Kentucky bar proposes regulation of attorneys' Facebook, MySpace postings
Karen Sloan, National Law Journal
November 16, 2010
The Kentucky Bar Association is the latest regulatory body to wade into the murky issue of social media and lawyer advertising rules.
The bar's Attorneys' Advertising Commission has proposed regulations that would bring lawyers' Facebook and MySpace communications under the bar's advertising rules. The regulations would apply to social media communications that are legal in nature, not those that are purely personal.
"We view this as giving guidance to lawyers about how we treat [social media]," said Amy Cubbage, the commission's chairwoman. "We want to be fair and treat different mediums the same way. We can't let Facebook becomes the Wild West if we are regulating others forms of advertising."
In 2008, the bar adopted rules that require attorneys to register their legal blogs so they could be periodically monitored for advertising violations, Cubbage said. Should the proposed regulation be adopted, lawyers who use their Facebook or MySpace pages to discuss the law or promote their practices would also have to register with the bar, she said.
"There was much more screaming from the blogging community about that than we are getting with Facebook," Cubbage said.
There are attorneys who are unhappy with the prospect of the bar regulating lawyer use of social media. Marcus Carey, a solo practitioner in Erlanger, Ky., has blogged his opposition to the proposal. He said the move was just the latest attempt by the bar to overstep its authority. Carey successfully sued to overturn the Kentucky Judicial Conduct Commission's rule against judicial candidates identifying themselves by political party and the bar's rule against judicial candidates soliciting campaign money.
"When new things come along, like the ability to advertise on television, our bar association has a long history of trying to restrict freedom, restrict the freedom of speech and restrict the ability of the market to determine what works," he said. "As the world changes, their reaction is to regulate every change that comes along."
Carey doubts many attorneys will come out against the proposal, saying that few lawyers in the state use social media to promote themselves.
However, Louisville attorneys Christian Mascagni and Artie McLaughlin recently told the Louisville Courier-Journal that Facebook is an important way to connect with potential clients in their 20s and 30s.
Some attorneys have criticized the proposed regulation as being too vague regarding which Facebook pages would fall under the rules. The bar is accepting written comments regarding the proposal until Dec. 15.
The American Bar Association is also in the process of examining the ethics of online client-development tools like blogs and Facebook. The ABA's Commission on Ethics 20/20 is asking for feedback regarding whether it should pursue further research and regulation of that area during the next two years.
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Appeals Court Struggles With 'Red Flags Rule'
By Robert Ingram, The Legal Times
November 15, 2010
A federal appeals court in Washington wrangled today with the definitions of "credit" and "any person" as it tried to determine whether the Federal Trade Commission overstepped its authority in regulating the legal profession.
The panel's three judges asked skeptical questions of both lawyers in a case between the FTC and the American Bar Association. The ABA sued the FTC on behalf of lawyers trying to win an exemption from the “Red Flags Rule,” a new regulatory scheme designed to prevent identity theft among creditors. The ABA won a lower court ruling in December 2009.
As The National Law Journal reported last week, the case involves the broader question of when the federal government can regulate lawyers. But also central is a 2003 federal law covering any person who extends credit, a phrase that FTC lawyers interpret to include some lawyers who receive payment only after providing services to a client.
“Lawyers are no different — though they might think they are — from other service providers,” FTC attorney Michael Bergman told the U.S. Court of Appeals for the D.C. Circuit.
Judge Thomas Griffith echoed that argument at several points, discounting the ABA’s argument that Congress must be explicit when it intends to regulate the legal profession because the industry is the longtime province of states.
“They have to say, ‘This covers lawyers, as well’?” Griffith asked Proskauer Rose partner Mark Harris, who represented the ABA. Griffith suggested such language might be superfluous when a law covers any person. “It’s not as though this is a group that is unaware of the legal profession,” he said, referring to members of Congress.
Judge Judith Rogers also said the law could be read as unambiguous in covering everyone. “It doesn’t say, ‘anyone who extends credit, other than lawyers,’” she said.
Yet Rogers suggested that the issue might not be ripe for decision because the FTC has not had a chance to enforce its rules. “Why isn’t that the kind of statute that’s begging for an as-applied challenge?” she asked Harris. He responded by citing earlier cases, including a 2005 case in the D.C. Circuit, that he said make clear lawyers have a special status in federal regulations.
Senior Judge Harry Edwards was less receptive to the FTC’s argument, asking Bergman at one point to assume that he had lost his argument that the FTC has clear authority under the 2003 law to regulate lawyers. Edwards asked, would it still be possible to enforce the Red Flags Rule against lawyers? Bergman replied that it would be, because there are no anti-identity-theft regulations at any state bar that would conflict with the federal rules.
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Congress and the need to protect legal services for poor – [Op-ed]
William T. Robinson, III, Louisville Courier-Journal
November 10, 2010
Lawyers are renowned for working long hours and setting aside personal obligations to meet client needs. What is not often recognized is their commitment to the delivery of pro bono legal assistance to individuals who can't afford to pay.
During National Pro Bono Week last month, we were reminded of our tradition of civic volunteer responsibility to ensure that the poor receive legal help when they need it. Providing pro bono legal services expands our system of equal justice. I commend Kentucky lawyers who participated in a pro bono program during the past week and respectfully remind those who couldn't do so, that pro bono work is our privilege and obligation.
Four regional organizations across the commonwealth provide legal services and advice to the indigent: Legal Aid Society in Louisville, Kentucky; Legal Aid in Bowling Green; Legal Aid of the Bluegrass in Covington; and the Appalachian Research and Defense Fund in Prestonsburg. I urge all to build time into their schedules for pro bono service because it will make a positive impact on the life of someone financially less fortunate but equally deserving of justice.
Besides direct counseling, legal aid organizations and the pro bono lawyers who support them depend on donations from lawyers and law firms — which you and your firm should make – along with funding raised from Interest on Lawyers Trust Accounts, called the IOLTA program. IOLTA is a unique and innovative vehicle that helps provide civil legal aid to the indigent.
IOLTA accounts collect client funds that are small in individual amounts or are held for a short time and, consequently, can generate little interest for the client. Without taxing the public and at no cost to lawyer or client, these funds are pooled in an IOLTA account. The interest generated is distributed to legal services organizations. IOLTA monies provide vital funding to legal services organizations, even though the funding amount varies depending on the principal balances in those accounts and on the prevailing interest rate.
IOLTA programs are required in 42 states and became mandatory in Kentucky last January. As a longtime member of the Kentucky Bar Association, I was privileged to play a small part in persuading the Kentucky Supreme Court to adopt IOLTA by court rule in 1986 and later to make IOLTA mandatory for all lawyers who hold such client accounts. As the first chairman of the Kentucky IOLTA Commission and with our volunteer board members, I helped recruit IOLTA trustees and the executive director. I learned first-hand how valuable are IOLTA and the pro bono services it helps fund.
Now it's essential that Congress, during the upcoming lame-duck session, act to protect this important source of legal aid funding. IOLTA accounts are fully FDIC-protected now, but that protection will expire at the end of the year. We need Congress to pass legislation to grant full FDIC protection for IOLTAs.
An IOLTA program and volunteer lawyer service go hand-in-hand to assure justice for all. Only lawyers can provide the legal services many people need. It should be our legacy to expand justice by making it accessible to all, regardless of social status or financial resources.
William T. (Bill) Robinson III is president-elect of the American Bar Association, a past president of the Kentucky Bar Association and member-in-charge of the Florence, Ky., offices of Frost Brown Todd LLC. He was honored in Louisville by the national Legal Services Corporation on Oct. 18 with a certificate of recognition and appreciation for his extraordinary commitment to equal access to legal services.
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Iowa Vote Shows the Injustice of Electing Judges
By Adam Cohen, TIME.com
Nov. 10, 2010
It was one of the more striking results from last week's elections: three Iowa Supreme Court justices who joined last year's pro-gay-marriage ruling were voted out of office. Opponents of gay marriage celebrated, confident that a miscarriage of justice had been corrected at the ballot box, but they were wrong. The removal of these three judges — all highly respected jurists, appointed by both Republican and Democratic governors — should send a shiver down the spine of anyone who cares about the American system of justice.
In Iowa, supreme court justices are nominated to the bench by the governor in a merit-based system, but the voters get a chance to decide whether to keep them on for their first term and later for any additional terms. In last week's election, voters opted to remove Chief Justice Marsha Ternus, David Baker and Michael Streit. Their ousters marked the first time that an Iowa Supreme Court justice had been removed since the system was put in place in 1962.
The three justices were targeted because last year they joined a unanimous Iowa Supreme Court in ruling that the state constitution required Iowa to recognize same-sex marriages. It was a legal decision based on pure constitutional interpretation.
To opponents of gay marriage, however, the ruling meant war. Anti-gay-marriage activists in Iowa and across the country poured as much as $800,000 into the state to attack Justices Ternus, Baker and Streit — the only ones of the judges up for a retention vote this year — for the ruling. The three justices, not surprisingly, did not raise a similar war chest or respond in kind.
The Iowa vote is just the latest evidence that elections are a terrible way of choosing judges — whether the decision is putting them in office or removing them. The Constitution's framers, who were brilliant in their sense of how government power should be allocated, had a very different idea about judicial selection. They decided federal judges should be appointed by the President and confirmed by Congress — with the people getting no say of any kind. Federal judges would then have lifetime tenure, insulating the third and equal branch of government from the pressures of the political majority.
If it sounds undemocratic, that's because it is — and intentionally so. Judges decide what people's fundamental rights are, and the founders understood that fundamental rights must not be put up for a popular vote. Judges are also responsible for protecting minority groups, which they might not be able to do if they had to answer to the will of the majority.
Federal judges' independence gives them a unique role in government — something that was clear in the civil rights era. In the 1950s and 1960s, when Southern elected officials strongly supported racial segregation, federal judges were the one powerful force in the region that could, and did, stand up for equal rights.
Frank M. Johnson, a federal district-court judge in Montgomery, Ala., integrated the city bus system and forced the state to register black voters. He was called "the most hated man in Alabama," he received regular death threats and his elderly mother's home was bombed. If Alabama voters could have voted to remove Johnson, they would have done so overwhelmingly — but because he was a federal judge, he was there for life.
State-court judges do not have the same protection. In more than two-thirds of the states, judges are either elected to begin with or eventually face the voters, as in Iowa. Judicial elections were once generally fairly high-minded, but in the past few years they have become bare-knuckle political brawls.
In a recent report, the Brennan Center for Justice at New York University Law School decried the steep rise in money spent on judicial races, much of it poured in by "super-spender" organizations that seek to influence the courts, and the simultaneous rise of vicious attack ads.
The money is almost always intended to buy justice in one way or another. Business groups funnel contributions to candidates who will let businesses trample on the rights of workers and consumers. Plaintiffs' lawyers, on the other hand, want judges who will uphold sky-high damage awards — and large attorney's fees. According to the Brennan Center, a single law firm in Alabama gave more than $600,000 to a candidate for the state supreme court, none of which, thanks to weak disclosure laws, showed up in contribution records.
The solution to this disturbing trend is appointing judges based on merit — a cause that Sandra Day O'Connor, the retired Supreme Court Justice, has adopted with great enthusiasm. O'Connor has lately been calling attention to the enormous amount of money being spent on judicial elections — and urging states to switch from electing to appointing judges. O'Connor also spoke in Iowa in September on behalf of the three justices, saying voters should not retaliate against judges who make unpopular rulings.
Last week in Nevada, a referendum that O'Connor supported to switch from electing to appointing judges was defeated. That loss and the Iowa results were the bad judicial news of this election cycle. The good news was that activists also targeted justices for defeat in Alaska, Colorado, Illinois and Kansas — and all of those efforts failed. In Kansas, justices targeted by antiabortion groups won with more than 60% of the vote.
O'Connor has been bitterly attacked by allies of big business who accuse her, wrongly, of misusing her position. The reason they are attacking her is simple: they are afraid that, in time, she may persuade enough people that states will be better off with the kind of judges the founders envisioned — ones who cannot be intimidated, who aren't subject to political whim and, most importantly, who are not for sale.
Cohen, a lawyer who teaches at Yale Law School, is a former TIME writer and a former member of the New York Times editorial board. Case Study, his legal column for TIME.com, appears every Wednesday.
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D.C. Firms Team to Put Senior Lawyers to Work on Pro Bono Projects
The Legal Times
November 5, 2010
The D.C. Bar Pro Bono Program and the D.C. Access to Justice have teamed to launch a new project that is designed to put senior lawyers who are winding down their practices to work on pro bono efforts.
The project, dubbed the Senior Attorney Initiative for Legal Services or SAILS Project and chaired by Marc Fleischaker of Arent Fox, asks participating law firms to implement programs in which older attorneys can ply their legal skills on pro bono projects across Washington. Participating firms are reviewing their billable hour policies to ensure that they support senior lawyer efforts.
The idea for SAILS grew out of a January meeting of firm chairs and managing partners that had been called by James Sandman, chair of the D.C. Bar Pro Bono Committee, and Peter Edelman, chair of the D.C. Access to Justice Commission. During the meeting, firm leaders discussed ways to help meet the growing need for legal services among Washington’s poor. That need was exacerbated by the recession, which reduced the amount of funding legal services providers were able to raise.
According to a report released last year by the D.C. Access to Justice Commission and the D.C. Consortium of Legal Services Providers, that the legal services community lost approximately 25% of its funding due to the recession, leading to the loss of 12% of attorneys and nearly 40% of critical non-attorney staff.
When the idea came up during the meeting for senior lawyers to play a larger role in pro bono efforts, Fleischaker, then-chair of Arent Fox, volunteered to organize the project and serve as its chair.
“There is a tsunami of lawyers entering their 60s and heading toward retirement. We thought this would be a great way for them to use their legal skills while helping to meet a growing need for legal services,” Fleischaker said.
Fleischaker said from there he began reaching out to some of the District’s largest firms to gauge the interest in the program. “We received a lot of enthusiastic support among firm leaders,” Fleischaker said.
So far, 11 firms have agreed to take part in the project: Arent Fox; Arnold & Porter; Covington & Burling; Crowell & Moring; Dickstein Shapiro; DLA Piper; Hogan Lovells; McDermott Will & Emery; Skadden, Arps, Slate, Meagher & Flom; Steptoe & Johnson; and Zuckerman Spaeder. Arent Fox has changed its billable hour requirements for senior lawyers to allow pro bono work done as part of SAILS to count towards their mandatory minimums.
Senior lawyers from two of those firms, Arent Fox and McDermott, are already working together with two legal services providers on a project to help homeless and low-income veterans in Washington.
Fleischaker said he is working with other legal service providers to match specific projects with firms participating in SAILS. He said he hopes to have all of the participating firms matched with a legal service provider by Jan. 1. Fleischaker added that he hopes other firms in Washington will want to take part in SAILS.
Both the D.C. Bar and the D.C. Access to Justice Commission have pledged to provide Fleischaker with a staff to help organize the project and to help answer questions.
If the program is successful in Washington, Edelman said that it has the potential to spread to other jurisdictions.
“Washington is the best place in the country to launch something like this, given our long history of pro bono service. But there are a lot of other places where this could really be effective,” Edelman said. “It’s a very exciting project to be a part of.”
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Taking On a Second Mortgage to Pay the Foreclosure Lawyer
By DAVID STREITFELD, The New York Times
November 6, 2010
For some Florida residents, the price of getting out of foreclosure will include taking on a second mortgage — payable this time to their lawyers.
The new mortgage, which takes effect only if the foreclosure is dismissed and the homeowner’s debt to the bank is reduced, is controversial among defense lawyers, some of whom call it “creepy” and “crass.” Yet even they acknowledge it offers a solution to a vexing question: How do they get paid?
After recent revelations that banks were sloppy in processing many foreclosures and in some cases lack standing to seize a house, potential clients seeking to challenge their lenders are flocking to lawyers. But while these distressed homeowners might have a case, they generally lack the resources to pay legal fees. Being in foreclosure usually means being broke.
“We thought, ‘Why don’t we use a bit of ingenuity to find an affordable way to represent them?’ ” said Peter Ticktin of the Ticktin Law Group in Deerfield Beach, Fla. “It’s a new model, a new paradigm.”
Foreclosure defense is a new legal specialty whose strategies and techniques are still being worked out. Mr. Ticktin, who has some 3,000 foreclosure clients, says his plan to collect fees by taking another mortgage on his clients’ properties has already been copied by other firms.
The Ticktin mortgages resemble the loans that the clients originally got from Countrywide, GMAC and other lenders. Each will be a contractual obligation with the law firm, labeled as a mortgage and structured like one, too, with the client paying a certain sum every month and using the house as collateral.
Unconventional payment structures are becoming popular in the foreclosure hotbed of Florida. Whether they yet have caught on elsewhere is unclear. Certainly, Mr. Ticktin is far from the only lawyer being forced to innovate.
“We can put in $100,000 of our time but over the length of a case be paid only $6,000 in monthly fees,” said Thomas E. Ice of Ice Legal in Royal Palm Beach.
Mr. Ice, Mr. Ticktin and many other Florida foreclosure lawyers typically receive a few hundred dollars a month from each client. To supplement that, they seek legal fees from the banks they successfully challenge as well as contingency fees.
Contingency fees are standard in cases in which the client has little money but there is the possibility of a large payout. A slip and fall on a store’s wet floor or a medical malpractice claim are classic contingency cases. If the plaintiff wins, insurance companies ultimately foot the bill.
In foreclosure cases, however, the client pays the contingency fee. While such an approach is sometimes used in commercial litigation, this is a first for consumer cases, said Lester Brickman, a professor at Cardozo Law School in New York.
“For a lawyer to supplement or replace the banks as a long-term mortgage creditor of homeowners leaves me a little queasy,” said Mr. Brickman, an expert on contingency fees. “It’s an invitation for the public to say, ‘There go the lawyers again.’ ”
If the Ticktin lawyers — there are 19 now and will be two more soon — cause the original mortgage to be nullified or reduced because of the bank’s misdeeds, the client must take out a new mortgage for 40 percent of the savings.
For instance, if the mortgage was $500,000 and is reduced by the bank to $200,000, the client would owe Ticktin 40 percent of $300,000, or $120,000, minus any legal fees paid by the losing bank as well as any monthly sums paid to the law firm.
Clients would be attracted to this arrangement because they might save nearly $200,000 and avoid foreclosure. They can either stay in their house or — after another legal hurdle — sell it.
Mr. Ticktin conceded there were potential problems with this “pay later” plan, starting with the uncertainty over whether the clients could and would pay the debt over a period of many years and what Mr. Ticktin’s response would be if they did not.
“We would never enforce the mortgage and foreclose,” he said. “We’re not in that end of the game. We’re not money lenders. We’re charging a small amount of interest” — four percent — “just to make it legal.”
For any of this to happen, of course, he has to win his cases. Successful foreclosure litigation can take years, and even if the banks are under fire few believe they will go out of their way to make it any easier. But even if people in foreclosure never win a settlement from a bank, they could stay a few more months in their homes by filing a lawsuit.
The Ticktin firm is growing rapidly, adding three clients a day. If all 3,000 clients ended with mortgages payable to the firm, Mr. Ticktin said, “that would be wonderful, but realistically I’m expecting fewer.”
So far, he said, he has mortgages on the homes of five clients. None were available for comment.
Other lawyers said they were still puzzling over how to proceed. Roy Oppenheim is a veteran foreclosure defense lawyer, which means he has been doing it two years.
“Until recently, foreclosure defense would have been considered the lowest of the low — below the divorce guys, below ambulance chasers,” said Mr. Oppenheim, who practices in Weston, Fla. “The idea was inconceivable that you might have legitimate defenses when your client did not pay the bank that had lent them a sum of money.”
Then foreclosure lawyers started deposing bank employees, who admitted that their behavior in preparing court documents was negligent. That was quickly followed this fall by freezes imposed by some of the lenders. All 50 state attorneys general have joined forces to investigate and reshape banks’ foreclosure practices.
Mr. Oppenheim now has 500 clients, twice as many as a year ago, all whom are paying $500 a month. “I’m happy and thrilled to wake up in the morning and be a real estate attorney in Florida,” he said. “We’re starting to look at what the definition of exemplary representation would be.” That would allow them to charge higher fees.
Some foreclosure lawyers have a more traditional approach, starting with a firm grip on clients’ expectations.
“Any time someone calls me and says, ‘I want to keep the house and get my mortgage gone,’ I say, ‘That’s not realistic or fair,’ ” said Margery E. Golant of Boca Raton, a former executive at the lender Ocwen.
She takes foreclosure clients who can afford to pay as they go; there are a few. “I don’t want to be my client’s creditor,” she said. “I want to be on their side.”
Counting on clients to shoulder a large legal bill after the case is over can be fraught with conflicts, said Mr. Ice, the Royal Palm Beach lawyer.
In some cases, he said, the best a client might be able to do was get a mortgage modification. But the client might reject a bank’s offer if it did not allow him enough every month to pay Mr. Ice as well.
“It’s touchy,” the lawyer said. “I don’t ever want to have a client say, ‘I’m not taking the deal because I can’t afford to pay you.’ ”
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Marriage ruling costs Iowa judges
By C. David Kotok, OMAHA WORLD-HERALD (Nebraska)
November 3, 2010
Iowa voters punished three justices of the Iowa Supreme Court for their 2009 ruling legalizing same-sex marriages.
The results do nothing to overturn the controversial 7-0 ruling by the court but sent a loud message that a majority of Iowa voters remained angry that the court — not the Legislature — had overturned the state's ban on same-sex marriages.
Ousted was Supreme Court Chief Justice Marsha Ternus, along with Justices David Baker and Michael Streit. They happened to be the three Supreme Court justices who faced a retention vote on Tuesday's ballot.
It was the first time that voters have ousted a member of the Iowa Supreme Court. As in Nebraska and many other states, judges are appointed by the governor in Iowa, and they stand before voters who decide whether to retain them. It is very rare when judges are removed from office.
The fight over the Iowa justices gained national attention when a combination of in-state and out-of-state organizations made it the focal point of their protest over the same-sex marriage ruling.
For example, the National Organization for Marriage spent $200,000 on anti-justices TV commercials. The organizations working to remove the judges outspent the pro-justices groups by nearly 4-to-1 through mid-October.
Late efforts on behalf of the justices, with former Republican Gov. Robert Ray as the spokesman, failed to turn the tide.
Ternus, the chief justice, argued that the removal could make the judicial system too influenced by political pressure. The message to judges could be that they can be removed from office for following the law and the constitution.
Although social conservatives in Iowa mounted the effort to remove the justices, it was not partisan. Ternus was appointed to the high court in 1993 by then-Gov. Terry Branstad, who made his political comeback Tuesday by reclaiming the governorship.
The action could force the Iowa Legislature to revisit same-sex marriage in the coming session.
Neither Democratic Gov. Chet Culver nor Democratic legislative leaders, including Iowa Senate Majority Leader Mike Gronstal of Council Bluffs, revisited same-sex marriage following the Supreme Court decision on the matter.
Pottawattamie County voters closely matched the statewide verdict on the three justices with about 54 percent voting to bounce each of them.
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