Kentucky Law Review

ETHICS: Snitch Rule for Lawyers Discussed at LawReader

I was hoping to receive a guest post from a reader with some comments on the new ethical rules.  But, alas my hopes were dashed.  But, Lawreader did come through with a comment by Stan Billingsley, as follows:

NEW RULE CREATES DUTY OF LAWYERS TO REPORT ETHICAL VIOLATIONS OF THE CODE OF PROFESSIONAL RESPONSIBILITY.

By Stan on Uncategorized

  By Stan Billingsley, LawReader Senior Editor – June 20, 2009   One of the important new ethic rules applying to the legal profession, which became effective on June 15, 2009, makes an important change in the duty to report ethical violations to the KBA Inquiry Commission.   Until this new provision of the Code of Professional Responsibility became effective .........

New Ethics Rules to take effect July 15, 2009 - anyone willing to do commentary/digest of them???

[LINKS TO RULES and RULES WITH CHANGES CORRECTED; note that the additions to the rules are underscored, and the deletions in brackets].

The Rules of Professional Responsibility have been revised with a little mixup in the news.  Here are some of the stories, with links to the rules and changes.  Should anyone wish to do any commentary on the rules, just email me and we'll post them!

Here is the LINK to the revised rules in PDF which are effective JULY 15, 2009!!!

Here is a link to the rules prior to 7/15/2009 with changes and deletions noted and marked! CLICK HERE.

Click here for the AOC Press Release.

Office of courts clarifies new rules on lawyer ethics

The day after the Kentucky Supreme Court announced it had approved the first major changes in lawyer ethics rules in 20 years, the Administrative Office of the Courts said some of the changes were incorrectly described in a document released to news outlets and posted on the court's Web site.

Lawyers must report misconduct, court says

The Kentucky Supreme Court made it mandatory yesterday for lawyers to report the misconduct of other attorneys and judges, as part of its first major revision in lawyer ethics rules in 20 years.

KBA: If you want the KBA to email your CLE Credits, you need to give them permission!

On the KBA Website - Because Kentucky Supreme Court rules mandate the confidentiality of KBA CLE records, please email a brief note to cle_reg@kybar.org indicating “I grant the KBA permission to email my CLE records to me.”

COURTS: Allegations of election finance impropriety made and the response - Jefferson District Court Judge Katie King

Mark Herbert has the following post and link to his story as follows.  Of course, there are other stories providing the other side of this election finance issue indicating no violations of state law were made:

Registry Complaint Filed Against Jim and Katie King
By Mark Hebert

Political blogger and former mayoral candidate Ed Springston has filed a complaint with the Registry of Election Finance that alleges District Judge Katie King, Metro Councilman Jim King and King Southern Bank conspired to illegally finance some of Katie King's campaign for judge. Here's the story.

Here's the response indicating nothing wrong.

King's lawyers defend loan from father's bank

Lawyers respond to campaign complaint

By Andrew Wolfson • awolfson@courier-journal.com • February 27, 2009

Jefferson District Judge Katie King's lawyers say the $209,000 loan she got from her father's bank a week before November's election was made "in the ordinary course of business" and was not an illegal election contribution.

In a response to a citizen's complaint filed earlier this month, King's attorneys also say the Registry of Election Finance told her father, Jim King, last July that gifts he made to her would not be considered campaign contributions, which are limited by law to $1,000.

The response was filed yesterday to a complaint from blogger Ed Springston, who alleged the loan from King Southern Bank amounted to an "illicit" last-minute contribution. He claimed the loan exceeded what was justified by her $41,465 salary as an assistant county attorney or by the value of her home pledged as collateral.

King's lawyers, Sheryl Snyder and Joe Terry, said King's total 2007 salary -- as supplemented by income from a title search company she co-founded -- was $72,025, which they said is "more than adequate" to cover the $1,164 monthly payment on her five-year loan.

They also said her house was independently appraised recently at $245,000, which was more than enough to secure the loan. * * * 

And the timing of the following story of retired Justice Sandra Day O'Connor's endorsement of judicial merit selection of judges with retention elections is worth noting here:

Sandra Day O'Connor Backs Missouri Decision   
Sean Powers
Listen Now (on line audio!!)

COLUMBIA, MO (2009-02-27) Former Supreme Court Justice Sandra Day O'Connor says Missouri's system for selecting judges is one of the best in the nations, but as KBIA's Sean Powers reports, she has some suggestions on how to improve it.

The state uses a merit system to select its judges. A committee of lawyers and citizens creates a list of candidates, and then submits that list to the Governor, who picks a finalist. O'Connor, who didn't want her remarks recorded, says opening judges to elections is expensive, and she worries their decisions on the bench could be swayed by the political views of their constituents. She also had two suggestions on ways to improve Missouri's merit system: expand the selection panel to include more lay members, and let the public closely follow the selection process. The law school's Associate Dean of Faculty Research Thom Lambert likes the former Supreme Court justice's suggestions.

You know there really quite sensible. I'd probably like to think about them a little more, and see if there might be some unattended consequences, but for the most part they seem like very sensible suggestions.

Missouri voters adopted the system in November 1940 after several controversial judicial elections that were influenced by Tom Pendergast's Kansas City political machine. About thirty other states have adopted Missouri's method. Sean Powers, KBIA News.

And here is a blog post from Stan Billingsley at Lawreader.com

JUDICIAL CAMPAIGN RULES CONTINUE TO CHANGE – Ohio Judicial races given leeway for partisan ads – “there’s a fine line between saying. ‘I commit.’ and wink-wink, nudge-nudge.”

JUDGES: Financial reports show that Katie King raised $296,550 in her recent election with $194,000 of her own money

Andrew Wolfson has a post-election story on the election finances and concerns over the sources of funds for Judge Katie King's recent election which unseated Judge David Holton who had been appointed by Gov. Beshear.   Click on heading for his entire story.  Several readers have made some serious comments (and some a little biting) but nonetheless raise concerns about the financial reporting laws in Kentucky and enforcement.

Note that the personal loans from Katie King total an amount of her"own money" was comparable to the total amount spent by each of the individual candidates for the Kentucky Supreme Court race.

King lent $194,000 to her campaign for judge
She says source was 'personal accounts'

By Andrew Wolfson • awolfson@courier-journal.com • December 12, 2008


Katie King, who earned $41,465 a year as an assistant county attorney, lent $194,000 to her successful campaign for Jefferson District Court judge, campaign finance records show.
Advertisement

King, who was sworn in and began serving Nov. 26, replied by e-mail to a reporter's query about the money this week by saying it came from her "personal accounts." But she declined to answer questions about how she accumulated the money, whether it came from relatives, or when she acquired it.

King's father, Jim King, the owner of King Southern Bank, president of the Louisville Metro Council and an active participant in his daughter's campaign, referred questions to his lawyer, Sheryl Snyder, who relayed them to Katie King.

* * *

Records filed last week show that Katie King raised $296,550 for the general election, including seven loans she made to her campaign totaling $194,000. She spent $250,966 on the campaign. Holton raised $44,310 and spent all but about $800 of it.

One of the comments to the Courier Story:  Professor72 wrote -

Judge King, your honor, you can stop all the speculation immediately. Reveal the campaign bank account deposit records to prove you loaned the money from existing funds in your own bank account before you filed for the office, because that is legal. Referring these simple questions to a lawyer to answer for you seems to indicate you need someone to speak for you so we citizens don't hear the answers from you directly. You are recieving the benefit of the doubt, but why allow any doubt at all?

LAWYERS: Former Humana Lawyer was not properly licensed for 15 years receives one-year sanction from Ky. Sup. Ct.

From Courier Journal (click on heading for entire post).  Interesting thought in this era of corporate responsibility and duties owed to shareholders and the public - would some consider a person claiming to be an attorney who was not an attorney was entitled to his compensation and benefits during that time period and should the corporation take action to protect their shareholders for this "mistake"?

Putative attorney Chris Watkins several years ago came under significant scrutiny and criminal charges when he practiced law without a license.  See, eg:  Jason Riley's story in the Courier Journal from 2005 - Prosecutors say Louisvillian posed as lawyer for years.

State supreme court suspends former Humana lawyer

By Andrew Wolfson • awolfson@courier-journal.com • October 27, 2008

Humana’s former general counsel has been suspended from the practice of law for one year as a sanction for working as a lawyer without a license for 15 years.

The Kentucky Supreme Court unanimously imposed the penalty last Thursday on Arthur Hipwell, who served as general counsel for the insurance company almost continuously from 1992 to 2007.

Hipwell’s Kentucky law license had expired in 1985 because he failed to pay his bar dues.

Hipwell, who retired from the company in July, claimed he wasn’t required to be licensed because he didn’t appear in court for Humana or perform legal work for the general public.

But in accepting the one-year suspension, Hipwell admitted that his duties as general counsel and senior vice president included supervising the work of in-house attorneys and signing corporate documents for the Securities and Exchange Commission and other agenices, which the Supreme Court said requires a license.

ETHICS: Diet drug lawyers Gallion and Cunningham permanently disbarred

From Kentucky.com.  Links in the post were added by me and go to the KBA opinions referenced in the article.

Two fen-phen lawyers disbarred

Fen-phen settlement lawyers William Gallion and Shirley Allen Cunningham Jr. have been permanently disbarred from legal practice by the Kentucky Supreme Court.

The high court entered orders Thursday afternoon disbarring both attorneys. Neither man can ever apply for reinstatement to the bar, the orders say. Cunningham and Gallion had filed motions with the court asking to withdraw from the Kentucky Bar under terms of permanent disbarment.

Thursday's disbarment is just the latest twist in the legal saga involving the $200 million diet-drug lawsuit that began in 2001, shortly after the case was settled on behalf of 440 former clients who said the drug fen-phen damaged their hearts and lungs.

In agreeing to the court's disbarment order, Gallion and Cunningham admitted to committing eight of 22 ethical violations that had been alleged in their handling of the settlement money.

KBA OPINIONS ON LINE:

• William Gallion
• Shirley A. Cunningham, Jr.

BAR: "Bar leader tried to stall abuse deal, records show Bonar, facing complaint, denies any misconduct"

Andrew Wolfson, Courier Journal, has posted the following story; click on heading for his entire story on-line:

Bar leader tried to stall abuse deal, records show
Bonar, facing complaint, denies any misconduct

ELSEWHERE: "Law - "Lawyers worry about liability if banks holding client trust accounts fail" By Marcia Oddi on General Law Related "

In the midst of this downturn in the economy, lawyers must also be concerned about their trust accounts too?  Here's a post noted by Marcia Oddi at the Indiana Law Blog:

Law - "Lawyers worry about liability if banks holding client trust accounts fail"   By Marcia Oddi on General Law Related

And this is not the only story on the internet on this topic, eg:

• Hot Topic: Are Lawyers Liable for Client Trust Accounts at Failed Banks? from the ABA Journal
  
  

  By Martha Neil

  If the bank holding my client trust funds fails, could I be held responsible?

  That is the question many attorneys are now asking bar associations after the recent failure of California-based IndyMac Bank, and the answer appears to be a qualified yes, according to the National Law Journal.

  Disciplinary authorities in a number of states say they won't punish lawyers if the funds are held in an Federal Deposit Insurance Corp.-insured bank account at a bank that isn't obviously unstable, according to the legal publication. However, there could be an issue if the amount in the account exceeds the FDIC-insured limit, which is currently $250,000. (The safest course is to hold no more than $250,000 at any one FDIC-insured bank.)

  And civil litigation is always a possibility, as far as unhappy clients are concerned, the NLJ points out. "A New York lawyer was once sued when a bank failed, taking client funds with it. With that in mind, bar counsel are cautioning lawyers to consult their insurance carriers and 'take reasonable precautions.' "

  Related coverage:

  The Lawyer: "Law Soc advises on client money held in insolvent banks"

• If Your Bank Goes Under, Are Your Clients’ Trust Account Deposits Fully Insured?
  
  James M. McCauley, Ethics Counsel
  Virginia State Bar
  July 30, 2008
  
  Here is a question that makes lawyers very nervous as the list of failed banks1 and banks on the "watch list" grows: Could a lawyer be liable if the bank that held a client's trust funds went under? After reading news articles about the recent collapse of Pasadena-based mortgage lender IndyMac Bank, lawyers are making inquiries on state bar ethics hotlines. With financial institutions recognizing losses on their sub prime loan portfolios, increasing mortgage foreclosures and steeply declining bank stock prices, concerned lawyers are making inquiries about the security of IOLTA/trust accounts in federal and state chartered banks.

 

ELSEWHERE: "ABA: W. Va. case has chance to provide landmark ruling"

Judicial recusal issue is subject of post at West Virginia Record prompted by ABA story:

ABA: W. Va. case has chance to provide landmark ruling

WASHINGTON, D.C. -- State Supreme Court Justice Brent Benjamin's controversial decision not to recuse himself from the appeal of a supporter should serve as a guideline for future similar issues, the American Bar Association says.