Attorney E-Newsletter

November 2009

Judge Throws Red Flags: FTC Policy Stayed

Last month, we reported on the lawsuit brought by the American Bar Association against the Federal Trade Commission, seeking to enjoin the application of the FTC’s “red flags”’ rule to lawyers collecting fees over time. With the flair that fans of the Pittsburgh Pirates[1] have come to expect of their heroes, we sent out the newsletter on October 29. On that same day, U.S. District Judge Reggie Walton of the District of Columbia, issued an order granting the ABA summary judgment on Count I of the complaint, essentially staying application of the rule to lawyers, which was scheduled to take effect November 1. Judge Walton indicated that a memorandum order would be issued within thirty days.[2]

ABA President Carolyn B. Lamm issued a written statement, saying, “This ruling is an important victory for American lawyers and the clients we serve. The court recognized that the Federal Trade Commission’s interpretation of the Fair and Accurate Credit Transactions Act over-reaches and its application to lawyers is unreasonable. By voiding the FTC’s interpretation of a statute that was clearly not intended to apply to the legal profession, the court has ensured that lawyers stay focused on the mission of their work: providing aid and counsel to the individuals and organizations that need us.”

The FTC's general counsel, Willard Tom, replied: “It’s safe to assume the commission is going to consider its options very seriously. We think there is no reason lawyers should be exempt.”

Full story here.

In other “red flag” news, on October 20, 2009, the U.S. House of Representatives passed a bill which would exempt certain businesses from the Red Flags coverage, including law firms with 20 employees or less.[3] The bill, H.R. 3763, [text][status] passed by a vote of 400-0, and was sent to the Senate where it has been referred to the Senate Banking Committee. On October 30, 2009, the FTC delayed enforcement of the rule as to entities under its jurisdiction until June 1, 2010. Accountants are getting in on the act, as well.

Luzerne Judges Fallout Continues

The scandal over two former judges of the Luzerne County Court of Common Pleas who took payoffs from contractors continues to unfold.

The Supreme Court of Pennsylvania, in a per curiam order dated October 29, 2009, vacated all adjudications of delinquency or consent decrees by former judge Mark Ciavarella between January 1, 2003 and May 31, 2008. It has been estimated that this may involve as many as 6,500 adjudications. The Court accepted most of the recommendations of the Court’s Special Master, Arthur E. Grim, who found a “systematic failure” by Ciavarella to observe the rights of juveniles before him, who acknowledged receiving payments from institutions to which he was committing the juveniles. The Court concluded that “this Court cannot have any confidence that Ciavarella decided any Luzerne County juvenile case fairly and impartially while he labored under the specter of his self-interested dealings with the facilities.” The Court approved Grim’s recommendation to dismiss the cases with prejudice and expunge the records of the actions. The Court set up procedures by which Grim would evaluate cases not yet final to determine whether they could still be pursued.

The Court’s cleanup of the Conahan/Ciavarella mess is not limited to juvenile cases. In another case, Joseph v. Scranton Times L.P., the Court set aside a $3.5 million defamation verdict against the newspaper company based on judicial impropriety. In a per curiam order entered November 4, 2009, the Court found that then-President Judge Michael Conahan, despite assurances that the case would be assigned at random, steered the case to Ciavarella, who rendered a bench trial verdict against the newspaper for $3.5 million. The Court also cited evidence that Conahan had a “long-term relationship” with a convicted felon, whose alleged organized crime connections were reported by a newspaper owned by the company. While the Court did not reach any conclusions on the merits of the case, it found that the misconduct of Conahan and Ciavarella had so tainted the verdict that a new trial was ordered.

The disgraced former judges are attempting to avoid civil liability for their actions by invoking judicial immunity. In two lawsuits pending before U.S. District Judge A. Richard Caputo, Conahan and Ciavarella argue that their actions were protected by judicial immunity. Attorneys for the Juvenile Law Center, which brought the suits, argue that the payments the former judges were receiving take their official actions outside the coverage of judicial immunity. This has led some to question whether the scope of judicial immunity should be reduced.

The Luzerne County Court, meanwhile, is struggling to absorb the workload created by two judicial vacancies and a large backlog of cases. Ciavarella’s seat remains open, and another judge, Ann Lokuta, is appealing her removal from the bench by the Court of Judicial Discipline. A third judge will be leaving the court in January. President Judge Chester Muroski has asked experienced lawyers to help out by volunteering to serve as trial masters with the power of judges, by agreement of parties.

Judge Orie Melvin Elected to Supreme Court

On November 3, 2009, Superior Court Judge Joan Orie Melvin won election to a seat on the Pennsylvania Supreme Court, winning a hard-fought campaign against fellow Superior Court Judge Jack A. Panella. It was her second try for a Supreme Court seat, following an unsuccessful candidacy in 2003. Judge Orie Melvin has served on the Superior Court since winning election in 1997, and prior to that served on the Court of Common Pleas of Allegheny County from 1990 to 1997.

Possible Scam Alert: Attorney Registration

We have often reported scam alerts here, but not any that hit so close to home.

The Disciplinary Board has been informed that some attorneys may be receiving unsolicited telephone calls from parties inquiring as to whether they are current on their registration status. These callers offer to make sure the lawyer’s status is current and solicit credit card information for this service.

The Registration Office has not seen checks from any third party payor which has been paying registration fees on behalf of attorneys, other than firms, employers, friends or family members. The Registration Office does not accept credit card payments, and each attorney’s registration must be accompanied by an individually signed Annual Fee Form.

Our scam detectors are in the red zone. The Disciplinary Board has no reason to believe such calls represent a legitimate service, and attorneys should definitely not give anyone credit card information to process registration renewals without checking very, very thoroughly.

Lawyers Behaving Badly: November Edition

The fun thing about having a feature on lawyers sanctioned for their behavior is that every month, there are so many stories to choose from.

This month brings us New Jersey attorney Lewis P. Hannah, whose incivility in dealing with his opponent, James E. Ellison of Rhoads & Sinon in Harrisburg, led Judge Gene Pratter of the U.S. District Court for the Eastern District of Pennsylvania to order a unique sanction: she ordered Hannah and Ellison to sit down for a meal together, Dutch treat[4]. Judge Pratter said she was inspired by a quote from Shakespeare's The Taming of the Shrew: "And do as adversaries do in law, Strive mightily but eat and drink as friends." The decision arose out of a deposition in which Hannah, after strewing the record with obscenities, referred to Ellison, who is black, as “boy.” Ellison noted that ironically Hannah’s client is a black former janitor who complained of a white principal referring to him as “boy.” Hannah, who is himself black, conceded the inappropriateness of the term but suggested it had a different meaning in context.

In Connecticut, noted medical malpractice defense attorney Madonna Sacco[5] has been ordered to pay $11,484 for a fifth offense[6] of witness coaching, after she met deposition questions with “speaking objections” which, in the opinion of the court, gave her witnesses clues as to how to answer the questions. The court declined, however, to disqualify her from attending depositions, [7] citing a party’s right to choice of counsel. Ms. Sacco denied in a hearing that the statements were improper, and contended that the allegations of violation of the Rules of Professional Conduct should have been asserted as a grievance, although the State Grievance Committee has said no grievance is pending.[8]

Finally, California attorney Richard Berman became entangled in a controversy with the office of the Sheriff of Madera County, California, over an incident that occurred September 2. Berman, a high-profile criminal defense attorney from neighboring Fresno, was going through security as he entered the Madera County Courthouse. He placed several items in a box for the scanner, but refused to take off his watch, informing the deputies that “this is a $30,000 watch.”[9] A sheriff’s deputy attempted to block Berman from going through the metal detector, and the parties dispute whether physical contact occurred. In any event, the Sheriff’s Department has asked the District Attorney to file a complaint against Berman for battery and avoiding courthouse security, and has filed a disciplinary complaint with the State Bar.[10] Berman told the Fresno Bee that the whole incident is “very silly.” Although we are disinclined to invest much sympathy in a lawyer who wears a watch worth more than our car, we must wonder if the Madera County criminal justice system does not have bigger fish to fry.

Star Law: Are You Covering All the Bases?

Our final story has nothing to do with legal ethics, but raises an interesting point of practice: should lawyers be making proper provision for the extraterrestrial implications of their work?

The Wall Street Journal reports that a trend in entertainment law is to reserve rights in, shall we say, venues beyond the traditional. Contestants on “America’s Got Talent” sign contracts providing that their performances may be “edited, in all media, throughout the universe, in perpetuity." WQED-TV in Pittsburgh has news panelists sign a release which allows it to reproduce their images and voice’s image or voice "throughout the universe in perpetuity, in any and all media now known or hereinafter devised." Jacquelyn Thomas, general counsel for WQED, is quoted as saying, "I don't mean to sound like a science-fiction nut...but it's not inconceivable that media will move beyond planet Earth."

So, are you thinking far enough ahead? Or far enough out?

Got a Tip?

Or a question, a comment, an idea you’d like to see addressed? We are always glad to hear from you. Write us at This is a publication of the Disciplinary Board of the Supreme Court of Pennsylvania, and will remain so in all media, places, and times, past, present, future, or none of the above, in this universe or any alternative universes and/or space-time continua that may or may not exist or be imagined, depending upon what the quantum physicists come up with.

[1] Which we remain, despite a decade and a half in the wilderness.

[2] Probably on the day this newsletter goes out.

[3] Query: would the passage of an act of Congress specifically exempting law firms with 20 employees or less implicitly express the intent of Congress to apply the requirements to law firms with more than 20 employees?

[4] It has been suggested that the phrase “Dutch treat,” meaning “no treat at all because each person pays his or her own check," is “a linguistic relic of a low point in relations between England and The Netherlands.” However, in Egypt, the practice is reportedly referred to as “englizy,” or “English style.”

[5] We so wanted to see her argue that the offense was “not Material.”

[6] Giving a whole new meaning to the term “take the Fifth.”

[7] Like that request had a prayer.

[8] So she lived to tell.

[9] Perhaps the Rolex of Criminal Procedure.

[10] He was not, however, placed on a watch list.