Wednesday, July 31, 2013

Hearing Provides More Evidence that the Indiana Supreme Court Needs to Order an Investigation of the Disciplinary Process

A hearing was held yesterday on the disciplinary complaint filed against me by the Disciplinary Commission, the body that handles disciplinary matters against Indiana attorneys.  The charge was that I had unfairly criticized a judge, who I had removed via a lazy judge motion from an estate case, in an email sent to people who were involved in the case.   The second charge is that I sent an "ex parte" letter to a judge regarding the process that was supposed to be followed at the end of the civil forfeiture case when the money is being divided up between the various government entities. The law requires judges to make a case-by-case determination of law enforcement costs with the balance going to the common school fund.   No money has gone to the common school fund for years from Marion County as judges are just signing off on orders given to them by the prosecutor which allows law enforcement to keep 100% on every case, in violation of the law.  Contrary to the claim the letter was "ex parte," it was copied to the prosecutor, the public safety director and the Attorney General, the very people involved in the issue I was raising at trial and on appeal.  This is all information I've noted before here and elsewhere.

Michael Witte, Executive Secretary
Disciplinary Commission

I would like to talk about everything that happened at the hearing  but the case is pending before the hearing officer.   We will need to let that process play itself out.   I, on the other hand, will speak about what I saw from the Commission yesterday that highlights the need for the Indiana Supreme Court to investigate the operations of the Commission and the disciplinary process.

I have long felt that one of our responsibilities as attorney is to speak out about the need for reform of our legal system.  While I have broached many topics for reform in the legal system, many times on this blog, it was not until January of 2011 when I first decided to touch the third rail and publish an article on the disciplinary process. That story included my research that during the last three years when the Disciplinary Commission was headed by Donald Lundberg, 397 of the 400 published disciplinary cases had been against small firm attorneys and sole practitioners.  It was just a few months after that story that the relatively new Executive Secretary of the Commission Michael Witte began filing grievances against me which ultimately resulted in the charges that were heard yesterday.

I was constantly assured that this, and other instances of unusual timing, were just "coincidences." The Commission's attorney assured me the DC was only objectively and dispassionately enforcing the disciplinary rules and it wasn't personal to me or because I had criticized the Commission.  Events yesterday proved otherwise.

The Disciplinary Commission showed up with about 5-6 attorneys and assistants, most of whom stayed throughout most of the hearing.  Of course, the top attorney at the DC, Seth Pruden, was assigned to prosecute my case.  The DC had gone to considerable effort to research a six year old, complicated estate case to try to claim, contrary to the my assertion, that the estate was handled properly.  The Commission had boxes of evidence on the estate matter. The hearing itself last for 11 1/2 hours with only a few 5-10 minute breaks.   It was evident that, contrary to the Commission's claim, the Commission is willing to spend limitless enormous to prosecute me for the allegation that I improperly and inaccurately criticizing a judge in an email as well as my sending an ex parte letter to a judge that obviously wasn't an ex parte communication.

Yet when the Indiana Lawyer asked Disciplinary Commission Executive Secretary Michael Witte
why the Commission didn't do anything about attorney William Conour who stole $4.5 million from the settlements of 25 clients and had complaints on the issue ranging back a decade or so, Mr. Witte responded that the DC just didn't have the resources to do the investigation necessary to uncover wrongdoing in Conour's trust accounts.  Yet the FBI had no problem uncovering Conour's misuse of the trust account.  Indeed were it only up to the Disciplinary Commission, Conour would still have his license and still be in a position to victimize yet more clients.

The number one job of the Disciplinary Commission, and where most of the Commission's resources should be devoted, is protecting the public from unethical attorneys.   Enormous resources of the DC should not be used to prosecute an attorney for criticizing a judge in an email.  Even if resources of the Commission are devoted to that subject, which is highly questionable given it is clearly free speech, those resources should never be increased ten fold because the attorney is a critic of the Commission's leadership and the disciplinary process.

Again, I would renew my call for the Indiana Supreme Court to form a committee to conduct an independent and thorough investigation of the Commission, all its "confidential" files, and the attorney discipline process.   I would urge the Court to also hold hearings around the state to solicit input from attorneys about their experiences with the Commission and the disciplinary process in general.  Part of this process must be confidentiality given to attorneys who provide information to this investigatory body.  Attorneys are terrified they will be the next target if they dare criticize the Commission and its operations.  From what I experienced yesterday, that fear is not at all unreasonable.

If the only thing pleasant that comes out of this unpleasant experience is that the Indiana Supreme Court hears my call for reform of the disciplinary process and takes action, it will be worth it.

Monday, July 29, 2013

Attorney Free Speech and My Hope for Reform of the Disciplinary Process

Tomorrow I will have my attorney disciplinary beginning at 10 am in the Indiana Supreme Court conference room.  It is open to the public.

I have spoken out publicly about this case because of the extraordinary impact it could have on attorney free speech in Indiana.  In the case the Disciplinary Commission is seeking, for the first time, to use Rule 8.2 to target an attorney not for public criticism of a judge, but private criticism.   Mine was a response email sent to people involved in the case in which I declared quite bluntly that an elected Hendricks County judge improperly handled an estate case and the matter should be investigated by the judicial disciplinary commission.  The Commission complains my criticism was unfair and was at some points inaccurate.

As noted in the notes accompanying Rule 8.2 that the purpose of the rule is "false statements by a lawyer can unfairly undermine public confidence in the administration of justice."   It is difficult to conceive how a private email, going to people involved in the case about the judge's handling of a case in which he was no longer involved (I eventually had him removed employing the "lazy judge" notice rule), "undermines public confidence" in the "administration of justice."  As the United States Supreme Court has stated attorneys have free speech like every other member of the public and disciplinary rules cannot be used to proscribe that speech unless they are making comments about a pending case that potentially undermine the administration of justice.  An example would be the Indiana Supreme Court disciplining the former Marion County Prosecutor Carl Brizzi's for public statements he made about the pending Mendenhall and Turner/Stewart murder criminal prosecutions.

No one should forget that these county judges are elected by the public.  Who best in the community to attest to the job an elected judge is doing than members of the bar?  Yet we attorneys are told that if we dare publicly criticize those elected judges, our criticism, even if it only the expression of an opinion, we better be prepared to prove that criticism to be true or face sanctions under Rule 8.2.  (The Commission's position on Rule 8.2 is that it needs only prove the statements or opinions were made then it becomes the attorney's responsibility to prove the statements or opinions are true.) The chilling effect on political free speech is enormous.

My case goes even beyond that.  I am not aware of any case in the country where a state disciplinary body attempted to punish an attorney for criticizing a judge in an email.  Almost every Rule 8.2 case across the country involves public statements about judges in the media, on blogs or in court proceedings.

The Disciplinary Commission takes the position that Rule 8.2 does not even require that the speech be public, nor does it even have to be in writing.  An attorney out at lunch who criticizes a judge, according to the Commission, can be subject to Rule 8.2 charge and will be guilty if he cannot prove that the criticism of the judge is true.  If an attorney tells his wife over dinner that he thinks a judge is biased against his client, that attorney had better be able to prove the judge is actually biased or he can be disciplined.

Under the Disciplinary Commission's interpretation of Rule 8.2 I believe virtually any attorney in the state can be charged with a disciplinary violation. We all criticize judges.  Many attorneys I know regularly criticize US Supreme Court justices in the harshest tones imaginable  As my mentor, the late Judge Paul H. Buchanan, Jr. told me when I clerked for him at the Indiana Court of Appeals, if a judge cannot accept criticism, even criticism the judge feels is unfair or inaccurate, the judge needs to get in another line of business.  I agree, especially when it comes to county judges who sit for election every six years.

The other charge against me also touches on speech.  At the conclusion of civil forfeiture proceedings, when the defendants are out of the case and the government is dividing up the proceeds, the judge is supposed to make a determination of law enforcement costs on a case-by-case basis with the balance above costs going to the Common School Fund.   Yet for years no Marion County judge has ordered money to be paid to the Common School Fund.

Judges appear to simply be signing off on whatever order they are given by the prosecutor at the end of the case.  I believed that the judges simply do not know the obscure statute and fairly recent Supreme Court case reiterating the duty of a judge to determine law enforcement costs in a civil forfeiture case on a case-by-case basis with the remainder going to the Common School Fund. (The DC attorney opined in my conversation with him that the Marion County judges know the law, but that they are "just lazy,")  I reviewed the disciplinary rules to make sure I wasn't violating any of them, and sent a letter to the judges outlining the law regarding the division of civil forfeiture proceeds.  (I also wrote a blog article on the subject of judges not following the rules on division of civil forfeiture proceeds.)  I had no forfeiture cases before any of the judges and to make certain I wasn't accused of some sort of improper ex parte communication, I copied the letter to the prosecutor, the Attorney General and the Public Safety Director, the very people involved, at trial or on appeal, for the very issue I was addressing in the correspondence.

For that I was charged with improperly trying to influence a judge by ex parte communication.  The Commission's position is that the only way judges can learn about the law is through court filings.  (Though the Commission's attorney admits there is a service which tries to keep judges updated about legal developments.)  That simply isn't the case.  If that were true, an attorney sitting down to talk to a judge over lunch and discussing the law would be violating the rules.  An attorney making a legal point at a CLE seminar where a judge is present could be violating the rules.  An attorney sending a judge an interesting law review article would be violating the rules.  The charge simply has no merit whatsoever.

Besides the free speech implications of this case, there are even larger issues raised by my case which I hope will be considered by attorneys debating the future of our profession but especially by the Indiana Supreme Court.  Over the course of my nearly 26 years of practicing law, and I fully expect that the 26th will be my last, the number one complaint by attorneys about the profession is how the Disciplinary Commission has operated under Executive Secretaries Donald Lundberg and now Michael Witte.  The complaint is that the rules are not enforced equally, that certain attorneys become a target while others who commit much more serious violations walk away without ever being charged.  Attorneys though are terrified of criticizing the Disciplinary Commission publicly and arguing for reform of the disciplinary process because of fear that they will become the next target of the Commission.

I can't say from my experience that such fear is unwarranted. In January 2011, I wrote a column criticizing how the Disciplinary Commission appeared to have been targeting small firm attorneys and sole practitioners over large firm attorneys when it came to discipline.  In the article, I talked about the result of my study finding that of the 400 published disciplinary decisions during the last three years of Lundberg's tenure, 397 involved small firm attorneys or sole practitioners.  The two grievances, both filed by Witte, were filed against me just months later.  Since that time, the Commission has employed considerable resources to prosecuting my disciplinary case.  Meanwhile, despite the Commission knowing for years the allegations that Attorney William Conour was dipping into trust funds for personal use, the Commission failed to take any action against Conour until the FBI finally stepped, did an investigation, and filed criminal charges.   As I've outlined previously this is just one of several instances where an attorney was involved in very serious ethical violations and the Commission failed to take action.

As noted, I expect this year of the practice of law to be my last.  I will not give up my free speech rights to be an attorney and I certainly refuse to stop criticizing the Disciplinary Commission operations which are in desperate need of review by the Indiana Supreme Court.  Hopefully something good will come out of my case - that the urgent need for reform of the disciplinary process will be brought to the attention of the Indiana Supreme Court.

Saturday, July 27, 2013

Privately-Run Marion County Jail II Sharply Limits Attorney Visitation to Make More Profit

Marion County Jail II
I discovered today what I believe reflects a major change in policy affecting criminal defense attorneys.   Marion County Jail II, which is run by the Corrections Corporation of America, now limits attorney visitation to 8 am to 5 pm, M-F.  No weekend visitation.  No visitation after 5 pm.  I have many time met with clients at Jail II after 5 pm and on weekends.  Many criminal defense attorneys find it easier to meet with clients after 5 pm or on weekends because there is less demand that they return to their offices for appointments and attorneys never know how long it will take to get in to see an inmate.

On the other hand, Jail I run by the Marion County Sheriff's Office describes its attorney visitation hours as on its website as this:
Attorney visiting hours are generally 7:00 A.M. to 11:15 A.M., 1:30 P.M. to 5:15 P.M., and 7:30 P.M. to 9:30 P.M., seven days a week.
Thank you Sheriff John Layton by doing your job and making the effort to ensure attorneys' schedules are accomodated.  But I would add that you also oversee the CCA contract with Jail II.  I believe Jail II should have the same hours for attorney visitation at Jail I and, if that means CCA makes a little less profit because it has to pay an extra worker or two, so be it.   CCA knew its responsibilities when it signed that contract to run Jail II.  It should not be able to change the rules post-signature to increase its profits.

Finally, before I have people going off on a tangent about how these people have no rights because they've committed a crime, it is important to note that most of the people in jail (unlike prison) are only accused of a crime and haven't yet been found guilty.  In Jail II, in particular, you have less serious offenders than in Jail I.  These people aren't in prison where shorter attorney visitation hours would be justified.

University of Miami Law Review Takes on Fictious Law School Employment Numbers

A third year University of Miami Law School student pens this law review article discussing the class action lawsuits against law schools for misrepresenting employment information to get students.  I haven't read it all yet, but it looks promising.  Here is how the article, published in January of 2013, starts:
I am $206,294.11 in debt. At first blush, my decision to enter law school, like many would-be law students’ decisions, seemed profitable.  Pay more than $150,000 now and recoup my original investment in several years. Once the borrowed funds are repaid, earnings are mine to keep and this income represents a positive return on investment.  If
salary data or the employment statistics presented to potential students do not fairly represent reality, however, the mechanism by which they decide whether or not to pursue a degree has been compromised.  Whether one comes directly from an undergraduate program or seeks additional education in furtherance of a career change, if the data upon which one bases one’s decision is misstated, it follows that decisions made in reliance on this data may be inaccurate. The potential law student’s ability to make a rational and informed decision is jeopardized by the reliance upon erroneous information.

Likewise, the source of data is as important as its veracity. Much of the data related to law schools—whether about costs, salaries, or percentage of students employed after graduation—is reported by the schools themselves. In a world where law schools have a pecuniary incentive to paint more promising a picture of potential than perhaps exists, one should carefully consider the accuracy of these self-reported statistics. At bottom, a decision-maker8 should be entitled to rely upon the data presented to him; he must trust those with the power to disseminate information relevant to his decision-making.
Here is the author's conclusion:
I do not suggest that if law schools began fairly and accurately reporting salary and post-graduation employment statistics, the legal economy would immediately correct itself. This is no panacea, but honesty in reporting is an excellent starting point. It would allow potential students to make sounder economic decisions that will affect them for the rest of their lives, and it would soften the effects of a market over-saturated with attorneys. In my mind, the answer to certain questions, such as the following, should be obvious: Do law schools truly believe that students considering enrollment in their programs, many of whom will take on tens- and hundreds- of thousands of dollars in debt—and all of whom already have a bachelors degree—are interested in their post-graduate employment prospects at a coffee shop? It may be true that schools are following the ABA’s reporting rules or are “following the industry standard.” But, for a profession historically lambasted for its purported lack of ethics, and one whose education system is finding itself on the wrong end of multiple class action proceedings, maybe it is time to reevaluate the means by which schools choose to present their data. Perhaps law schools should hold themselves to the same high level of candor they demand from applicants: How would a law school likely react if—while considering or even after admitting a student—it subsequently discovered that it had been misled during the application process?

Given the uncertain future lurking ahead of our legal economy and our legal education system, do students wish they could retract their decision to enter law school? For me, saddled in massive debt and with a net worth rivaling my three-digit LSAT score, my answer remains a resounding, “No.” Law school was, and is, the right decision for me: I want to be a lawyer. Like Holden Caulfield describing his dream profession, “I know it’s crazy, but that’s the only thing I’d really like to be. I know it’s crazy.” That said, there exists an enormous and still unfolding problem in American law schools with—using Mr. Caulfield’s words—phoniness. Holden yearned to “stand[ ] on the edge of some crazy cliff” and “catch everybody if they start[ed] to go over— . . . if they’re running and they don’t look where they’re going [he] [had] to come out from somewhere and catch them.” It appears now that it is we—the country’s current and potential law students—who need to be caught.
Although the author is rightly critical of law schools, I'm fairly certain his remaining optimism has or will soon be crushed when he has to start paying back that student loan debt in a job market where he is unlikely to earn the income needed to pay such a debt.  Perhaps he was able to snag one of the very few high-paying first year associate jobs at a  big law firm and is putting in his required 60 plus hour weeks.  Even then he will have little life with that non-dischargeable $200,000 albatross hanging around his neck.

The article, in pdf form, can be downloaded through this link.

Thanks to the Legal Education Forum for finding this article.

Friday, July 26, 2013

Attorney Reports on Jurisdiction Abuses in Marion County Small Claims Court

The Indianapolis Business Journal reports:
An attorney’s report examining more than 7,700 lawsuits filed by an Indianapolis-based trucking school in just two Marion County township small-claims courts alleges systemic abuses that resulted in thousands of judgments against people who may never have stepped foot in the county or the state.

“I tried to get as much data as I could to establish there are real problems here,” said Jeffrey C. Boulden, who provided copies of his report this week to key judges, Supreme Court justices, the Indiana attorney general’s office and media outlets.

Boulden asserts Driver Solutions LLC filed 7,711 suits in Franklin and Warren township small-claims courts from 2008 through April 30, 2012. That total equals about 148 cases per month – or more than six cases per business day – predominantly against driver trainees nationwide. The company has campuses around the country.

Boulden reviewed 25 percent of those case files as a sample and found 93 percent of the sample cases were filed against defendants who lived outside Indiana, which he claims violates the Fair Debt Collections Practices Act. The federal law regarding venue requires such collection actions be filed in the jurisdiction where a contract was signed or where a consumer resides.

The report also claims defendants in numerous cases were improperly served notice through standard U.S. mail, and that about 70 percent of judgments exceeded the statutory small-claims cap of $6,000. Boulden says any such judgments should be voided.
Warren Township Small Claims Judge Garland Graves said he had seen the report and was reviewing Driver Solutions cases filed after he took the bench in 2011.

“I am concerned,” Graves said, and he noted the township no longer allows service via regular mail. But he has concerns, too, about Boulden’s report. “A lot of incomplete information was put forth,” Graves said. For instance, he said some suits might have been properly served, but notice of service could be confidential because it contained Social Security numbers.

“He never contacted me as a judge to address any concerns he may have,” Graves said.

Graves noted Driver Solutions contracts carried a venue clause in which parties agree that any litigation would be filed in a Marion County township court. But he said he couldn’t say whether that provision might violate federal collections law.

“The federal (Fair) Debt Collection (Practices) Act is something I don’t have jurisdiction over,” Graves said. That’s an issue someone could bring in federal court, he said.
With all due respect to Judge Graves, he is wrong.  FDCPA claims can be brought in state court.  You don't have to be in federal court for a federal law to apply.

It is inexcusable that these cases are allowed to proceed in Marion County Small Claims Courts.   Could it be though that the business from Driver Solutions helps the bottom line?  At an average of 148 cases per month, that's about $13,000 a month in filing fees from one filer alone.  That is precisely why we need to take profit making out of the Marion County Small Claims Court system.

Special thanks to Attorney Boulden for his tireless work in researching and publicizing this problem with the Indianapolis small claims courts.

Indiana Tech Law School Can Only Fill One-Third of Initial Class

Business Insider reports:
A law school ridiculed for even opening has an inaugural class of just 30 people — way fewer than its goal of 100 students, The Indiana Lawyer reports.
...

[Indiana Tech Law School's founding dean, Peter] Alexander attributed the tiny incoming class to the nationwide decline in law school applications. Of course that comment raises the question of whether it should have opened in the first place.

Paul Campos, a law professor at the University of Colorado, previously derided Indiana Tech for purporting to set itself apart from other law schools and charging nearly $30,000 annual tuition to boot.

"Chutzpah has been defined as murdering your parents and then pleading for mercy because you're an orphan," Campos wrote on his now-defunct blog, Inside the Law School Scam. "How about setting up another legal diploma mill in a hyper-saturated market, while claiming that what will set your school apart is its emphasis on 'ethics' and 'professionalism'?"

Law school applications dropped for the third year in a row, The Washington Post reported in June. They were down 13.4% just since 2012. While the folks at Indiana Tech might argue that this trend could reverse itself, industry experts have predicted otherwise.
My message to the 30 Indiana Tech law students:  Drop Out!   If you can get your tuition money back, great, if not, don't send good money after bad.  The legal job market is completely saturated.  If, on the other hand, you want to graduate with $100,000 in non-dischargeable student loan debt and live in your parents' basement while not being able to even score an interview for a legal job and also finding out that your legal education knocks you out of consideration for good, high-paying non-legal jobs, then by all means stay at Indiana Tech.  That will likely be your future.

Is "Human Trafficking" A Made Up Crisis for State and Local Officials to Extract Federal Dollars?

Someone needs to ask the question:  Is this crisis regarding "human trafficking" real or grossly exaggerated so state and local officials can claim the millions of dollars that Congress has allocated to fighting the crime?

Of course, human trafficking was a big story here in the Winter of 2011-2012 as Indiana officials pleaded for more legal authority to combat the crime in anticipation of hosting the Super Bowl.   It was back in the news again just days ago when Attorney General Zoeller joined with 48 other state attorneys general in asking Congress to amend  the Communications Decency Act to provide criminal jurisdiction to state and local prosecutors.

Virtually every time an Asian massage parlor is busted locally there is a press conferences with law enforcement officials claiming to have struck a blow against "human trafficking."  But when the cameras are turned off and the press leaves, the reality sets in that the people involved in the cases are not charged with human trafficking but rather good old fashioned prostitution.  Also it bears mentioning that the prostitution busts also come with a large seizure of cash, cars and equipment, which is then divvied up between the law enforcement agencies involved.

At the end of last year, the Atlanta Journal-Constitution went to check on the human trafficking numbers claimed by law enforcement officials and found those numbers to be incredulous:
The situation was dire, police warned. The City of Atlanta was under siege by human traffickers.

Some 1,000 Asian women and girls ages 13 to 25 were being “forced to prostitute themselves” in the city, a 2005 internal police email said. Many of the victims, police said, were Korean.

To free them, police forged ahead with a $600,000 task force.

Had agency leaders questioned the estimate, they would have found it defied common sense. If it were true, one in eight of the city’s Asians would have been sex slaves.

Perhaps, then, it’s little wonder that the program had such poor results that it drew scrutiny from the U.S. Department of Justice. An initial report said Atlanta police had found more than 200 victims, but auditors could only confirm four.
...

Atlanta launched its search for Korean prostitutes as hundreds of millions of dollars began to pour into anti-trafficking efforts nationwide. The federal Trafficking Victims Protection Act of 2000 gave special assistance to foreign victims in the U.S. and paved the way for a 2004 Department of Justice initiative to fund local human trafficking task forces.
 ...

City officials argued they desperately needed the money. “Human trafficking is now beginning to get a foothold in Atlanta and must be stopped before it becomes entrenched,” police told Justice Department officials.

The Atlanta Police Department won a $450,000 three-year grant, and the city chipped in an additional $150,000. Two investigators and a sergeant joined forces with a Korean translator.
  ...
 
The Justice Department’s Bureau of Justice Assistance reported that Atlanta police identified 216 potential victims from January 2005 through December 2006.

But this count was later revealed to be grossly inaccurate. Auditors for the Justice Department’s Office of the Inspector General could find documentation for only four victims, a July 2008 report said.

...

Such problems weren’t unique to Atlanta. Auditors found victim over-counts by task forces across the nation, although none was as bad as Atlanta’s.

The City of Los Angeles, for instance, identified 49 victims and the Metropolitan Police Department of Washington, D.C., found 51. Auditors confirmed none of them.

Auditors also found that nearly $32 million in federal funds for victim assistance groups aided far fewer people than expected.
 ...

We are told by the State Department that every year 15,000 people are trafficked into the U.S. But then, where are they?” said Elzbieta Gozdziak, research director of the Institute for the Study of International Migration at Georgetown University.
 ...

If the problem were pervasive, more victims might have applied for special visas created by the 2000 anti-trafficking law. But between fiscal year 2002 and June 2010, the U.S. issued fewer than 1,900 of the visas, which allow victims to stay in the U.S., the Congressional Research Service found in a December 2010 report.

“Why are the numbers so small? Is it because the scope of the problem is not as big as they say? Or is it small because we don’t know how to find them?” Gozdziak asked.

Those numbers are proof that the fight against human trafficking has gone wrong, U.S. Sen. Charles Grassley, R-Iowa, said in a November 2011 report on a bid to reauthorize the trafficking law. While he supported it, he sought more accountability.

“Either the government is doing an unconscionably poor job of finding victims or there are not that many total victims in the first place,” Grassley wrote.
Here's another idea.  State and local law enforcement officials are grossly exaggerating the scope of the human trafficking problem to get their hand on federal tax dollars?

Angie's List Stock Takes a Dive As Ebay Enters Consumer Review Business

The Indianapolis Business Journal reports:
Indianapolis-based Angie’s List's stock continued to tumble Thursday morning after an analyst downgraded the stock following a report that Internet giant eBay will test its own consumer-reviews site in the United Kingdom. Shares in Angie's List fell as much as 12 percent before rising slightly. They traded at $23.92 late in the morning, down nearly 10 percent.

Even though the company reported record second-quarter revenue Wednesday, Raymond James lowered its Angie's List outlook to "outperform" from "strong buy."
...
Angie's List on Wednesday said revenue rose to $59.2 million in the quarter ended June 30, a rise of  62 percent over the second quarter of 2012.

The company continued to lose money but the losses are getting smaller. The company lost $14.3 million, or 25 cents per share, compared to a loss of $23.4 million, or 41 cents per share, for the same quarter a year earlier.

...

Despite spending millions of dollars on national marketing, Angie's List has been facing growing competition in its niche by firms such as Yelp, Thumbtack and HomeAdvisor.  Angie’s List, which arguably has more consumer reviews and leading-edge service scheduling via its website, has been perennially unprofitable since its founding in the 1990s. Much of its cash flow has gone to establishing a presence in new cities.
As always Angie's List brags about increased revenue.  But the bottom line is profits and in that area Angie's List is once again in the red: Angie's List has been in business for some 18 years, and made a profit, I believe, in just one quarter.

Earlier this year, IBJ reported on self-dealing by Angie's List CEO Bill Oesterle, namely Oesterle's formation of a company to buy up near eastside property for $2.625 million and then sell it to Angie's List for $6.25 which inflated purchase price was eased by by $4.6 million in taxpayers incentives.  Although the IBJ article is not available on-line without a subscription, the Advance Indiana article discussing the IBJ article is.

The best bet on the stock market today is to short Angie's List stock.  It is inevitable that the company, with an astonishingly long history of not making money, is going to collapse. The only question is when that collapse is going to happen.

Thursday, July 25, 2013

A Must Read for Indiana Attorneys: My Disciplinary Case and Its Impact on Attorney Free Speech in Indiana

As some readers know, I have been charged by the Disciplinary Commission. The trial is set for July 30, 2013 in the Indiana Supreme Court Conference Room beginning at 10 am.  As the rules do not appear to require a closed proceeding, I am insisting that it be open to the public.  It is an extremely important case which result will affect every attorney who practices law in Indiana.

I decided to write this because of concern other attorneys have expressed about how their speech, both public and private, could suddenly be targeted by the Disciplinary Commission as a result of my case.  I also write this to clarify the facts behind the charges.

BACKGROUND:  Around 2009, I represented one of three heirs, children of the decedent, in a Hendricks County estate that should have been worth more than a million dollars.   (An inventory wasn't done until 27 months after the estate was opened and the assets and debts of the estate weren't valued as of the time of death. ) The estate had been opened about 2 1/2 years when my client hired me out of concern of how the estate was being handled.  When I got involved, I saw that the estate was not being properly administered.  The executor was a fourth child who had essentially been disinherited from the bulk of the estate.  The estate had only been recently converted to supervised. Worse yet the executor served without bond, i.e. we had no insurance for any executor wrongdoing.   The attorney was being paid by the executor in the middle of the case, without court approval, on bills he didn't even bother to itemize.   The executor was twice caught misappropriating money.  On one he was told that he had to return $8,990 for payments he had made out of the estate for unpaid rent on a house that wasn't even part of the estate.  He agreed to pay it back, while cutting himself a check, again without court approval, for $9,000 in executor fees.
Michael Witte, Executive Secretary
Ind. Supreme Court Disciplinary Commission


The worst thing though was that the executor, a home builder, was in exactly the same business as the decedent.  He even had mortgages on the homes he was building at the same bank as the decedent.   Checks to the bank for mortgage payments often included payments for several mortgages.  It was impossible to tell whether the executor was paying his own bills or the estate's bills.  Given the executor already had been caught twice misappropriating money and the very questionable payments, especially those to the bank for mortgages, I had a reason to ask for an accounting of how the executor had handled the estate.  The judge refused that as well as all my efforts to protect the interests of my client which coincided with the other heirs.  Inexplicably, the judge did not insist that the executor take steps to close the estate.  Meanwhile the money dwindled as the estate continued to remain open.

The judge missed a deadline on one of my motions, and I had him removed through the lazy judge rule.  The Indiana Supreme Court appointed a judge from Hamilton County who very capably and professionally ensured that the estate was closed as soon as possible. But by the time the case had arrived at the desk of the new judge we were about 5 years into the estate and there was little money left.  Outside of some shares of an LLC, my client and the other heirs received $8,000 apiece (and only that after some money was put back into the estate.) The attorney made over $40,000.  Even the disinherited executor by paying himself the $9,000 in executor fees made more than each heir.  And that's not counting the money he may have used to pay his own bills.

THE EMAILS:  As the case was being wrapped up in front of another judge, I emailed the estate's attorney about some matter.  He emailed me back, but included others involved in the case in the cc line, including the executor and his mother (who was doing the books for the executor and I suspected was involved in any misuse of the estate's money). That led to the executor and his mother directing invective toward me which I responded via email saying I felt the Hendricks County judge had grossly mishandled the case and that the strange way in which the judge handled the case, supported my client's insistence that the judge had a conflict because he was a friend of the family and attended parties with the decedent and the executor.  (Another person had independently confirmed that the executor and decedent - obviously before his death - talked about being friends with the judge and attending parties with him.)  Prior to my involvement in the case, my client, pro se, had asked that the judge recuse because of the conflict.  The judge denied being a family friend and denied the request.   In my email, I said that the judge's behavior was so questionable it warranted an investigation by the judicial disciplinary commission.

The mother of the decedent took the emails to the Hendricks County Judge.  He wrote a letter complaining and demanding that I apologize.  When I refused, he submitted a letter and the emails to the disciplinary commission, but did not file a grievance.

GRIEVANCES:  The judge's letter to the DC in September of 2010 appeared to be going nowhere.  Then in January of 2011, I wrote an article on my blog criticizing the Disciplinary Commission for uneven punishment.  I had reviewed the last three years of discipline during Donald Lundberg's tenure as DC chief and found that of the 400 published disciplinary matters during those years, 397 were against small firm and sole practitioners.  I asked the question whether the DC was protecting big firm attorneys.   A few months later, Michael Witte, Executive Secretary of the DC, filed a grievance alleging that I had violated Rule 8.2 in my criticism of the Hendricks County Judge.

A few months after that I got hit by a second grievance filed by Witte.  After reviewing the disciplinary rules and making sure I wouldn't be violating any of them, I had written a letter to Marion County Superior Court judges telling them about the law and a recent Indiana Supreme Court decision that requires that they, at the conclusion of the civil forfeiture action (when the forfeiture defendant is out of the case and the civil forfeiture proceeds are being divided between government agencies), they make a determination of law enforcement costs on the case, with a check for the balance going to the Common School Fund.  In Marion County, law enforcement has been pocketing 100% of the civil forfeiture proceeds for years, undoubtedly because at that point, there is only one party to the case left (government) and the judges are just signing off on whatever is given to them.  I copied the letters to the Marion County Prosecutor, the Attorney General, and the Public Safety Director, all people involved in the split of the civil forfeiture money at trial or on appeal.

One of the Marion County judges who received the letter sent it to the DC.  That judge could not identify any rule I violated. Even in the grievance Witte filed against me, he did not identify any rule I violated.  It was only when formal charges where filed nearly two years later that I found out what rule the DC claimed I violated.

FORMAL CHARGES:   None of my witnesses I provided with respect to the Hendricks County emails was ever contacted by the DC.  I was never contacted by the DC about the grievances or asked for information.  I was never told in advance they were going to file formal charges.  In March of 2013, I get a certified letter indicating that formal charges were filed against me for: 1) A Rule 8.2 violation; 2) improper influence of a judge by ex parte communication.   The timing of the charges is curious because I had started to look for other legal employment, and the charges pretty much stopped that.  It could be yet another "coincidence" in timing which is what the DC always says when you point out strange timing in actions taken by the DC.

RULE 8.2 CHARGE:

According to Rule 8.2(a)

(a) A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer, or of a candidate for election or appointment to judicial or legal office.
 The relevant comments associated with Rule 8.2 state:

[1] Assessments by lawyers are relied on in evaluating the professional or personal fitness of persons being considered for election or appointment to judicial office and to public legal offices, such as attorney general, prosecuting attorney and public defender. Expressing honest and candid opinions on such matters contributes to improving the administration of justice. Conversely, false statements by a lawyer can unfairly undermine public confidence in the administration of justice.
...
[3] To maintain the fair and independent administration of justice, lawyers are encouraged to continue traditional efforts to defend judges and courts unjustly criticized.

Now here is where all licensed attorneys should pay attention because it affects all of them.  Having been involved in this case, it is clear that the DC takes the position that:
1) The DC only needs to prove that the statement was made. At that point, according to the DC, it is the attorney's burden to prove the statement is true.

2)  The DC takes the position it doesn't matter if it is a statement of opinion, the attorney still has the burden of proving the opinion is true.

3)  The DC takes the position that it doesn't matter if the statement is public or private.  If two attorneys are having lunch and one makes a derogatory comment about a judge, the DC takes the position that is a Rule 8.2 violation and and the only way the attorney can escape discipline if the DC files charges is if that attorney can prove the criticism is true.

4) The DC takes the position that Free Speech does not protect an attorney when criticizing a judge, even one elected by the voters.
There probably isn't a licensed attorney in the State of Indiana could survive the DC's interpretation of Rule 8.2. Every attorney criticizes judges, often in very harsh terms.  As my mentor Judge Paul H. Buchanan, Jr. would tell me when I clerked for him at the Indiana Court of Appeals, a judge should expect criticism from attorneys and those who can't handle it should look for a different line of work.   Amen.

The DC's approach to Rule 8.2 is like setting the speed limit on an Interstate to 20 mph. Doing so gives police officers enormous authority to pick and choose which speeders it wants to cite for a traffic offense.  The DC's interpretation of Rule 8.2 gives the DC the authority to charge any attorney in the State.  We all criticize judges privately and often publicly.

FREE SPEECH DEFENSE TO RULE 8.2 CHARGE:  The United States Supreme Court has discussed attorney free speech, most recently in Gentile v. Nevada, 501 U.S 1030 (1991).  In that court, the Supreme Court stated that attorneys have free speech just like any other non-attorney and that the only time an attorneys speech can be proscribed is when an attorney is speaking out publicly about a pending case and it could influence the finder-of-fact.  In that case, the Court specifically said states cannot use state disciplinary rules to discipline attorneys for speech that is protected by the First Amendment.  In other words, if the criticism of the elected Hendricks County Judge would be protected if uttered by a non-attorney, then it is protected if uttered by me. 

IMPROPER INFLUENCE OF A CHARGE BY EX PARTE COMMUNICATION:

It was only when the DC filed formal charges that I learned of the rule they claim that I violated, one prohibiting improper influence of a judge, which then claim was done by ex parte communication.  Nowhere in the Complaint did the DC even mention that I had in fact copied the Marion County Prosecutor, the Attorney General, and the Indianapolis Public Safety Director on the letter.  In subsequent litigation of this matter, the DC came up with a new theory....it was ex parte because I didn't copy the civil forfeiture defendants.   As I've pointed out repeatedly to the DC, pursuant to a Court of Appeals opinion, civil forfeiture defendants are not a party to the case when the civil forfeiture proceeds are being divided between government and do not have standing to raise any issue regarding the division.  It's ironic though that the DC is asserting to be standing up for civil forfeiture defendants who weren't cc'd on the letters when in fact what I was doing in trying to get compliance with the law would take much of the profit out of civil forfeiture and help those who are having their property seized.

Ironically the DC attorney told me that the problem was not that the Marion County judges did not know about the law they were supposed to be following regarding distribution of civil forfeiture proceeds, the problem is that the Marion County judges are "just lazy."  Not sure why that wouldn't be a Rule 8.2 violation under the DC's own interpretation of the rules. After all, how could the attorney prove the judges are actually lazy?

I have yet to have a single attorney look at this charge who has concluded it has any merit whatsoever.  As one attorney told me, if there was any question whether the DC's prosecution is personal to me instead of being about rules violations, that is answered by this completely meritless charge..
 
PUNISHMENT:  Attorney friends are baffled at how this could be anything more than a public reprimand case, at best.  Well believe it.  Not only will I become the only attorney in the country (according to my research) suspended from the practice of law because of criticizing a  judge in an email, the DC is going to insist that my suspension from the practice of law be without automatic readmission.    The DC will claim that is justified because I do not express "remorse" for my actions, i.e I haven't been properly "rehabilitated" by the prosecution.  Even if it is only a month's suspension is followed by the additional line "without automatic readmission" that will likely mean I will never practice law in Indiana again.

I am fine with leaving the practice of law.   I should have started looking for another career 15 years ago.  You get on the wrong tract professionally in law and it's not going to be a profitable or enjoyable career.  As much as it was the best job of my legal career, my clerkship at the Indiana Court of Appeals, in years 3-6 of my being a lawyer put me on a bad career path.  I don't want to be an 80 years old attorney trying to make a living by taking divorce cases or going to small claims court on landlord-tenant cases.   I find it sad that so many elderly attorneys don't have the money or retirement to retire and have to work until the day they die.

While I am fine with walking away from law, I am not fine with how it is being accomplished.  I have no doubt that what the DC is pursuing this out of personal animosity toward me and my criticism of the Commission.  In fact one of the DC members is a Barnes & Thornburg partner.  Not only have I been highly critical of the DC allowing B&T attorneys to escape discipline for rules violations, I filed a grievance against this attorney just weeks before he was appointed to the DC.  The DC does not deny that the B&T partner participated in the discussion and vote on the filing of grievances against me in 2011 and the filing of formal charges in 2013.

When I was sworn in as an attorney in 1987, I do not recall giving up my free speech rights in the ceremony or any document I signed.  I will not give up my free speech rights to be an attorney now.  I have the right to criticize an elected  judge who I feel mishandled a case, even more so in a private communication.  What the DC wants to do in this case will affect all Indiana attorneys, placing a chill on their speech as they practice their craft in constant fear that their communictions will be reported to the DC for prosecution.

For years, I have spoken out and written about the need for legal reform. I have disscussed problems with law schools misleading students about the value of a legal education.  I have tried to draw attention to problems in Marion County small claims court system, problems with the  Marion County Traffic Court, problems with the slating system/judicial selection of Marion County judges, problems with civil forfeiture.   But there was one issue I had not addressed directly that almost all attorneys complain about - the operation of the Disciplinary Commission.  When I finally addressed that issue on my blog in January of 2011, in what I thought was a fair and evenhanded way, I had call from attorney friends who warned that my criticism would make me a target of the DC. They turned out to be exactly right.

While I didn't intend to be out of on the limb, I am now and might as well speak the truth.  The fact is the DC has become heavily politicized and uneven in its enforcement of the disciplinary rules for years.  For example, an attorney who pled guilty to felony wire fraud in January has never been charged.  William Conour, who had grievances against him for years for misappropriating trust funds, was not charged by the Commission until well after he was charged criminally.  It was only through the actions of the FBI, and not the DC, that Conour is no longer a practicing attorney today. Another attorney was found to have committed civil fraud by failing to disclose over a million dollars in legal income and the DC did not file charges.  Four attorneys at Barnes & Thornburg violated the nonwaivable conflict of interest rule by representing the State of Indiana against IBM on the Medicaid privatization effort while their firm also represents ACS, the major contractor on the job and a major witness in the case.  Yet the DC did nothing about the conflict of interest which may well have cost the taxpayers millions of dollars, yet more victims of the DC not doing its job.

Yet when it comes to an attorney in closing argument discussing a woman at a restaurant so drunk as to try to drink out of a ketchup bottle, the DC charges the behavior.  Then you have attorneys who routinely have charges filed against them because of a slight error in management of a trust account that, unlike Conour, has nothing to do with dishonesty.  Repeatedly the DC will ignore attorneys who commit the most serious transgressions displaying extreme dishonesty in order to pursue small firm and sole practictioners on matters that have nothing to do with being dishonest or unethical.

Part of our responsibility as attorneys is to speak out about problems in the legal profession.  No bigger problem exists in our legal profession than how our Disciplinary Commission is operated.   While Mr. Witte's leadership of the Commission has been very poor, it is not all his fault.  Much of the problem with the DC's operations is structural.  Any government agency that is allowed to operate in virtual secrecy, as is the case with most of the DC's operations, will inevitably become politicized.  The DC has become exactly that, inexplicably targeting certain attorneys for, at best, mild transgressions, while attorneys, in particular those at bigger, more politically-powerful law firms, are often given a pass on very serious ethical violations.

While I do not expect to be a practicing attorney much longer, I do hope my case is a catalyst for the Indiana Supreme Court to take a hard look at the operations of the DC and to order an independent review of its operations and its files.  It's long overdue.  While I won't be a practicing attorney anymore, one advantage I will have is much more freedom to speak out openly and candidly about the need for reform of the legal system and profession, especially the operations of the DC, without fear that it will jeopardize my license.

When it comes down to choosing between my license to practice law or my freedom of speech, I choose freedom of speech.

Tuesday, July 23, 2013

Detroit, Like Indianapolis, "Invested" Taxpayer Money in Private Development and Professional Sports

This morning, I caught a bit of Greg Garrison on WIBC. Garrison was being highly critical of Democratic leadership in Indianapolis while praising the Republican leadership of the City for "balanced budgets" and pursuing things "we know work like public-private partnerships (i.e. corporate welfare) and privatization."

I'm not sure what Garrison is talking about.  First of all, by law municipal budgets always have to be balanced - the only question is how much smoke and mirrors are used to achieve the balance.  From what I read, the Ballard administration has used plenty of smoke and mirrors.  Even more significantly, over the last six years, I've seen the Ballard administration push to raise every tax and fee under the sun, including currently property taxes. As far as privatization, the parking meter contract, in which the City gives away 70% of the revenue from the meters for the next 50 years for a pittance paid up front, was probably the most one-sided deal this city has ever done. 

But what about these public-private partnerships, things like the city administration using our tax dollars to give a $23 million subsidy to a private company to develop the old Market Square Arena property? Or what about the Broad Ripple Parking garage, built with $6.35 million of the public's money for the pure profit of private developer?  Or how about all those TIF districts created all over the city which end up diverting property tax dollars from basic services so that more money can be handed out to private developers in the form of tax abatements and direct subsidies?

Later I flipped on WIBC again and Garrison was saying Detroit went bankrupt because of liberal policies.  He's not wrong when discussing things like out of control public employee pensions.   But what Garrison conveniently ignores is that Detroit, in an attempt to create economic development in its city, did the exact same thing Indianapolis does on a regular basis - hand over the public's money to the private sector in the name of economic development. 

No one is better at getting public subsidies than professional sports franchises.  In March of this year, I wrote about Detroit's big bet on professional sports:
According to the AP,  Detroit is facing a $327 million budget deficit and "more than $14 billion in long-term debt." 
How could this be?  Last decade, Detroit's government invested heavily in downtown sports stadiums to spur economic development.  In 2000, Comerica Park opened for Major League Baseball's Detroit Tigers.  In 2002, Ford Field opened for the National Football League's Detroit Lions. 
But even though Detroit was drowning in debt, City political and business leaders plowed ahead with the downtown professional sports investment strategy.  Just this past December, it was reported that the owner of the Detroit Red Wings was looking to building a new $650-million entertainment district for the team in downtown Detroit with the help of state and local taxpayers:
A spokeswoman for the Ilitch family's Olympia Development said the proposal begins a process "to explore the viability" of such a district. But a news release quoted George Jackson Jr., the city's top development official and president and CEO of the Detroit Economic Growth Corp., as saying the plan "makes good business sense."

"It's not a plan for an isolated, single-use structure," Jackson said in the release. "Instead, it builds on the clear successes we've already had downtown integrating districts that feature entertainment and support commercial, retail and residential development around them."

There were no estimates yet of the number of residential units, retail shops or office space square footage.
A "significant private investment" -- presumably from the Ilitches -- would help pay for it. But the project also would need public support in the form of tax dollars currently collected by the city's quasi-public Downtown Development Authority. Parts of the plan need approval by the state Legislature. 
Paying for the project would not require any new taxes, Jackson said. But a state Senate Fiscal Agency analysis said the financing arrangement, if approved, "would reduce both state School Aid Fund revenue and local tax revenue by an unknown amount."
As part of its economic development strategy, Detroit invested heavily in downtown sports stadiums to try to drive economic development.   The City was promised lofty returns on its money.  It didn't happen.  Detroit's fiscal woes only grew worse. The return on the investment in professional sports never paid off.  
In an article last month the website Crain's Detroit Business discussed other public subsidies that flopped in Detroit and nearby Flint:
Detroit People Mover: $200 million, plus operating subsidies

The 13-stop elevated single-track loop opened in 1987 at a cost of $200 million -- reportedly more than $60 million over budget and almost two years late because of construction and labor problems.

"The 2.9-mile monorail, once considered a possible savior of the city's dying center, is now being greeted with both the excitement of a child trying out a new toy and the dread of a parent wondering what will go wrong first," The New York Times wrote of the system's opening in August 1987.

It was designed as a feeder system for a citywide light rail system that so far hasn't happened and was intended to move 15 million passengers a year. Peak use was 2.38 million riders in 2012.

Since opening, the system has been threatened with shutdowns because of rising operational costs. Fare box and advertising revenue has to be supplemented with state and federal grants to cover the system's $12.3 million annual cost.

The federal government paid 80 percent of the capital costs, with the rest coming from state and local funding.

Its fleet of 12 automated, driverless vehicles is operated remotely by computer. The Detroit Transportation Co. operates the system as a public corporate body rather than a city department.

Pinnacle Race Course: $26 million

The thoroughbred horse racing track in Wayne County's Huron Township closed in late 2010 after two seasons because it didn't generate enough betting to stay open, and scrutiny of its land deal with the county made headlines.

The promise of jobs won Pinnacle's developers a deal to buy 320 county-owned acres for just $1 and led the county to make about $26 million in infrastructure improvements near the Huron Township site in 2007 and 2008.
...

The track went bust in 2010 as the horse racing industry nationwide suffered declines and when the state slashed its budget for racing officials. This drastically reduced the number of days the track could operate.

...
Allen Park Unity Studios: $31 million

Allen Park in 2009 issued $31 million in bonds to finance the purchase of a former Visteon Corp. site to house Unity Studios for Southfield native and Hollywood producer Jimmy Lifton, who had proposed a $146 million film facility to capitalize on Michigan's lucrative new film incentives law of 2008.

But the Allen Park Studio Center soon proved a financial albatross for the city, after Unity had leased less than 60,000 square feet and Lifton was in a dispute over whether his company was making lease payments.

...

No studio ever opened at the Allen Park site, though Unity did operate a film school there for several months before moving out in 2010.

The departure left Allen Park saddled with more $2 million in annual debt service payments on the bonds and rent revenue that wasn't enough to cover the building's operation and maintenance costs.

...

Asian Village: $4.5 million

After several false starts, Asian Village, an 18,000-square-foot, $4.5 million mixed-use development on the ground floor of General Motors Corp.'s parking garage on Beaubien Street, just east of the Renaissance Center, opened in 2008.

It closed a year later. A coffee shop and food court closed before that. The location remains vacant.

Detroit's General Retirement System fund lost the $2.75 million it invested in the development

....

Jefferson plant land deal: $42.2 million

The city of Detroit in 1987 paid $42.2 million to Joseph Giacalone -- a member of the reputed Giacalone organized crime family -- and some of his business associates for 15 acres of land and the abandoned buildings and equipment sitting on it.

The land was bought by the city with the intent of giving it to Chrysler for its Jefferson Avenue plant expansion.

Here's the rub: Chrysler had sold the buildings and 10 of the acres to Giacalone for $300,000 in 1984, according to news reports.
Indianapolis is repeating the same mistakes Detroit made with unbridled corporate welfare, including heavy professional sports subsidies.  However, unnlike Detroit, there is still time for Indianapolis to correct its disastrous economic development policies.  I wouldn't bet on it though.

Civil Forfeiture Critic Wins Right to Proceed With Malicious Prosecution Case; Notice Pleading Still Rules in Federal Court

Eapen Thampy, Executive Director of Americans for Forfeiture Reform, takes note of a significant Seventh Circuit case released last month.

Mark McKinney, a former Indiana prosecutor who became infamous for personally profiting from asset forfeiture lawsuits, is back in court:
A federal appeals court has revived Indiana criminal defense lawyer Michael Alexander’s lawsuit accusing the U.S. government of conspiring with a state prosecutor and two criminal suspects to falsely accuse him of attempting to bribe a witness. 
The U.S. Court of Appeals for the Seventh Circuit on Wednesday reversed Southern District of Indiana Judge Sarah Evans Barker’s April 2012 dismissal of Alexander’s claims. Barker held that Alexander failed to raise a valid malicious prosecution claim and that his intentional infliction of emotional distress claim was time-barred. 
Alexander’s June 2011 Federal Tort Claims Act suit claimed that former Indiana state prosecutor Mark McKinney conspired with Federal Bureau of Investigation agents Neal Freeman and James Howell and father-son criminal team Stanley Chrisp and Adrian Kirt, who faced drugs and arson charges, to frame him. He claimed that McKinney nursed a grudge against him because he was a vocal critic of the prosecutor’s handling of drug forfeitures. 
He alleged that his February 2008 arrest and was based on false evidence and that the alleged conspirators withheld a tape recording of a July 2006 meeting with Chrisp and Kirtz during which he denied knowledge of his investigator’s alleged bribery of clients. 
A Delaware County, Ind., jury acquitted Alexander in March 2009. He filed a notice of his tort claim with the FBI in October 2010 and followed with the lawsuit when the FBI opted not to act on the claim. 
Judge Diane Wood wrote Wednesday’s opinion, joined by judges Richard Posner and John Daniel Tinder. 
Concerning the malicious prosecution claim, Wood wrote that the allegations are “more than sufficient to assert a causal link between the agents’ actions and the subsequent prosecution.” She added that the complaint adequately pleads malice despite the fact that Alexander hasn’t yet given a reason for the agents’ animosity toward him. 
“Unfortunately, in a world where public corruption is hardly unknown, we cannot agree that Alexander’s complaint is too implausible to hold together absent allegations of this sort. We might wish to live in a world in which such an egregious abuse of one’s official position would be unthinkable, but experience suggests that we do not,” Wood wrote. 
(Sheri Qualters, Court Revives Defender’s Malicious Prosecution Suit, National Law Journal, 26 June 2013)
Those of attorneys who practice in federal court should take note of the Seventh Circuit's rejection of the approach taken by the Southern District of Indiana in which some judges have imposed significant, albeit vague, evidentiary requirements on a plaintiff at the pleading stage in order to overcome a Rule 12(b)(6) motion to dismiss.  I have long argued that the Southern District's interpretation of the Twombley and Iqbal cases as imposing new heightened pleading standards is a gross misreading of those cases.  Seventh Circuit cases after Twombley and Iqbal have said those cases did not change pleading standards and that notice pleading is still the rule.  Once again the Seventh Circuit has confirmed that principle.

ACLU Leadership Chooses Politics Over Principle by Calling for Second Zimmerman Prosecution

Law Professor Jonathan Turley has an excellent discussion of the division with the ACLU over whether Zimmerman should be prosecuted for a civil rights violation in the wake of his acquittal on state murder and manslaughter charges:
Anthony Romero
... To the surprise of many, including myself, [ACLU Executive Director Anthony] Romero sent a letter to Attorney General Eric Holder that seemed to clearly invite a civil rights or hate crime prosecution of George Zimmerman. The ACLU however has long taken the view that such prosecutions violate the double jeopardy clause of the Constitution. When the federal government does not like the outcome of a high-profile case, it can use the very same facts to bring another prosecution under a different crime. After sending the letter, however, the ACLU staff appear to have objected and sent out a conflicting position that such successive prosecutions are violative of constitutional principles.
... In his letter to Holder, Romero wrote:
“Last night’s verdict casts serious doubt on whether the legal system truly provides equal protection of the laws to everyone regardless of race or ethnicity. This case reminds us that it is imperative that the Department of Justice thoroughly examine whether the Martin shooting was a federal civil rights violation or hate crime.”
That would seem to clearly invite not just an investigation but possible prosecution under civil rights or hate crime laws. Indeed, the ACLU said such action was “imperative.”

Various civil libertarians cried foul and reminded the ACLU of its policy that “There should be no exception to double jeopardy principles simply because the same offense may be prosecuted by two different sovereigns.”

It was then that the powerful Washington DC office stepped in with a letter of its own to Holder stating that
“We are writing to clearly state the ACLU’s position on whether or not the Department of Justice (DOJ) should consider bringing federal civil rights or hate crimes charges as a result of the state court acquittal in the George Zimmerman case. The ACLU believes the Double Jeopardy Clause of the Constitution protects someone from being prosecuted in another court for charges arising from the same transaction. A jury found Zimmerman not guilty, and that should be the end of the criminal case.”
...

I believe that the original letter of Romero was a mistake and contradicts the long commitment of the ACLU to the protection of citizens from successive prosecutions following acquittal. Former ACLU board member Michael Meyers Joined many in criticizing Romero:
“The ACLU is out of line; a civil liberties organization is concerned with the accused getting a fair trial, which includes the right of effective counsel, due process and protection against double jeopardy. No government, much less an angry community, is entitled to a verdict to their liking . . . The ACLU is not the NAACP; the ACLU is the guardian of individual liberty, not a victims’ rights or racial grievance group.”
As a conservative, I too admire some of the work the ACLU does, in particular its work in the free speech and Fourth Amendment area.  My problem with the ACLU is that it picks and chooses which constitutional rights it will support.  Additionally, the ACLU often pushes a political agenda by twisting the actual words of various constitution provisions (and ignoring the history regarding their enactment) to include those favored policies.

In this case, many of my liberal attorney friends want to see Zimmerman prosecuted by the federal government.  But when you ask them though if a they are okay with the federal government as a matter of routine prosecuting those defendants who are acquitted in state court, they duck the question.  If the enormous power of the federal government is used to do second prosecutions of defendants acquitted in state court, those who will be the most harmed by such an approach are the poor and minorities. 

The Founders did not provide any exceptions to the Double Jeopardy clause of the Fifth Amendment.  However, even if the constitutional protection and the history behind its enactment can be fairly read (twisted?) to allow second prosecutions under the guise of "dual sovereignty," which I don't think it can, then the question becomes whether allowing a second prosecution following an acquittal represents good policy.  To that question, all of us who are involved in the legal system and care about its fairness to those charged with a crime, should answer "no."   Zimmerman won. The game is over. It is time to move on.

Monday, July 22, 2013

Indianapolis Star Editorial Supports Changes to Indiana Economic Development Commission to Create More Transparency, Accountability

When former Governor Mitch Daniels formed the quasi-government entity known as the Indiana Economic Development Corporation to replace the Department of Commerce I was not a fan of the move.  These type of entities too often operate with little transparency or accountability.  That inevitably leads to conflicts of interest and other problems, which is indeed what exactly what happened with the IEDC.  Today's Star editorial agrees that there needed to be a change with the IEDC:
It was a welcome, and overdue, move when Gov. Mike Pence and the General Assembly approved legislation this spring to require the Indiana Economic Development Commission to be more transparent in its operations.

The latest example of why transparency is so critical is the frustrating case of Elevate Ventures, a private nonprofit hired by the state to stimulate business investment. It took an Indianapolis Star investigation, published July 14, to alert taxpayers to troubling conflicts of interest. The news story prompted a federal audit of Elevate Ventures.

...

The IEDC and the companies it works with have long tried to have it both ways: They use public dollars for economic development, but then claim exemption from scrutiny because, in the name of private enterprise, they need to protect trade secrets from competitors.

The contradiction would be more palatable if the results were proven. But Indiana still has fewer jobs than it had when the recession hit And the potential jobs touted by IEDC and the companies it helps haven’t materialized in the numbers promised. That discrepancy is especially frustrating in a state with an unemployment rate of more than 8 percent.
The editorial then discusses the IEDC's questionable moves regarding Bob Yanigahara,  Mynette Boykin, Monica Liang.  The editorial concludes:
Lack of openness, lack of due diligence, lack of measurable results — it certainly adds up to an agency deserving of the priority attention Pence assigned it shortly after taking office in January.

State Sen. Mike Delph, R-Indianapolis, author of the new law, says he is heartened by the governor’s strong words upon signing the legislation and believes the law should be allowed time to show its effectiveness....

“We don’t want to make companies disclose trade secrets,” he said. “But it’s a balancing act. I’m a strong believer in the public’s right to know how taxpayer dollars are being spent.”
So far the balance has been tipped to the private side. It’s time for the weight to be shifted back toward transparency and the public -- the people who are paying the bills.
Amen.   Thanks for the work of Governor Mike Pence, Sen. Mike Delph and everyone else who have worked to bring some accountability and transparency to the IEDC.

Friday, July 19, 2013

William Conour: Why Did the System Fail to Protect Hoosiers from an Unethical Attorney?

Why was William Conour allowed to continue practicing law without the public even being so much as warned about he was allegedly doing?  It is a question Indiana attorneys and lay persons interested having a legal system with honest, ethical attorneys in this state should be asking. It is certainly something the Indiana Supreme Court should be investigating in open and public hearings.  Who knew what when and failed to take action to protect Hoosiers?

William Conour
A couple days ago, the Indianapolis Star had a lengthy update on the fortunes of William Conour, the former "Super Lawyer" who according to the federal criminal complaint (credit to the Indiana Law Blog for easily making this available on-line)  he later pled guilty to, "devised a scheme to defraud, and to obtain money by means of materially false statements and fraudulent pretenses.  Mr. Conour wants out of prison so he can continue to work so he can pay the victims.

News of Conour's unethical behavior didn't just come to the forefront recently. It has been known by those at the Disciplinary Commission for years.  The Indiana Lawyer reported back in September 2012:
John Daly, a partner at Golitko & Daly P.C., said he alerted the disciplinary commission in July 2008 that Conour wasn’t paying a client in a nursing home from a six-figure special-needs trust that was supposed to be set up to compensate for injuries she sustained falling down an elevator shaft.

“To me, the ‘A’ story is the tremendous delay between the time I made the initial complaint to … this year,” said Daly, who stopped working with Conour in February 2008.

“Bill did a lot of mayhem in the meantime,” Daly said.

Disciplinary Commission Executive Director G. Michael Witte said the commission’s confidentiality rules restrict him from confirming or denying complaints
Michael Witte
against Conour prior to the filing of the verified complaint against him in May.

But Witte said building a case against Conour took time, as evidenced by the federal court information alleging that Conour’s actions date to 1999. It took years for the FBI to make the case, he said, and the commission has far fewer resources.

“This case is one that’s frustrating to a lot of lawyers because Mr. Conour was a go-to lawyer for a lot of lawyers around the state,” Witte said. “Because he was this go-to person for lots of referrals, he engaged in more deceit and cover-ups to hide things from those other attorneys.

“He had to avoid the suspicion of all the lawyers who sent him work,” Witte said.

“The most difficult part about this is that the rules of confidentiality sometimes hamstring us from being able to use outside resources and exchange information,” he said. “I can’t just pick up the phone and call the FBI and say, ‘We’ve got a case against a lawyer.’

“The only thing we can do is utilize our own investigation resources to pursue our own independent investigation,” Witte said. That includes one full-time investigator and 12 staff attorneys who handle about 1,200 complaints per year.
According to my source, the Disciplinary Commission had complaints against Conour going back more than 10 years.  The rules already allow the Commission to seek an order that a lawyer's license be suspended during an investigation.  Even if the Commission didn't go that route, simply filing charges would have alerted potential future victims of Conour and allowed them to steer clear of Conour or take precautions to protect themselves.  But the Commission led by Donald Lundberg,and now Michael Witte, failed to take any action to protect the public from Conour's unethical, indeed criminal, behavior.

Donald Lundberg
In the Indiana Lawyer article, Executive Secretary Witte seeks, as is often the case with the Commission's leadership, seeks to hide behind confidentiality rules when questioned about the Commission's handling of the complaints against Mr. Conour.  But the purpose of confidentiality rules is to protect the attorney, not to protect the Commission from allegations that it mishandled a disciplinary matter against an attorney.  Mr. Conour can easily waive confidentiality rules and undoubtedly would do so if asked   Let him waive confidentiality so we can have an investigation of how the Conour grievances were handled by the Commission.

In the Indiana Lawyer article, Executive Secretary Witte offers another line of defense - that the Commission is overwhelmed with investigations and prosecutions of attorneys and the Commission simply wasn't able to timely complete the decade long investigation of Mr. Conour.   Rather, it is an example of failing to properly prioritize attorney discipline in this state. The focus should be on attorneys committing serious ethical violations, especially when those violations endanger the public. That's not the case with how the Commission has operated under Lundberg and Witte.

Full disclosure, I have a complaint against me filed by the Commission for harshly criticizing a judge in a reply email, sent to the attorney and others involved, for the judge's mishandling of an estate case in which I represented an heir.  My disciplinary hearing is set before a hearing officer for later this month.  (The disciplinary process began shortly I wrote on my blog the result of my research finding that over a three year period 397 of the 400 published disciplinary cases involved sole practitioners or small firm attorneys.)  The Commission has had no problem finding the resources to vigorously pursue my case using their top attorney, Mr. Pruden, a former interim Executive Secretary, to prosecute me.  I have no doubt the Commission will insist that I lose my law license for speaking out, in a private communication no less, about how an elected judge handled the case.  Apparently I'm a much bigger threat than Mr. Conour and those who commit felony type criminal conduct and never get charged by the Commission.

But my case as an example of misplaced priorities is not alone.  A few years ago, the Commission filed charges against an attorney for in a conversation referring to the Washington Township Small Claims Court as a "Mickey Mouse Court" because, allegedly, the court was allowing a landlord's attorney to set the court schedule.  Attorneys who bounce one check from their trust account, perhaps because of some mistaken bank fee (IOLTA accounts are not supposed to have bank fees applied to them), are dealt with very harshly by the Commission even when there is no evidence that the mistake involved unethical behavior.  But Mr. Conour who had at least a decade and a half history of dipping into his trust account for personal use, depriving clients of their settlements, is allowed to continue practicing law with no charges filed?  Questions need to be asked about why the Commission failed to protect the public from Mr. Conour.

I realize the Commission will likely be successful in its efforts and I won't be a practicing lawyer much longer. That, however, will never deter me from speaking out for the improvement of the legal profession, including reform of the disciplinary process.  The Disciplinary Commission should exist primarily to protect the public from dishonest, unethical, and especially criminal attorneys.  Any government body that is allowed to operate in virtual secrecy with almost no public oversight, as has been the case with the Disciplinary Commission, is inevitably destined to become politicized in its activities, enforcing the rules unequally and protecting certain attorneys over others.   In this case, the result of the Commission's failure to act is that a lot of innocent people were harmed.  That is unacceptable.