Joseph Bonci Helen Elizabeth Curtis Brandon Louis Garrett David Chun-hui I Christopher Dillon Allen Michael Anthony Borja Emily Alexa Danchuk Elizabeth Mary Garrett J. Shai Ingber Forrest Gillett Alogna William Woodward Bos James E. Daniels Susan Geevarghese Derek Arnold Jackson Carmen Alonso Shawn David Bradia Leslie K. Danks Burke Matthew James Geisel Martin Brandon Jackson Michael David Amm Penelope Brady Wolfgang A. Dase Moshe Gerstein M. Ari Jacobson Coale Parker Anderson Jennifer Kate Bralower Iya Davidson Andrea Meenakshi Robin E. Jacobson Julie Elizabeth Anderson Oliver Werner Bretz Soumyalatha Dayananda Ghoorah Omar Cassim Jadwat Peter N. Aquilone Ann Catherine Brickley Jennifer N. Deitch Timothy K. Giordano Nicole Marie Jantzi Courtney Abigayle Jonathan Bryan Brooks George Gerasimos Demos Carlo Giovannetti Camille C. Jenman Aronowsky Martha Jane Brosius Michael Andrew Jonathan Givner Debra Jones Kyriakos Gary Arvantis Eric Broutman Denyszyn Seth Alkon Gladstein Julie Rebecca Jones Peter Asplund David W. Brown John Garo Derderian Lara Janae Glasgow Justine Faith Jones Dana Whitney Atchely Suzanne K. Brown Adam Eric Deutsch Canaan Reuben Goldman Stacey D. Joslin Robert Hampton Atkins Andrea Robin Burgess Claudio DiFalco Jeremy Isaac Goldman Victoria Howard Jueds Sally Samir Attia Sidney Burke Tanja Diklic Neil Andrew Goldman Sneha Pradip Kapadia Lasherelle Renae Bailey Susan Young Burlazzi Sara Alta Director Claire Elise Goldstein Bryan Robert Kaplan Cory Matt Baker Michael S. Burns James Francis Dobrow Richard S. Goldstein Neal H. Kaplan Hayden Sheffield Baker Allen W. Burton Sarah Donnelly Jayme Todd Golstein Thomas Joseph Kasa James Edward Baker Peter Joseph Buscemi Scott C. Dorey Christopher M. Michael Joshua Kasdan Stephen B. Ballas Courtney Megan Cahill Emmy Galit Dotan Gomprecht Joshua Aaron Kaufman Lacey J. Banks Mylene Pinky Calingo Nancy Jean Downing Chang-do Gong John Jeremy Kell Mohammed Ismail Michael Edward Callahan Irina Dragulev Jose Alejandro Gonzalez Daniel Lee Keller Barakat Elaine Maria Campbell Siddharth G. Dubal Garza Glen Neil Kelley Joseph Bartel Abigail Phillips Caplovitz Sean C. Duffy Susana Kristine Gonzalez Kathleen Patricia Kelly Alexander Shefler Teresa Rose Caputo Paul Joseph Dutton Ella Cortland Goodyear Katrina Anne Kelly Barylski Joseph Carmelo Carino Daniel Michael Duval Daniel Steven Gordon Garfield Mark-Andrew Richard S. Basuk James R. Carr Ekaette Patty-anne David G. Graziani Kerr Jules G. Baughns Matthew D. Caudill Eddings Michael J. Greenberg Sally Kesh Nicolas Eric Beaudoing Nicole Gabrielle Centanni Dona C. Edwards Laura Lee Gribbin Matthew Abram Kidd Margie Bechara Erik W. Centner Philip Thomas Edwards Alexandra Grigoras Peter J. Kiernan Ryan A. Becker Mehtap Cevher Seth D. Eichenholtz Josette Marie Grippo Debora Sunhee Kim Michael Bruno Beckman Reginald Alan Chambers Brian J. Eiting Sean J. Grygiel Jae Jung Kim Martin Earl Beeler Justin Hsiang - Yu Chan Jeffrey William Eldridge Jesse F. Gutierrez Jeen Kim Stacy Rene Bekman George Percy Chang Chad Richard Ellsworth Holly M. Gyles Jeremy McGuire King Marc-Andre Belanger Hyeyun Chang Karen Eltis Benjamin Haber Fritz Klantschi Gregory Amilcar Alan P. Chapell Mark Benjamin Engel Allison Roseman Hagey David E. Klein Belinfanti Stephen Thomas Charest James A. English Jonas Noah Hagey Lawrence William Klein Susan Elizabeth Bell Joshua Robert Charlton David Charles Erroll Daniel Haies Sharon L. Klein Linda F. Beller Priya Chaudhry Richard Evangelista Louise Sharry Hammond Yukiko Kojima Stella Veronique Belvisi I-Chuang Chen Marie E. Fabian Charles Jason Harary Thomas Kollar Yariv C. Ben-Ari Eugenia R. Cheng Eduardo Facha Mala Ahuja Harker Glenn Alexander Kopp Stephen David Benedek Jessica Cherry Tara Dawn Falsani Aaron Joseph Harkins Ayelet A. Koren Beverly Benjamin-George Stephen S. Chiang David Alan Farber Marcella Ann Harshbarger Marcie Jan Kowlowitz Ameer N. Benno David P. Cho Vito Anthony Favazza Zenobia Tyreese Hartfield Karen M. Kozlowski Laura Nyantung Beny Joseph Choi Maria Fernandez Michael Jay Harwin Larry Bruce Kramer David C. Berg Kyong Chul Choi Kara Ryan Finck Jamette Lonear Heard Maria Ines Krasnikow Benjamin Berkowitz Lillian Yoonmi Choi Sharon Gale Finegan Jeanne Heffernan Hans Joachim Kriefall Scott Howard Bernstein Maria Caliope Choupres Brian Jason Fischer David Isaac Held Myungshin Kwak Hamish R. Berry David S. Chun Victoria Austin Fisher Bella S. Helford Yoo-kyeong Kwon Patrick E. Fitzmaurice

56 Journal | March/April 2003 Michael Andrew LaGatta David Frank Menschel David Paris William Aloysius Ryan Benjamin Ross Tessler James Lambert Michael N. Meola David S. Paris Behir A. Sabban Ruchi Thaker Marla Sue Lance Jennifer Lynne Mercer Michael John Parrish Aimee E. Saginaw Philip Thamarappally Mark P. Lande Daniel Adam Messeloff Averardo Peruzzi Anjan Singh Sahni Thomas Ronald Anthony Landen Kathleen L. Metinko Pascarella Frank Christopher Suma Samuel Thomas John R. Lane Lori Kathleen Meyer Kyle A. Pasewark Salzano A. Scott Tinkham Chad Omar-jai Langley Jennifer Jenkins Ersilia Lynn Passaro Judith Sara Salzman Tal Tirosh Richard Mark Lansky Middleton Yera Patel Dana Marie Santino Suzu Tokue Shahzeb Lari Ioana A. Mihaltu Cynthia Alison Patrick Agda Schaler-Haynes Matthew Tollin Amy E. Larson Mark A. Mikullitz David Paul Alec John Scheiner Matthew David Tomback Gregg Thomas Larson Brady W. Mills Vernon Lee Payne Leigh Erin W. Schmeltz Preeti Torres Sarah Lawsky Olivia C. Milonas Sheila Merri Peluso John A. Schoenig Jeffrey A. Trimarchi Christian Guillermo Paul Mishkin Wendy Hope Perlmutter Margaret Byrnes Segreti Terri Lynn Trimarco Le Brun Jennifer Anne Mo Sherita M. Perry John Thomas Seguin Dana A. Troetel Andrew M.I. Lee Crystal Monahan Tal Perry Matthew S. Seidner Isidoros I. Tsamblakos Boong-Kyu Lee Concepcion Altea Paige M. Petersen Eric A. Seiff Susan R. Tucker Carol Jung Min Lee Montoya Brian Joseph Petruska Purvi Patel Shah Laurie Anne Turnau Jiyeon Lee Julian Jamal Moore Sheldon A. Philp Asim Rahman Shaikh John Knox Tyson Kahyeong Lee Stacey Michon Moore Patrick Pickett Sonny S. Shalom Ellen Blanche Unger Melinda Lin Lee Simone Indira Damian J. Pieper Jacqueline Beth Shapiro Jason Mendoza Valino Nicole Joy Leibman Moore-Baker Eddy Pierre Pierre Oren Adar Shapiro Marijke Karin Van Ekris Jamie Kathleen Leigh Alexandra Josephine Eric Francis Pierson Ora Rivka Sheinson Alexandra Diana Van Nes Rebecca A. Lesser Moosally Leila Rachele Pittaway Tushar J. Sheth John L. Van Sickle Lawrence Marc Levine Andrea Hoong Morgan Gregory M. Poehler Margarette Shim Ivanyla D Vargas Renee Jennifer Levine Jonathan Edward Morrill Joshua Killion Porter Dong Hoon Shon Vimy Varghese Timothy Wayne Lewis Geoffrey A. Mort Neil Leon Postrygacz Kimberly Janelle Shur Irene Michelle Vavulitsky Jennifer L. Lewkowski Michelle Mullen Robert Jeffrey Powell Sorin Anne Siddiqui Michelle Vega Anthony K. Lin Daniella Machnikoff Brian Andrew Preifer Robert Noah Sidman Tudor Catalin Velea Geoffrey W. Lin Muller Brett Randall Prieur Jason Ashley Silverman Melanie Velez Philip Aaron Lindenbaum Gabrielle Lisa Muller Jung Frederick Pryjma Joshua M. Silverman Brian Patrick Verminski Charles Francis Linehan Marcus Sean Muller Andrew Sekou Quinn Mark Sanford Silverman Susan M. Vernon David Adam Kingsley James Edward Munoz Lori Jean Quinn Carrie A. Simon Waleska Anne Vernon Linley Laura Elena Munoz Susmita Meenakshi Scott Adam Simon Michelle Olga Vesecky R.Z. Margaret Lu Rose Jennifer Murphy Ramani Naomi Lee Singer Barbara J. Vining James P. Lundy Scott William Naidech Porfirio F. Ramirez Timothy G. Slavin Louis Vitale Robyn Hayley Lundy Andrew W. Needham Haroon Rashid Andrew C. Smith Alexandra M. Vulliez Denise Anne Winter Laura Elizabeth Neish Mark Anthony Rasile Jennifer J. Smith Kaiser Wahab Luparello Nicole E. Nelson Rebecca Naomi Reder Brendan Nicholas Jonathan K. Waldrop Susan Ly Tracy L. Nesom James Regan Snodgrass Rebecca Wall Kirk M.H. Lyons Matthew Seth Jessica H. Ressler April Christine Snyder Nadia A. Wallace Cameron Daniel Neugeboren Sivan Rhodes Christopher Thomas William Stewart Wallace MacDougall Kenneth A. Newby Devin A. Rice Snyder Joshua Campbell Francis Michael Maggio Harvey Kenyatta Newkirk Frederic P. Rickles Anya Sobodinska Wallenstein John Michael Magliery Hoai D. Ngo Phillip Morgan Ricks Audra Jan Soloway William Andrew Wargo David Joseph Mahoney Minh Van Ngo Charles David Riely Jamian Spadavecchia Linda M. Wayner Michelle Maiolo Angel P. Nguyen Joshua H. Rikon Danielle Joy Spector Jessica Gail Weinberg Moshe Aaron Malina Matt Michael Nichols Sarah Jane Ritch Jeffrey Thomas Spinazzola Elana Dena Weiss Romana Mancini Barbara A. Nohrr Kalyani Robbins Eliza Meredith Sporn Jed Matthew Weiss Andrea N. Mandell Ann Elena Nolan Marie Angelie Robert Judd Robert Spray Amy Weiswasser Matthew Craig Mann Craig Radley Nussbaum Katherine Jean Roberts Alexander James Stack Michelle Freda Weitz Louis F. Manzo Terence Joseph O’ Leary Lisa E. Roberts Clinton Matthew Stauffer Michael Brian Wenger Thomas Mark Joshua Garet Oberman Kevin Michael Roche Alfred F. Steiner Ariane Raquel West- John D. Marmo Andrew J. O’Brien Stephen J. Rochester R. Bruce Steinert Pernica John D. Marth Matthew Emmett O’Brien Gail Mclemore Rodgers Malani Jan Sternstein Keeley Cain Wettan Patricia A. Martone Carol W. Ohlandt Andrew Sylvan Rodman Seth A. Stevelman James Murray Wheeldon William Francis Mastro Chinwe Nonyerem Okasi Michal D. Rogson Bryna Jaime Stiefel Amber Lea Whipkey Jamie Kuflik Mattice Heather Gresham Okoro Amor Celeste Rosario Brian W. Stolarz Amy St. Jude Wichowski Maria R. Mauro Oliver Michael Olanoff Joseph D. Rose Jonathan Neil Strauss Nicholas Joseph Wilder Dennis A. Maycher Katherine Koenig Olsen Adam J. Rosen Kinga Katalin Sugar Stephanie Ann Wilkins Jennifer Lynn McBrien Matthew William Olsen Brett Aaron Rosen Matthew M. Sullivan James Justin Williamson John Bennett McDaniel Amy Cibinic Ondreyka David Caleb Rosen Ryan Patrick Sullivan Peter William Wilson Mark F. McElreath Patricia C. O’Prey Issachar Rosen-Zvi Stephen K. Sullivan John Michael Winter Karin Ing-marie McEwen Barak Y. Orbach Elizabeth Rosenberg Jonathan Howarth Edward Charles Wipper Alexandra Claire Karen G. O’Reilly David Rosenblum Sutcliffe Douglas J. Witter McGinley Sheryl Lynn Orr Adam S. Rosenbluth David Edward Swarts Debra J. Wolf Lindsey McGinnis Laurie L. Page Katherine Ruth Rosenfeld Diana Thuy Swartz Shaoyun Xu Rita Mary McKenna Clair Elizabeth Pagnano Mark Ian Rosoff Jean Marie Swieca Tal Yallon-Koenigsberg Shannon Patricia McNulty Mohammed Ali Panjwani Sidney D. Rosoff Suzanne R. Sylvester Ekow Nyansa Yankah Jaime Melissa McPhee Joan M. Papke Amy Thomas Ross Philip C. Tam Hideki Yashiro Christopher Michael Diana Paraguacuto- John Herbert Roth Stacy L. Tamburrino Andrew Yuen Wei Yew McRorie Mahed Joseph A. Rotter Amanda Anne Tarkow Shiri Ben Yishai David Thomas McTaggart Tatziana Paraguacuto- Dina Shulamit Rovner James P. Taylor Roger J. Yoo Kenneth Robert McVay Mahed George Royle Kimbarly H. Taylor Philip Jinho Yook Rachel Anne Meeropol Jennifer Sally Parietti William Thomas Russell Penny P Tehrani Aaron M. Young Daysi Maria Mejia

Journal | March/April 2003 57 Fausto Ernesto Zapata Nicole Burckard Robert K. Hughes Martin Flaxman Paul J. Farrell Margaret Zawadzka Ginger J. Cantwell Michael J. Keenan Dawn K. Friscoe Matthew T. Fella John M. Zeberkiewicz Michelina Capozzolo Melanie LaFond Mario C. Giannettino Karen A. Fielder Emily Justine Zelenock Elsie Chun Gregory David Latulipe Sonna F. Goldstein Andrew T. Garbarino Zhen Zheng William J. Conboy William B. Lotze Patricia W. Gurahian Michael P. Giampilis Louis J. Zivot William T. Conway Jason P. Mallette Stephen Haas Pamela Jennifer Halprin Lauren B. Zolondek Keri E. Corrado Brian W. Matula Roni Lynn Jacobson Adam I. Hasson Grazia Maria Zorub Sandra R. DesBiens Matthew McArdle Jeffrey L. Koenig Jeffrey Y. Hirth Jeffrey D. Zukerman Joanmarie M. Dowling Stephen P. Sherwin Helen C. Lebrecht Kylie Higgins Hollosi Jennifer C. Driver George R. Slingerland Felipe Lecaros Melissa C. Ingrassia SECOND DISTRICT Louis Gasparini Katherine Suchocki Christie Lynne Magno Jonathan B. Jacobs Stephanie Dawn Amin- Kari Gathen Jennifer Ukeritis Prassana Mahadeva Mandana Kavoussi Giwner Erin P. George David Harold Martin Gary M. Kavulich James E. Andrik Julianne Girard FIFTH DISTRICT Brendan J. Mayer Tracy Keehner Weggeland Charles A. Archer Darcy L. Green Matthew E. Bergeron John H. McCabe Michael F. Kelly Brett David Beecham Jennifer L. Hairie Todd C. Carville Joan H. McCarthy Graham Kistler Marianne Elizabeth Ibrahim Hamed Jeffrey Liu Janet Mary Murphy Rebecca S. Kittrell Bertuna Scott T. Harms Meghan M. Mahaney Raymond W. Murphy Bryan Matthew Konoski Marnie A. Bevington Stephen P. Hayford John R. O’Connor Michelle A. Nolan Jacob Thomas Kubetz Denis T. Brogan Randi Heitzmann Brian A. Phillips William Fred Norton Bonnie Scheer Kurtz Daniel J. Byrnes Thomas J. Higgs Paul J. Pimpinella Alice H. Oshins Lesley Joel Lanoix Elaine F. Cates Albert C. Hrdlicka James S. Skloda John Polinsky Christopher Victor Lerch Erin Kathleen Colgan John W. Huleatt Debra A. Verni Justin G. Powell Lev J. Lewin Damian Dajka Steven Imbriaco Maria-Alana Salome Matthew I. Littman Richard A. D’Amura Lisa M. Istria SIXTH DISTRICT Recine Robert Phillip Louttit Julinda A. Dawkins Patrick K. Jordan Peter Bogdasarian Tova R. Rosenberg Susannah C. Lyson Marcel Pierre Denis Lucy Kats Thomas F. Farrell David S. Rubackin Bradford Steele Magill Susan Beth Edelstein Kathleen Joan Kelly William C. Green Kate Tenney Ruggieri Cheryl Y. Mallis Carolyn M. Fast Lee Carey Kindlon Denice A. Hamm Maurice J. Salem Shannon Daly Marchell Maria Lourdes Cruz Michael Krenrich Chris Hammond Russell C. Savrann William McCabe Feliciano Rodney W. Kyle Jeffrey Michael Jacobs Alfred Schaefler Michelle Keri McCarthy Samuel Figueroa Ira B. Lobel Halle McCutchen Jones Jay C. Sherman Christopher Jude McGuire Michael A. Flake Chad Matthew Maria E. Lisi-Murray Colleen Mary Smith Marc Matthew Mullen Matthew Gaisi Loshbaugh Wilton G. McDonald Douglas Joseph Smith Lisa R. Nakdai David R. Hassel Amy J. Maggs Susan B. McNeil Paul Edward Svensson Howard M. Nemetsky Rosharna Delilah Hazel David Maho Lars P. Mead Paul G. Thomas Stacey Ramis Nigro Breda A. Huvane Catherine E. Melone Todd H. Miller Elena Marie Tsougranis Kyle Eric Norton Tony Jackson Emily Morales Victoria J. Monty Maria Iris Valentin Kenneth W. O’Donnell Baimusa Kamara Carol K. Morgan Dai Noguchi Michelle Marie Vitullo Susan Melissa Paroff Peter Alland Kempner Timothy Muck Wesley A. Roe Lance R. Whitman Charles James Pendola James W. Kirshner Mark D. Nizer Virginia Tesi Samantha Caroline Jason Penighetti Joseph Lassen Devon T. O’Hearn Williams Stephen Erich Rach Richard Michael Levy Erin Oliver SEVENTH DISTRICT Cora Yanacek Stacey Ramis Nigro Steven M. Narow Tara A. Pleat Michael Ballman Michael Edward Ratner Christopher R. Neufeld Kate M. Powels Carl J. DePalma TENTH DISTRICT Peter T. Ridge John Paul Newton Thomas James Reilly Perry Duckles Zeena Judith Abdi Margalie Rodriguez Richard Duy Nguyen Todd C. Roberts Aaron J. Hiller Jeffrey J. Amato Kimberly M. Romano Jason Scott Pergolizzi Lisa J. Ross Anthony F. Pagano Jason Franklin Arnold Debby R. Rosenfeld Luc Robert Pierre Jaime I. Roth Donna P. Suchy Fredrick M. Ausili Christine Thea Rubinstein Lee Elliott Rankin Barbara Rothaupt Heather Nicolle Babits Christopher Jon Ruckh Jill Marie Robertson Michael J. Shultes EIGHTH DISTRICT Bobby Bakhchi Peter Anthony Saad Laurie Rubiner Lori Sievers Andrea N. Anderson Aimee-Joan Caparas Nadia Natasha Seeratan Kenneth P. Thompson Michael J. Simolo John M. Aversa Baldillo Lisa J. Silverman Gina Andree Tones Jeremy H. Speich John Louis De Fazio Danielle Marie Borelli Linda Ann Silverstein Kira Treyvus Amanda R. Stern Natalie A. Grigg Christopher Charles Kim M. Smith Lekha Ann Varghese Kimberly A. Stock Rebecca D. LaCivita Brocato Scott Peter Sorel Mashawna Mary Ann Mia D. Van Auken Michele Louise Frank P. Bruno Jennifer Spirn Vernon Anthony M. Wilmarth Sterlace-Accorsi Danielle Louise Buckhardt Jaclyn D. Streit Mariya S. Vinnik Anne C. Wojewoda Nicole M. Burns Brian P. Sullivan Kimberly S. Williams John D. Zaremba NINTH DISTRICT Susan C. Carman John Karl Tegelman Judith A. Ackerman Tanya Joan Chor Christopher D. Tinnerello THIRD DISTRICT FOURTH DISTRICT Marcia L. Adelson Debbie Chun Sophia Magdalene Tsantes Lauren Abbamonte Justyn P. Bates Sarita Bhandarker Nicholas Cifuni George J. Tsunis Gerard V. Amedio Jennifer L. Buckley Rhona Bork Sandra Cirincione Cynthia C. Vigilante Pamela E. Babson Anthony S. Casale Stephen D. Chakwin Diana M. Coen Ingrid J. Villagran Henry K. Baranczak Tina M. Champion Kevin H. Cohen Patrick Michael Conroy Vivienne Marie Weinreb Michael K. Barrett Killeen Cirilla Brian Conley Lee D. Cornell Kyle Oakley Wood Rebecca Bauscher Shauna M. Collins Barry A. Cozier Joseph Tancredi Darr Robert T. Wu Christianne Beaury Marnie M. Dzialo William E. Curtin Marianne De Rosa Italo Andres Zanzi Jonathan M. Bernstein Amanda Farrell Anthony J. DiOrio Paul Demetriou Aaron E. Zerykier Jonathan Berstein Joshua L. Farrell Holly S. Dormeyer Bartholomew J. Divita Robert C. Black Teneka E. Frost Stuart Englard Victoria C. Donohue ELEVENTH DISTRICT Kristen L. Broden Stephen A. Gargiulo Patricia Ann Finn Daniel S. Drucker Rhoda Marie Alvarez James A. Buccini Leah Hallenbeck John Joseph Fitzgerald Roni Faye Epstein Mark Bastian

58 Journal | March/April 2003 Blair Burroughs Takuro Awazu Harold Lionel Daniel Roger Paul Galer Meghan Irmler Benjy Montesa Corpuz Marie-amelie Barberis Coppel Peter Joseph Gallagher Hideki Ishibashi Tanya Simone Foster Kim L. Barfield Andrew G. Costello Evan D. Gamm Jose A. Izquierdo Kelesha Ann Fowler Lien Chau Benedict Andrea Carolina Fernando Gandioli Elsa C. Janairo Gillian Frances Frasier William Walker Benz Couttenye Bonnie Lynn Gauch Jean Ann Jensen Aaron Goldsmith Sanjay N. Beri Jonathan D. Cox Patrick J. Gavin Chuck H. Jew Sangjoon Han Monica Berry Tim Cramm Melgar S. Gayao Lidong Jiang Diane Kosteas Eugene K. Bertman Joan Ann Cunnison Jennifer Grace Gebbia Eric S. Johnson Jeffrey Nicholas Lanci Katia Bianchini Gavin J. Curley Michael N. Germano John P. Johnson Yumari L. Martinez Anna K. Birus Everett Joseph Cygal Carole M. Gilchrist Laura Johnson Mayank V. Munsiff Patricia Ann Black Carole Dagher Deborah Anne Gitin Kimberly Johnston Carrie Lynn O’Connell Sharon Annette Blackman Descera Daigle Angela J. Giunto Eamon P. Joyce Impirika Quinzon Juan Carlos Carlos Blanco Anthony Mario Danti Dianne Glenn Sorrayah Juma-Bhojani Mitesh Satish Raniga Tomas Bliznikas Julie Michelle Davis Michael Andrew Scott H. Kaliko Irosha Ratnasekera Georg Blumauer Margaret Anne Mcauliffe Salvatore Goba Elaina Kalivretakis Alan Jay Schiff Mary F. Boehlert De Guzman Marisa Godwin Dana R. Kandel Ran Zev Schijanovich Gretchen Borchelt Anthony Decicco Ian Goes Anna Kang Ali Nicole Shusterman- Lisbeth Bosshart Jannell DeGennaro Jarrod Goldfeder Aaron Katz Goldsmith Federico Botta Brian Emil Derdowski Aryeh Seth Goldman Akemi Kawano Eric L. Spinner David Bowden Monique D’Errico Tal Jacob Golomb Karen M. Kazanchy Jessie Thomas Chris Bradstreet Adam Di Vincenzo Kenneth B. Goodman Tamesha Keel Dennis E. Warren Erin Marie Brady Lisa Michelle Dickinson Meghan Goodwin Michael J. Kehoe Rong Wei Sherri Braunstein Daniel R. Diepholz Gianina Gotuzzo Leland Ivan Kellner Robert C. Brighton Paul A. Diller Rajeev Kumar Goyle Andrew M. Kennedy TWELFTH DISTRICT Thomas R. Brooks Gerard Peter Dobbyn Noah Gradofsky James Hollace Kennedy Marco Antonio Angel Thomas James Brooks Edward F. Dombroski Brooke Grandle Patrick M. Kennell Karen Elizabeth Antoine Dana A. Buchwald Matthew Forrest Devon Grant Michael S. Kenwood Michael Philip Bloomfield Molly Buie Dombrow Charles Carlton Gray Marc Kestenberg Tara R. Goffney John Joseph Burke Silvia Judith Dominguez Gabriel Joaquin Gray Elizabeth A. Khalil Michael J. Keenan Lawrence Eldridge Keith Donoghue Llezlie L. Green Hyunchoong Kim George K. Kuntu- Burkhalter Nathaniel J. Dorfman Denis P. Greendoner Joo-mee Kim Blankson Danielle C. Burt David Dratch Preetpal Grewal Anthony King Lamont H. Littlejohn Jason Burt Natalie Dubsky Darren John Griffith Allison Marie Kinnier Lumarie Maldonado Cruz Maria Concetta Burton Matthew J. Dunn Gina Grippando David James Kinsella Barbara F. Newman Elizabeth Mary Bush Robert D. Dunne Kimberly Noel Gronau Steven Kleinman Pilar Elena Pereyra Miguel Buxo Shannon Dyer Paul S. Grosswald Daniel Kligler Troy Scott Quiles Alexander A. Bychkov Kimberly Dynowicz Monika Gupta Kristina Kloiber Damaris Cindy Rosario Elizabeth Anne John Paul Dyro Martin F. Gusy Hurr Ko Ian Matthew Sack Byrne-chartrand Lauren Brooke Eisen Archie Jay Haas Victoria Yee Ying Ko Lorna Kathryn Spencer Amanda K. Caldwell Satoshi Endo Ioannis Hadjiyiannis Peter Koch Tal Zvi Zarsky Cristina Campanella Marita Erbeck Lisa Hageman Nina A. Kohn Steven Cantarutti Allison Estin Jasper Hagenberg Kristin Konschnik OUT OF STATE Rachel A. Cantillon John Herbert Fagan Anthony John Hall Orsolya Kore Farida Zohra Abbadi Adam S. Cantor Naghmeh Faghirzadeh Michelle Z. Hall Richard Kornylak Thomas Abbate Daniel Owen Carroll Farah Elizabeth Fakir Young Ham Chris Kroldin Selim Ablo Garret J.W. Chan Hao Fang Yingli Hao Wendy Kroll Eric Ira Abraham Alan C. Chang Teresa Mounia Farah Otis Harper Yvonne Krywyj Shara Abraham Eric Chang Susan Butler Farkas Molly C. Harris Jeremy Kuester Adam C. Abrams David A. Checchio Shauna Farr Thomas E. Harris Banu Kuru Miguel Angel Adame- Sue Kim Chen Fabio Fauceglia Michael Jonathan Hasday Carolina Laborde Martinez I-Jung Chiang Greg Featherman Leslie Haskell Victoria A. Labriola Roy Ahiezer Ping Chiang Timur Feinstein David J. Hatem Clare Elizabeth Laleh Alemzadeh Sann Ching Christopher D. Felker Caroline F. Hayday Langley-Hawthorne Imhotep Alkebu-lan Chipila O. Chipepo Mark Jason Fenelon Paul S. Hayes Michael James Larson Kevin James Allen Kalyani Reddy Chirra Dahlia Saleh Fetouh Hermine Serena Scott T. Lashway Fernando A. Alonso Illae Cho Roberto L. Figueroa Hayes-Klein Michelle Lee Peter P. Alpi Sarra Cho Patrick N. Findlay Andrew Hegt Robinne Antoinette Lee Adam Ambrogi Pil Sun Choi Jonathan Fine George Eugene Heibel Woo Suk Lee Nimalan Amirthalingam Young-Jun Choi Joshua Bailey Fischman Javad Heydary Jeffrey Lehmann Adi Amrany Kevin Ciaglo Elizabeth A. Fitzwater Steven Robert Hill Patricia Ann Leid Christopher Anderson Jack Cieszynski Chris Fladgate Christopher Hinton Janice Kathleen Mary Mark J. Anderson Anderson Edward Clipper Mitchell A. Flagg Amber S. Hoffman Leiper Juhi Mehta Anello Alexandra Coler Carrie E. Flynn John W. Hofsaess Joy Leong Joanna P. Angelides Michael Joseph Collins Matthew J. Forrest Sean T. Hogan Patric Alexander Lester Angela Angelovska- Lisa M. Colone April Love Foscue Andrea Hopewell Elias M. Levenson Wilson Eric Randal Columbus Pamela K. Fox Kenji Hosokawa Noam Levy Todd Anthony Michael Comas Jonathan N. Francis Jennifer Hu Natasha G. Lewis Caroline Antonacci Lisa Compagno Timothy J. Fraser David Tien-Wei Huang Yuexin Li Michael M Antovski Natasha Concepcion Melissa A. Freiling Adrianne Michelle Sonali Limaye Kelly Arcidiacono Damian Peter Conforti Richard Horne French Huffman Stefano Linares Adam Arkel Brenda Cooke Harold B. Frey Steven Robert Hummell Bart Wim Lintermans Richard Arnholt Alanna Debra Melissa Froehle Kimmo Hussain Gary Henry Lisowski Kei Asatsuma Coopersmith Kristen Marie Gafric Alina Ionescu Robert David Little Dana W. Atchley Megan E. Gailey Nikolay D. Iordanov Matthew Logterman

Journal | March/April 2003 59 Jonathan Lomma Shinichi Murata Fahd M. Riaz Milena Sterio Paula Uscilla Peter Abram Londa Pilar Tirado Murray Angela Ribaudo Jenna Sternberg Nkem T. Uzoka- Dimitrios L Loukas Aaron Nahumi Jennifer D. Riddle Helene Susan Stetch Anofienem Angelo J. Loumbas Dariush Naraghi Aramis Gonzalo Rios Mark L. Stevens Cindy Vaes Gohar H. Lputian James Lee Ndiaye Robert Ritacco Lara S. Still Sonali Vakil Lea Lorene Lucas John H. Nichols Henry John Riva-Palacio A. Paul Stofa Eva M. Vazquez Neil C. Luke Corey L. Norton Daniel Wonyong Ro Linda Strauss Song H. Volk Gregg Luna David Anthony Nunez Margaret Robertson Michael Clinton Strauss Nicolas S. Von Lingen Yonatan Lupu Tara A. O’Brien Wu Polly Rodberg Allison T. Stumbo Yin Wang Peter Michael Macaluso Margaret Irene O’Brien Robert Vance Roeder Barak Sudri Yuming Wang Diane Alexa MacDonald Tim A. O’Brien Andres R. Romero Marcia Clare Sugrue Jeanne Marie Waters Timothy H. Madden Dennis J. O’Connor Rebecca Simone Devand A. Sukhdeo Monica J. Watson Bertrand R. Madsen Patricia O’Donnell Rosenzweig Lynn Odette Sussman - Andrew Weaver Andrew Michael Mae Kazuo Ogura Natasha Rossi Alster Torsten Wehrhahn Shlomy Maman Mary Gladys T. Oranga Lauren M. Rothenberg Joseph Sussman Michael Weinstock Sandra Manios Sinead Eileen O’shea Arlene Rachel Rothman Tracy A. Swanson David E. Weischadle Alexandra M. Mareiniss Henry D. Ostberg Daniel Evan Rubenstein Peter A. Swift Douglas E. Weischadle Scott Michael Marinelli Lucius Turner Outlaw Roy Ruda Nayeem Ahmed Syed Sherri L. Weisinger Dean Wilburforce Aderonke Folashade Jacob Russin Cindy L. Szabo Gary Michael Wells Martin Leslie Owolabi Tahmika Racheal Ruth Anna Szikla Sara A. Wells Elizabeth A. Martin Scott Joseph Palmer Karen Saah Anna Babrbara Szolach Sally Whitehead Clarissa Martinez Lianzhong Pan Tal Shira Sagorsky Juliet Tabanao-Galicinao Robert W. Wilcox Lucille L. Marvin Yong Pan John C. Salyer Michelle F. Tabarrok- Todd Wilson Sebrina Mason Dominic Pang Christopher Conrad Keeling Jordan A. Wishnew Adrienne Mastromonaco Elliot Johann Santora Christopher Taggart Martin Wolfbauer Philippe Jules Mathieu Papageorgiou Tara Sarathy Sumiko Takeuchi Herman Horman Wun Saloni Nagin Mavani Michael Pardo Kwajo Mensah Sarfoh Fahd Muhammad Mikio Yamaguchi Parisa Mazaheri-Tameh Hyo Joon Park Petra Saskova Tambra Riaz Desiree C. Yang Daniel Luke Mcauliffe Jungjin Park Yoshiyuki Sato Dawn Ly-Ru Tan Chia-lin Yao Scott McBride Andrea Parra Anthony Francis Scarpelli Anil Taneja Eric K. M. Yatar Michael McCaffrey Nicholas A. Pascale Astrid Schmidt Gray Taylor Joonki Yi Judy Elaine McCausland Paul Robert Pasternak Abraham Schmilowitz Khalilah M. Taylor William K. Yoo Paul McCormick Salvatore M. Paszynsky Allison Jean Sciortino Elizabeth Teira Paul M. Zagar Mikaela Ann McDermott E. Kate Patchen Michael Seibert Helen P. Telfer Michael Zamat Heather D. McDowell Jerrod Patterson Talis E. Seja Andrea Tessitore Maria A. Zarrella Jennifer Lisa McGarr Roxanne Paul Mehmet K. Serdengecti Tatiana Timchenko Meredith Lee Zeigar Cathy Melitski Mary E. Pelzer Sirion J. Shaffer Vitaly Timokhov Weiyi Zhang Melissa Melzer Jennifer Y Peng Andrew Shane Nicole Tremblay Haichuan Zheng Gilbert G. Menna David James Penna Louis A. Shapiro Gail B. Trenk Cecile Helene Pedro Perez Stephen B. Shapiro Lana Truong Menu-Eisenchteter Myrna Perez-Drace Jason L. Shelly Goroshit Tsirina Gail Merel Pablo Perhacs Shamala Shibles Alexander Tuttle Stephanie L. Merk Assata Njeri Mccreary Brandy D. Shiloh Nancy L. Merwin Peterson Catherine Sunae Shin Tammy L. Meyer Lee Petherbridge Anat Shinar Robert Joseph Meyerhofer Michael E. Pikiel Gregory P. Shugar Marc Meyers Kimberly Ann Pikul Adam A. Shulenburger In Memoriam Berco Meytal Michael G. Pitman Carolin Silke Siegrist Jennifer Alman Michaels James Edward Pittman David Benjamin Sikes Alfred C. Bereche George M. Gibson Scott D. Michener Alexander M. Debra J. Silberstein New Port Richey, FL Buffalo, NY Paraskevi V. Migdalis Pleshkewych Tyler E. Sill Bernard S. Brickman Walter Gidaly Michelle Mills Samuel Pollack Richard Bradley Simpson New York, NY New York, NY Schuyler Minckler Nandakumar Ponniya John P. Sirico Carolina Mirabal Marie Poulhies Brent Zeff Skolnick Leonard Brodsky Philip D. Jackson Aisha Y. Mirza Devendra Pradhan Amanda Post Slater Brooklyn, NY Worcester, MA Jason R. Mischel Ziv M. Preis Micol Sara Small Israel Cohen T. Paul Kane Kenneth Misken Brian L. Prill Even Jason Smith Boynton Beach, FL Cobleskill, NY John P. Mitchell Lara G. Quint Michael Patrick Smith George C. Cooley James E. Kehoe Olga N Mitireva Ivana Radu Celia D. Smoot Albany, NY Olean, NY Sandeep Mitra Mary Raines Zhanna B. Snelbecker Karla Linn Momberger Jennifer J. Raisbeck Melvyn L. Solmon Eugene F. Crowley Mitchell W. Rabbino Todd Gregory Monahan Alysha Rajnarine Hae-ran Song Binghamton, NY Accord, NY Young-jong Moon Ruixue Ran Miriam Ann Sonnabend Dorothea E. Donaldson Albert A. Walsh Erica I. Moore Geoffrey Rapp David M. Spector Winter Park, FL New York, NY Sandy M. Morales Anant P. Raut Aldo A. Spicacci Citarella Joseph F. Donnelly Mary Moers Wenig Jason Morales-Macedo Madhuri Ravi Eric A. Spindel Slingerlands, NY Hamden, CT Ryoko Moriyama Sharon Raviv Richard A. Sprague Michael J Morley Jennifer Raymer C. R. Srivatsan Peter F. Dow Joseph A. Wolinsky Evan Lewis Morris James Dalton Raymond Pamela Stampp Green Valley, AZ New York, NY Maria Viette Morris Steven Matthew Elizabeth Ann Stanek Harry G. English Jules E. Yarnell Marc David Mory Rees Davies Leah Michele Stansbury Brooklyn, NY Rye Brook, NY Marjorie B. M. Mpundu Daniel D. Regan T. Ahlise Stebbins Bernard A. Frank Jason Ben Mudrick John Michael Reh Douglas E. Steele Rochester, NY Birgit I.E. Mueller Joseph John Reilly Justin R. Steinmark

60 Journal | March/April 2003 THE LEGAL WRITER Develop your own style. No one 3. Harper Lee, To Kill a Mockingbird CONTINUED FROM PAGE 64 style represents the ideal. Your style 205 (1960). will command attention if you don’t 4. Saying on countless coffee mugs and T-shirts. fellow who threatened to detonate a bore your reader. No longer does the 13 bomb. United States v. Hash hashes profession prefer solemn, stuffy, pon- 5. Kentucky Fried Chicken Corp. v. Diver- sified Packaging Corp., 549 F.2d 368, out a case of a cannabis cultivator. derous legal writing. Be serious, but 14 372, 374 (5th Cir. 1977) (Goldberg, J.). United States v. Funmaker merrily de- interest your reader. Then press your tails the exploits of a defendant who 6. In re Charlotte K., 102 Misc. 2d 848, reader forward, with restraint focused 848, 427 N.Y.S.2d 370, 371 (Fam. Ct., had fun making fires. And in Worm v. on substance. Leave no stone unturned Richmond Co. 1980) (Leddy, J.). American Cyanamid Co.,15 a family of to elude the rock and the hard place by 7. Mack v. Great Atl. & Pac. Tea Co., 871 Worms sued a herbicide producer. writing on a clean slate. Follow that F.2d 179, 187 (1st Cir. 1989) (Selya, J.). If you must pun, don’t get carried advice and you’ll land on your own 8. Commonwealth of Mass., Dept. of Pub. away. In Oregon Natural Resources two feet, not between Scylla and Welfare v. Sec’y of Agric., 984 F.2d 514, Council v. March,16 the district court’s Charybdis. 518 (1st Cir.) (Selya, J.), cert. denied, first decision, about a contract to build 510 U.S. 822 (1993). a dam, was reversed. On remand, the GERALD LEBOVITS is a judge of the 9. 422 F.2d 824, 824 (9th Cir. 1970) (Duniway, J.). district court might’ve left well enough New York City Civil Court, Housing 10. 211 Cal. App. 3d 17, 19, 259 Cal. alone after its first sentence: “The dam Part, in Brooklyn and Staten Island. An adjunct professor at New York Rptr. 185, 185 (2d Dist. 1989) case is back. When the case was here Law School, he has written Advanced (George, J.). before, there was only a dam plan. 11. 197 Va. 104, 111, 87 S.E.2d 776, 780 17 Judicial Opinion Writing, a handbook Now there is half a dam.” for New York’s trial and appellate (1955) (Miller, J.). Cringe at commenting on your courts, from which this column is 12. 961 F.2d 145, 145 (9th Cir. 1992) (Noonan, J.). prose. Writing about your writing dis- adapted. His e-mail address is GLe- [email protected]. 13. 956 F.2d 63, 64 (4th Cir. 1992) tracts the reader and, depending on (Phillips, J.). the comment, shows weakness or self- 1. A good, lengthy list of impermissi- 14. 10 F.3d 1327 (7th Cir. 1993) (Wood, J.). congratulation: “In a manner of speak- ble clichés is found in Bryan A. Gar- 15. 5 F.3d 744 (4th Cir. 1993) ner, The Elements of Style § 7.16, at ing,” “if you will,” “so to say,” “no pun (Niemeyer, J.). intended,” “you should pardon the ex- 198–99 (1991). 2. The adage “A verbal contract isn’t 16. 677 F. Supp. 1072 (D. Or. 1987) pression,” “appellant’s argument – to (Burns, J.). avoid a cliché – mixes peaches and worth the paper it’s written on” is illogical. “Verbal” relates to words, 17. Id. at 1073. pomegranates.” oral or written.

And justice for all?

In communities across New York State, poor people are facing serious legal problems. Families are being illegally evicted. Children are going hungry. People are being unfairly denied financial assis- tance, insurance benefits and more. They need help. We need volunteers.

If every attorney did just 20 hours of pro bono work a year – and made a financial contribution to a legal ser- vices or pro bono organization – we could help them get the justice they deserve. Give your time. Share your talent. Contact your local pro bono program or call the New York State Bar Association at 518-487-5641 today.

Sponsored by the New York State Bar Association

Journal | March/April 2003 61 Jean E. Nelson II, Associate Director, Lawyer Assistance Program [email protected] Ray M. Lopez, Director, HEADQUARTERS Jean Marie Grout, Staff Attorney, [email protected] [email protected] Management Information Systems STAFF Leslie A. Fattorusso, Staff Attorney, John M. Nicoletta, Director, [email protected] [email protected] E-MAIL ADDRESSES Cheryl L. Wallingford, Program Manager, Ajay Vohra, Technical Support Manager, [email protected] [email protected] Daniel J. McMahon, Assistant Director, Paul Wos, Data Systems and Telecommunications Publications, [email protected] Manager, [email protected] Executive Staff Patricia B. Stockli, Research Attorney, Margo J. Gunnarsson, Database Services Patricia K. Bucklin, Executive Director, [email protected] Administrator, [email protected] [email protected] Governmental Relations Marketing John A. Williamson, Jr., Associate Executive Ronald F. Kennedy, Assistant Director, Richard Martin, Director, Director, [email protected] [email protected] [email protected] L. Beth Krueger, Director of Administrative Graphic Arts Media Services and Public Affairs Services, [email protected] Roger Buchanan, Manager, Bradley G. Carr, Director, Kathleen R. Baxter, Counsel, [email protected] [email protected] [email protected] William B. Faccioli, Production Manager, Frank J. Ciervo, Associate Director, Lisa Bataille, Administrative Liaison, [email protected] [email protected] [email protected] Human Resources Amy Travison Jasiewicz, Editor, State Bar News, Kathleen M. Heider, Director of Meetings, Paula Doyle, Director, [email protected] [email protected] [email protected] Membership Barbara Beauchamp, Web Site Content Editor Law Practice Management Patricia K. Wood, Director, [email protected] Stephen P. Gallagher, Director, [email protected] Accounting [email protected] Pro Bono Affairs Kristin M. O’Brien, Director of Finance, Law, Youth and Citizenship Program Cynthia Feathers, Director, [email protected] Deborah S. Shayo, Director, [email protected] Anthony M. Moscatiello, Controller, [email protected] [email protected] Emil Zullo, Assistant Director, Continuing Legal Education [email protected] Terry J. Brooks, Director, [email protected]

THE NEW YORK JOURNAL BOARD BAR FOUNDATION MEMBERS EMERITI

s a tribute to their outstanding service to Aour Journal, we list here the names of 2002-2003 OFFICERS DIRECTORS each living editor emeritus of our Journal’s Board. Richard J. Bartlett James B. Ayers, Albany President Richard J. Bartlett John P. Bracken, Islandia Coleman Burke 1 Washington Street Cristine Cioffi, Niskayuna P.O. Box 2168 John C. Clark, III Angelo T. Cometa, New York City Glens Falls, NY 12801-2963 Angelo T. Cometa Maryann Saccomando Freedman, Buffalo Roger C. Cramton Robert L. Haig Emlyn I. Griffith, Rome Maryann Saccomando Freedman Vice President Emlyn I. Griffith 101 Park Avenue John H. Gross, Northport H. Glen Hall New York, NY 10178-0001 Paul Michael Hassett, Buffalo John R. Horan, New York City Paul S. Hoffman Patricia K. Bucklin Charles F. Krause Bernice K. Leber, New York City Secretary Philip H. Magner, Jr. Susan B. Lindenauer, New York City One Elk Street Wallace J. McDonald Albany, NY 12207 Kay C. Murray, New York City J. Edward Meyer, III Hon. Randolph F. Treece Robert L. Ostertag, Poughkeepsie Kenneth P. Nolan Treasurer Thomas O. Rice, Garden City Albert M. Rosenblatt 375 State Street M. Catherine Richardson, Syracuse Robert J. Smith Albany, NY 12210 Lawrence E. Walsh

62 Journal | March/April 2003 Members of the House of Delegates 2002-2003 First District Third District * Freedman, Maryann Saccomando Alcott, Mark H. Ayers, James B. Gerstman, Sharon Stern OFFICERS Baker, Theresa J. Bauman, Harold J. Graber, Garry M. Barasch, Sheldon Burke, Elena DeFio Guiney, Daniel J. Berkowitz, Philip M. † Butler, Tyrone T. †* Hassett, Paul Michael † Bing, Hon. Jonathan L. Carreras, Marilyn T. McCarthy, Joseph V. Bresler, Judith A. Flink, Edward B. Newman, Stephen M. Brown, Lloyd W., II Friedman, Michael P. O’Connor, Edward J. Capell, Philip J. Higgins, Patrick J. O’Mara, Timothy M. Lorraine Power Tharp, President Chambers, Hon. Cheryl E. Katzman, Gerald H. Palmer, Thomas A. Albany Christian, Catherine A. Kelly, Matthew J. Pfalzgraf, David R. * Cometa, Angelo T. King, Barbara J. Sconiers, Hon. Rose H. A. Thomas Levin, President-Elect Crane, Hon. Stephen G. LaFave, Cynthia S. Seitz, Raymond H. Cundiff, Victoria A. Leistensnider, Ruth E. Mineola Cuyler, Renaye B. Maney, Hon. Gerard E. Ninth District Kenneth G. Standard, Treasurer Eisman, Clyde J. Miranda, David P.D Aydelott, Judith A. Eppler, Klaus Ricks, Wendy S. Bartlett, Mayo G. New York Farrell, Joseph H. † Tharp, Lorraine Power Fedorchak, James M. Finerty, Hon. Margaret J. Treece, Hon. Randolph F.H Geoghegan, John A. A. Vincent Buzard, Secretary Fink, Rosalind S. * Williams, David S. Goldenberg, Ira S. Rochester * Forger, Alexander D. * Yanas, John J. Herold, Hon. J. Radley Freedman, Hon. Helen E. Ingrassia, John Gerrard, Michael B. Fourth District Johnson, Martin T. * Gillespie, S. Hazard Bartlett, Hon. Richard J. Klein, David M. Goldstein, M. Robert Cioffi, Cristine Kranis, Michael D. Gross, Marjorie E. Coffey, Peter V. Longo, Joseph F. Gutekunst, Claire P. FitzGerald, Peter D. Manley, Mary Ellen Haig, Robert L. Heggen, Karen Ann * Miller, Henry G. Handlin, Joseph J. Hoye, Hon. Polly A. Mosenson, Steven H. Vice-Presidents Harris, John B. Keniry, Hon. William H. O’Leary, Diane M. First District Harris, Martha W. McAuliffe, J. Gerard, Jr. * Ostertag, Robert L. * Heming, Charles E. Rodriguez, Stephen T. Plotsky, Glen A. Mark H. Alcott, New York Hoffman, Stephen D. Riley, James K. Stephen D. Hoffman, New York Jacobs, Robert A. Fifth District Standard, Kenneth G. Second District Jacobs, Sue C. Alessio, George Paul Sweeny, Hon. John W., Jr. Jacoby, David E. Alsante, Cora A. Walker, Hon. Sam D. Edward S. Reich, Brooklyn Jaffe, Hon. Barbara Amoroso, Gregory J. Third District Kilsch, Gunther H. Doerr, Donald C. Tenth District James B. Ayers, Albany * King, Henry L. Dwyer, James F. Asarch, Hon. Joel K. Kougasian, Peter M. Fennell, Timothy J. * Bracken, John P. Fourth District †* Krane, Steven C. Fetter, Jeffrey M. Corcoran, Robert W. Peter D. FitzGerald, Glens Falls Landy, Craig A. Getnick, Michael E. Filiberto, Hon. Patricia M. Fifth District Leber, Bernice K. Hayes, David M. Fishberg, Gerard Lee, Charlotte C. Kogut, Barry R. Franchina, Emily F. James F. Dwyer, Syracuse Levy, M. Barry Michaels, Joanne E. Fredrich, Dolores Sixth District Lieberman, Ellen Peterson, Margaret MurphyT Futter, Jeffrey L. Kathryn Grant Madigan, Binghamton Lindenauer, Susan B. Priore, Nicholas S. Gross, John H. * MacCrate, Robert Renzi, David A. Karson, Scott M. Seventh District Mandell, Andrew †* Richardson, M. Catherine Kramer, Lynne A. C. Bruce Lawrence, Rochester Miller, Michael Rizzo, James S. Lerose, Douglas J. Eighth District Miller, Sonia E. Seiter, Norman W., Jr. † Levin, A. Thomas Milonas, Hon. E. Leo Uebelhoer, Gail Nackley Levy, Peter H. Joseph V. McCarthy, Buffalo Minkowitz, Martin Meng, M. Kathryn Ninth District Mitzner, Melvyn Sixth District Monahan, Robert A. Joseph F. Longo, White Plains Opotowsky, Barbara Berger Beehm, Angelina Cutrona Perlman, Irving Tenth District * Patterson, Hon. Robert P., Jr. Gacioch, James C. * Pruzansky, Joshua M. Paul, Gerald G. Kirkwood, Porter L. Purcell, A. Craig A. Craig Purcell, Hauppauge Quattlebaum, Poppy B. Lewis, Richard C. †* Rice, Thomas O. Eleventh District Rayhill, James W. Madigan, Kathryn Grant Tully, Rosemarie Gary M. Darche, Queens Reimer, Norman L. Mayer, Rosanne Walsh, Owen B. Reitzfeld, Alan D. Tyler, David A. Twelfth District Richardson-Thomas, Edwina Walsh, Ronald, Jr. Eleventh District Lawrence R. Bailey, Jr., New York Rifkin, Richard Wayland-Smith, Tina Darche, Gary M. Robertson, Edwin D. Dietz, John R. Rosner, Seth Seventh District Fedrizzi, Linda F. Rubenstein, Joshua S. Buzard, A. Vincent James, Seymour W., Jr. Russo, Salvatore J. Castellano, June M. Nashak, George J., Jr. Members-at-Large of the Safer, Jay G. Clifford, Eugene T. Nizin, Leslie S. Schumacher, H. Richard Cristo, Louis B. Terranova, Arthur N. Executive Committee * Seymour, Whitney North, Jr. Dwyer, Michael C. Wimpfheimer, Steven Sherwin, Peter J.W. Grossman, James S. Michael E. Getnick Silkenat, James R. Harren, Michael T. Twelfth District Matthew J. Kelly Sloan, Pamela M. Hartman, James M. Bailey, Lawrence R., Jr. Gunther J. Kilsch Stenson, Lisa M. Lawrence, C. Bruce Friedberg, Alan B. Bernice K. Leber Torrent, Damaris E. †* Moore, James C. Horowitz, Richard M. Wales, H. Elliot * Palermo, Anthony R. Millon, Steven E. Susan B. Lindenauer Reynolds, J. Thomas †* Pfeifer, Maxwell S. David R. Pfalzgraf Second District Schraver, David M. Summer, Robert S. Cerchione, Gregory T. Tyo, John E. Weinberger, Richard Dollard, James A. * Van Graafeiland, Hon. Ellsworth Fisher, Andrew S. * Vigdor, Justin L. Out-of-State Golinski, Paul A. †* Witmer, G. Robert, Jr. * Fales, Haliburton, 2d Hesterberg, Gregory X. Peskoe, Michael P. Kamins, Barry Eighth District * Walsh, Lawrence E. † Delegate to American Bar Association House of Delegates Morse, Andrea S. Doyle, Vincent E., III * Past President Reich, Edward S. Edmunds, David L., Jr. Romero, Manuel A. Evans, Sue M. Sunshine, Hon. Jeffrey S. Flaherty, Michael J. Sunshine, Nancy T.

Journal | March/April 2003 63 Writing on a Clean Slate: THE LEGAL WRITER Clichés and Puns BY GERALD LEBOVITS

nless you practice between usual punishment, you might be sent pansion of section 140.35’s mean- Scylla and Charybdis, you’ll to jail until you end your sentence with ing, the foundation of Corporation Uwant to avoid clichés and puns a preposition. Counsel’s argument plainly sags. like the plague. That’s an open-and- • “This is a case without appeal.” • From the First Circuit, when a shut case. But some exceptions – dis- • “Old lawyers never die. They just grocery worker claimed sexual dis- tinctions with a difference – prove the lose their appeal.”4 crimination: “Having taken stock of rule. Learning the pros and cons of • “There’s no justice on the New plaintiff’s case, we find the shelves to 7 clichés and puns is its own reword. York State Court of Appeals. Only be bare.” Clichés judges preside there.” How do you spell R-O-L-A-I-D-S? The word “cliché” comes from the Only clever and original puns, used In an opinion that considered whether French “clicher,” to stereotype. Clichés rarely, are acceptable in legal writing. the U.S. Department of Agriculture’s are rhetorical or proverbial. Rhetorical • “Defendant, charged with petit Food and Nutrition Service properly clichés are popular because of their larceny, suffers from kleptomania. fined the Commonwealth of Massa- quick wisdom and catchy sounds. When it gets bad, he takes something chusetts, the First Circuit used the fol- Proverbial clichés are metaphorical for it.” lowing puns: “Finding the penalty (“apple of his eye,” “apple does not fall • “Defendant, guilty of forging U.S. hard to swallow, the Commonwealth far from the tree”). currency, proved that imitation is the serves up a gallimaufry of issues for As a general rule, last, but not least, sincerest form of flattery.” appellate mastication. Although these issues contain some food for thought, knock off clichés. All things consid- Do you like the puns that follow? they lack true nutritive value.”8 ered, nip them in the bud. Clichés fall The first is funny and insults no one. on deaf ears. They paint the writer The second shows that over-used and with a broad brush as a copier with obvious puns are the lowest form of Puns are for children, limited independent thought. They’re humor. The third is childish and mean. not groan readers. 1 avoidable and banal. • From Kentucky Fried Chicken: But sometimes clichés are just the “And the bizarre element is the facially Some can’t resist humor when they ticket – if you twist them and if they’re implausible – some might say unappe- see interesting names in the style of a not stale. At first blush, after all, the tizing – contention that the man whose case. In Plough v. Fields,9 the court sum and substance of clichés is that chicken is ‘finger-lickin’ good’ has un- opened with this: “In spite of its title, they’re not carved in rock: clean hands . . . . We find a kernel of this case does not involve the age old • “To add insult to perjury . . . .” truth in all Kentucky Fried’s con- struggle of mankind to wrest a living • “An unwritten law isn’t worth the tentions and therefore affirm.”5 from the soil . . . .” In Silver v. Gold,10 paper it isn’t written on.”2 • From Staten Island Family the court began by noting that “[d]es- • “No truer words were ever si- Court:6 pite its title, the case before us does lenced.” Is a girdle a burglar’s tool or is that not involve the relative merits of pre- • “Tried and untrue.” stretching the plain meaning of sec- cious metals in the commodities mar- • “Bankruptcy is a fate worse than tion 140.35 of the Penal Law? This ket . . . .” In Short v. Long,11 the court elastic issue of first impression debt.” ended thus: “The judgment of the trial Clichés are also effective when used arises out of a charge that the re- spondent shoplifted certain items court is affirmed, and that is the ‘long’ as word-play to make a memorable ar- and ‘short’ of it.” gument: from Macy’s Department Store by Legal writers shouldn’t pun when it • Atticus Finch closing to the jury, dropping them into her girdle. comes to case names. It’s too easy, like arguing that whites falsely accused his Basically, Corporation Counsel ar- shooting fish in a barrel, and too obvi- African–American client of rape: “This gues that respondent used her girdle ous. Often the best humor is coinci- case is as simple as black and white.”3 as a kangaroo does her pouch, thus adapting it beyond its maiden form. dental. Consider United States v. Van Puns Boom,12 an explosive opinion about a Puns are for children, not groan The Law Guardian snaps back readers. If you inflict cruel and un- charging that with this artificial ex- CONTINUED ON PAGE 61

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