Wednesday, December 17, 2008

Criminal vs Civil

I've noticed an alarming trend lately in which prosecutors are criminalizing behavior that used to be handled in the civil courts. The example that comes to mind is a series of cases being handled by an attorney friend in Ohio, Ken Sheets.

Ken's client is a contractor. As a regular part of his business he enters into contracts for construction. It may be improvements to a dwelling, building a barn or even new construction. The contract, inartfully drafted because he wrote it instead of retaining the services of a lawyer, generally provides that he must begin work within a number of months and sets no end time.

He has been arrested several times because the homeowner has complained to the authorities that he "stole" their money by not doing the work. In each case, the arrest came within the time period that the contract provided for him to begin work.


Since when did a contract dispute become a criminal matter? And how can a prosecutor bring charges for theft, in good faith, when it is still possible for him to perform under the terms of the contract?

What all this brings home to me is the fact that perhaps it's time to revisit the whole idea of prosecutorial immunity. If prosecutors could be sued for their charge/no-charge decisions, perhaps they would make them more carefully. In all honesty, what appears to be happening to this guy is that someone in authority has it in for him and is using the theft statutes to harass him out of business.

This simply shouldn't be allowed.


Tuesday, December 16, 2008

The Rest of the Story

Someone wrote me and asked what I thought about the banks and how they contributed to the current problems we face. Well, that one is pretty simple. Like the insurance companies who legislated away their risks, the banks lobbied the legislatures for laws that made it much easier for them to part people with their money. I point to two main areas.

First, years ago the laws did not permit the banks to charge many of the fees that they now charge. By fees, I mean $35 overdraft fees and items like that. One example - the Uniform Commercial Code used to provide that stop payment orders on checks were a service that the banks were to provide at no fee. That provision was eliminated from the UCC and banks began to charge fees for stop payment orders.

Then a provision was added to the UCC that permits banks to charge items to your account in any order they desire. So, naturally they process them in the manner that creates as many overdraft items as possible. If there is one big item that overdraws your account and ten small items that would all clear with no overdraft, they process the big item first then charge you ten separate overdraft fees for each of the ten smaller items. This provision of the UCC was actually litigated in Ohio and the court ruled in favor of the bank (even though Ohio law contains an implied duty for the parties to act in good faith and I don't see any way that such a scheme could be executed in good faith).

Then there is the way that they process debit cards. They will actually permit you to charge something to the card even though you don't have the money in the account - then they charge you a fee. Once again, not good faith.

But the biggest thing I think the banks did wrong was the pushing of credit as a manner of living beyond peoples means. Want a vacation - get a "home equity loan." It used to be that second mortgages were considered the last resort of people who were already in financial trouble. But the banks changed the name to home equity loans and marketed them aggressively and everyone had to have one. Finance that lifestyle instead of working for it.

A couple of years ago there was a commercial for one of the credit cards that showed a girl stepping off a curb and breaking her heel. Suddenly, someone hands her a credit card and she gets new shoes, new dress, new hair and goes dancing down the street while the song "Downtown" is playing. I remember watching this and thinking that my dream case would be a class action lawsuit against that credit card company for violations of the false or misleading advertising provisions of the various state's consumer practices act. The commercial basically was designed to falsely imply that "if your life is bad, just go shopping with our card and everything will be perfect." Until the bill comes in the mail, that is (but they left that part out).

But those kind of cases don't often walk into small law offices in Lebanon, Tennessee, so the dream remains unfulfilled. Maybe I should get past my disappointment by getting a home equity loan and buying an airplane.


Monday, December 15, 2008


Every once in a while I get a case that illustrates how this country got into the mess we're in (in my opinion). Anyone who knows me knows that I lay the blame at the feet of the banks and insurance companies (and the lawmakers who permitted them to purchase laws tailor made to increase their profits).

This case deals with insurance subrogation. Years ago, subrogation was not permitted. If you purchased an insurance policy and your insurer had to pay a claim, your insurer bore the loss. After all, they had issued the policy and collected the premiums. They took the risk.

Beginning in the 70's state legislatures began to listen to the insurance company lobbyists and to change the law to permit subrogation. That permitted the insurer to collect premiums but, if they had to pay a claim, their risk was reduced - they might be able to collect the amount they paid from a third party. Most people thought that was OK, since the third party most likely had insurance (after all, the insurance companies lobbied to get laws passed that required motor vehicle insurance - even making it a crime to drive without it).

But the insurance companies didn't want to stop there. They wanted protection even if the third party was uninsured and unable to pay. So, back to the legislatures they went to obtain passage of laws that permitted them to notify the appropriate state authority and obtain suspension of a driver's license if they made demand upon him for some sum they believed they were due.

What's wrong with this? Well, the case I am handling started with an auto accident in which it appears that my client was not at fault. At least not entirely at fault. The other driver filed a claim with his own insurer and was paid. That insurer then assigned their right of subrogation to a third party and that party made a naked demand for payment against my client.

At this point, there has been no determination by a court or other authority that establishes my client is at fault. He just gets a letter that says "you were at fault. Pay us." When he declined, the third party filed with the Department of Safety saying "we have determined that he is at fault, he owes us $x, please suspend his license."

My client then gets a letter from the Department of Safety saying, please deposit with us the sum of $x or your license will be suspended. He contacts me and we file an appeal. The matter will be heard in January. We intend to make them prove that my client was at fault (and Tennessee is a comparative negligence state, meaning that the fault of the other guy has to be factored in here).

I suspect most people either pay up or lose their licenses, though.

What a country.


Thursday, December 11, 2008

Internet Privacy

Well, here's proof that internet usage can be bad for you. I am handling a case in Cannon County, Tennessee where the defendant is charged with possession and distribution of child pornography via e-mail messages. The interesting (and disturbing) thing is how he got caught.

All of our e-mail messages are being monitored for objectionable content.

America Online (and all of the other internet providers) have entered into agreements with the National Center for Missing and Exploited Children to report any instances of child pornography being sent by e-mail via their systems. The NCMEC then tips local authorities, who obtain search warrants for the person's computer.

The NCMEC was created by an act of Congress. Its board of directors is loaded with government officials, primarily from Federal law enforcement agencies. Despite this, they maintain that they are not a government agency and that their actions do not violate the 4th amendment (which applies only to governmental searches).

This is pretty disturbing. I am not a supporter of child pornography. But I am a big supporter of civil liberties. Here, we have the government making an end run around the 4th amendment by creating a non-governmental agency to accomplish searches that would be illegal if conducted by the government. And, for the most part, the Federal courts have permitted this.

The issue of whether they are a governmental agency doesn't seem to have been directly raised. I will be raising it via a motion to suppress. In this case, the defendant has to fight to prevent a conviction since Tennessee law prohibits him from pre-trial diversion or even probation. It even prevents him from remaining on bond pending appeal (although I think that provision is also invalid since it basically diminishes his right to an appeal). So, this case is going to trial unless I can get the evidence tossed. Of course, it's unlikely that a trial court will rule that way, so an appeal is likely.


Wednesday, December 10, 2008

Driver's License Suspensions

Here's another thing that has been bugging me recently. I had a child support case in which I was defending a father who had gotten behind on his payments. The goal was not to get the payments reduced or eliminated, but merely to give him time to get caught up.

The issue that bugged me was the threat to suspend his driver's license until the arrearage was paid. Tennessee law arguably permits such an action. The question I have is - why?

It seems that we're suspending driver's licenses on a regular basis. A DUI carries a mandatory 1 year suspension for a first offense (higher for subsequent offenses). Perhaps that is understandable (at least for multiple offenders) since driving is an essential element of the offense. (I won't get into the issue of administrative suspensions prior to a finding of guilt, such as are permitted in Ohio, since Tennessee has had the wisdom not to enact that law.) But what connection does a driver's license have with the non-payment of child support? None.

In fact, there is probably a reverse connection. Does it not make more sense to leave a person's ability to drive intact, so that he (0r she) may continue to work and make the money needed in order to pay the support. Take away his right to drive and you have actually decreased his chances of paying child support. If the goal of the law is to get child support paid, this is counterproductive.

And it goes beyond child support. In Ohio, even minor drug crimes carry a mandatory six months suspension, even when there is no connection between driving and the crime.

How do laws like this get passed? Well, first there is this mistaken assumption that driving is a privilege that is granted us by the state. We have no right to drive. The state owns that right and permits us to drive only so long as we are good little citizens. If we do something the state doesn't like, they can take away our privileges (in essence, ground us like teenagers who bring the car home too late).

My opinion is that laws like this get proposed by someone who has an axe to grind and is blinded to all of the consequences. When the law gets debated, any dissenting voice gets stifled by the argument - if you oppose this you are in favor of not supporting children or you're soft on crime. So the law gets passed. The thing that really bothers me is that the courts ought to be looking at these laws critically and overturning them. Yet the courts just seem to buy in and permit the legislature to do what it wants.

Perhaps someday sanity will return to the process. Until then, we just muddle through as best we can.


Tuesday, December 9, 2008

Slipping Through the Cracks

I was in criminal court yesterday for an arraignment on a DUI case. Since my case was way down the docket, I had time to sit and watch. I was struck by the number of cases of people who were asking for public defender appointments, but who did not qualify.

Why is this interesting? Well, basically the appointment of a public defender is based upon income. Now that times are tough, economically, people who have income often have only enough to meet their monthly obligations, with nothing at all left over for legal fees. They can't tap home equity, since often that is already gone or they can't get a loan in the tight credit market. Several people had made every effort to retain counsel, saying that they had called several attorneys in town, but couldn't come up with the money they wanted.

One gentleman simply told the judge he had no option except to plead guilty and accept whatever punishment the court wished to impose.

It's obvious that people are falling through the cracks. Most lawyers won't accept anything less than full payment on criminal cases. We call that Rule 1 - get the money up front. When people can't do that, and they don't qualify for a public defender, what are they to do?

Nothing much, I suppose, which is a shame. I think that the formula for qualifying for a public defender needs to change.

It was also interesting that the judge placed great emphasis on the fact that some of the defendants had posted bond. Apparently, if you are able to post bond you are able to afford an attorney. Put another way, it looks like people may be forced to choose to sit in jail in order to secure legal representation. I did read a case from one of the states whose law I follow that held that practice to be unconstitutional. I guess that hasn't filtered down to the trial courts yet. But it is unconstitutional. You simply can't force defendants to choose between incarceration and their fundamental right to counsel.

In my practice I try to make legal services affordable. And I often violate Rule 1 if I think I can trust the person to make payments (although I am careful to make sure that the payment schedule gets the entire fee paid before the case is over). But there is only so much a solo practitioner can do.

I would like to have talked to some of the defendants and told them that I would work with them on fees, but face to face communications like that is considered to be unethical. One complaint and you're done.

The end result is some people who needed a lawyer didn't get one. I left before the court decided what to do with the gentleman who thought he had no choice but to plead guilty. I hope it worked out for him.