Juris Magazine- Summer 1990

VOLUME 23

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NUMBER 4

SUMMER 1990

''We should all be concerned about the future because we will have to spend the rest of our lives there." ''

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Inside This Issue of JURIS PAGE

JURIS The Duquesne Law School News Magazine Pamela J. Castrucci

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6

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DNA Typing: Sherlock's Methods Never Seemed This Complicated!

by Diana Lynn Stavroulakis ORGAN DONORS: A Deadly Game of Supply and Demand

by Susanne Kimberland Plague of the Nineties by f. Alan Fuehrer and Aileen Hickey How We Read the Bankruptcy Code

by Assoc. Professor Mark 0. Yochum

Editor-In-Chief Raymond Sekula

Jan Daschbach

Faculty Adviser

Administrative Assistant

Rosalie Pugliese

David Hvizdos

Executive Managing Editor

Execu live Manager's Assistant

Catherine L. Waggle

Marilyn Gilman

Production Editor

Articles Editor

Cheryl Cindrich

Susanne Kimberland

Production Assistant

Articles Assistant

Kelly Scanlon

Ralph Karsh

Photographer

News & Recent Decisions Editor

Aileen Hickey

James Heneghan

Front Line Editor

News & Recent Decisions Editor

Diana Lynn Stavroulakis

Michael Ivory

Front Line Editor

Front Line Editor

Steven W. Zoffer

Molly Murphy Lauralee Snyder

Front Line Editor

Production Crew

Nwenenda Adele Ed Santillan

Production Crew

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Justice Soviet Style

by Ella Kwisnek

18

The Price of Landmark Designations

by Molly Murphy

21

Isn't It A Fact That You Have Insurance?

by Jim Heneghan

22

Taking Clients

by Carmen Martucci

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Recent Decisions

Writing Staff Chris Ferry Alan Fuehrer Deanna Heasley Jim Kocur Ella Kwisnek Carmen Martucci Molly Murphy Kim Oliver Colleen Ramage Ed Santillan Lisa Sciullo Thomas Shope Mike Silver Lauralee Snyder Daniel Taylor Starla Williams Bob Walter Peter Wright JURIS is a student publication of the Duquesne University School of Law. Views and opinions expressed are not necessarily those of JURIS or Duquesne University.

All manuscripts and comments may be addressed to JURIS

Up Front Hope and excitement are back again as the perennial escorts of Spring.

Growth and re-birth surround us at this time of year. For many of us, this Spring holds even more anticipation as graduation - and the bar - looms that much closer. In keeping with the season, we would like to leave you on a hopeful note.

Juris opened the year with the goal of destroying indifference. All of the articles we have published this year, augmented with the ones within these pages, have all been carefully selected to fulfill this goal. Drugs, religion, professional responsibility,

Duquesne University School of Law 900 Locust Street Pittsburgh, Pennsylvania 15282 Telephone (412) 434-6305 Copyright Š 1990 Duquesne University

the elderly, juvenile defendants, insider trading, capital gains tax, immigration, AIDS, the Soviet Union and abortion are just a few of the areas we have presented for your consideration. These diverse sections of the law represent just a small number of possibilities in which we all can be involved. One area we wished to cover, but for one reason or another did not, is the environment. The environment, above all other concerns, can least tolerate indifference.

Indeed, such indifference can only be classified as lethal. In any event, we leave that to the Juris staff of 1990-1991.

The new staff of Juris is very enthusiastic and energetic. We only ex-

pect great things from them as they carve out their own identity. We hope their year is as gratifying as ours was.

Special thanks to Rosalie Pugliese and Catherine Waggle for their undying support, organization and creativity. Additional thanks to Jan Daschbach who has helped us immeasurably this year. Speaking with the SBA President and the Law Review Editor, it has become clear that Jan plays a very important role in the student activities . We hope the members of the Class of 1990 succeed both in their careers and in making a difference in the world.

Thank you for a wonderful year.

Pamela J. Castrucci

3

DNA TYPING: Sherlock's methods never seemed this complicated!

"Identification through DNA testing is being heralded as a revolutionary advance in scientific evidence . . . [which] will determine paternity and help solve cases of rape, assault, hit and run, and homicide, locate missing persons, and identify bodies. The popular press has lauded the DNA identification tests and embraced DNA typing as the greatest advance in crime-solving since Sherlock Holmes." 1 Could there be a scientific procedure which procures evidence of identity with the precision of Sir Arthur Conan Doyle's master sleuth?

My curiosity was peaked . Any technique which claimed to bestow upon me detecting skills akin to the great, yet fictitious, minds of Holmes or Hercule Poirot was certainly worth investigating.

Inundated by various legal articles, I slowly waded through the trepid waters and found myself drowning in a deluge of scientific terms and phrases. Words like "deoxyribonucleic acid," "polymorphism:' and "electrophoresis" tended to stymie me and to interrupt the otherwise steady tempo of my read. Instead of an education on DNA testing, I got a tension headache.

It became painfully obvious that I would never join the unparalleled ranks of the fabled master detectives.

Are the probability statistics of DNA testing accurate? Is the evidence reliable? Which techniques meet accepted standards of the scientific community? 2 Who knows?

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You've got to make your way through an intense amount of data on genetics, DNA, and cellular and molecular biology to possess a working knowledge of what this is all about.

Lifecodes Corporation3 and Cellmark Diagnostics Corporation,4 two of the key commercial proponents of DNA testing can provide literature on their respective techniques if an in-depth analysis is desired. For the purposes of this article, suffice it to say that DNA is a complex molecule comprised of two intertwined chains of repeated units. The DNA molecule is shaped like a twisted ladder, referred to as a double helix. The hope of DNA testing is to compare and possibly match DNA samples.5 (Do not be fooled by my simplistic verbalization of the process.)

Leaving a discussion of cellular intricacies to the scientists, the question becomes one of whether or not this celebrated form of scientific evidence is legally sound. It's a relatively untread frontier, but courts' holdings in several cases indicate that the road is paved for the use of DNA evidence.

Caution : Lest prosecutors become too confident due to the existence of this awesome technique, I'm compelled to advise that we all pick up a drop/add form at the locai college and enroll in BI0-101. From all indications, it's appallingly clear to me that DNA testing is best understood by the lawyer with a scientific mind.

In Frye vs. United States, 293 F. 1013 (D.C. Cir. 1923), the standard for determining the admissibility of scientific evidence was created. The Court re-

jected defense counsel's attempt to admit evidence of a systolic blood pressure ~st, since the test had not yet gained wide acceptance. The standard announced in Frye required, inter alia, that in order for scientific evidence to be admitted into Court, the technique used to obtain the evidence must be generally accepted by the scientific community.

It would appear we had our first clue as far back as 1923 when the Frye Court admitted its own inadequacies and left the determination of validity of scientific techniques in the hands of the scientists. Despite this subtle hint that, perhaps, science was better judged by the experts, we persisted in exposing ourselves to matters beyond our ken.

For example, People vs. Castro, 540 N.Y.S. 2d 143(Sup.1989), was a Bronx murder case where a spot of blood found on the Defendant's watch was alleged to be that of the victim's. DNA typing evidence was proffered in an attempt to link the Defendant as the murderer. The Court determined that while DNA evidence will be admitted when meeting the Frye standard, the evidence was inadmissible in that particular case where utilized techniques did not meet generally accepted standards of the scientific conununity.

That bottom line factual synopsis gives the illusion of a simple, legally comprehensible case. However, complexity fogged my visibility of this seemingly clear-cut holding when I was apprised of the extensive scientific analysis mandated prior to reaching the eventual result.

The reliability of DNA typing evidence in general was tested in Castro.

Scientists were called as expert witnesses for both the prosecution and the defense. Testimony, which lasted nearly four months, amounted to mind -boggling lectures on chromosome formations and genetic pools.

The scientific theories were being advanced, mind you, in an attempt to determine the reliability of DNA evidence. After much controversy, the experts from both sides became allies and held a joint conference to scrutinize the accuracy of the technique. In the absence of lawyers, the expert witnesses found it relatively easy to reach conclusions which would later constitute a two page consensus statement for the Court.6 This doesn't strike me as any news flash. It doesn't take Einstein to figure out that an understanding of the details of DNA typing is reserved for the qualified experts . Among this group, don't expect to find Jane "1was -an-English-major" Attorney.

Excuse me for not being shocked that issues became blurred, and questions became more legally adversarial than scientifically relevant.

The admissibility of DNA evidence was also debated in Andrews vs. State, 533 So. 2d 841 (Fla. App. 5 Dist. 1988), which resulted in the Defendant's conviction for rape with a term of imprisonment of 78 years. The science lesson in this case was taught for the benefit of the jurors who were asked to understand DNA typing and to determine its validity. Wielding charts, diagrams and other visual aids not foreign to an eighth grade science classroom, the prosecution enclosed the jurors behind a wall of scientific data supported by statistics.7 A 63-year old juror has been quoted as saying, "We all felt like we were back in science class."8 Despite the necessity of a crash course in cellular biology, both Castro and Andrews exemplify that the courts are willing to admit the use of DNA evidence. Since the Castro holding, the new focus is shifting toward a necessity for guidelines and standards for DNA typing. Experts agree that the judge's ruling in Castro has insured the future of DNA evidence once a form of standardization is. developed . The scientific community needs to institute a format for laboratory procedures, as well as for training laboratory personnel, in an effort to preserve the credibility of DNA evidence.9

Forgive my pessimism, but I can't help but predict that the creation, explanation, and implementation of these much needed guidelines will be no less scientifically intoxicating than the subject matter they concern .

Nonetheless, it's obvious that DNA typing techniques are here to stay.

I read an article which quoted Lifecodes' probability rate as a "1-in-200,000 chance of two people having the same prints:'10 It went on to say that "however courts rule on specific technologies, experts predict that DNA fingerprints will someday send other crime-lab tests the way of Sherlock Holmes' magnifying glass:'11 I wish that were true; but, until someone can explain all these statistics and probabilities to me, I am forced to leave the scientific analysis to Dr. Watson.

References 1. Tarantino, Convicted By A Hair- DNA Testing: A Primer on the Facts of Life and Death, 4 Crim . Just. 4, at 5, (Summer 1989).

2. Williams, Conviction by Chromosome:

DNA Faces Its Day In Court, Student Lawyer, December, 1989 at 26.

3. Saw Mill River Road , Valhalla, NY 10595.

4. 20271 Goldenrod Lane, German town, MD 20874.

5. Tarantino, Convicted By A Hair- DNA Testing: A Primer on the Facts of Life and Death, 4 Crim. Just. 4, (Summer 1989).

6. Lewin, DNA Typing on the Witness Stand, 24Science1033 (June, 1989).

7. Lewis, DNA Fingerprints: Witness for the Prosecution, Discover June, 1988 at 44.

8. Id . at 52.

9. Anderson, DNA Evidence Questioned, ABA Journal, October, 1989 at 18.

10. Begley, Leaving Holmes in the Dust, Newsweek, October 26, 1987, at 81.

11 . Id .

Diana Lynn Stavroulakisis a third year day student who will receive her Juris Doctor in June of 1990. She earned her BA in English and Spanish at Washington and Jefferson College prior to attending Duquesne University School of Law. Presently, she is employed as a Law Clerk at the Office of the District Attorney, Allegheny County, Pa .

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ORGAN DONORS: A Deadly Game of Supply and Demand Tabitha Foster. Ronnie DeSillers.

Former Pittsburgh Steeler Steve Courson . These people have a common link . But it is not a bloodline they share, they share a lifeline. All of these people and thousands of others each year become candidates for organ transplant surgery. They wait in anticipation for a miracle that will save their lives. That miracle is a donor orga .

Technology is not an impedime to transplant surgery. The first kidney transplant was done over 30 years ago, and the first heart transplant 20 years ago. Today, the long-term surviv rate for a heart recipient is 70 perce t to 80 rcent . A liver transplant patient has a 65 percent chance of living beyond five years and some kidney atients live full lives.

The uccess of technology however: does have its price. The demand fo onor transplant organs e ceeds tlie s ply. Approximately 14,000 kidney, heart and liver transplants are performed each ear. Another 200,000 operations are perfor ed to transplant bone, sk4t and corneas For every candidate receiving an o gan, one and one half other patient await a donor organ. Twenty-five percent of all organ tra splant candidates will die before an organ can be procured .

The average wait for an organ is one year, however, candidates whose status is critical receiv organs immediately upon vailability.

Congress and state awmakers have attempted to alleviat the dilemma .

Both state and federal egislatures have enacted laws requir'' g a medical institution's personnel to request organ donation. The laws, however, are ineffective, according to organ pro6

curement officials and state officials .

Congress enacted the American Council on Transplantation Act in 1983. The Council is composed of health rofessionals, hospital adminis tion and organ procurement o~anizations working together to motivate the public to become organ donors, encourage timely identification f poten tial donors, and to address tee ical, financial and ethical issue involved in organ transplantation.

In 1984, the council was directed to work with the national task force Congress est blished under the National Qrgan Transplant Act (1984) . The task orceestablished in 1984 gave birth to national rgan procurement network sfill in ~ffect to ay.

Congress further attempted to remegy the pt oblem 03 enacting the Omnibus Bud~et Reconciliation Act (1986'). The Act requires hospitals to estaolish protocolsforo . an procureme t including contact with organ pr curement ag ncies established u der the 1984 Adi:, and contact with families of potential orgam dono , .

The 1986 sanctions noncomHliance by ~evocation of hospit 1Medic~re fm;ilding. While the sancti'Ons are blac~et­ ter, the penalties are unenfon:zed.

Brian Bronznick, executive director of the Pittsburgh Transplant FOundation, the region's member of the national procurement network, says the 1986 Act is ineffect ve. '1 can't fathom they would pull somebody's Medicare;' Broznick says.

While similar laws in three western states successfully increased organ donation by up to 100 nercent, attempts by Pennsylvania lawmakers to remedy the donor shortage have proven less effective due to the same problems of enforcement as Congressional legislation. Pennsylvania's Required Request Law, Act \1.41, requires all hospitals to develop a p, otocol for organ procurement, yet fails to establish penalties for noncompliance. "The law has no teeth. There is always some way to get around the law," Broznick says.

The law not only fails to establish sanctions, but does not give authority to the Pennsylvania Department of Health or any agency, task force or committee to develop sanctions, according to Donna Wenger, executive assistant to the Secretary of Health .

Wenger also represents the Secretary of Health on the Organ Donor Committee, a public and professional inter-

est group designed to expand awareness and education of organ procurement .

Typically, laws which do not establish sanctions for implementation contain language permitting development of regulations to enforce the law.

Act 141, however, contains no such language. Thus, organizations such as the Organ Donor Committee can only review and develop procedures for organ procurement. The committee does not have the authority to review organ procurement protocol and implementation of hospital procurement procedures. The Department of Health is also barred from followingup on protocol guidelines it issued in 1987 pursuant to the Act. The protocol established by hospitals in compliance with Act 141 can only be reviewed upon examination of an institution's license. The only other effort by the state 1o review compli. ce with Act 141 has been through a - - •- - - -· q estionnaire distributed by Pennsylc=va ia Secretary of Health N. Mark Richard's, M. 0. Answers to the questionnaire require a ran om pullmg of·--i" - - charts which Brosnick says P.ermits hospital administrators t9 complete the survey m a favorable light to the hospital.

Furthe , failure to comply with the o an P. ocurement protocol alone d~not jeopardize a hospital's license.

"The licensing committee has never tur d down a hospital on the basis of the e quired request law itself," Wenger says.

Implementation of the law is further hampered by the nature of the act itself. Many, including Health Department legal counsel, believe that regulations are not needed to make the law effective, according to Wenger.

Without regulations to enforce the law, the biggest impediment to organ procure~ent will continue . The resistanc~ of health professionals is the biggcl;t hurdle in promoting organ donation . Medical personnel resist approaching families about organ donations because of the feeling of failure that arises when a patient dies, according to Brosnick.

The rapport that medical personnel share with families also impedes the quest for donor organs . After helping a family deal with death, the health professional also feels a loss, says Broznick. While Broznick says he understands the plight of the health professional, he sees a duty imposed on the request for donor organs .

Organ procurement leads to improvement in the quality of life for its recipients. "This is part of their job," says Broznick .

The reluctance of the health professional could be reduced if its members took a different approach to requesting organ donation, according to Broznick. If the professional approached the family believing in what they were doing and explaining the Pennsylvania law requiring the request, the role of the health professional could be made a little easier, Broznick says.

The lack of cooperation in organ procurement and effectiveness of the laws have forced organ procurement personnel to play a more direct role.

Broznick and his staff are involved in 80 percent of organ procurement in Allegheny County. Without the cooperation of medical personne ~nd support of effective legislation, B1oznick prefers that donation requests be handled by organ procurement officials. "We're better at it because we're detached from the situation:' The current state of the law only serves to antagonize hospital officials and healthcare personnel, Broznick says. Hospitals already have a i:ietwork of legislation to a ere to nd organ procurement is only a small part

PL~GUE Among the rights and foeedoms many of us take for granted is our constitutional right to privacy. It is not uncommon for many of us fo have experienced a situation where confidential or even intimate information was somehow accessible to people who did not have the need or the privilege to know. Think of how you would feel if it became common knowledge among your co-wo kers that your were once treated for substance abuse or had suffered a nervous breakdown? Would you be angry if your fellow co-workers somehow found out you had been fired from a previous job? Would it bother you if your neighbors learned that you had been arrested for drunk driving?

1f instances such as these would leave you feeling angry and violated, imagine how those people who have AIDS or those who have tested HIV positive might feel if such information was made widely known. The ramifications for those who are infected with the disease or who have tested positive as being carriers of the HIV virus

of the healthcare field, according to Broznick. Unless strinent penalties are adopted and enforced, the healthfield will continue to resist involvement in organ procurement . "We're giving the hospitals a mixed signal rules without enforcement," Broznick says.

State law esta1'lishing voluntary donor designation on drivers' licenses has also p,roven ineffective . Ninety percent of the public is aware of organ donor programs. Statistics show 78 percent of those aware of efforts to procure donor organs say they would participate in such programs, yet only 17 percent can;y licenses with organ donor designatio'n, according to Broznick . The statistics are comparable nationwide.

Healthcar e professio als also express some resistance in enforcing this law without approval from the family. The growth oflitigation in the medical field has resulted in a cautious reaction by physicia s. Precautions are taken even though the phy ican is supported by blackletter law.

The price of lack of support in organ procurement is high. Compromises in treatment for transplant candidates are being developed to compensate for the shortage in donor organs.

Multiple organ transplants are performed only as a last resort. Artificial hearts are substituted, and a growing number of kidney patients remain on dialysis for extended periodsof time.

The purpose of organ transplantation is to improve the quality of life and the alternatives do not meet this goal, Broznick says. Patients receiving artificial hearts spend the remainder of their lives hospitalized . Dialysis treatment is sufficient for only a limited period of time, at the end of which a new kidney must be obtained or the patient will die. There are no substitutes for the patient requiring a liver transplant.

If lawmakers and healthcare professionals continue to fail in recognizing their roles in organ procurement, the life-saving procedures will become form without substance, and ironically an obsolete method of preserving the quality of life in a society which pridesitselfon such accomplishments.

Susanne Kimberland is a second-year day student. She is currently a legal intern for the Allegheny County District Attorney. Susanne is a former free-lance reporter for the Pittsburgh Post-Gazette and Associated P,ress.

OF THE NINETIES if that right to privacy is violated can be severe: People who have or are perceived to be at risk for AIDS have been fired from their jobs, evicted from t eir homes, refused services by businesses and government agencies, and denied visitation privileges with their children . Discrimination may persist even after death; some funeral homes have refused to accommodate the bodies of people who have died from the disease.1

Because of the social stigma attached to the carrier of HIV, both through society's view of one being infected with an incurable disease (a modern "bubonic plague") and through the stigmas attached to the sociological groups that the disease has hit hardest (homosexuals, intravenous drug users, minorities), the knowledge by others of one's seropositivity for HIV can be just as life threatening, in a sociological sense, as the disease is in physiological terms.

According to the Center for Disease Control (CDC) in Atlanta, as of December, 1989, there were a total of

117,781 diagnosed cases of AIDS in the

United States and territories. e CDC also reports that thr0t~gh that date, 70,313 persons have died from infections related to .Acquired Immune Deficiency SY1Jdrome.2 So what does this mean? Well, from a legal standpoint, lookihg at just the deaths themselves, not much. However, if we are to consider the sociological impact of this ~isease in terms of the law, then different concerns come info play. s of this writing, there is no known cure for a person infected with the HIV virus. The treatments available to infected inHividuals range from the margin :y useful to the absurd . Many of the d gs approved by the Food and Drug Administration produce sideeffects comparable in severity to the opportunistic infections that come w 'th AIDS. So what, then, is the law doing to protect those either with AIDS or who have tested positive for HIV in terms of the right to privacy and discrimination? The degree of state legislation on 7

the subject of confidentiality of HIV test results varies widely and depends largely on the occurrence of AIDS within the state. In Pennsylvania, which has the eighth highest occurrence of AIDS in the country,3 the legislature has yet to enact AIDSspecific legislation to deal with the confidentiality problem. Rather, the state is managing these issues by applying general medical confidentiality statutes.

With regard to testimony at trial, Pennsylvania utilizes the rule under 42 Pa. C.S.A. §5929 to proscribe a physician's testimony relating to patient information. The language of the statute reads: No physician shall be allowed, on any civil matter, to disclose any information which he acquired in attending the patient in a professional capacity, and which was necessary to enable him to act in that capacity, which shall tend to blacken the character of the patient, without consent of said patient, except in civil matters brought by such patient, for damages on account of personal injuries. (emphasis added)

By enacting legislation containing language, such as that emphasized above, the state has created for itself great problems in statutory interpretation in the phrase "shall tend to blacken the character of the patient:' Does being HIV positive "blacken" the patient such that his or her seropositivity should be immune from discovery or does this protection extend only to those who have begun exhibiting symptoms of AIDS? When distinctions such as these are left to the discretion of courts instead of being explicity prescribed by the legislature, vast inconsistencies in interpretation based on varying factual situations can develop. HIV positive test results are also liable to bias a jury in its deliberations and lead to prejudice towards the carrier.

Pennsylvania also attempts to discourage physician's disclosure of patients medical information through 49 Pa. Code§16.61(a) (1) which defines the scope of unprofessional and immoral conduct for physicians. This section states that a physician who "reveal(s) personally identifiable facts, obtained as the result of a physicianpatient relationship, without the prior consent of the patient, except as authorized or required by statute" is subject to disciplinary action under section 41 of the act. Hospitals are pro8

scribed from releasing patient records under 28 Pa. Code §115.27 which requires that written releases must be obtained from the patient before medical records can be released. However, 28 Pa . Code §115.28 relating to ownership of medical records states that such records "are the property of the hospital, and they shall not be removed from the hospital premises, except for court purposes:' Through these latter regulations, the state has opened up a gap in the confidentiality protection afforded to HIV positive persons in the court.

Once these records and/or testimony is admitted in court, such information becomes a matter of public record.

While it is true that a plaintiff gives up his or her right of confidentiality to medical information when he or she files a medical-related suit, should this continue to be the case with regard to

Absent this required reporting to the state, there is no express statutory or regulatory duty to disclose AIDS or HIV information to any other source, including third parties.

HIV test results? The legislature, by creating such a loophole in this protection has, in essence, created a chilling effect upon possible plaintiffs who, afraid of employment and societal repercussions of public knowledge of their seropositivity, will be more hesitant to file suit even if their cause of action is based on sofid ground.

The state requires reporting of AIDS cases under the Disease Prevention and Control Law of 1955 to the State Department of Health or to the county health departments. 28 Pa. Code §27.32. This act does not require the reporting of persons who are merely HIV infected, but only those who have showed signs of AIDS infection .

Under 35 P.S. §521.15, the state enumerates the confidentiality grant for this reported information. This provision prohibits the disclosure of any "reports or any other record maintained pursuant to that act to any person who is not a member of the Department or a local board or depart-

ment of health except where necessary to carry out the purposes of the act:' Once again the legislature has carved out a cavernous exception to the confidentiality of these records.

The concept "for the purposes of this act" can be broadly construed by a court to allow the admission of such HIV evidence in cases where it is not relevant.

Absent this required reporting to the state, there is no express statutory or regulatory duty to disclose AIDS or HIV information to any other source, including third parties. After Tarasoff v.

Regents of University of California, 17 Cal.3d 425, 551P.2d334, 131 Cal.Rptr.

14 (1976), the California Courts imposed a duty upon a psychotherapist to warn a person against whom their patient made a threat. Through a broad application of this case, a duty to warn a third party of a patient's HIV status can be implied by the courts, thus further breaching the conficentiality that is required in these cases.

Pennsylvania law currently supports the proposition that the physician only owes a duty of care to his patient, and this duty does not extend to the patient's family. Soto v. Frankford Hospital, 478 F.Supp. 1134 (ED Pa, 1979).

While it is certainly true that a physician's ethics might require him to notify a patient's sexual partner of seropositivity, it does not hold that such notification must be at the expense of the patient. Pennsylvania law requires that AIDS must be reported to the state, and, in turn, the state has begun partner notification procedures in 1989. These procedures require that the Department of Health shall notify all sexual partners, with the person's approval, but will not divulge the identity of the infected person.5 While this step is an adequate balancing of interests in protecting the innocent third party, it is also a blatant violation of the privacy interests of the HIV carrier. Notification against the will of the carrier should only take place in cases where the person threatens to infect others maliciously and wantonly.

The social stigma of AIDS is so strong, that despite the protection of the federal Rehabilitation Act of 1973, specifically Section 504, discrimination against those w ho are actually afflicted with the disease and those who have been diagnosed as being HIV positive is pervasive. Discrimination has been most pervasive in the

areas of employment and health insurance.

Section 504 states that discrimination is unlawful against a handicapped individual who is "otherwise qualified to perform the job duties of the position in question ." 29 U.S.C. ยง794.

The Court of Appeals for the Ninth Circuit has held in Chalk v. United

States District Court Central District of California, 840 F.2d 701 (9th Cir. 1988), that those afflicted with AIDS are afforded protection under the federal act, by extending the Supreme Court's decision in School Board of Nassau County, Florida v. Arline, 107 S.Ct. 1123 (1987). Although the plaintiff in Arline was suffering from tuberculosis, the Supreme Court found that she was a handicapped individual under Sec. 504 and that "the contagious effects of a disease could not be meaningfully distinguished from the physical effects that the disease has on the claimant." The Court held that to allow an employer to discriminate on the basis of merely carrying a particular disease would be unfair.

Yet, despite this legislation, because of ignorance and the devastating nature of the disease, discrimination persists and makes the need for confidentiality increasingly important. It is a combination of the snail-paced legal system and the fatality of the disease which presents a situation to employers that ridding themselves of an afflicted employee is worth the risk .

Lawyers who represent persons with AIDS against employers and insurance companies believe that the defendants deliberately stall, counting on the plaintiff to die in the meantime.

Also, AIDS victims do not litigate their claims because of the amount of stress and harassment involved and will often settle claims because of the time factor involved. Because of these factors, discriminating employers are not given sufficient incentive to change their policies.6 Rhonda Rivera, in her article, "Lawyers, Clients and AIDS: Some Notes from the Trenches," reiterates the need for confidentiality in the workplace because of the discriminatory practices leveled at those diagnosed or afflicted. "If [their] seropositivity becomes known, this information may have a detrimental effect on their employment and insurance coverage long before any symptoms truly affect their ability to work ." Not only has the employee been affected

economically, but equally as devastating says Rivera, is the psychological impact of removing an individual from his place as being a useful member of society.7 The economic burden leveled, in addition to cutting off a paycheck, is that of health insurance. According to Rivera, "The most valuable asset persons with AIDS have is a valid health insurance policy. Once a person is diagnosed as being seropositive and that fact becomes available to insurers, obtaining a new policy is virtually impossible."s Because of the enormous and often prohibitive cost of the health care involved in treating an individual with AIDS, the insurance industry has adopted means to permeate the individual's right to privacy as a means of discriminating against individuals who may be perceived as being a member of a high risk group.

''Pennsylvania ... has the eighth highest occurrance of AIDS in the country... " Insurance companies have engaged in such practices as developing an "AIDS Profile," a policy which required agents to set aside applications from single males who were employed in certain stereotypical occupations associated with homosexuality, a high-risk group. Those men who were employed as interior decorators, florists, antique dealers or in the jewelry or fashion industry were denied insurance coverage on the premise that they might be homosexual, and therefore, a high risk.

Some companies have adopted procedures which direct agents to scrutinize applicants who are unmarried, name a beneficiary who is neither a spouse nor a child or obtain information regarding living arrangements, residences or medical history in attempting to identify homosexuals or bisexuals.9 Intrusive measures such as these can only lead to a further concealing of test results or add to the fear of being tested for HIV altogether. Because of the paranoia that society has induced regarding AIDS, brought about by a

lack of knowledge, we will be forced to remain in ignorance regarding our personal status in order to continue our lives normally.

In an attempt to provide further confidentiality of these test results, the Pennsylvania House Appropriations Committee is currently reviewing a bill that would encourage people to get tested for AIDS by limiting disclssure of the results. This bill, however, provides for partner notification even without consent of the HIV carrier in a last resort situation .10 While some balance must be struck between the privacy of the infected individual and the right to know of sexual partners, this spread of information must be controlled and restricted. The Pennsylvania legislature must enact broad, pervasive legislation in at least an attempt to provide guidance for future regulation.

The law changes too slowly to control a situation such as AIDS. The need for protection is now. Infection with HIV and the threat of developing AIDS is enough, in and of itself, to ruin a person's life, there should not be the added threat of "societal death" imposed by the legislature also.

Notes 1. Schatz, The AIDS Insurance Crisis: Underwriting or Overreaching? 100 Harv. L. Rev. 1782 (1987).

2. Center for Disease Control, Atlanta , GA. AIDS telephone information service.

(404) 330-3020.

3. Id. 4. PBI. 5. Pennsylvania Bar Institute, AIDS: Business Employment & Litigation Issues, No. 1989-475, p. 37-8.

6. Rivera, Lawyers, Clients and AIDS, 49 Ohio St. Law J. at 913.

7. Rivera, Lawyers, Clients and AIDS, 49 Ohio St. Law J. at 903.

8. Rivera, Lawyers, Clients and AIDS, 49 Ohio St. Law J. at 904.

9. Schatz, The AIDS Insurance Crisis: Underwriting or Overreaching? 100 Harv. L. Rev. 1782 (1987) at 1787.

10. The Pittsburgh Post-Gazette, "Rally supports confidential AIDS testing," January 31, 1990, p.8.

J. Alan Fuehrer is a second year day division law student. He graduated from Washington and Jefferson College as an English major and was editor of the college newspaper and literary magazine.

Aileen Hickey is a second year day student and is a front line editor of Juris.

9

HOW WE READ THE BANKRUPTCY CODE The education and experience of the lawyer teach that all is not as it appears. When reading a statute, we hope for a plain meaning but expect that the words might create a dangerous illusion . With this lesson, lawyers at work drafting the more well-considered legislation (like the Internal Revenue or Uniform Commercial Codes) must seek to maximize the general accessibility of the law to all lawyers and to minimize the opportunity for the odd or hidden construction. Jurists confronting these carefully chiseled texts might take the statute on its face, respect the edifice, and curb desires to resculpt the words into something of their own device.

We practitioners of bankruptcy had hoped that the fresh Bankruptcy Code (the "Code") would be such a worthy statute. Instead, that dreaded secret mutability of words which troubles the practitioner perusing that which appears to be plain has reached a dangerous peak of serendipidity in this almost brand new code.

The Code was designed with both long lobbying and hard thought to modernize the provisions of the old Bankruptcy Act (the 'J\ct"). The Act used arcane language and was not organized in a contemporary sectional style. Years of odd judicial gloss had created a hazy build-up. While clearer form was at the root of the change, functional alterations were an important part of the package . Certain results reached under the Act (principally dealing with jurisdiction or voidable preference) represented an approach not in tune with commercial desires for centralized rapid bankruptcy administration and certainty. A full reworking and reconsideration of the Act ensued, a severe grammatical surgery producing a Code that would out muscle any modern statutory scheme in efficiency of use, ease in comprehension, and achievement of its salutary goals.

The skeletal form of the process of 10

by Mark D. Yochum Assoc. Prof of Law bankruptcy is simple. As of a certain date, through the appropriate petition, a debtor is created in bankruptcy.

Claims which arose against the debtor before that date participate in a distribution from his estate, the assets of the debtor which were his as of that date.

To the extent unpaid, these claims are discharged so that the debtor and his post-bankruptcy assets are free of these c:l aims. Claims arising post-bankruptcy do not participate in the distribution from the debtor's estate and are not discharged. State law priorities or liens established by mortgages, judgments, or statutes are preserved and the distribution from the estate reflects these interests .

Rehabilitative bankruptcy, principally Chapters 11 and 13, function similarly except that the reorganization process allows the debtor to file a plan describing how his financial life will be organized over a period of federal protection. Claims arising while a debtor is in rehabilitation are often given a priority over other unsecured creditors as an administrative expense to encourage third parties to deal with the debtor and aid in the recreative process. In the end, however, these plans must give effect to the rights that creditors would have had in liquidating bankruptcies.

As the language altered from Act to Code and as old judicial constructs became calcified to statute, litieation centered on whether the Code had effected a change in prior principle.

While the legislative history of magnum opi like the Code might be vast, the troublesome case of your client always seems to have been missed in the legislature's deliberations. With a newly formed Code, few decisions parsing its provisions, and inopportune ellipses in Congressional

guidance, the law nestled in the cold words of the statute. Rapidly, issues of this type, how to read this Code, rose to the Supreme Court .

In Midlantic National Bank v. New

Jersey Department of Environmental Protection, 474 U.S. 494 (1986), the Court dealt with a common modern problem : a debtor falls into bankruptcy possessed of property which is an environmental hazard . Outside of bankruptcy the entity would be forced to clean the site and would suffer fine or jail for non-compliance . The discovery of a toxic problem alone often is the impetus for bankruptcy. Rehabilitation is hopeless; the assets of the debtor are insufficient to cover the clean-up cost . The issue is who gets what in liquidation. The competing claimants are a government which seeks recompense for the clean-up it must accomplish for public safety if the debtor cannot and other unsecured creditors. A secured creditor, with a mortgage on the toxic site or other assets, may enter to confuse the mix.

If the assets of the debtor are insufficient to satisfy all, should the cleanup costs be paid first, before any distribution to the unsecured creditors?

Should the government simply share in distribution in proportion with other creditors to its d ebt? Should the secured creditor's interest be burdened by these costs?

The lawyer reader, perhaps representing an unsecured creditor, thumbs the Code and finds a simple sentence with an elegant answer to all of these problems. ยง554(a) of the Code, with false clarity, states : "the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit .. :' Surely, the waste dump is precisely that sort of property, extremely burdensome and of no benefit. If the trustee in bankruptcy were not the ownerof the property which has generated the clean-up

liability, the estate would not be burdened. In cruder terms, the remaining assets of the debtor's estate would be distributed to the unsecured creditors; the government would be stuck for the clean-up costs. There is virtually no dispute over the effect of abandonment in relieving the trustee and estate from any responsibility for abandoned property, but may the trustee abandon?

Justice Powell for the five-person majority in Midlantic opined that the Code cannot mean what it says. There is no legislative history on the breadth of this simple sentence, which by its terms is clearly unlimited. Justice Powell reviewed, however, cases under the old Act (roughly three cases; none from the High Court) which suggested that the plenary abandonment power was impliedly restricted by state and federal policies, policies to be protected by the bankruptcy court through the exercise of its equitable power to control estate administration. He offered a rule of construction for the Code which must chill all hearts who first look to simple meaning. "In codifying the judicially developed rule of abandonment, Congress also presumably included the established corollary that a trustee could not exercise his abandonment power in violation of certain ... laws.

The normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific.' 474 U.S. at 501. (Emphasis added).

Justice Rehnquist, in dissent, appropriately notes that the well established judicially created construct limiting abandonment under the old Act was not well established or well recognized. (The soon-to-be-Chief Justice is joined by the then Chief Justice Burger and Associate Justices White and O'Connor.) Further, the dissent pleads, how much more specific must Congress be in writing its statutes where, as here, the clear unqualified language of the statute lacks even a hint of traditional ambiguity? Further, the principal opinion of the Court colors its limitation on abandonment powers, disallowing abandonment only where a "statute or regulation that is reasonably designed to protect the public health or safety from identified hazards" intervene. Id. at 507.

Justice Rehnquist calls this the "surprise ending:' Labels routinely and thoughtlessly

attached to the justices of the Court, conservative or liberal, breakdown in the wrestle over bankruptcy. See C. Tabb, "The Bankruptcy Reform Act in The Supreme Court," 49 U. Pitt. L.R. 477 (1988). (This fine summary is in the nature or a scorecard, suggesting whether a justice moves well to the left or backs up creditors.) One might argue that aggressive interpretation of statutes, requiring a legislative history as well as a statute crystal clear has the impact of impinging on Congressional prerogatives, the sort of judicial activism which is abhorred by the judical conservative. But assessing these decisions as a product of economic, legal, or social ideologies is dicey because of the strange effects created by the permutations of bankruptcy.

Forexample, whileMidlanticmaybe viewed as a proenvironrnent decision, its real effect is in allocating the burden of clean-up. Largely, the cost is on the debtor's estate first. Instead of the

government picking up the tab, the creditors of the debtor suffer. The unsecured creditors may be smaller businesses less able to stand more substantial losses. A philosophical motive, the product of an ill-concealed prejudice or an unarticulated social theory for decision making is blurred in this context.

This argument, conducted at the highest level, over construction is what makes Code reading so hazardous today. For example, on another front, the innocent practitioner may represent a secured creditor who inquires of his lawyer, to what he is entitled in distribution from an estate?

A security interest in property may have been created by a consensual agreement, as a mortgage, or by lien of judgment, or by statute as a tax or other lien. The property to which the lien has attached may have a value which exceeds the amount of the principal obligation. Outside of bankruptcy, each of these secured claims in

some fashion accrue interest until the debt is paid. Will your client obtain interest accruing post-bankruptcy as part of his distribution from the debtor's estate?

Try on the punctuation of the Code's ยง506(b): 'To the extent that an allowed secured claim is secured by property the value of which ... is greater that the amount of such claim, there shall be allowed to the holder of such claim [,] interest on such claim [,] and any reasonable fees, costs, or charges provided for under the agreement under which such claim arose:' (Brackets added). The plain meaning of that statute is that if you are an oversecured creditor (the asset subject to the lien has a greater value than the debt), you may obtain post-petition interest and any contracted-for charges out of that collateral. This statute varies bankruptcy's ordinary rule that no creditor is entitled to post-petition interest. But for ยง506(b), interest stops accruing as of bankruptcy.

Under the old Act, the only sort of oversecured creditor entitled to postpetition interest was the one whose lien was the product of a consensual security arrangement. For example, a judgment creditor with a judicial lien on the real property of the debtor would not be entitled to post-judgment interest accruing by reason of state law to the extent it accrued after bankruptcy. The language of ยง506(b) of the new Code does not directly mention the distinction and seems to allow such interest for all oversecured creditors regardless of the origin of their security interest. In re Ron Pair, 109 S.Ct. 1026 (1989) examined the simple sentence of ยง506(b) as the United States as a secured creditor sought post-petition interest on an oversecured tax claim.

This legal dispute is the product of some nice grammar. Does the phrase "under such agreement" limit the right to receive interest or simply fees and charges? Note the first bracketed comma above begins a list. (Strunk & White in The Elements of Style at their seventh rule of usage offer that the mark to precede a list after an independent clause should be a colon but a comma may be used, although with less effect.) Note the second bracketed comma following "interest on such claim." The Court held in this five to four decision that the grammar impels the conclusion that interest is set apart from the limitation on the collection of fees and charges to those created 11

under an agreement. All oversecured creditors now may obtain post-petition interest, varying a traditional bankruptcy rule and departing from that rule in a significant fashion.

The ordinary reader with a short study of the statute may have reached the same conclusion. Th is guess might have risen to a feeling of virtual certainty if the practitioner were not aware of the prior rule. While mounds of dead law can provide an educative vantage from which to scan the variants of active law, on the whole, it is not good for the legal process if such dormant law can unexpectedly, in zombie-like fashion, be revived to fright the unsuspecting. In dissent in Ron Pair, however, Justice O'Connor, joined by Justices Brennan, Marshall, and Stevens, suggests exactly this shockingly disruptive way to read the Code.

Her opinion is a by-product of Midlantic, in which the Justice also contrarily dissented. There, the English of the abandonment statute was unread by the Court to give effect to a supposed judicially created concept of antique design. In Ron Pair, the majority, confronted with an occasion for the same style of activism, shuns gloss and concludes that the language of ยง506 is clearer. Justice O'Connor, however, engages in an usual reading process to reach her determination that the placement of the comma upon which we have relied is "capricious:' Id. at 1036. She concludes that the only way we can know if the Code is ambiguous (and consequently subject to extra-textual tools for interpretation) is if we know prior law. Changes in prior law which seem to be effected by a reading of a statute, even written more clearly than this ยง506, in a plain fashion may be the unintended product of thoughtless Congress. Id. She offers a rule of construction. "The rule of Mid/antic is that bankruptcy statutes will not be deemed to have changed pre-Code law unless there is some indication that Congress thought that it was effecting such change. Id. Justice O'Connor is unbashed in her explanation of the procedure a reader of the Code must use. This method, which has the support of nearly half the Court, requires (for how many centuries?) to discover first whether there was a pre-Code practice. (Librarians note; save the ancient tomes of Collier's, often the only source of old Act law when the regular reporting of bankruptcy court decisions was not 12

yet a gleam in West Publishing Co.'s eye.) If the Code seems to vary that result, no language, however plain, will insulate the provision from the charge of ambiguity and the jurist's reworking. Changes in prior law are only to be effected, in this view, if the Code's legisfative history indicates an awareness of the pre-Code practice and a willingness to change it. Merely rewriting the statute itself is insufficient to change the law.

This philosophical tug over interpretation of the fragile Code in the High Court may be watched with trepidation by those who trade in bankruptcy and as a matter of general instruction. The Code is replete with instances in which old Act procedures and construction appear to be varied.

Further, as with Midlantic, students of the game cannot be sure of what preCode practice was, making our guesses of new law more problemat-

ical. Worse, legal confusion fuels litigation. And importantly, this reading problem is not simply roiling on the fringes of bankruptcy law but is disturbing central themes in the Code's purpose and effect.

Take this tale. Prior to bankruptcy, a thief is sentenced. The penarty may be jail, a fine, and an order to pay restitution to the victim. The restitution is paid to the court which, in turn, pays the victim. Whife the victim has no right to sue under the restitution order, the state may enforce this order through penal sanctions, such as revocation of parole. For your amusement, change the crime from theft to vehicular homicide or other crimes with tortHke effects and contemplate that similar sanctions, including payments to the victim, are available.

The issue confronting the Court in Kelly v. Robinson, 479, U.S. 36 (1986) was whether a restitution order was discharged in a Chapter 7 bankruptcy.

Remember that a claim in bankruptcy

participates in the sharing from the debtor's assests and, to the extent unpaid, is discharged. Several provisions of the Code preclude discharge of particular debts. Without discharge, the debtor and his post-bankruptcy assets may be chased through eternity by a creditor seeking satisfaction. In the Code is ยง523(a) (7) eliminating a d ischarge "to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss .. : Clearly, the conventional criminal fine is not discharged. The restitution order, however, seems to be for the benefit of the ultimate recipient of the payments, not a governmental unit, and the payments are often explicity designed to compensate for actual pecuniary loss. Consequently, the e]ementary conclusion is that the restitution order may be discharged.

The opinion in Kelly is a model of the O'Connor approach (albeit before that procedure had been freely articulated): several pages of admitted dicta on the historical treatment of criminal penalties (dicta which creates a special specter which will be illuminated shortly); several more pages on the appropriate constructs for legislative interpretation when bankruptcy meets state criminal law; a brief dismissal of the language of the statute, concluding that its plain words do not effect a change from historical approaches. The Court, with only Justices Stevens and Marshall dissenting, holds that restitution orders are not dischargable under ยง527(a) (7).

The Court first finds history, traditionally criminal judgments were not dischargeable. The Court embraces warmly the notion that the Code should not be used to invalidate state criminal proceedings which are "an important aspect of sovereignty retained by the States:' 479 U.S. at 47.

Since the statute does not impel discharge of restitution orders (perhaps by stating: "restitution orders are dischargeable") and since there were no House or Senate reports indicating an intent to change prior law, prior law is not changed. Under such analysis, ' resort to the statute itself, the Code, is reduced to a nuisance.

How can restitution be made to a victim and yet, to preclude discharge, also be "for the benefit of a governmental unit?" The Court offers that the rehabilitative function of restitution is the state's true purpose and that the 1

receipt of money by the victim is simply incidental. Consequently, restitution is for the state's benefit because it improves the criminal's character. But the prohibition against discharge, according to the statute, does not extend to "compensation for actual pecuniary loss." The Court concludes that the focus on the penal aspects of the punishment renders the tie of the penalty to recompense equally minor. While the victim may by happenstance be compensated, the real reason for the order is to improve the criminal's morals.

It is hopeless to perjorate on the conclusions of courts supreme especially where the moving hand has writ so clearly. Perhaps had Congress thought harder in drafting ยง523(a) (7) it may have realized the language opened a tiny window for the discharge of punishments produced by state criminal processes. The existence of the statute itself suggests that some obligations to pay produced by criminal proceedings might be discharged .

Perhaps, however, that window, if seen, would have been rapidly shuttered shut; in a sense, this is the conclusion of cases like Kelly v. Robinson.

One small criticism might be noted, however, which is of a piece with this warning on the interpretation of the Code. If "for the benefit of the government" and "not compensation for actual pecuniary loss" do not mean a payment to a government and compensation in substance, respectively, why are these now idle words in the Code? In an insufficiently timid footnote, the Court suggests that the "government" limitation was to permit discharge of "wholly private penalties such as punitive damages," 479 U.S. at 50n.13. One might have thought that the rehabilitative and corrective role punitive damages are supposed to serve might be as beneficial to the state as the restitution order in Kelly. Besides, many punitive awards are not dischargeable under ยง523(a) (6) which precludes discharge of claims arising out of wilful and malicious injury. As to the phrase "actual pecuniary loss," the Court offers that perhaps this apparently maladroit phrase was added to stop states from collecting tax deficiencies (the actual pecuniary loss) through use of criminal penalties. 479 U.S. at 50n.13.

The Court rejects a plain reading of the statute which may have been designed by Congress (although there

is no history) to preclude creditors from obtaining an advantage over other creditors of the debtor simply because the claim may be enforced through a criminal judgment. Suppose a debtor before bankruptcy writes a bad check to each of two creditors. The aggressive system-wise creditor hauls the debtor before the magistrate on a bad check charge; the debtor makes a plea, as they all do when the alternative is jail, and is sentenced to court costs and restitution . The passive creditor waits or, perhaps, engages in the more sedate process of civil collection. In bankruptcy, both creditors may share in the pot but the aggressive creditor's claim, supported by the restitution order, will survive bankruptcy under Kelly and may be extracted from post-petition assets. The passive creditor's debt, however, may be discharged, depending upon the nature of the debtor's intent in writing the check .

When the statute is viewed as regu-

When reading a statute, we hope for plain meaning but expect that the words might create a dangerous illusion. lating distribution between creditors, an analysis centering on the avoidance of any inhibition on state penal proceedings seems a bit wide of the point.

While this nice question of restitution seems to sit on the periphery of interest for the bankruptcy practitioner as numerically few debtors have such criminal problems, in fact, a key determination for all of bankruptcy sits at the center of this problem. That determination is whether an entity holds a claim against the debtor. The existence of a claim as of the date of bankruptcy has two effects. First, a claim shares in distribution from the debtor's estate which is formed as of bankruptcy. Second, to the extent the claim is unpaid, the claim is discharged but for exceptions provided by statute of a type as noted in Kelly. A natural corollary to this analysis is that, if an entity does not have a claim, that entity does not participate in distributions. Similarly, the obligation of

the debtor under this non-claim is not discharged.

What is this claim? Congress has written ยง101(4) (A) of the Code. A "claim means-right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured."

This Code centerpiece has some legislative history as gilding, a necessary accoutrement as this provision is explicitly an attempt by Congress to broaden withered notions of which obligations of a debtor are to be dealt with in bankruptcy. Congress sought to define claim anew "by this broadest possible definition" to include "all legal obligations of the debtor:' Sen R. No. 95-989. The plain reader, adding the adjectives of ยง101(4), must agree that the description is so vast that it is inconceivable to describe any obligation of the debtor which might be excluded. What else is there? Ask the plain reader whether the restitution obligation of the debtor, the criminal judgment of Kelly, is a claim and the response must be, surely it is so.

The Supreme Court is not a simple reader. In Kelly, the Court offers this dicta: "we have serious doubts whether Congress intended to make criminal penalties" claims within the meaning of ยง101(4). 479 U.S. at 50.

(This comment is dicta as the Court in Kelly assumed that the restitution order was a claim, in order to reach the question of discharge.) The Court viewed the Congressional comments on the definition of claim and the statute of insufficient force to alter a traditional rule. "Nothing in the legislative history of these sections compels the conclusion that Congress intended to change the law with respect to criminal judgments:' Id. at n .12. Here is the coming rule for Code construction on full display, giving short shrift to the statute and seeking a legislative history that the Codewriting Congress was unaware it had to produce to change law.

Some courts before and since Kelly have concluded that restitution orders are not claims; the Supreme Court's reference to this line of cases in Kelly was to support the principal opinion's antipathy to the interference with state criminal proceedings through the Code. Under the Act, criminal penalties were not claims and, thus, not discharged. Courts who argue that such obligations are not claims under the 13

Code have pointed again to the notion of federal restraint and that the focus of the penalty is rehabilitation, not collection. These obligations are not like those ordinary claims which are the stuff of bankruptcy, claims which arise from contract or tort.

A distinction based on the origin of the obligation is not apparent on the face of the statute. There is no clue in the broad range of ยง104(4) that there are any limitations. The restitution order is a "right to payment:' (The phrase, "right to payment," has created its own linguistic turmoil which is a large story for another time.

Be warned that those three little words also await final construction which will be framed by the Court's attitude toward the expanded notion of that which is a claim.) Why does the Code include an exception from discharge for fines and penalties at ยง523(a) (7) if these were not now claims in the first instance? A penal order should produce a claim because if not a claim, the state could not be paid out of the assets of the estate but must wait for the accumulation of post-bankruptcy assets. If the criminal is a corporation in a Chapter 7 liquidation, there will be no assets post-bankruptcy. A fine against it, if not a claim, will not be paid. The determination of "no claim" in this instance produces an effect that does not support a tradition of upholding state criminal judgments but instead might reduce the opportunity for collection.

How the statute on claims is to be interpreted is of critical import to bankruptcy proceedings outside of this criminal setting. The issue is whether traditional restrictions on claims continue to have force under Congress' attempt to expand the range of the concept without detailed legislative history. For example, suppose a debtor-to-be manufactures a dangerous product, sent into the stream of commerce. Some are injured by the product and bankruptcy ensues. Those injured have a claim but what of those who may be injured in the future. A broad interpretation of claim (here, albeit, unliquidated, contingent, and unmatured) would require this class of claimants to participate in the estate but at the price of discharge of their unpaid claims.

Now students of the Code, stand watch. The Court has granted certiorari in a case which should fine tune the rule of interpretation and which may unsettle Congress' expansive 14

definition. The context of the issue is exceedingly simple, a debtor seeks discharge of a restitution obligation.

Unlike Kelly, where the debtor was in Chapter 7 liquidation, this debtor, however, is in Chapter 13.

Chapter 13's discharge provisions differ from those for Chapter 7 in a crucial respect. In Chapter 13, a debtor proposes a plan of rehabilitation with payments to creditors (those entities with claims) to take place over a period of time. If the Chapter 13 debtor completes this plan, all unpaid claims, except alimony and support obligations are discharged. Simply, under Chapter 13, there is no exception for fines, penalties, or restitution orders.

Under the Code, if the restitution order is a claim, it will be discharged.

In re Johnson-Allen, 871F.2d421 (3d Cir. 1989), cert. gr. sub. nom., Pennsylvania Dept. of Public Welfare v.

Davenport, 58 U.S.L.W. 3213 (1989) held that restitution orders were claims and that such debt is dischargeable in Chapter 13. The dissent in this Third Circuit case suggest the majority was too simple in reading the statute. Judge Hutchinson has caught the drift: "The Supreme Court has indicated to me that the policy considerations and history transcend the logic of a textual analysis:' Id. at 431.

Which reading will prevail? The odds lean with the preponderance of Justices in Kelly expressing enmity toward statutes which ostensibly impinge on state functions. Of course, bankruptcy does this all the time in the area of contracts and collections.

Arguably, bankruptcy considerations which led to the all-encompassing definition of claim should not be muted by judicial restrictions, born of an incomplete view of the fulJ effects in the criminal setting. Nonetheless, the rule for reading the Code must be at the vortex of this turbulent dispute over the meaning of claim. The majority on either side of this issue is tenuous and shifting and a forceful return to the elements of basic }egal style, allowing Congress to change law by quietly changing the statute, seems unlikely.

A willingness to proceed first by finding prior law, followed by a search through legislative history, and only then to the statute, reflects an unfortunate belief about the actual capacity and technique of lawyers. The origin of the statute's first and only approach of traditional legal analysis came in a day when extra-textual materials avail-

able to the common lawyer were limited or non-existent. Now, the record of commentary and deliberation is organized, catalogued, and open. This great and growing mass of commentary has accumulated from the natural chattiness in lawyers, encouraged by the institutions of law schools and law reviews. From the legislature, a blizzard of paper now blows, not from simple statutes but from the modern use of secondary methods for communication, like debates or reports, on the meaning of enacted law. All of this paraphenalia has been produced, in part, because we can produce it and because more information seems better than less.

We function, too, under a myth, which is also of older days when statutes were simply read, that all law is available to all. Each lawyer, no matter how humble the client or remote the jursidiction, can easily follow the circuitous route through the sources old and secondary to find new law.

From the rarefied heights of the Supreme Court, the process of discovery of the law through this new method must not seem burdensome; we an have access to all information so the playing field must be level. Such a process of discovery, however, takes costly time, arcane expertise, and often modern support, in the form of a battery of younger lawyers and the tireless computer assisting research.

The Justices and the elite bar are familiar with this milieu of the hypertechnical, well-papered practice. Consideration must be given as to whether this approach to law itself should be institutionalized further as matter of legal imperative through a rule of construction. If this recent history of the Code is evidence, resort to extratextual materials in such a vigorous fashion does not have the effect of reducing ambiguity and uncertainty about the law but rather destablizes our meager abilities to predict outcomes. Increasing the complexity of the difficult Code with this technique may not serve the needs of the poorer and simpler world of bankruptcy.

JUSTICE SOVIET STYLE For many the phrase "Soviet justice" may seem to be an oxymoron . The standard, somewhat macabre, joke one utters when they hear of someone being punished by Soviet authorities is something to the effect of: "See you in Siberia ." As I hope to make clear in this article, however, the Soviet Union actually has a fairly complex, functioning legal system . An examination of the philosophy behind this system and a juxtaposition with our own processess may help to make the Soviet system a little more understandable.

The key difference between the Soviet and American legal systems is philosophical. While in the United States we are champions of individual rights, the Soviets are proponents of the society. The rights of the individual are subordinate to the welfare of the state, and Soviet courts are more concerned with mankind than with the individual. The Soviet courts, therefore, are often considered as having an educational or a parental role i.e., teaching the proper way in which citizens are to conduct themselves if the goal of a peaceful society is to be attained . Their function has been defined as being "to educate citizens in a spirit ofloyalty to the motherland and to the cause of communism." 1 In the ideal Soviet state, the legal system would have withered away and comrades courts would be sufficient to maintain order. According to Marxist-Leninist theory, Jaw is a tool of the bourgeoise used to keep one class in power, therefore, with the achievement of a true Communist or classfree society, there would be no need for laws.2 Comrades courts, which exist in factories and communes, are cited as proof of advancement toward this goal of a society without need of regulation.

In the Soviet Union the Jaw is created by and subordinated to the state, therefore, it binds all but the state itself. As one put it, "formal law is subordinated to the law of revolution."3 Within the USSR law is held in low regard by both the leaders and the people.4 This anti-judicial attitude helps to explain the lack of respect given attorneys, or advocates as they are called in the USSR. Their position has been described as "among the lowest of the low" and until quite recently, their salaries were far below those of factory workers and teachers.5

The Soviet legal system, while usually distinguished from both the common and civil law systems, has many characteristics similar to the latter. For one, Soviet Jaw is based on statute not precedent . Additionally, as in civil law countries, the court proceedings tend to be more informal, especially at the lower levels. This practice is based on the notion that law be more readily accessible to the people.6 Besides this is the notion that, if one emphasizes informality and proceeds in such a manner as is best suited to the particular circumstances of a case, a more just hearing results.

The role of an attorney is very different in the Soviet Union than in the United States as they "play only a minor role in their system of justice:' 7 The fact gathering in criminal cases is conducted by a very powerful agency called the procuracy. While one may question the fairness of such an investigation, the whole tradition of the procuracy, a civil law element, is impartial or neutral investigation .

Rather than favor a particular party in a suit or a particualr official, this agency strives for a solution which will best advance the Soviet social goals. In stark contrast with our adversarial system, the Soviet system of justice employs what is known as the inquisitorial system in which the prosecution and defense attorneys work in cooperation with the state agency to ensure "socialist legality:'8 The procuracy conducts a very thorough investigation and it has been estimated that 60% of cases are dropped before trial.9 Quite clearly, once the procuracy has decided to proceed against one criminally, conviction is almost guaranteed - the acquittal rate is about 1% in the USSR. The trial then, rather than a factfinding forum, is little more than a pronouncement of the investigators findings and has been likened to a sentencing hearing.10 As George F. Fletcher noted in his article "In Gorbachev's Courts," "the procuracy's decision to bring the case to trial verges on an official finding that the defendant is guilty:' 11 The procuracy's findings are submitted to the judge who is to review the file prior to the case. Similar to the United States, the defendant has a right to remain silent and a plea of guilty will likely result in a milder sentence. During the trial the judge asks questions of the defendant, calls

15

witnesses, and rules on matters of evidence. There are few restrictions on admissibility and the judge may order evidence to be submitted from whomsoever he may deem appropriate.12 After the judge is finished, the prosecuting attorney and, finally, the defense attorney may pose questions.13 Certain situations justify detaining a suspect: catching the individua] in the act, testimony of an eyewitness, traces of the crime on the suspect, the lack of a permanent address, and an attempt to escape are all deemed sufficient .14 Once one is detained, the procuracy must be notifed within 24 hours.15 Bail is not permissible and the procurator may decide to detain a suspect for the entire length of the investigation. The maximum time which one is to be detained is fixed by statute, but this may be extended at the discretion of the prosecutor. Also, it should be noted that one may be released pending investigation, this, too, is left to the discretion of the procuracy and varies depending upon such factors as the severity of the offense and the past record of the defendant. Should sufficient evidence be found, one's status changes from that of suspect to "charged person;' and in the final stage one has the status "accused:' The prosecutor is a representative of the procuracy, or the state agency in charge of all criminal matters. The prosecutor has a very powerfu1role in the Soviet legal system. He, not the judge, makes decisions about prisoner detainment and he, not the judge, signs search warrants.

Most startling to Americans is the minimal role the defense attorney plays in a trial. His primary, if not sole, function, is to mitigate the sentence.

The defense counsel is often not even appointed until after the investigation and, even if he is, he must wait until the preliminary investigation to get any information. Additionally, the defense attorney usually only studies the prosecutor's findings and visits the scene of the crime; it is thought that if they would contact a witness, this person's testimony may be distorted .16 If the attorney conceals evidence or information from the procurator, he may be disbarred. Additionally, defense attorneys risk punishment if they are too zealous in defending a client who has been deemed a menace to the state. For political trials, the KGB actually has a list of attorneys deemed acceptable to

16

Organization of the Soviet Judicial System Elected by

Supreme Soviet of the U.S.S.R.

Supreme Soviet of The Union Republic

Supreme Soviet of Autonomous Repubiic Soviet of the Respective Region

Citizens of Districts

-

-

Court

Procurator

Supreme Court of the U.S.S.R.

ProcuratorGeneral of the U.S.S.R.

I

I

Supreme Court of the Union Republic

Procurator of the Union Republic

l

l

Supreme Court of the Autonomous Region

I

'

Procurator of Autonomous Republic

l

l

Court of Territory, Region, or Autonomous Region

Procurator of Territory, Region, or Autonomous Region

I I

I

l

People's Court

Procurator of area, district or city

I

Workers and apartment house Collectives

I

Comrades' Court

Appointed by:

-

Supreme Soviet of the U.S.S.R.

-

ProcuratorGeneral of the U.S.S.R.

-

Procurator General of the U.S.S.R.

-

ProcuratorGeneral of the U.S.S.R.

-

Procurator of the Union Republic

fAKEN FROM: The International Journal of Comparative and Applied Criminal Justice, Winter 1980, Vol. 4, No. 2, p. 115.

conduct such a defense.17 The ju dge, too, must be very careful about his acquittal rate and, rather than acquit, they will more likely send the case back for additional investigation.

Another interesting difference one will note in the Soviet courtroom is that, rather than a judge and jury, the court is presided over by a three-judge panel. The composition is one professional judge and two lay judges called people's assessors. These are individuals elected by their co-workers to serve for two weeks a year. In theory, these persons have an equal vote with the professional judge and could,

hypothetically, out vote him. In practice, however, the people's assessors defer to the professional judge almost without exception. This practice of deferment has earned the people's assessors the nickname "nodders:' Soviet civil law is composed of two kinds of relationships: property relationships and personal, non property relationships.18 Since property is under the exclusive ownership of the state, these rights are easily lost in the USSR. While just compensation must be given if all one's property is taken, this is not the case if the state action only changes the size of the holding.

Two problems which plague the courts of the Soviet Union are alcoholism and divorce. The state is so concerned with alcoholism that it is a crime which may result in two years of forced treatment. Divorce, too, is a very serious problem . Housing is in great demand in the USSR and youths will often use marriage as a vehicle to move out of their parents' home into a flat of their own. When such marriages end, the apartment is one of the most valuable assets in dispute.

Gorbachev, an attorney himselt has called for a "law-based" state.

At the lowest level of the Soviet court system are the Comrades' Courts, these courts, which exist in the factories and housing blocks, are much like vigilante organizations and the penalties assigned usually include such things as public apology or selfdenunciation. At the next level are the Peoples' Courts. Then are the Courts of the Territory, Region or Autonomous Region. Above this is the Supreme Court of the Autonomous Region then the Supreme Court of the Union Republic . Finally, is the Supreme Court of the USSR. This final arbiter is far less influential than our court as may be inferred from the fact that law is subordinate to the state.

As the various levels indicate, appeals are permitted, but the request must be filed within one week of the verdict.

People's assessors are included at all levels to insure inclusion of the citizenry in the judicial process and to allow each individual to be judged by his "peers:' In the time of Glasnost and Perestroika, a reform movement is also going on in the Soviet legal system . It seems quite logical that as the philosophy of the state changes, so, too, will the institutions which reflect these ideals. Subjects of reform include the role of defense attorneys, the number of crimes punishable by death, the number of acquittals, and "telephone justice" i.e., the contacting of judges by party officials concerned about the outcome of a particular case.

This final problem has become so acute that a standard joke is that there are three kinds of law in the USSR: criminal, civil, and telephone.19 Legal scholars within the Soviet Union and without feel that, in order

for the Soviet legal system to gain more respect from its citizenry and leaders, many of these reform elements must be attained. Were the courts to be more independent and were the attorneys to have a more enhanced role in the process, the judicial system may come to be viewed as a useful vehicle for the just resolution of disputes.20 Gorbachev, an attorney himself, has called for a "lawbased" state, but until the aforementioned reforms are instituted the Soviet government will remain to be one based on the power of the government rather than the assent of the governed .

SOURCES USED George Dana Cameron III, The Soviet

Lawyer and His System, a historical and bibliogmphic study, Michigan International Business Studies; no . 14, Division of Research , Graduate School of Business Administration, The University of Michigan, Ann Arbor, MI, 1978.

George P. Fletcher, "In Gorbachev's Courts," The New York Review, May 18, 1989, p. 13.

Darrell P. Hammer, The USSR, The Politics of Oligarchy, 2d ed., Westview Press, Inc. Boulder, Colo. 1986, p. 163.

Timothy Harper, "A Rare Look into Soviet Courts;' American Bar Association Journal, October, 1983, Vol. 69, p. 1492.

John N . Hazard, Isaac Shapiro, Peter B. Maggs, The Soviet Legal System Contem-

poran; Documentation and Historcial Commentan;, Parker School of Foreign and Comparative Law, Columbia University, Oceana Publications, Inc ., Dobbs Ferry, New York, 1969.

Eugene Huskey, "The Politics of the Soviet Criminal Process: Expanding the Right to Counsel in Pre-Trial Proceedings,"

American Journal of Compamtive Law Review, Vol. 34, 1986, p. 93.

Ioffee, Soviet Law in Theory and Practice.

Robert Kroll, "Moscow Justice," Barrister, Vol. 13, #1, Winter 1986, p. 22.

Robert E. Kroll, "Justice -in the- USSR," California Lawyer, Vol. 4, #9, September, 1984, p. 28.

Michael Orey, "A New Rule of Law? Not Quite.", The American Lawyer, April, 1989, p. 34.

David W. Patterson and Ann Doak, "Criminal Justice in Soviet Russia," Inter-

national journal of Comparative and Applied Criminal justice, Winter, 1980, Vol. 4, no. 2, p. 116.

Simona and Roman Pipko, Inside the Soviet Bar: A View from Outside," The International Lawyer, Vol. 21, 1987, p. 853.

John Quigley, "Soviet Courts Undergoing Major Reforms;' International Lawyer, Summer, 1988, p . 459.

1. JohnN . Hazard, Isaac Shapiro, PeterB. Maggs, The Soviet Legal System, Contem-

poran; Documentation and Historical Commentary, Parker School of Foreign and Comparative Law, Columbia University, Oceana Publications, Inc ., Dobbs Ferry, New York, 1969, p. 60, citing the Statute on Disciplinary Responsibility of Judges of the Courts of the RSFSR, June 12, 1965.

Sovetskaia Ivstitsiia, 1965, no. 14, p. 31.

2. George Dana Cameron III, The Soviet

Lawyer and His System, a historical and biographic study, The University of Michigan, Michigan International Business Studies; no. 14, Division of Reaearch, Graduate School of Business Administration, The University of Michigan, Ann Arbor, MI, 1978, p. 19.

3. Jaffee at p . 15.

4. Jaffee, Soviet Law in Theory and Practice, p. 9.

5. Michael Orey, "A New Rule of Law? Not Quite:', The American Lawyer, April 1989, p. 1495, and George Dana Cameron III, The Soviet Lawyer and His System,

Michigan International Business Studies; no.

14, Division Research, Gmduate School of Business Administration, The University of Michigan, Ann Arbor, MI, 1978, p. 50.

6. Cameron at p. 42.

7. Robert E. Kroll, "Justice-in-the-USSR," California Lawyer, Vol. 4, #9, September, 1984, p. 30.

8. Kroll at p. 3.

9. Kroll, p. 30.

10. Id. at p. 3.

11 . Fletcher, p. 14.

12. Hazard, The Soviet Legal System, Con-

tempomry Documentation and Historical Commentary, p. 93.

13. Robert Kroll, "Moscow Justice;' Barrister, Vol 13, #1, Winter, 1986, p. 25.

14. David W. Patterson, "Criminal Justice in Soviet Russia;' International journal of

Comparative and Applied Criminal Justice, Vol. 4, no. 2, Winter, 1980, p. 117.

15. Id .

16. George P. Fletcher, '1n Gorbachev's Courts;' The Nw York Review, May 18, 1989, p. 16.

17. Jaffee at p. 62 .

18. loffee at p. 55.

19. Orey at p. 39.

20. John Quigley, "Soviet Courts Undergoing Major Reforms;' International Lawyer, Summer, 1988, p. 473.

NOTE: In November of 1989 the Supreme Soviet adopted new fundamental laws governing the judicial system which provide for such things as inclusion of the defense attorney at an early stage of investigation and trial by jury in certain criminal cases.

Ella Kwisnek is a second year day student. She received her undergraduate degree from Sa int Vincent College and has studied Russian at Norwich University, Vermont, and the University of Pittsburgh.

17

The Price of Landmark Designations *[Note: The historical information regarding St. Peter's Epsicopal Church was provided by Lynne Wohleber, Archivist for the Episcopal Diocese of Pittsburgh.]

As our society progresses into the future, a continuing land use problem arises concerning whether to preserve the past - specifically, the architectural and historical sites of our heritage. Recently, the City of Pittsburgh was faced with this dilemma when the Episcopal Diocese of Pittsburgh (hereinafter Diocese) wished to sell to Oxford Development Corporation, St. Peter's Episcopal Church* and the land on which it sits. Oxford offered $1.6 million to the Diocese for the land provided the developer could raze the church and erect its own structure. St. Peter's Church was the only church left in Pittsburgh designed in the mid-19th Century Gothic Revival style! The 131 year old structure, which had a congregation of about fifty when it closed, had fallen into disrepair due to the elements, pollution and lack of funding to maintain the structure. It was estimated about four years ago that it would cost over $400,000 to restore St. Peter's.

St. Peter's was one of the oldest existing churches in Pittsburgh and the only example in Pittsburgh of the work of the distinguished, 19th Century architect, John Notman. For this reason, among others, the Pittsburgh History and Landmarks Foundation opposed its destruction and attempted to have it designated as a historical landmark. Doing so would protect the Church from material changes in its structure.2 The Diocese advocated the sale of St. Peter's Church because it had virtuall no congregation left and because the maintanence of the structure was a drain of the Diocesan funds. The Diocese believed that the sale of the property would allow them to do 18

more good for the community and their congregations. The age of the structure, along with the poor condition of the stone and mortar, made it impossible to move to another focation, as was determined by a construction engineer, according to Lynne Wohleber, Archivist of the Episcopal Diocese of Pittsburgh.

Under the present system, the Pittsburgh City Council votes on whether to make a building a historically protected landmark.3 The Council voted not to grant historical designation to St. Peter's ina5-2vote. There was concern that, had St. Peter's Church been designated a historical landmark, this would have been a "taking" of the Episcopal Diocese property under the Fifth and Fourteenth Amendments.

The Diocese would have possessed "valueless" property because they had no practical use for the structure.

The issue arises whether this would have been a taking such that the City of Pittsburgh would have had to reimburse the Episcopal Diocese for the loss and, if so, whether the compensation would be the $1.6 million price offered by the Oxford Development Corporation.4 It is necessary to examine what constitutes a taking under the Fifth Amendment. The United States Supreme Court stated inA rmstrong v.

United States, 364 U.S. 40, 80 S.Ct. 1563, (1969), the Fifth Amendment injunction "nor shall private property be taken for public use, without just compensation;' prevents the government from taking private property and forcing those private owners to bear the burden of loss alone. By providing for comp ensation to be paid by the government, the burden is spread to the public. This injunction is applicable to states through the Fourteenth Amendment.5 In Penn Central Transportation Co. v.

New York City, 438 U.S. 104, 98 S.Ct. 2646, 57L.Ed. 2d631 (1978) the Appel-

)ants, who owned Grand Central Terminal, protested the designation of the terminal as a landmark under the New York City's Landmarks Preservation Law. The Appellants were denied permission to construct an office building over the terminal because it was determined that the existing structure would have its aesthetic beauty impaired. The Appellants claimed that New York City had taken their property in violation of the Fifth and Fourteenth Amendments by the designation of Grand Central Terminal as a landmark and preventing the Appellants from constructing the office building. It was argued that such a taking requires just compensation from the government.

It has long been held that preserving the aesthetics of a city through land use restrictions is a permissable goal. City of New Orleans v. Duke, 427 U.S. 297, 96 S.Ct. 2513 (1976); Village of Belle Terre v. Boraas, 416 U.S. 1, 94 S.Ct. 1536 (1974). In Penn Central, the United States Supreme Court concluded that whiJle New York City has not physically taken the Appellants' property the City had impaired their ability to put the property to its most profitable use. The Court found that the Appellants were still able to receive a reasonable return from the operation of the terminal.6 While the proposed multi-story project was rejected, a modified plan which would not impair the aesthetics of the landmark could still be presented to the Planning Commission?

The Court also recognized that the transferable development rights (TOR) program afforded by New York City is a method of returning some value to the owners of Grand Central Terminal.8 A TDR is a separation of the air rights from the surface rights to the property. The unused density of air rights become TDR's. Basically, the owner of the landmark is provided with development certificates which

they may apply to other property they own or they can sell these certificates to other developers. Selling these certificates enables the possessor of the certificate to build or add to a structure outside of the existing land use regulations. For example, if, under normal circumstances a landmark owner would be permitted to build a twenty story office building but, because of the existing five story landmark, is prevented from doing so, the government will issue the owner TOR certificates equivalent to 15 storie路s.

The owner may then apply those TDR's to another piece of property he owns and build a 35 story building where normally the maximum height allowed would be 20 stories. Of course, the certificates may only be applied to certain parcels upon government approval. Also, while TDR's are a valuable commodity in a city such as New York, they are questionable as a means of adequate compensation in a city such as Pittsburgh where large office complexes are only built in a very sporadic fashion due to an office vacancy rate as high as sixteen percent in the Downtown area.8 Prior to the decision in Penn Central the New York Court of Appeals heard the case of Fred F. French Investing Company, Inc., v. CityofNewYork, 39N.Y.2d 587, 350 N.E .2d381 (1976) . ln that case New York City rezoned two private parks making them open to the public. The City granted the owners TDR's to compensate them for the deprivation of the private use of their property. The Court of Appeals determined that even though the City gave these severed development r_ights to the owners, it was not sufficient to compensate them for the taking of their property. T)lis was the first case to consider the usefulness of TDR's and found them to be of questionable value because the severed rights do not regain value until attached to another parcel. The fluctuations in the market make the value of a TOR indeterminate.

The dissenting opinion in Penn Central is of special note because it was authored by Chief Justice Rehnquist.10 The dissent determined that the New York ordinance which enabled the Commission to single out only individual property owners for historical designation was only zoning in a superficial sense. Traditional zoning restrictions put a similar burden on a group of landowners within a designated area . This ordinance puts the

burden on the individual owner not to alter their property while neighboring landowners are at liberty to maintain or change their property as they see fit. In addition to restricting the owners of the terminal from altering the structure, the ordinance has placed an affirmative duty on the owners to maintain the structure at their own expense. Because of the landmark designation of the terminal the Appellants will lose millions of dollars in revenues.u The dissent went further to acknowledge that in some cases the government may restrict a specific use of an individual parcel and not be required to pay compensation to the owner. However, this exception only applies to nuisances which are determined to be "dangerous to the safety, health or welfare of others." It is obvious the Appellants' proposed structure would not constitute a dangerous nuisance.12

... because TDR 's have uncertain value, the granting of them may only mitigate the taking" ....

0

The dissent also concluded that just compensation for a Fifth Amendment "taking" requires not approximate compensation but "'must be a full and perfect equivalent for the property taken:"13 Monongahela Navigation Co. v.

United States, 148 U.S. at 326, 13 S.Ct. at 626, as cited in Penn Central 98 S.Ct . at 2672. The dissent determined that because TDR's have an uncertain value, the granting of them may only mitigate the "taking" and does not necessarily provide just compensation in the true sense.14 In Maher v. New Orleans, 516 F.2d 1051, reh. den 521F.2d815, cert den.

426 U.S. 905 (1975), the Court held that the City's historical preservation ordinance, which prevented the property owner from demolishing the existing building in a historic district and from erecting a modern apartment building, did not rise to the level of a taking of his property without compensation . The fact that the property owner was prevented from putting his property to the most profitable use did not obligate the government to compensate him for the loss. The property was still capable of giving a reasonable

return to its owner and was capable of being sold. Therefore, the property was not valueless. ln First Presbyterian Church v. City Council of York, 25 Pa . Cmwlth 154, 360 A .2d 257 (1976), the Court held that the denial of a permit to demolish a church-owned building situated in the center of a duly designated historic district was not deprivation of property without due process of law. Compensation would not be given where . the church had failed to prove that the building was unusable for any purpose, that it could not be sold, that it could not provide a reasonable return if rented, or that other potential uses for the property were impracticable.

In Keystone Bituminous Coal Association v. DeBenedictis, 107 S.Ct. 1232 (1987), the coal companies brought a challenge to the Pennsylvania Department of Environmental Resources' (DER) regulation requiring the companies to leave a portion of the coal unmined. The goal was to prevent subsidence by providing support for existing above-ground structures. The Supreme Court found that the regulations served a legitimate public purpose and that the companies did not suffer a substantial diminution in the value of their property. To determine if there had been an unconstitutional taking of the property, the Court held that the unmined portion of the property must be viewed as a part of the whole and not as a separate parcel which had lost all value. The portion of coal that had to be left unmined was Zl million tons, which constituted less than two percent of the coal left in place. While the amount of coal left unmined pursuant to the DER regulation seems substantial, 27 million tons, in relation to the entire parcel, is negligible. It is merely two percent. It did not warrant such a taking under the Fifth and Fourteenth Amendment as to require compensation by the government .15 In Nollan v. California Coastal Commission, 107 S.Ct. 3141 (1987), the Court held that the conditioning of a building permit upon the grant of a permanent public access easement across the property owner's beach was a taking in violation of the Fifth and Fourteenth Amendments requiring the government to compensate the owners. The Nollan's leased, with an option to buy, a piece of beachfront property situated between two public beaches. They submitted a plan to the Commission calling for the razing of 19

the existing bungalow, which had fallen into disrepair, and for the erection of a three bedroom residence in accordance with existing neighborhood structures. The Commission conditioned the permit upon the Nollan's providing an easement across their property enabling the public to move freely between the two public beaches flanking the Nollan's property. It has been recognized that one of the most valuable rights accorded to a property owner, is the right to exclude others from that property. When this right is taken away, the value of the property is substantially impaired.16 In Nol/an, the Court stated that it has been recognized that a land use restriction does not constitute a taking where legitimate government interests are furthered and the owner is not denied viable use of his land. A standard to determine a "legitimate state interest" has riot been defined by the courts. Nor has the connection necessary between the regulation and the state interest it advances been established. It has been made clear that a broad range of interests may be legitimate, such as those advancing the health, safety and general welfare of the public.17 It was determined by the Court in Nollan that, while obtaining a public easement across the Nollan's land would be a benefit to the public, it is unfair to place the burden solely upon the private owner. If the Commission wished to achieve its goal through a permanent easement across the land, the government was required to pay for it.18 The designation of St. Peter's as a landmark would have taken the right to convey the property and to alter the structure from the Episcopal Diocese.

This taking would be premised upon benefiting the public by preserving the aesthetic beauty of the structure.

Applying Nollan, it would seem that, if the City of Pittsburgh wanted to preserve St. Peter's, it must shift the burden from the Diocese to the City and compensate the Diocese for the loss of their property. The rationale for this is that the cost of restoration would be substantial and the use by the most recent congregation of fifty would not provide a reasonable use of the property.

It was recognized by the New York courts in Trustees of Sailor's Snug Harbor v. Platt, 29 App. Div. 2d 376, 288 N .Y.2d 314 (1968), that where an organization's charitable purpose is substanti20

ally impaired by the landmark designation, either physically or economically, the regulation becomes confiscatory. In effect, the regulation has deprived the owner of reasonable use of the land.19 The New York Preservation Landmarks Preservation Law provided that, where appropriate, the Landmarks Preservation Commission could provide tax benefits to landmark owners. This would insure a sufficient return of income on the site. For the already tax-exempt owner (i.e. a church, nonprofit organization, etc.) the Commission may provide a buyer or leasor to use the property in accordance with the existing structure. Were the Commission to fail to do this, it must let the owner proceed with plans to demolish or alter the property.20 It has been alleged that, where landmark designation is applied to an entire district, it usually increases property values while restricting the use of the property. However, the designation of a single site usually reduces its value and burdens the single owner, especially where surrounding properties are allowed to develop at will.21 In the case of St . Peter's Church, applying the test from Keystone Bituminous Coal, considering the structure as a whole makes it evident that even if the Diocese had continued to use the church for its most recent congregation, the value remaining in the structure was negligible compared to the fair market value of the property of $1.6 million. Under that analysis, the City of Pittsburgh would have been required to compensate the Diocese for the taking of their property by the historical designation because it would have denied the owners of "an economically viable use of the land:' 22 It could be argued that the City would have only had to compensate the Diocese in the amount necessary to restore the existing structure. However, this presents the problem of future costs to be incurred in the maintenance of the structure. It was suggested that additional taxes be assessed to the public to be put into a historic preservation fund. This would allow the government to purchase appropriately designated structures and shift the burden to the public and away from the private land owner. Thus the private owner would receive a fair return on his property even though he is prevented from putting it to its most profitable use.

In conclusion, it seems that if the City of Pittsburgh had designated St. Peter's Church as a historical landmark, it would have had to pay the Episcopal Diocese compensation for the "taking" of their property. The compensation would have to be at least the amount required to restore the church, $400,000 and, at the most, the price offered by Oxford Development Corporation, $1.6 million. The granting of transferable development rights would not be viable in Pittsburgh because of the rarity of large development projects. (The current zoning code in Pittsburgh makes no provision for the granting of TDR's .)

Also, tax incentives would not be a form of compensation to the Diocese as they are already a tax-exempt organization.

References 1. Skratt, Alison, "Planners Want to Preserve the City," Pittsburgh Post-Gazette, Sept. 6, 1989, p. 6.

2. Lowry, Patricia, "Saving St. Peter's;' The Pittsburgh Press, Nov. 7, 1989, p. 87.

3. Pittsburgh Code, Section 1007.2(513.3).

4. "Vote Oears Way for Church's Demolition;' Pittsburgh Post-Gazette, Nov. 29, 1989, p. 4.

5. Armstrong, 364 U.S. at 49, 80 S.Ct. at 1569.

6. Penn Central, 96 S.Ct. at 2657.

7. Id. at 2665-66.

8. Id. at 2666.

9. fur a further explanation ofTDR's see: Daniel R. Mandelker, Land Use Law, Sec. 11.34 (2d ed. 1988).

10. Penn Central 9A S.Ct. at 2666.

11. Id. at 2667, 2669.

12. Id. at 2669-70.

13. Monongahela Navigation Co. v. United States 148 U.S. at 326, 13 S.O. at 626, as cited in Penn Central 98 S.Ct. at 2672.

14. Id. at 2673.

15. Keystone Bituminous Coal, 107 S.Ct. 1232, 1235, 1248-9 (1987).

16. Nol/an, 107S.O.at3141, 3145(1987).

17. Id. at 3146-7 see also Penn Central438 U.S. 104, 98 S.Ct. 2646, and Euclid v. Ambler Realty Co. 272 U.S. 365, 47 S.Ct. 114 (1926).

18. Nol/an, 107 S.Ct. at 3150.

19. Note, "Urban Landmarks: Preserving Our Cities' Aesthetic and Cultural Resources;' 39 Albany Law Review 521, 532 (1975) .

20. Id. at 526-8.

21. "Historic Zoning: The Test for an Unconstitutional Taking;' 81 Dick L.R. 136, 143 (1976).

22. Mandelker, Land Use Law, Sec. 2.22.

Molly Murphy is a third year day student. She earned her BA degree in history from St. Francis College in

1986.

Isn't It A Fact That You Have Insurance?

There are many factors that assist a jury in coming to an impartial conclusion to the action in which the jury is involved. However, there are some elements which are immaterial to achieving a fair decision and should not be included in the jury's thought process. It is the duty of the Court to assure that the unnecessary information is not presented to the jury, so that an unbiased decision may be attained.

To fulfill this obligation, the tribunal is required to deny the jury access to any information that is irrelevant and prejudicial to securing justice. This article will review the present availability of admitting into a Pennsylvania Court as evidence any reference to insurance coverage held by one of the parties in the suit, and the reasoning behind the law.

The general rule in Pennsylvania is that an allusion to insurance coverage held by one of the parties to an action will be excluded if it is irrelevant and prejudicial. Greenwood v. Hildebrand, 515A.2d963(Pa . Super. 1986); Paxton

National Insurance Company v. Brickajlik, 522 A.2d 531 (Pa. 1987); Beechwoods Flying Service, Inc. v. Al Hamilton Contracting Corporation, 476 A.2d 350 (Pa. 1984).

The purpose for the general rule of denying the reference of a party's insurance coverage where it is irrelevant and prejudicial is obvious. The court in Greenwood indicated, "This rule was intended to avoid precluding a claimant from obtaining redress for his or her injury merely because coverage for the injury was provided by some collateral source, e.g., insurance:' Id. at 968. Further, in Paxton, the court stated: "Fact finders should not be tempted to render decisions based upon the extraneous consideration that an insurance company will actually pay the bill." Id. at 533.

The current attitude of the Pennsylvania Courts is a valid apprehension that the reference to insurance coverage held by the defendant will result in a different award if no reference to the insurance coverage is allowed. For example, take a defendant, who the jury has been informed, is uninsured

and unemployed . It seems likely that a jury will, at the very least, subconsciously take into effect that the accused has no visible means of monetarily reimbursing the plaintiff, which will inevitably produce a lower judgment for the plaintiff. The fact that a negligent party has no perceivable financial means of immediately compensating the injured party should not have any effect on the jury's conclusion, but it seems that such a factor would effect the amount of the judgment provided by the jury.

The jury will likely conclude that because the defendant is unemployed and uninsured, the plaintiff will not get the funds anyways, so why bother to give it to the plaintiff. The jury may also take a sympathetic view of the defendant because he will have to pay the judgment on his own. These are just two of several examples that could be unfairly added to the jury's thought process in deciding the case, where the jury knows the defendant is uninsured . This is not suggesting that the jury would completely neglect the plaintiff, but only that a lower judgment would be given, because of the possible subconscious or conscious effect in the jury.

If the same defendant is insured, there can be no doubt that the jury would provide a different judgment.

The jury would know there is now a visible source to monetarily reimburse the plaintiff for his or her damages. As well, the general public has a perception that the insurance companies receive high premiums for a benefit that they are often unwilling to distribute for even valid claims. This disfavorable opinion towards the insurance companies would often lead the fact finders to propose a higher judgment. The jury may equate the judgment not only as a compensation to the injured party for his or her harm, but also as an opportunity to make the insurance industry pay for the number of perceived valid claims that have been denied coverage.

However, it is not only an insured defendant that may effect the award given by the jury. A plaintiff in a

wrongful death action, who is also the beneficiary of an insurance policy, may certainly receive a reduced award if a reference about the plaintiff's benefits is allowed. The knowledge that the injured party has already received a substantial amount of money from an insurance company as a result of the decedent's death may tend to lead the jury to the conviction that the beneficiary has already been highly compensated for his or her loss, although the recovery on an insurance policy is not to be figured into the jury's award.

The plaintiff may have a two million dollar insurance policy, which he or she recovered as a result of the decedent's death . Although the facts of the case may demand a million dollar judgment, it seems improbable that the average lay person, with the knowledge of the two million dollar insurance policy, could be persuaded to provide the plaintiff with another million dollars. If not purposely, subconsciously some of the jury will believe that the plaintiff has already been fully compensated by the insurance policy. This is not to suggest that the jury would not rightfully award a judgment to the injured party, but only that the judgment given would be less than warranted.

As stated, the general rule in Pennsylvania is that a reference concerning a party's insurance coverage is not allowed where it is irrelevant and prejudicial. However, for every rule there is an exception.

In Beechwoods Flying Service, Inc. v. Al Hamilton Contracting Corporation, 476 A.2d 350, 353 (Pa. 1984), the Supreme Court of Pennsylvania held "that where the evidence of insurance is relevant to the issues in the case, it will not be barred merely because it might be prejudicial:' The Court established the principle that the relevancy of evidence will outweigh the prejudicial effect it may have on the suit. It is important to realize that there are some situations in which the presence of insurance is an element that assists the Court and the fact finders determining the truth of the issues presented. Yes, the jury's knowledge of 21

the party's insurance may be prejudicial, but the relevancy of the insurance coverage far outweighs the possible discriminatory effect of the reference to the insurance coverage. For example, where the issue is that of a bailment status, the evidence of an insurance coverage is admissible into evidence, because the parties' contractual agreement of the bailee's liability and the subsequent procurement of insurance by one of the parties could establish that the party understood it was their contractual responsibility to bear the risk of loss for any damage which would occur to the property held, thus, aiding the Court and jury in the determination of whether a

bailee/bailor relationship exists.

This article is not presented to suggest that all juries' judgments would be affected by the reference to a defendant's or plaintiff's insurance coverage, but only that it is likely that some awards would be affected by a jury's knowledge of a party's insurance coverage. If one award is prejudiced by the reference to an insurance coverage that is irrelevant to the issues at hand, then it is one judgment too many.

The fact that a defendant is covered by an insurance policy or that a plaintiff is the beneficiary of a substantial life insurance policy in a civil suit should not be a consideration of the

jury. A harm is a harm, the injured should be justly compensated and the guilty should fully redeem the afflicted party. The relevant facts should continue to determine the fact finder's conclusion, not an element that is irrelevant to justice. Thus, this writer firmly agrees that a reference to an insurance coverage held by one of the parties to an action must continue to be excluded, where such a reference would be irrelevant and prejudicial to the issues presented.

Jim Heneghan is a third year day

student.

TAKING CLIENTS The Problem:

When an attorney leaves a law firm and contemplates taking an active client of the firm with him, what are the rights of the respective parties?

What duty does the departing attorney owe the firm, and vice versa, taking into account any employment contract which would limit or enhance that duty? What duties do the attorney and the firm owe the client? Agency, Contract, Tort, Constitutional Law, and Public Policy all have a bearing on the final disposition in these cases, but there is neither a uniform consolidation nor conflict of the principles. A valid Agency relationship may be superseded by a violation in Contract, or the opposite can be true. Occasionally one area of law bolsters another, and perhaps this benefit comes from Tort law more than any other. What is certain about the situation is that the solution to the problem is not certain; answers change as facts change.

is subject to a duty not to compete with the principal concerning the subject matter of his agency." And even after the termination of the agency relationship, section 396(d) proscribes that the ex-agent has "a duty to the principal not to take advantage of a still subsisting confidential relation created during the prior agency relation:' But this rule is tempered later in the same section: "the agent is entitled to use general information concerning the method of business of the principal and the names of the customers retained in his memory, if not acquired in violation of his duty as agent." So the right to use acquired skills and knowledge in the free marketplace is not easily impeded. Furthermore, agency/post-agency rights and contract restrictions are not conclusive in determining the rights of departing attorneys to contact firm clients.

Claims of privilege under the 1st and 14th Amendments of the U.S. Constitution are not unusual.

Agency Rights & Contract Restrictions

In an Agency relationship a definite fiduciary responsibility exists subject to contracted for variations. Prior to termination, in the absence of an employment contract, the general rule is illustrated by the Restatement (Second) of Agency. Section 393 reads: "[U]nless otherwise agreed, an agent 22

The Constitutional Right to Advertise

Speech on commercial transactions is not outside the protection of the Constitution, and states cannot prohibit truthful advertising of "routine" legal services. An injunction cannot impair a constitutional right, although courts can justify an injunction's appli-

cation based on a substantial governmental interest. In the legal profession, forms of self-recommendation may warrant sanction in some circumstances, specifically where there has been a violation of the RULES OF PROFESSIONAL CONDUCT, adopted by PA in 1987. For example, RULE 7.1 states that a lawyer shall not make a false or misleading communication about the lawyer or his services, a false communication being that which: (a) contains a material misrepresentation of fact or law, or omits a fact . . . (b) is likely to create an unjustified expectation about results the lawyer can achieve, or ... implies that the lawyer can achieve results by ... [violating] the rules of professional conduct or other law; or (c) compares the lawyer's services with other lawyers' services, unless the comparison can be factually substained.

Otherwise, RULE 7.2 (a) on Advertising, maintains that "a lawyer may advertise services through public media, such as telephone directory, legal directory, newspaper or other periodical, outdoor, radio or television, or through written communications not within the purview on RULE 7.3." Among other things RULE 7.3 (b) mandates that: "[A] lawyer shall not contact, or send a written com-

munication to, a prospective client for the purpose of obtaining professional employment, if ... the communication involves coercion, duress, or harassment."

Constitutionally speaking, as far as advertising is concerned, an attorney may contact anyone he wants, except when he is not allowed to. As to the effect which the commission of a tort has on an attorney's right to advertise, the RULES OF PROFESSIONAL CONDUCT make no direct mandate; however, to preserve legal integrity and justice, an attorney's right to practice law may be jeoparized in light of RULE 8.4 on Misconduct. Obviously, protecting legal integrity and justice is a substantial state interest, and the commission of the tort of interference of contract by an attorney would naturally affect his right to advertise.

But determining whether a departing attorney, making certain kinds of contact with firm clients, is committing the tort of interference with contract depends entirely on case scenarios.

Even with the natural mesh of legal principles, the tort findings are what warrant constitutional exceptions and disciplinary involvement.

Intentional Interference with Contractual Relations The recognizable ancestry of the interference doctrine dates back to the Black Plague-scourged middle ages when laborers were few and demand was great. The Ordinance of Labourers (1349) provided that workers could not leave their work, and that Masters could not hire already employed persons or induce a breach of an existing relationship. Lumlei; v. Gye, 2 El . & Bl. 216, 118 Eng . Rep. 749 (Q.B. 1853) was the initial application of the interference principle to a modern day employment situation. Gye was a theater manager, and his offensive act encouraged an opera singer to break her contract with a competing theater so she could sing in his production.

The Queen's Bench laid down a rule of tort liability for wrongful and malicious interruption of a personal service contract. Today the concept of the tort of Interference with Contract applies when a third party intentionally intermeddles with the business affairs of another, and that imposition is a wrongful interference. FLANAGAN, Lateral Moves and the Quest for Clients: Tort Liability of Departing Attornei;s for Taking Firm Clients, 75 California Law Review Oct '87, 1809, 1813.

Although the Interference with Contract doctrine has been accepted in every state, excepting Louisiana, no uniform treatment has surfaced, and the tort is said to be in its formative stages. CoNREv and GuRNEY, Interference with Economic Relations of Attorneys, 23 Washburn Law Journal Spr '84, 528-65. There are no set number of elements to prove Interference with Contract, but generally the tort can be broken down into four essential elements: 1) a contract; 2) a third party's knowledge of the contract; 3) intentional and improper interference by the third party causing a breach of the contract; and 4) damages caused by the third party's conduct.

Some jurisdictions and commentators suggest the tort applies to interference with pre-contractual relations and or simple valid business relations existing without a contract; this eases the requirement for breach (because without a contract there can be no breach of contract) but complicates the finding of damages (because without a contract losses become speculative) .

The Restatement (Second) of Torts does not use the element approach, and it does not struggle with range of application. Section 766,on Intentional Interference with Performance of Contract by Third Person, reads: One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary Joss resulting to the other from the failure of the third person to perform the contract.

And then sub-section 766B deals with pre-contractual relations. Intentional Interference with Prospective Contractual Relation, reads: One who intentionally and improperly interferes with another's prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of (a) inducing orotherwise causing a third person not to enter into or continue the prospective relation or (b) preventing the other from acquiring or continuing the prospective relation.

Some jurisdictions and commentators believe a separate element of absence of justification is needed to sustain a violation of interference (not

exactly an epiphany noting the presence of the term "improper" in the elements and within the restatement sections). In any case, non-justification is a reasonable inclusion when one considers that clients, deserving quality legal representation, have at stake.

(Termination at Will rights create a whole new series of questions to be posed .) On the issue of justification, section 767, Factors in Determining Whether Interference is Improper, reads: In determining whether an actor's conduct in intentionally interfering with a contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors: (a) the nature of the actor's conduct, (b) the actor's motives, (c) the interests of the other with which the actor's conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor's conduct to the interference and (g) the relations between the parties.

These are the factors that guide courts to the holdings in interference cases.

The different standards elicited in the RULES OF PROFESSIONAL CONDUCT are not a disregard of the tort laws; rather, the RULES intensify the scrutiny used to determine misconduct. Finally, opinions in these type of cases, which look like a hodge-podge of rationale on the interference doctrine, are compelled mainly by the tort law, but also by legal ethics and professionalism.

Cases Involving Departing Attorneys & Perspective Clients In Adler, Barish, Daniels, Levin and Creskoff [henceforth AB] vs. Epstein, 393 A.2d 1175, 482 Pa. 416 (1978), the PA Supreme Court reversed a Superior Court Order and reinstated the decree of the Court of Common Pleas of Philadelphia County granting injunctive relief against former associates of AB (Epstein, et al) from contacting clients of AB. The associates, while at AB, decided to form their own law firm . To procure a $150,000 loan they listed 88 AB cases with anticipated legal fees. After announcing resignations, but before leaving AB, the associates began contacting approxi23

mately 400 clients assigned to them.

'Thus, clients ... served a dual purpose in [the associates'] effort to start their own firm .. . AB cases formed the basis for [the associates] obtaining bank credit. Then ... as they left AB, [the associates] made a concentrated attempt to procure the cases which had been used to obtain credit:' Id. at 393 A.2d 1175, 1178, 482 Pa . 416, 421.

Most determinative of the finding against the associates in AB v. Epstein was the particular contact made with AB clients, part of which was a mailed package containing: 1) a cover letter explaining to AB clients their right to discharge AB and choose new legal counsel; 2) a form letter discharging AB; 3) a contingent fee agreement hiring Epstein; and 4) self-addressed stamped envelopes. The associate's action was likened to in-person solicit at ion : a practice which exerts pressure and demands immediate response: "[T]he aim and effect of inperson solicitation may be to provide a one-sided presentation and to encourage speedy and perhaps uninformed decision making .. :' Id. at 393 A.2d 1175, 1181, 482 Pa. 416, 427. The Interference, though not a flagrant violation of the tort factors, when combined with state regulatory interest, justified the injunction of otherwise standard rights to advertise. And the associate's Constitutional Claim was distinguished for the same reason: the state's interests, explained by the then promulgated Code of Professional Responsibility, supported the injunction. Though DR 2-102 allowed the announcement of the formation of a new firm, DR2-103(A) provided: "[A] lawyer shall not recommend employment, as a private practitioner, of himself, his partner, or associate to a nonlawyer who has not sought his advice regarding employment of a lawyer," Id. at 393 A.2d 1175, 1179, 482 Pa. 416, 425.

In Pratt v. Blunt 488 N.E.2d 1062 (Ill.App. 5 Dist. 1986), former employees of the plaintiff law firm were accused of improper solicitation consisting of: 1) sending between 100-150 letters to firm clients after leaving the firm; 2) attempting to persuade a client to leave by showing him uncomplimentary newspaper articles; and 3) inducing a third party to sign a contingent fee contract by representing an association with the former firm. The trial court granted a preliminary injunction prohibiting Blunt et al. from contacting past or present clients pending the findings of the Court concerning the alleged improper solicitation of those clients. The defendants 24

brought an interlocutory appeal questioning the validity of the injunction.

The associates contended, among other things, that their 1st and 14th Amendment rights had been unconstitutionally restricted, and that factually the record did not support the allegation of improper solicitation .

The Appellate Court's decisions in these areas are the significant contributions made by this case.

On the constitutional issue the Appellate Court adopted the reasoning of AB: "Under this reasoning the defendants' conduct here of attempting to induce clients of the plaintiff to change law firms in the middle of their active cases may, to the extent that it is prohibited by disciplinary rules, be enjoined without violating the defendants' constitutional rights of free speech," Id. at 1068. And working from the factual situation, the Apellate Court could not say that the trial court erred in granting the preliminary injuction: It is settled that to justify issuance of a preliminary injunction, the plaintiff must establish by a preponderance of the evidence (1) possession of a certain and clearly ascertained right which needs protection; (2) immediate and irreparable injury if the preliminary injunction is denied; (3) lack of an adequate remedy at law; and (4) probability of success on the merits.

Id. at 1068. In the Appellate Court's judgment, the only problem with the injunction was that it was overbroad in that it prohibited the defendants from making contact with past clients of the plaintiff.

In Meehan v. Shaughn essy, 535 N.E.2d 1255 (Mass. 1989), the plaintiffs were former partners of Parker, Coulter, Daley & White [henceforth PC) . PC counterclaimed alleging violation of fiduciary duties, breach of the partnership agreement, and tortious interference with business and contractual relations. Specific grounds charged the plaintiffs with improper conduct in withdrawing 142 of 350 contingent fee clients, and in inducing PC employees to leave PC and join the newly formed law firm.

The partnership agreement provided that a retiring partner, on paying a fair charge, could remove matter being represented by the firm where the client came to the firm via the personal effort of the retiring partner, if the client so desired. This valid agreement was done to offset the fact that major assets are tied up in unfinished business; the provision was struck "[i]nstead of assigning a value to the departing partner's interest in this

unfinished business, or waiting for the unfinished business to be 'wound up' and liquidated ..." Id. at 1261.

Thirty-nine of the 142 removed cases met the "personal effort" standard, and in the remainder, the departing attorneys "had direct, existing, relationships with the clients:' Id . at 1260.

The Court determined that an "existing relationship" standard was the actual intent of the agreement; also the

Mass. Canons of Ethics and Disciplinan; Rules Regulating the Practice of Law generally prohibited restrictive covenants between attorneys for public policy interests. Id . at 1262.

As to the partner's fiduciary duty, the Court found that they did violate this duty when they unfairly acquired consent to withdraw cases to their new firm. "[T]hrough their preparation for obtaining clients' consent, their secrecy concerning which clients they intended to take, and the substance and method of their communication with clients, [they] obtained an unfair advantage over their former partners in breach of their fiduciary duties." Id. at 1264. For these reasons it was determined that the departing partners acted improperly. Nevertheless, while it is conceivable that a breach will affect some types of compensation due an employee, a breach will not cause forfeiture unless there is a causal connection between the breach and the claimed loss. Where the cases were unfairly removed, based on Section 21 of General Laws c.

108A (1986 ed.) which governs the formation, conduct, and liquidation of partnerships, the court held that the partner must account for his resulting profit to the extent that the/rofits would have been shared ha there been no dissolution. Id. at 1270.

Conclusion This is an area oflaw in which there is great tension. Im probity is an absolute element of the Interference Doctrines, but justification, stemming from principles of Agency and Contract, does alleviate evidence of improbity. And if exceptions can be implemented against 1st and 14th Amendment rights, due to Public Policy concerns, then surely the same concerns can be used to either validate or invalidate an ex-partner's act in contacting firm clients.

Carmen Martucci is a second year

day student.

RECENT DECISIONS

Hair Today, Gone Tomorrow On the evening of August 30, 1982 Gerilia Boyd and seven friends were returning home from a party. While en route the group was accosted by a trio of young men who demanded money.

When the former group refused to comply with the latter's demand, a member of the trio produced a handgun and shot into the crowd . Gerilia Boyd was killed and another member of the group was wounded in the back.

According to several eyewitnesses, the gun wielding assailant was approximately five feet four inches tall and had reddish hair, which he "wore shoulder length in a slicked-back 'butter' style." People v. James, 528 N.E .2d 723, 724 (1989). Subsequent investigation led the police to focus their endeavors upon a young man named Daryl James . The police located and took James into custody on August 31, 1982. The police found James "at his mother's beauty shop sitting under the hair dryer:' Ibid. While in custody, James admitted to the police that as of August 30, 1982 his hair was shoulder length, combed straight back and that it had a reddish hue. Furthermore, James also stated that he had gone to his mother's beauty parlor on August 31, 1982 in order to have his hair cut, curled and dyed black so as to change his appearance . This statement was later suppressed at a pretrial hearing because it was obtained in violation of James' Fourth Amendment rights.

At trial, James' principal witness, who was a close personal family friend, testified that on the day of the shooting she had driven James to his high school for registration and that his hair was black and worn in a natural style. James did not take the stand in his own defense and several prosecution witnesses identified him as the murderer but stated that his hair was long and red. In order to impeach the credibility of the defense witness' testimony, the prosecution sought to introduce James' suppressed statement. The trial court permitted the

state to introduce the statement over the defendant's objection. The court was careful to instruct the jury that the statement was being admitted solely for the purposes of impeaching the witness' testimony.

James was convicted for the murder of Gerilia Boyd as well as for the attempted murder of Gerilia's friend .

He received a sentence of thirty years for the murder conviction and a concurrent sentence of 15 years for attempted murder. An appeal was taken and the Illinois Appellate Court reversed James' conviction holding that the statement was improperly admitted. The State of Illinois appealed this decision to the State Supreme Court contending that the trial court properly admitted James' statement in order "to impeach and rebut" the defense witness' testimony.

528 N.E .2d at 725.

The Illinois Supreme Court upheld the conviction holding that the evidence was properly admitted under the doctrine enunciated by the United States Supreme Court in Walder v.

United States, 74 S.Ct . 354 (1954). Simply stated, Walder and its progeny stand for the broad proposition that the prosecution in a criminal case may use evidence that has been obtained in violation of the accused's Fourth Amendent's rights solely to impeach the accused's testimony which contridicts that evidence. It is axiomatic that evidence obtained in violation of the Fourth Amendment may not be introduced into evidence at trail. See e.g., Mappv. Ohio, 81 S.Ct . 1984(1961)and Weeks v. United States 34 S.Ct. 341 (1914). However, a number of exceptions have been carved out from the fascially absolute ban imposed by the exclusionary rule with respect to illegally procured statements. The impeachment exception to the exclusionary rule has been justified in situations where the defendant in a criminal trial testifies in contradiction to his suppressed statements or commits perjury. In other words, the

accused should not be permitted to pervert the exclusionary rule into a "shield against contradictions of his own untruths:' Walderv. United States, 74 S.Ct. at 356.

It is important to note that the impeachment exception to the exclusionary rule was used solely to impeach the credibility of the defendant's own testimony and not the testimony of his principal witness.

This point was driven home by James' counsel during the course of the appeal. James also contended that because he did not take the stand in his own defense he never waived his right not to have the excluded evidence admitted for impeachment purposes. Accordingly, it was improper for the trial court to permit the suppressed statement to be used to rebut his witness' testimony.

The Illinois Supreme Court dismissed these arguments basing its rationale upon several factors. First, the Court noted that caselaw indicated that there has been a gradual expansion of the impeachment exception to the exclusionary rule. Second, the Court also pointed out that there exists a tension between the constitutional interests protected by the exclusionary rule and the importance of arriving at the truth in a criminal trial. The existence of these competing interests require that courts balance these interests when the situation presents itself.

Accordingly, it would not be equitable or fair for the defendant to affirmatively exploit the "fact of suppression in fashioning his defense" while a prosecutor could not make his case with suppressed evidence. 528 N.E.2d at 730. Essentially, the holding of the Illinois Supreme Court maintains that a defendant cannot be permitted to use perjurous testimony via a biased witness without "affording the prosecution an opportunity to challenge the veracity of that testimony" with suppressed evidence. Id at 729.

25

The United States Supreme Court granted certiorari and, in a 5-4 decision, reversed the Illinois Supreme Court's affirmation of James' sentence. According to Justice Brennan, the proposed expansion of the impeachment exception would "create different incentives affecting the behavior of both defendants and law enforcement officers." James v. Illinois, 58 USLW 4115-16. (1990). Furthermore, the proposed exception would undermine, as well as frustrate, the purposes underlying the exclusionary rule.

According to Justice Brennan and a majority consisting of Justices Stevens, Blackmun, White and Marshall, the expansion of the impeachment exception as promulgated by the Illinois Supreme Court failed on several grounds. The majority believes that the "mere threat of subsequent criminal prosecution for perjury" is enough to deter a defense witness from intentionally lying on behalf of the defendant. Id. at 4117. The majority also voiced concern that the Illinois exception might prevent or "chill" some defendants from presenting their best defense. The majority maintains that a defendant may hesitate to call forth a witness, who could present probative and truthful testimony, for fear that the witness might utter something that does not exactly square with the suppressed evidence.

Accordingly, any misstatement made by a defense witness would beckon the admission of the excluded evidence. This would cause considerable harm to the defendant's case. Further, these problems are particularly exacerbated where the witness is reluctant or hostile and presumptively does not share "the defendant's concern for avoiding statements that invite impeachment through contradictory evidence:' Ibid. As a result, the proposed exception would actually dissuade a defendant from presenting a meaningful defense via other witnesses, thereby tipping the balance struck between the exclusionary rule and the Walder exception in the prosecutor's favor.

The majority also opined that the proposed exception would significantly weaken the exclusionary rule's deterrent effect on police misconduct.

The Illinois exception could increase the number of occasions in which illegally obtained evidence could be used in a trial because the number of defense witnesses often outnumbers 26

the number of criminal defendants.

Justice Kennedy writing for a minority comprised of the Chief Justice and Justices Scalia and O'Connor, would have upheld James' conviction and would have recognized the proposed exception. The minority of the Court agreed with the majority that the resolution of the case turned upon a weighing of the value of deterrence as embodied in the exclusionary rule against "the costs of withholding reliable information from the truthseeking process:' Id. at 4119. However, according to Justice Kennedy, the testimony of James' witness was sufficient to create "real doubt in the mind of the jurors" with respect to the testimony of the several eyewitnesses who identified James as the young man who shot Gerilia dead. Id. at 4120. Accordingly, to deprive the jurors of knowledge of James' inconsistent statements, a position advocated by the majority, could have resulted "in a decision by triers of fact who were not just kept in the dark as to the excluded evidence, but positively misled:' Ibid. Essentially, the

The majority believes that the "mere threat of subsequent criminal prosecution for perjury" is enough to deter a defense witness from intentionally lying on behalf of the defendant. minority contended that the Court's holding threatens and undermines the truth-seeking process inherent in any criminal proceeding. The minority reasoned that jurors are skeptical of a defendant's self-serving testimony, but rarely hold similar inclinations toward the testimony of an "independent" witness. Hence, if a defense witness "can present false testimony with impunity," that is, without fear of impeachment, the jurors might consider the rest of the prosecution's case contrived and suspect. Moreover, in the words of Justice Kennedy, "(j)urors will (also) assume that if the prosecution has any proof that the statement was false, it would have made the proof known." Ibid. Accordingly, the triers of fact as well as the state must "suffer the introduction of false testimony" and the state must apparently condone this falsehood by its own silence. Ibid.

The minority also contended that the potential chilling effect that the proposed exception would bring upon

defendants is far too speculative to justify the majority's ruling. The minority reasoned that there is no restriction imposed on the defendant if suppressed evidence, which directly contradicts the witness' testimony, is admitted for rebuttal purposes. In other words, only that portion of the suppressed evidence that directly contradicts the witness' testimony should be admitted to impeach the testimony. The minority does not contend that all of the suppressed evidence should be introduced, only the necessary portion. This approach would not only preserve the integrity of the exclusionary rule, but would also further the truth-seeking function of a criminal proceeding in that it would serve as an effective foil to counteract false testimony.

Finally, the minority maintains that Justice Brennan's contention that the mere threat of a subsequent perjury prosecution is adequate to guarantee truthful testimony "is not realistic ."

Ibid. As Justice Kennedy notes, proof of perjury is "exceptionally difficult" Ibid . citing Dunn v. United States, 442 U.S. 100, 108 (1979). Moreover, the threat of purjury is often an idle one, particularly where the testimony is presented "on behalf of a friend or family member:' James v. Illinois, 58 USLW at 4120. Further, the minority disagreed with the majority's prediction that the exception would weaken the deterrent effect the exclusionary rule has on proscribed police conduct.

According to the minority, even the most unsophisticated police officer knows "for certain that evidence from an illegal search or arrest (which may well be crucial to securing a conviction) will be lost to the case in chief."

Id. at 4121 .

The argument presented by the minority of the Court is consistent with the precedent established by Walder and its progeny. As previously noted the impeachment exception to the exclusionary rule is the product of the tensions existing between the interests protected by the rule and the truth-seeking function of a criminal trial. The absolute ban imposed by the majority's rule undermines this balance and enables a biased witness to commit perjury with impunity to the detriment of the truth .

Michael Leo Ivory is a Frontline Editor of Juris and a Vice President of the Student Bar Association.

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