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2 VoL. 2, No. I

~-----

.Published by

The Utah State BarVol. 2, No. I January 1989

645 South ZOO East

Salt Lae City , Utah 84111Telephone (80 I) 531-9077

Letters 4

PresidentKent M. Kasting

President's Message 6

President.ElectHans Q. Chamberlain

Commissioner's Report 8

Executive Director

Stephen F. Hutchinson

Recent Developments in Corporate LawBy P. Christian Anderson

10

Board of Bar CommissionersH. James Clegg

James Z. Davis

Randy L. DryerHon. Pamela T. Greenwood

Stewar M. Hanson Jr.James R. HolbrookJackson B. Howard

Hon. Gordon J. LowAnne M. Stirba

Managing the High Profile CaseBy Chief Judge Bruce S. Jenkins

14

A Practitioner's View of Johnson v. RogersBy Kevin P. McBride

20

Ex Offcio MembersBruce C. Hafen

Norman S. JohnsonReed L. MarineauEdward D. Spurgeon

The Political Action Disclosure ActBy Gordon D. Strachan and Gar R. Thorup

22

State Bar News 25

Case Summaries 33Young Lawyers Section

PresidentJerr D. Fenn Jr. Views From the Bench

By Judge Timothy R. Hanson34

Bar Journal Committeeand Editorial Board

EditorCalvin E. Thorp

Legislative ReportBy Douglas A. Taggar

37

Assiate Editors

Randall L. RomrellDavid B. Erickson

CLE Calendar 39

Letters EditorNann Novinski-Durando

Final Say 40

Articles EditorsLeland S. McCullough Jr.

Glen W. Roberts

Classified Ads 42

Views from the BenchJudge Michael L. Hutchings

COVER: "Ice Formation in Big Cottonwood Canyon" by Chris P. Wangsgard, a partner in the firm ofVanCott, Bagley, Cornwall & McCarthy. .

Legislative Report EditorDouglas A. Taggar

Cas Summaries EditorsWiliam D. Holyoak

Clark R. Nielsen

AdvertisingLar A. Steele

The Utah Bar Journal is published monthly, except July and August. by the Utah State Bar. One copy ofeach issue is furnished to members as par of their State Bar dues. Subscription price to others, $20; Singlecopies, $2.50; second-class postage paid at Salt Lake City, Utah. For information on advertising rates and

space reservation, call or write Utah State Bar offces. - Il

M. Karlynn HinmanKevin P. McBride

Margaret R. NelsonHon. Homer F. Wilkinson

Statements or opinions expressed by contributors are not necessarly those of the Utah State Bar, andpublication of advertisements is not to be considered an endorsement of the product or service advertised.

Copyright (Ç 1989 by the Utah State Bar. All rights reserved.

II

January 1989 3

-. -' ILETTERS . . ", I

, ",1, ~ )!:~:'"''., ;:¡,,:~,,l,,'.;

Editor:

"Autumn Cottonwoods" by Chris Wangsgard, which ap-peared on your November issue, was the most beautiful photo-graph I have ever seen on the cover of the Utah Bar Journal.

Congratulations to you and to your photographer. I would verymuch like to own a print large enough for framing. . .

. . . I hope to see photos by Mr. Wangsgard on future issues ofthe Utah Bar Journal.

Marie Iverson, SecretaryROGER NUTTALL AND ASSOCIATESSalt Lake City, Utah

So does the staff of the Utah Bar Journal. The staff alsowelcomes the submission of photographs from others whowould like to have their work considered for publication.

Editor

Editor: '

I recently enjoyed reading an excellent booklet pertaining tothe late Judge (Utah Supreme Court Justice) R. LeRoy Tuckettwritten by retired Utah Supreme Court Justice J. Allan Crockett.

I was very pleased and interested having been born and rearedin Payson, Utah, a community adjoining the Santaquin area.

I knew Judge Tuckett well, and our Honorable Judge AllanCrockett was indeed very masterful in his discourse pertainingto Justice Tuckett and his private life. . .

. . . such a tribute is wonderful for our public to be moreinformed about these talented, wiling individuals who haveserved us faithfully for so many years. Well done!

Thelma SmurthwaiteSalt Lake City, Utah

Editor:

The recent Utah Supreme Court case of Johnson v. Rogers,90 Utah Adv. Rep. (1988), was reviewed in two separatearticles in Volume I, No.3, of the Utah Bar Journal (November1988). The two articles contradicted each other as to what theSupreme Court said. In David Black's article "Punitive Dam-ages in Utah," Mr. Black stated that "the Supreme Court

reversed the trial court's summary judgment to the defendantsand stated that in view of the facts, plaintiffs were entitled to ajury verdict on the question of whether NAC authorized the actor whether the employee was recklessly employed" (page 13).On page 23 of the same issue in "Case Summaries" by WiliamD. Holyoak and Clark R. Nielsen, we find the followingcontradictory assessment:

In a partially concurrng opinion, written by JusticeZimmerman and joined by Chief Justice Hall and JusticeStewart (thereby making it the view of a majority of thecourt on the issues it addressed), the three justices agreedthat the restatement standard should apply, but concludedthat the trial court should determine upon remand whethersufficient evidence existed to send the case to the jury onthis issue.

I rather agree with Messrs. Holyoak and Nielsen.

II

Edward J. McDonoughBerman & 0 'RorkeSalt Lake City, Utah

Mr. Black responds: The sentences referred to, suggestingthat plaintiffs were entitled to a jury verdict, were phrasedincorrectly and as the latter writer indicates, should have statedthat plaintiffs may be entitled to a jury verdict if so determined'by the trial court on remand.

INVITATION TO SUBMIT ARTICLESUtah Bar Journal readers are invited to submit articles to be considered for publication in the Journal.Articles should be topics and issues of current interest. Narrowly focused or highly specialized subjects should be treated in a

way that is of general interest and understandability. Articles of a humorous or lighter nature wil also be considered.The Utah Bar Journal staff wil seriously and conscientiously review all articles, but reserves the right to reject aricles it

considers, for example, inappropriate, poorly written, poorly researched, of too limited interest or to have been recently coveredin earlier Journal issues.

Manuscripts must be typed, double spaced, and accompanied by brief biographical information about the author. Althoughthere is no minimum or maximum length, the length of any aricle submitted must be reasonable and appropriate for the subjectcovered and must obviously fit within the physical limitations of the Journal. Submissions should be made to the Utah BarJournal, State Bar Offices.

The Journal staff wil edit punctuation, spelling and style as required. Articles may be cut as appropriate and needed, but cutsthat are substantial or which could affect the overall impact of the article wil not be made without consultation with the author,

If an article has been previously published elsewhere, the submission should include a statement that includes the name andtype of publication, when it was published and any other information that would affect the editor's decision concerningpublication in the Journal.

The editor also welcomes oral inquiries about possible articles. \

4 Vol. 2, No. i

Did you hear the oneabout the lawyerwho. . . ?

We've all been there-at the party orthe business meeting or the family

gathering-and someone wil invariably tella lawyer or a judge a joke like "What's

brown and black and looks good on alawyer-a doberman," or "What do you

have when you have io lawyers buried up totheir necks in sand? Not enough sand," or "Isaw a strange sight the other day-a lawyerwalking down the street with his hands in hisown pockets!" And when those jokes aretold the crowd wil voice its approval, lookcritically at you and wait for someone else tocome up with another "Well, did you hearabout the lawyer who. . . ?"

To say the least, those exchanges are

uncomfortable for lawyers and for the mostpar unjustified, and I for one am getting

tired of the continuous assault on our

profession-be it in the form of humor orotherwise. That is especially so when I seethe thousands of hours of volunteer time thatlawyers and judges freely give to their pro-fession, their fellow citizens and their com-munity. Lawyers are always helping thepoor, the elderly, students, minorities, char-ities, and civic groups. They unselfishlygive of their time and talents in the hope thatour communities, our institutions and oursystem wil become a little better, a littlemore responsive to the needs of each of us.

This year I've been trying to get thatmessage out to the public. I've been speak-ing whenever asked by civic groups such asthe Kiwanis, Exchange and Rotary clubs,local Bar Associations, and anyone elsewho may want to hear about the positivethings lawyers and judges do, but for whichthey seldom or ever receive fair credit orrecognition. I've told my audiences that I'mgetting tired of the incessant lawyer jokes.I've told them about the high Code of Pro-fessional Responsibility to which we allattempt to adhere. I've asked them to look

, around and see if they can find anotherprofession that requires the stringent and

extensive ethical standards that we imposeupon and apply to ourselves. I've askedthem to identify a public service projectundertaken by any other profession thateven closely reaches the magnitude of theLaw and Justice Center-a $3.2 milion

Kent KastIng

project with $1.1 + milion in lawyer dona-tions. It is a first-of-its-kind facility that is

already serving the public with a variety ofprograms-all without the expenditure ofone taxpayer dollar. I've asked them tohonestly and objectively think where ournation, and in fact our society, would be ifdedicated lawyers had not been around togive of their time and talent. I've asked themto consider what Lewis Land said aboutlawyers:

I am the lawyer. I displaced brute

force with mercy, justice and equity. Itaught mankind to respect the rights ofothers to their property, to their per-sonal liberty, to freedom of con-science, to free speech and freeassembly. I am the spokesman of therighteous causes. I plead for the poor,the prosecuted, the widows and or-phans. I maintain honor in the mar-

ketplace. 1 am the champion ofunpopular cases. I am the foe of tyr-anny, oppression and bureaucracy. Ipleaded for the freedom of the slave inGreece and for the captive in Rome. Ifought the Stamp Act. I wrote the

Declaration of Independence and TheRights of Man. I defended the slaves.I was an abolitionist. I issued theEmancipation Proclamation. In everyland, in every clime, I punish the

wicked, protect the innocent and raisethe lowly, and oppose brutality andinjustice. I fought in every war forliberty. I stand in the way of publicclamor and the tyranny of majority. Iplead for the rich man, lest prejudiceprevent him from getting justice, andI insist that the poor man be accordedall his rights and privileges. I seek theequality of mankind regardless of

-race, color, caste and sex or religion. Ihate fraud, deceit or trickery. I amforbidden to serve two masters or tocompromise justice. I am the con-

servative of the past, the liberal of thepresent and the radical of the future. Ibelieve in convention, but I cut theGordian knot of formalism and red

tape to do justice and equality. I amthe scapegoat of the world. I hold therights of mankind in the hollow of myhand, but am unable to obtain recog-nition of my own. I am the pioneer. Iam the last to renounce the past and tooverturn the present. I am the justjudge and the righteous ruler. I hearbefore I condemn. I seek the best ineveryone. I am the lawyer.The responses I've received from the

people I've spoken to have been positive. Ihave not been forced from the podium or theunwiling recipient of tomatoes jettisonedfrom the crowd. To the contrary, I've seenreactions such as, "Well, I've never lookedat it that way before," or "Kasting may havea point there."

During the remainder of my term as yourpresident, I intend to continue my efforts ingetting the message out to the public thatlawyers and judges are honest, hard-working, caring individuals committed tothe high ethical standards of their pro-fession.

However, I do not believe that the duty toeducate the public about the legal professionfalls only on the shoulders of a Bar presi-dent. It is an obligation that each of us asmembers of the legal profession have. Wehave to stand up for our profession. We haveto be vocal about it. We have to register ourdissatisfaction if someone elects to malignlawyers and judges. And whether the jokeswe hear are malicious or innocent, our dutyis not to chuckle and sheepishly move intothe background, but rather to say, "Hold ona minute, that may be funny, but let me tellyou what lawyers and judges really do-what they are really about." You might alsowant to tell them the one about the lawyerwho, when asked what he was going to dowith a large contingent fee he had justreceived, responded and said, ''Ill just keeppracticing law until it runs out."

Or you could tell them the "rest of thestory," about Shakespeare's would-be line,"Let's kil all the lawyers." That line istaken out of context. The dialogue appearsin The Second Par of King Henry III. JackCade is a would-be rebel of questionablecharacter. He describes to a group of towns-people the Utopia they would enjoy if only

6 Vol. 2, No. I

Cade were king.Cade: And when I am king, as king Ishall be. . . there shall be no money;all shall eat and drink on my score;and I wil apparel them all in one

livery, that they may agree likebrothers, and worship me their lord.At this point, Dick the Butcher, who

questions Cade's proposition, tries to en-courage Cade to continue his fantasy:

Dick: The first thing we do, let's kilall the lawyers.Cade readily agrees, and responds:Cade: I did but seal once to a thing,and I was never my own man since.Apparently, Cade once made a contract,

and a lawyer held him to it!

As Myron Moskovitz has said:Shakespeare's meaning seems clear:In a fool's paradise, there wil belimitless quantities of food and drink;all wil think alike-so there wil beno disputes-and all wil worship thefooL. Kiling all the lawyers wil en-sure that people wil be as free aschildren, not having to keep their bar-gains. Since there wil be no disputes,

lawyers wil be unnecessar anyway.For better or worse, the real worlddoes not quite fit Cade's dreams. Inour quests for limited quantities offood and drink (and more), disputes

arise, and someone-such as

lawyers-must help to resolve them.This is the message that we as lawyers

and judges have to convey to the public. Wehave a duty as trained advocates to defendthe honor and integrity of our profession,and we can discharge that duty by letting thepublic know the great society in which welive, work and play would not be if therewere no lawyers to assist people in charinga course through a most complex and ever-changing world, and that lawyers' jokes forthe most par are inaccurate and simply not

that funny.By the way, did you hear the one about

the doctor who. . . ?

By Kent M. Kasting, President

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Dear Colleague:

For many years, I have sensed that theUtah Bar Association does not enjoy therespect and support of its members to thedegree that it should. My views in thisregard have been reinforced by my experi-ences since becoming a Bar commissioner.There is, in my opinion, a sizable schism

within our Bar.

Many of our members feel that the Barleadership has become the private provinceof the large Salt Lake firms. Some think it isa continuum of the Salt Lake County Bar. Idon't believe either to be true, but the his-tory of our leadership would support theseconclusions and the fact that many think thisis an unhealthy condition within our Bar.

There is also the unfairness attendant tothe disparity of lawyers represented by eachcommissioner. There are 11 commission-

ers, one from each division except the thirdwhich has seven commissioners. The num-ber of lawyers represented by each com-missioner is as follows:

First Division (FirstJudicial District)Second Division (SecondJudicial District)Third Division (Third

Judicial District)Fourth Division (Fourth

Judicial District)Fifth Division (Fifth,Sixth, Seventh and EightJudicial Districts)

74 lawyers

290 lawyers

408 lawyers

354 lawyers

145 lawyers

The problem is most exacerbated in theFifth Division, for there are few geographicties and no broad, underlying social or pro-fessional contacts. This is to a lesser degreealso true in the Fourth Division. Many of thelawyers have never met their representative.Under the circumstances, a sizable portionof our Bar feels disenfranchised.

Our recent experience with the Law andJustice Center pòints out the underlying

fragility of our present organization. Someof our members have told us that the centerwas for the benefit of the few and that it wasan expensive undertaking that imposed un-.waranted financial burdens on the mem-bership without their consent. The age-oldevil of "taxation without representation"

Jackson B. Howard

was at the heart of their complaints, for it isobvious that six members of our i i -membercommission had it within their power tomake major policy changes and incur largeobligations. (Incidentally, the decision

eventually was unanimous and I personallybelieve it to be a wise and necessary under-taking.)

As a practical matter, we do not have aforum to which any lawyer can become aleader or a representative. The reasons areapparent.

For these and many other reasons whichare implicit in the question, I brought theissue to the attention of the Commission andPresident Kasting has appointed me chair-man of a committee to research and inves-tigate the question with the charge ofmaking a report to the commission regard-ing our findings. The committee members,in addition to myself, are James H. Clegg,Salt Lake City; Brian R. Florence, Ogden;and Paul M. Durham, Salt Lake City.

To date, we have met with the EasternUtah Bar and the Uintah Basin Bar and haveobtained some input and impressions.Those Bars are each undertaking an analysiswithin their own jurisdictions. We intend tomeet with all the local Bars this year. Inaddition, we have prepared a questionnairewhich you wil soon receive. It is importantthat each of you take the time to respond to

ithat questionnaire. Your opinion is trulyimportant to our decision.

The experience of other similar Bars inthe country suggests that the most probablealternative to our present organization

would be a two-tier structure which wouldinclude a House of Delegates from 50 to 100delegates selected on a dual basis of geog-raphy and numbers represented. That bodywould meet once or twice a year for thepurpose of approving the budget, makingmajor policy decisions, and selecting fromits body officers and a Board of Com-missioners (Board of Governors) to managethe regular operation of the Bar.

It is too early to discuss other alternativepossibilities, and there is not the space inthis letter to intelligently analyze the prosand cons of any proposal. My purpose hereis to make you aware that the commission isconcerned and working on methods to im-prove our organization and to bring greaterharmony and more active participation fromour members.

If you have any questions or suggestionson this subject; you may address them to meeither at the Bar offce or my office inProvo.

l,I

Respectfully,

Jackson Howard

i

8 Vol. 2, No. I

Ii

Ii

January 1989

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9

-

Recent Developments in Corporate Law

The following is a distilation of infor-mation presented at the most recent

State Bar convention in San Diego, high-lighting significant developments in the ar-eas of corporate and securities law duringthe previous year. The statutes, rules andjudicial decisions described below shouldnow be familiar to practitioners in thoseareas. However, I have attempted to selectfrom the information previously presentedthose items most likely to be of interest tomembers of the Bar generally.

SEC ADOPTION OF RULE 701On April 7, 1988, the Securities and

Exchange Commision (the "SEC") adoptedRule 701, which provides an exemption

from the registration requirements of theSecurities Act of 1933 (the "SecuritiesAct") for offers and sales of securitiesissued by non-reporting companies pursuantto certain compensatory benefit plans andwritten contracts. This rule could have asignificant impact on the use of employeestock incentive plans and arrangements bycompanies eligible to rely on the rule.

In the past, a significant concern for pri-vately held companies has been the lack of areadily available exemption from the Se-curities Act's registration requirements forsecurities issued pursuant to employee stockoption and purchase plans. Companies

offering broad employee participation insuch plans have had a particularly difficulttask establishing the availability of an

exemption.The use of employee stock option plans

has also often resulted in the disappointmentof employees who have failed to understandthe restrictions imposed by Rule 144. Suchemployees frequently assume that once theiremployer has a registered public offering ofsecurities, or "goes public," the shares pre-viously acquired by them can be traded

without restriction. Unfortunately, this isnot true, as such shares are typically "re-stricted securities" which cannot be soldunder Rule 144 until they have been heldtwo years after the date of exercise of the

io

By P. Christian Anderson

MR. ANDERSON is a parner of the Salt Lake Citylaw firm of Rogers, Anderson & Poelman. Hepreviously practiced for seven years with theCalifornia law firm of Wilson, Sonsini, Good-rich & Rosati and for two years in the Salt LakeCity office of the New York firm of LeBoeuf,Lamb, Leiby & MacRae. Mr. Anderson is a1978 graduate of the University of Utah Collegeof Law.

option and payment for the shares. Evenemployees aware of the holding period re-quirements have been surprised to learn thattheir shares may have become freely trade-able sooner had they waited to exercise theiroptions. This is because employers with

option plans frequently register those planson Form S-8 promptly after becoming re-porting companies. However, while all un-exercised options may be included withinsuch registrations, the number of previouslyissued shares that may be included is limited(to 10 percent of the total number of sharesavailable under all registered employeebenefit plans).

Rule 701 alleviates the two problemsdescribed above by (i) providing an exemp-tion from the Securities Act's registration

requirements for securities issued by non-reporting issuers pursuant to compensatorybenefit plans and written contracts betweenthe issuer or its parent- or majority-ownedsubsidiaries and their employees, directors,general partners, trustees, officers, con-sultants and advisers, and (ii) exemptingshares issued under Rule 701 from the two-year holding period requirement of Rule

144, allowing them to be resold 90 days

after the issuer's initial public offering (non-affiiates are also relieved from the publicinformation, volume limitation and noticerequirements of Rule 144). Since Rule 701

applies to unexercised options granted priorto becoming a reporting company as well as.'to shares issued pursuant to such options,

whether exercised before or after a publicoffering, issuers may also avoid the need touse Form S-8 to register shares issuableunder Rule 701 options.

Rule 701 restricts the amount of securitiesthat can be offered and sold in reliance onthe rule. The amount of securities that maybe subject to outstanding offers (options) inreliance on the rule, plus the amount ofsecurities sold in the preceding 12 months inreliance on the rule, may not exceed thegreater of (i) $500,000, (ii) 15 percent of theissuer's total assets or (iii) 15 percent of theoutstanding securities of the class being

offered. In any case, the aggregate offeringprice of securities subject to outstanding

offers and sold during the preceding 12

months may not exceed $5 milion. Rule701 and accompanying Rules 702 and 703impose other limitations on the use of theexemption. Rule 702 requires the issuer tofile a notice on Form 701 within 30 daysafter aggregate sales pursuant to Rule 701exceed $100,000, and thereafter annuallywithin 30 days following the end of theissuer's fiscal year.

Significantly, Rule 701 permits issuers torely on the rule with respect to offers madeprior to its adoption. Accordingly, it wouldbe wise for companies to review all pastoffers (i.e., option grants) under employeeplans to determine if any steps should be

I

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Vol. 2, No. i

Itaken to secure the benefits of Rule 701.

Any offer or sale of securities must com-ply with state as well as federal laws andregulations. Accordingly, an issuer cannotassume that an offer or sale of securitiesexempt from the Securities Act's regis-tration requirements, by reason of Rule 701,wil also be exempt from state securitiesregistration and qualification requirements.It wil be interesting to see whether Utah andother states take action to provide exemp-tions consistent with that allowed by Rule701.

SEC ADOPTION OF CHANGESTO REGULATION D

The SEC has recently adopted significantamendments to the rules comprising Regu-lation D. The revisions, which becameeffective April 11, 1988:

(a) Expand the definition of accreditedinvestors to include:

(i) additional institutional investors,including savings and loan as-sociations and similar associations

such as credit unions, whether actingfor their own accounts or as fiducia-ries, and broker/dealers registered

under the Securities Exchange Act of1934 (the "Exchange Act") and pur-chasing for their own account;

(ii) ERISA plans which have savingsand loan associations as plan fiducia-ries;

(iii) self-directed employee planswhere investment decisions are solelywithin the control of an accredited

investor;

(iv) corporations, partnerships andbusiness trusts with total assets inexcess of $5 milion; and

(v) a couple with joint income in ex-cess of $300,000;(b) Eliminate the $150,000 purchaser

from the definition of accredited investors;(c) Increase the total offering amount

permitted for Rule 504 offerings from$500,000 to $1 milion; provided that nomore than $500,000 worth of securities areoffered and sold without registration understate securities laws;

(d) Revise general solicitation restric-tions under Rule 504 for certain state regis-tered offerings; and

(e) Adjust the disclosure standards forofferings of less than $2 milion to parallelmore closely the requirements applicable toRegulation A offerings.

ADDITIONAL PROPOSED CHANGESTO REGULATION D

(a) Innocent and Immaterial Violations.The SEC has proposed a new Rule 508 thatwould provide a good faith substantial com-pliance defense for "innocent and imma-terial" Regulation D violations. Theproposed rule would provide a defense

against loss of the Regulation D exemptionif the parties involved are able to show areasonable and good-faith effort to complywith the regulation and any violations areisolated and insignificant.

(b) Changes to Filing Requirements.Under the proposed rule changes, the FormD filing requirement found in Rule 503would continue, but such filing would nolonger be a condition to the availability ofthe Regulation D exemptions. However,

proposed Rule 507 would provide an incen-tive for timely filing of the form by dis-qualifying an issuer from the use ofRegulation D exemptions if it has beenfound to have violated the filing re-quirement. The SEC would have the powerto waive disqualification upon a showing ofgood cause.

(c) Further Accredited Investor Changes.Additional revisions to the definition ofaccredited investor have been proposed,including the addition of certain plans estab-lished and maintained by the governmentsof the states or their political subdivisions aswell as their agencies and instrumentalities,for the benefit of their employees. Suchplans must have either a bank, savings andloan association, insurance company orregistered investment adviser as their planfiduciary and must impose certain re-quirements regarding fiduciary respon-sibility.

(d) Demonstrating Restricted Nature ofSecurities. Securities acquired under Regu-lation D transactions have the same restric-ted status as securities acquired in atransaction under Section 4(s) of the Securi-ties Act and cannot be resold without regis-tration or exemption. Issuers are obligatedto ensure that no improper distributions oftheir restrcted securities occur and to takereasonable care to assure that purchasers arenot underwriters. Current Rule 502(d) listscertain actions which must be taken to re-flect such reasonable care, including theplacement of legends on certificates andnotifications to purchasers. Under the pro-posed rule change, the actions listed in Rule502(d) would no longer be required as acondition to a Regulation D exemption.

Taking such actions, however, would be asatisfactory demonstration of the requisitestandard of reasonable care.

UTAH LEGISLATIONIMPACTING THE PRACTICE OF

CORPORATE LAWThe following bils were passed by the

1988 session of the Utah Legislature andbecame effective on April 25, 1988:

(a) Directors (HB 176) (See Section 33and 34 of the Utah Business Corporation

Act). This legislation:(i) changes the law regarding the re-quired minimum number of directorsfor Utah corporations, to provide thatif a corporation has less than three

shareholders, the minimum numberof directors may be equal to the num-ber of shareholders; and

(ii) clarfies that directors are not re-quired to serve against their wil, byspecifying that a person may not benamed as a director without his or herconsent, and that a director may re-sign at any time upon written notice toa corporation.

I believe that the intent of HB 176 was agood one-to provide increased flexibilityto the management of corporations withfewer than three shareholders. However, Ialso believe that HB 176 is flawed in certainrespects. For instance, why is a corporationwith a single shareholder allowed to have

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January 19891l

Li

one director but not permitted to have twodirectors? There appears to be no logicalexplanation. Furthermore, are no directorsrequired for so long as no shares have beenìssued? Since no corporation can issueshares until after it is created by the filing ofthe Articles of Incorporation, at the time ofsuch filing, every corporation will have zeroshareholders. Accordingly, it would appearthat a newly formed corporation need notindicate any initial directors in its Articles ofIncorporation, defeating the purpose of theprovisions of Sections 34(2) and 48(k) of theUtah Business Corporation Act calling forinitial directors to be named in the Ariclesoflncorporation. I do not know whether theDivision of Corporations and CommercialCode is now accepting for fiing Articles ofIncorporation which show no initial direc-tors. If corporations are permitted to be

created without any initial directors, it isunclear who can elect the initial directors ortake any other actions on behalf of such

corporations. In states not requiring direc-tors to be named in the charter documents,the incorporators are typically authorized toelect directors and officers and to take otheractions appropriate to perfect the organiza-tion of the corporation. Utah statutes onlyauthorize incorporators to sign and deliverArticles of Incorporation and to call the

êêA Lawyers

ProfessionalLiability program. . . sponsored by

the Utah State Bar

Bj~ ~Bayl MM & Fay j Conti'nta Ino.

2180 South 1300 East, Suite 500Salt Lake City, Utah 84106/(801) 488-2550

organizational meeting of the directorsnamed in the Aricles. Finally, if the Arti-cles of Incorporation establish less than

three initial directors, as permitted by HB176, and the number of shareholders laterincreases to three or more but the bylaws failto fix a number of directors, what is theeffect of the provision that in the absence ofa bylaw the number of directors shall be thenumber stated in the Articles? I would rec-ommend that legislation be introduced toaddress these concerns.

(b) Same-Day Processing of CorporateDocuments (HB 141) (See Sections 100.5and 124.5 of the Utah Non-profit Cor-

poration and Cooperative Association Act,

the later Section of which should have madepar of the Utah Business Corporation Act).This bil directs the Division of Cor-

porations and Commercial Code to provideexpedited, 24-hour processing of corporatedocuments and authorizes the Division tocharge and collect a fee for this expeditedservice (currently $25).

(c) Corporate Dividends (SB 11) (Seesections 2(7) and (10) of the Utah BusinessCorporation Act). The purpose of this legis-lation is to clarfy that a corporation with

subsidiaries can use consolidated financialaccounting to determine surplus out ofwhich it may declare a dividend.

(d) Division of Corporations and Com-mercial Code Amendments (SB 106) (SeeTitle 46 of the Utah Code). The Division ofCorporations and Commercial Code pro-posed the amendments included in this bil.The bil repeals the existing laws relating toNotaries Public and enacts a new "NotaresPublic Reform Act." I wil not discuss thenew notary law in this article, but youshould be aware that it presents some trapsfor the unwar. For example, a notar pub-lic may not perform a notarial act if thenotary wil receive any fee, advantage,

right, interest or other consideration, in ex-cess of the statutory notary fee, from atransaction connected with the notaral act.This provision would prevent an attorneyfrom notarzing a document prepared for aclient, and may also be constred to preventthe attorney's secretary from notarizing

such a document.The bil also makes certain changes to the

Utah Business Corporation Act, the Utah

Non-profit Corporation and Cooperative

Association Act, and the Utah AssumedName Statutes. The principal modificationsare summarzed below:

(i) A corporate or assumed name notin English must be, for purposes ofrecordation, translated into English

(in addition to the existing requir-

ement that it be transliterated intoletters of the English alphabet).

(ii) A non-profit corporation mayamend its aricles of incorporation tobecome a business corporation, and abusiness corporation may amend itsaricles to become a non-profit cor-poration.

(iii) A foreign corporation which hashad its certificate of authority revokedmay requalify to transact business inUtah by reapplying for a new certifi-cate of authority and by complyingwith all applicable provisions of law,including the payment of any past -duetaxes, assessments, penalties and

fees.

(iv) The time allowed for reinstate-ment of a corporation suspended anddissolved for failure to fie an annualreport or pay corporate franchise

taxes has been shortened from threeyears to one year. The time for whichthe corporate name and any assumedname of a dissolved corporation isprotected from use by another per-sonal entity has also been shortenedfrom three years to one year.

CASES OF GENERAL INTEREST(a) Public Company Disclosure Ob-

ligations (Establishment of Materiality

Standard).By its decision in Basic Inc. v. Levinson,

108 S.Ct. 978 (1988), the U.S. SupremeCourt expanded the obligation of a publiclytraded corporation to disclose preliminarmerger negotiations. The Court rejected the"bright line" test of materiality that had

been adopted by varous lower courts andpursuant to which preliminar merger nego-tiations were not considered material orrequired to be disclosed until an agreement-in-principle had been reached regardingprice and structure. The Court concludedthat materiality in the merger context de-pends on the probabilty that the transactionwil be consummated, on the significance ofthe transaction to the issuer, and the sig-nificance a reasonable investor would place0on the negotiations. In short, whether

merger negotiations in any paricular caseare material depends on the facts, so themateriality issue must be determined on acase-by-case basis.

In a broader context, the Supreme Courthas adopted its standard for determiningwhether information is materiaL. The test isone of balancing the probability of the eventoccurrng against the impact or significanceof the event should it occur.

(b) In Par Delicto Defense in SecuritiesActions.

The Supreme Court, in Pinter v. Dahl,(108 S.Ct. 2063 (1988), has confirmed that

i,

I

!'i

I

II

I

,-

the "in pari delicto" or "equal fault" defenseis available in securities actions (specif-

ically private actions under Sect. 12(1) ofthe Securities Act, other than Sect. lO(b)and Rule lOb-5 actions, to which the de-fense was previously held to be applicable.The Court offered a two-part test to deter-mine the availability of the defense. First,the plaintiff must be at least substantially orequally responsible for the ilegal action (inthis case, the issuer's failure to register or toperfect an exemption). Second, preclusionof the suit must not significantly interferewith public policy (in this case, effectiveenforcèment of securities laws and pro-tection of the investing public). The Courtdetermined that in this instance the secondtest would be satisfied if the investor wereprimarily a promoter and not primarily aninvestor. The Court also addressed the issueof whether someone not transferrng title toshares can be liable for Sect. l2(l) actions.

The Court concluded that a non-owner whosolicits a stock purchase, motivated at leastin par by a desire to serve his own financialinterests or those of the security owner,might be liable as a seller for Sect. 12(l )purposes.

(c) Completion of Par-or-None Offeringby Other Than Genuine Market Trans-actions.

In c.B. Carlson, Inc. v. Securities Ex-

change Commission (lOth Cir., June 10,1988), the petitioners were the managingunderwriter for a par-or-none public offer-ing of shares of a newly formed corporationand a broker-dealer who was associatedwith the underwriter and also an offcer anddirector of the issuing entity. Unable to sellthe minimum number of shares required bythe prospectus to close the offering, thepetitioners attempted to avoid the failure ofthe offering by having the remaining sharespurchased by the individual petitioner andtwo parnerships which he controlled. TheSEC determined that by such actions thepetitioners had violated certain anti-fraudprovisions of the federal securities laws

(including Sect. 17(a) of the Securities Act;Sect. lO(b) of the Securities Exchange Actof 1934 (the "Exchange Act"); Rules lOb-5and lOb-9; Sect. 15(c)(2) of the ExchangeAct; and Rule 15(c)(2). The underwriterwas to receive a 10 percent commission

upon successful completion of the offering.Proceeds from the offering were to be heldin escrow until the required minimum num-ber of shares had been sold. If the minimumwas not reached within the offering period,investors' funds were to be returned. Unableto otherwise complete the offering, the peti-tioners and related entities purchased theremaining shares as indicated above, topermit the funds to be released to the issuer

and commiSSions to be paid to the peti-tioners. The purchases in question weremade in part with borrowed funds that wererepaid out of the proceeds of the offering,and they enabled the issuer to avoid re-funding amounts paid by public investors.The petitioners appealed the SEC's con-firmation of an administrative law judge's

decision. The 10th Circuit agreed with theSEC's reasoning that an underwriter orissuer may not represent that securities arebeing sold on a par-or-none basis unless theoffering is contingent on the refund featureof the offering. The potential refund of

investor subscriptions, should the marketjudge the terms of the offering un-satisfactory, offers some protection to in-vestors. In the instant case the funds topurchase the last shares in essence camefrom the offering itself, so the offering ap-peared successful, but not by genuine mar-ket transactions.

(d) Vicarious Liability of ShareholderAttorneys.

In Stewar v. Coffman, 748 P.2d 579

(Utah App. 1988), the Utah Court of Ap-peals considered the issue of whether a

shareholder of a law firm organized underthe Utah Professional Corporation Act is

vicarously liable for the acts or omissionsof another shareholder of the firm. The courtdetermined that there is no such liability ifthe shareholder did not paricipate in the

alleged acts or omissions.(e) Invalid Bylaw Provision Possibly En-

forceable Contract.

In McKee v. Willams, 741 P.2d 978(Utah App. 1987), the Utah Appeals courtindicated that a bylaw provision that is in-valid as a matter of general corporate law

may be enforceable between shareholdersassenting to it under principles of contractlaw. The case involved what was arguably astock forfeiture provision in corporate by-laws that was unsupported by any charerauthorization.

SUITTER AXLAND ARMSTRONG & HANSON

Is PLEASED To ANNOUNCE THAT

PAUL M. SIMMONS

HAS BECOME ASSOCIATED WITH THE FIRM.

FRANCIS H. SUITTERLERoy S. AXLAND

BRENT R. ARMSTRONGSTEWART M. HANSON. JR.

WILLIAM L. PRATERDAVID R. OLSENBRUCE T. JONES

JEROLD G. OLDROYDRICHARD J. LAWRENCE

FRANCIS J. CARNEYJ. MICHAEL HANSEN

CARL F. HUEFNERMICHAEL W. HOMER

DAN W. EGANFRED R. SILVESTERMICHAEL L. ALLEN

CHERIE P. SHANTEAUCHARLES P. SAMPSON

PAUL M. SIMMONSCLAUDIA F. BERRY

GARY R. HEN R I E

January i 989 13

"Managing the High Profile Case"(Taking the Constitution Seriously)

Lam genuinely honored to be here. I thinkthis may be the first time in Utah

history-pres tatehood, poststatehood-where a sitting federal judge has been askedto speak at a statewide gathering of statecourt judges.

From terrtorial beginnings, that amountsto 141 years.

From statehood, that amounts to 92years.

As a court, we appreciate the invitation,the camaraderie, and hope to merit yourconfidence.

Even so, I speak to you today with somehesitation.

I operate under a cloud. Let me lay it outso that everybody knows exactly what Imean.

Earlier this year, in a low profile case, thefederal district court was placed under acurse. I point this out to you not by way ofexcuse-nor indeed by way of exp-anation.I simply tell you the fact so that you canbetter evaluate my remarks. (I do take somecomfort in the fact that the curse came

directly from a defendant and not throughcounseL.)

One bright day, a defendant standing bythe side of his court-appointed attorney'

wanted me to reconsider a pro se motionfiled by him which I had previously denied.The following took place.

The court:". . . we're going to set a trialdate today. Your motion to dismiss I haveconsidered, sir. It looks to me like you havenothing to add to it. The motion wil bedenied. Let's fix a date."

Defendant: "Your honor, I am bound bythe laws of God to state to you that you are inviolation of your oath-that you are a crimi-nal under the laws of this United States ofAmerica. You have been and are a traitor ofthe United States of America. I command inthe name of Jesus Christ the angels speedilytake your spirit to the spirit prison and thereretain you until the resurrection of the un-just, in the name of Jesus Christ, amen."

REMARKS OF BRUCE S. JENKINSCHIEF JUDGE, UNITED STATES DISTRICT COURT

DISTRICT OF UTAH

1988 UTAH JUDICIAL CONFERENCEOGDEN, UTAH

SEPTEMBER 29, 1988

The court: "Okay. Now let's fix a trialdate."

Now that is an experience only a trialjudge could have. However, I am confidentthat if the matter went on appeal, the Ap-pelate Bench might suggest that the curseraised serious questions of fact which re-quire an evidentiary hearing and wouldprobably reverse and remand for furtherproceedings.

Please don't think that I took the curse

lightly. Shortly after I was favored with acurse, I was reading in a book picked up atan idle moment from a remainder table. Ittold of Father Divine, a black, self-appointed cleric who claimed to be God onEarth. He flourished during the Depressiondays when I was a child. He got into troublewith the law. After trial, he was sentenced.Four days later, the judge died. Father Di-vine, in response to an interview, merely

said: "I didn't really want to do it."Let me offer a toast-perhaps a prayer:

God wiling, may we meet together again atthis time next year.

At any rate, please appreciate the bag-gage of the curse.

I was asked to speak on management ofthe high profile case. Implicit in thatchallenge-and it was a challenge-is theother side of the coin. I call that side "takingthe constitution seriously."

I want to say a few things in general

before I make certain suggestions in par-ticular. I relish the opportunity to talk withfellow judges because we come from acommon culture, having learned to think ina common way. We speak a common lan-guage, and our values, goals and objectivesare the same.

The clues for meeting and mastering theever-present problems of a high profile caseare found in a few fundamental ideas footedin the constitution, in particular, and in thehistory of the legal system in general.

We are stil, some 201 years after theinstrument was first signed, trying to meetthe preamble-stated agenda. We are stillendeavoring to form a more perfect union.We are stil endeavoring to establish justice,promote domestic tranquility and secure theblessings of liberty for ourselves and ourposterity.

How miraculously wise of the foundingfathers to create a system of dual sov-ereignties and separated powers. But we arestil fighting the never-ending battle óf

fragmented power-the geographic battle,which we call federalism, and on the federallevel, the efforts of one branch of govern-ment to enlarge itself at the expense ofanother. We forever man the boundary linesof governmental power.

As background for the burden of mydiscussion, I want to talk briefly about whatcourts are all about and wil take a fewmoments to describe some common charac-teristics of the courts. I do this to revisitfundamentals with you. In the popular lit-erature of the day, there is much confusionabout the fundamentals-much confusionand much nonsense. We need first to think

14 Vol. 2, No. i

clearly about court purpose and court pro-cess, and the fundamental values they re-flect.

What is our purpose?To what and to whom do we owe our

allegiance?In the briefest way possible, our job is to

do justice. Micah said it best: Do justice,love mercy, walk humbly.

When I entered upon this job, I took anoath. When you entered upon yours, youtook a similar oath. Every appellate judge inthe federal system, including a justice of theUnited States Supreme Court, takes a simi-lar oath.

Let me read it to you. "I do solemnly

swear (or affrm) that I wil administer jus-tice without respect to persons, and do equalright to the poor and to the rich, and that Iwil faithfully and imparially discharge andperform all the duties incumbent upon me asa United States District Judge according tothe best of my abilities and understanding,agreeably to the constitution and laws of theUnited States. So help me God." I keep acopy of that under glass on my desk. I keep acopy before me on the bench.

When I suggested that the subtitle of thetopic for discussion-the other side of thecoin-was taking the constitution seriously,I meant what I said.

The oath summarzes eloquently courtpurpose and court manner.

Administer justice.Fairly.Agreeably to the constitution and laws.If done well, the court product is accepted

by most of the populace, even if they dis-agree with it.

The reasons for that, in my opinion, arethree characteristics that courts have which,I believe, persuade acceptance by mostmembers of the populace.

I call them continuity, stability, integrity.Let me ilustrate. Our courts provide cul-

tural continuity. We bind the past and thepresent with the future. Courts may reachback into the reservoir of experience and usethat past experience in resolving similarpresent-day problems. We look to pre-cedent.

Our courts provide stability. We are es-sentially conservative institutions in theclassic sense. We can deter other branchesof government from running too fast or stopthem from exercising power outside of theirrightful boundares. We arbitrate betweencontending factions which hold governmentpower.

Our courts provide integrity. That is ahandy label-a shorthand way of observing

that:(a) Courts are passive. They don't seek

business. They are available.

(b) Courts are disinterested. Not unin-terested. Disinterested. They have no ax togrind. They stand apart.

(c) Courts move at a different pace. Theyhave an obligation to take time to think.(Thought, not being a performing ar, isoften unnoticed.)

(d) Courts place high emphasis on themethod of reason and the value of talk, themeaning of words.

Continuity, stability, integrity. These, itseems to me, are some of the reasons theAmerican populace is generally wiling toabide by what a court says even if, onoccasion, they disagree with what it says.

These observations provide a glimpse ofsome facets of our actions relating to ju-dicial process and judicial product.

Our goal is a just product.Our means is a fair process, sometimes

called due process.Our fundamental guide is that venerable

instrument we call the constitution.Hauntingly present in the confluence of

process and just product are standards of

fairness relating to government conduct.Techniques have been developed histori-

cally to restrict government conduct whichis considered unfair.

The clues for meeting andmastering the ever-presentproblems of a high profilecase are found in a fewfundamental ideas footedin the constitution.

Many of these have been institutional-ized.

For example, a person charged with a

crime is presumed to be innocent. The factthat he is charged is supposed to say nothingabout the truth of the charge until the truth isfound-where a fact finder gives us "ver"(truth) "dict" (to say). The charge as we allknow is an invitation to community judg-ment.

The government has a solemn obligationto demonstrate guilt beyond a reasonable

doubt-no mean burden. No more solemn

obligation exists.While old-fashioned in the eyes of some,

on the federal level grand jury activity,determining whether one is even to becharged, is supposed to be secret. The effortis, of course, to be fair to a person who maybe a target but cannot properly be charged,in short to minimize the damage to his statusor reputation, if no charge is forthcoming.

As a means of deterring impropergovernment conduct in procuring evidence,we have developed a procedure called amotion to suppress, where the essential fair-ness of evidence gathering on the part ofgovernment may be examined, and iffoundto be beyond the bounds of fair activity, useofthe evidence can be precluded. This is notdone for the purpose of condoning criminalconduct of any kind, but of educating thoseengaged in law enforcement that they mustbe fair, that their actions must be con-stitutional, that they are expected to conductthemselves as officers of the government inan appropriate and lawful fashion. It is noexcuse to say that the crooks aren't fair, orthat one must fight fire with fire, or thatgutter tactics require gutter tactics.

In the interest of fairness, we allow thedefense of "entrapment" when a targetclaims that he was tempted to violate the lawby a lawbreaking but insulated govern-mental officer.

What I am trying to ilustrate here issomething that the legal philosophers, themoral philosophers, the thoughtful spokes-men of the great religious systems of theworld have all said.

Means and ends must haronize.

Means and ends must be consistent.One cannot achieve a just judicial product

by using unfair means-fabricated docu-

ments, untested testimony, surprise infor-mation. My sermon for the day.

No one says that we must administerjustice fairly and agreeably to the con-stitution and laws of the United States ex-cept in high profile cases.

The same obligation of providing a fairjudicial process and just product is equallythere and-because of varable factors-more challenging to achieve.

A Michael Deaver, an Olle North, aBily Sol Estes, a Sam Sheppard, a JosephSmith, a Gar Bishop, a Mark Hofmann, aHar Bridges, a Charlie Chaplin, a TedBundy, a Wiliam Presser, a Joseph PaulFranklin, a Bess Myerson, are all entitled tofair process and a just judicial product. ..

With them, as with anyone else, we needto take the constitution seriously,

I have talked of court mission, and havedescribed court characteristics, and havepreached that means and ends must be con-sistent. Now, I want to pause here to make adistinction.

It is an important distinction, often blur-red, often overlooked, often simply ig-nored.

It is an important distinction lost in theshuffe of life or descending media dead-

lines.In the social order, a court trial is not a

media event.

January 1989 15

-r~

A trial is a public event which may beobserved and reported by the media. Thepurpose of a trial is not exposition nor enter-tainment. The purpose of a trial is justice-a

word deservedly used with great humilty.The presumption of openness-a public

trial-is not meant to supply 30-second

headlines for the 5 0' clock news or to fil inthe blanks in the newspaper dummy. It is toensure that the judicial process is a justprocess and to obviate star chamber conse-quences with all of their attendant evils.

Let me give you a rough analogy. Onedoes not run a business for the purpose ofkeeping the books. One keeps the books inorder to run a business. A word from a moreancient source-man is not made for theSabbath, the Sabbath is made for man.

A trial is not a media event. All of societyneeds to think clearly about that and, havingthought clearly, act responsibly.

There is a wonderful instruction which Igive in all criminal cases. I always get a littlemisty eyed when I give it because I believeit.

You are expected to use your goodcommon sense in considering the evi-dence in the case. If the defendant isproved guilty beyond a reasonable

doubt, say so. If he is not proved

guilty, say so. The question is never"wil the government win or lose?"

The government always wins whenjustice is done, regardless of whetherthe verdict be guilty or not guilty.A defendant is presumed innocent. He is

entitled to a public triaL. He is entitled to"fairness" found in "due process," and thetral judge-with or without the help of the

attorneys, with or without the help ofothers-has a constitutional mandate to tryto give it to him.

A trial is not an athletic contest. It is not awar. And while answers sought appearcategorical-guilty, not guilty; for plaintiff,against defendant; for defendant, against

plaintiff-naive though it sounds, the

search is a search for trth-verdict-bymeans of a fair process.

Words can be wonderful. One of the mostintriguing of studies is exploring the historyof words. Let me give you an example. Takethe word verdict.Ver TruthDict To SayTo say the truth. In our search for trth,

, idealistic as it may be, we give informationto a jury to ask them to "say the truth" toproduce aver dict.

We ask them to do that from informationpresented in open court and tested by thehistoric tools of trial, examination andcross-examination of witnesses, and the

presentation of exhibits.

A witness is someone who knows some-thing helpful in a case. He offers testimonyat the behest of one pary or another accord-ing to rules which have been formulatedthrough the centuries.

From what a jury hears and sees in opencourt--vidence-it is called upon to "say

the trth." No mean task. No mean respon-

sibility.Justice Felix Frankfurter remarked in Ir-

vin V. Dowd back in 1961 as follows:Not a term passes without this court

being importuned to review con-

victions, had in states throughout thecountry, in which substantial claimsare made that a jury trial has beendistorted because of inflammatorynewspaper accounts-too often, as inthis case, with the prosecutor's

collaboration-exerting pressures

upon potential jurors before trial andeven during the course of trial,thereby making it extremely difficult,if not impossible, to secure a jury

capable of taking in, free of pre-possessions, evidence submitted inopen court. Indeed such extraneous

influences, in violation of the de-

cencies guaranteed by our con-stitution, are sometimes so powerfulthat an accused is forced, as a prac-tical matter, to forego tral by jury.366 U.S. 717, 730 (concurrng opinion).Back in 1968, The Kaufman Committee

reported to the judicial conference of theUnited States on the problems arsing on thefree press-fair trial issue.

In one paragraph of the report it states:The problem is by no means new.

American legal history is studdedwith notorious examples of the impactof widespread and uncontrolled in-flammatory publicity upon the admin-istration of criminal justice. The trialof P-rf. Webster in 1850, the Lizzie

Borden Case in 1893, the Hall-MilsCase, the Trial of Sacco and Vanzetti,and the Hauptmann Case are only afew instances. The events sur-rounding the assassination of Presi-dent Kennedy in November 1963graphically ilustrate the effect of per-vasive news coverage and publicityon the right of a defendant to a trial byan imparial jury. Because of this pub-licity, the president's commissionfelt, "It would have been a most diffi-cult task to select an unprejudiced

jury, either in Dallas or elsewhere."45 F.R.D. 391,394-95 (footnotes omit-

ted).The citations extend back to the trial of

Aaron Burr before Chief Justice Marshal in1807. Defense counsel urged that the jurors

had been prejudiced against Burr because ofaricles cared in the Alexandria Expositor

and other newspapers.Even then Chief Justice Marshal noted:

The jury should enter upon the trialwith minds open to those impressionswhich the testimony and the law of thecase ought to make, not with those

preconceived opinions which wil re-sist those impressions.The crux of the problem, according to the

Kaufman Report, lies in simultaneously ap-plying to the administration of criminal jus-tice two constitutional rights-the right of

the news media to publish, on the one hand,and the right of the individual accused ofcrime to an imparial jury on the other.

The first amendment provides in part:"Congress shall make no law***bridging

the freedom of speech, or of the press***."The sixth amendment provides in par:

"In all criminal prosecutions, the .accused shall enjoy the right to aspeedy and public trial, by an impar-tial jury of the state and districtwherein the crime shall have been

committed***. "The contour of a case, whether high or

low, is a function of the publicity it receives.It is a high profile case because of sus-

tained and pervasive publicity prior to andduring tral.

In a series of decisions, the Supreme

Court has made it clear that convictionsobtained under conditions permeated withprejudicial publicity cannot stand.

In Sheppard v. Maxfield, the Sam Shep-pard Case, 384 U.S. 333 (1966), the "Su-preme Court laid down a mandate to thecourts to deal with the problems caused bythe impact of publicity on the jury system.

The court ruled that "the state tral judgedid not fulfil his duty to protect Sheppardfrom the inherently prejudicial publicitywhich saturated the community and to con-trol disruptive influences in the court-

room. . . ." 384 U. S. at 363. The courtstated:

From the cases coming here, wenote that unfair and prejudicial newscomment on pending trials has be-come increasingly prevalent. Dueprocess requires that the accused

receive a trial by an imparial jury free

from outside influences. Given thepervasiveness of modern com-munications and the diffculty of ef-facing prejudicial publicity from theminds of the jurors, the tral courtsmust take strong measures to ensurethat the balance is never weighedagainst the accused. And AppellateTribunals have the duty to make anindependent evaluation of the cir-

16 Vol. 2, No. I

r

cumstances. ***We must rememberthat reversals are but pallatives; the

cure lies in those remedial measuresthat wil prevent the prejudice at itsinception. The courts must take suchsteps by rule and regulation that wilprotect their processes from preju-dicial outside interferences. Neitherprosecutors, counsel for defense, theaccused, witnesses, court staff norenforcement officers coming underthe jurisdiction of the court should bepermitted to frustrate its function.384 U.S. at 362-63 (emphasis/supplied).That case spawned Bar committees and

judicial conference reports and a spate oflaw review articles and even a few books. Itenergized some Bar associations and somemedia persons, including some in Utah, tocome up with agreed upon protocols-ethical standards, guidelines for lawyers

and media representatives.Standards were promulgated in 1969.

They were updated in 1981. They areeven now, 1989, being updated.

In my opinion, like the Dead Sea scrolls,they remain unknown to many. and a mys-tery to most, paricularly if measured by theconduct of many of the persons and insti-tutions which assisted in their formulation.

They are honored in the breach each day.Back in 1965, Skelly Wright, now de-

ceased but then a circuit judgeJor the Dis-trict of Columbia circuit, said this:

I realize, of course, that the con-duct of the press in the past with

reference to the protection of the

rights of the accused has not beenexemplary. Moreover, even after thepress has erred on the side of preju-dicial publicity in landmark cases,such as the Teapot Dome Scandal,Sacco and Vanzetti, and the Lind-bergh kidnapping, its acts ùf con-trition have consisted of little morethan the utterance of pious platitudes.After each of these great news events,extreme pressure was brought to bearon the press to use self-restraint inreporting information which mightprejudice the accused's right to a fairtriaL. Each time, a committee of theAmerican Society of Newspaper Edi-tors was appointed, and each time thereport of the committee amounted to apious plea for freedom of the press.38 F.R.D. 435, 439-40.

Perhaps the Court of Appeals of the 10thCircuit was right in 1967 when it said: "Theproblem presented is incapable of a satisfac-tory solution." Mares v. United States, 383F.2d 805,808 (lOth Cir. 1967).

Persons of good wil, persons with pro-

fessional responsibility, persons who caredeeply about the constitution ought to beable to do better than that.

Let me now tum to techniques in dealingwith some aspects of the cause celebre.

Some come from authoritative cases ortexts or standards of professional conduct orprotocol or federal regulations. Some comefrom frustrating personal experience.

First, let me war you that the contemptpower in dealing with persons other thanparies, attorneys or court personnel is ilus-

ory. Under the cases it is somnolent, almostentirely dead. Justice Stewart of por-nography definition fame and Justice Jack-son thought a spark of life remained, butdon't count on it in your lifetime or mine.

The power of contempt is most effec-,tively used as internal power realisticallyavailable in dealing with paries, witnesses,jurors, officers of the court, court per-

sonneL.Of course, if the media intervenes in a

case, as they sometimes do in high profiecases, they may become a party, subjectingthemselves to the orders of the court. AsJustice Frankfurter noted, in the opinioncited earlier, "The court has not yet decidedthat, while convictions must be reversed andmiscarages of justice result because theminds of jurors or potential jurors werepoisoned, the poisoner is constitutionallyprotected in plying his trade." 366 U.S. at730.

The fact that the contempt power is theredoesn't mean you have to use it.

The fact that it is there may relieve youfrom having to use it.

Remember means and ends, due process,just product. In order to achieve that in anappropriate case, you may have to changethe location where a case is to be tred from acommunity where passions and opinionsrun high to a more neutral site.

You may have to change the time-let

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things calm down-allow people to think The personal trauma to some lasts forever. The press at every tum has to say to itself,again-if such waiting can be compatible Common folklore in our shop is that the last wil this, if published, detract from the pro-with the constitutional right to a speedy time we sequestered, we ended up with two cess and taint the judicial product?tral. Depending on the circumstances, it divorces and one marage. It simply must Time, in a sensitive judicial process, is somay be wise to hear a matter quickly rather be a last desperate resort. important and the press is so bent on beingthan delay. Publicity builds on itself. Satu- Follow the admonition of the high court first. Think twice and then think again. Tryration takes time. There may well be less to make use of side bar and chamber con- to do something in depth when all the infor-damage in hearing a matter earlier than ferences outside the presence of the jury and mation is available rather than somethinglater. A speedy trial may serve the public all but paricipants to deal with matters of shallow, or speculative, or incorrect, andpurpose in more ways than one. high sensitivity which, if made known to the uninformed now.

You may have to remind the attorneys, jury, directly or indirectly, would taint the Is it too much to ask that one be part of theprosecutors, defense attorneys and their as- process and raise questions as to the result. solution rather than part of the problem?sociates of their professional oaths, their Adopt a special rule if need be as to We return to means and ends and theirprofessional responsibilities, their statutory procedure which, if violated, would be sub- need to haronize. Fair triaL. Just judicialresponsibilties, and point out that a pro- ject to sanctions. product.fessional tries his case in open court and on Insulate witnesses from new interviews Some people think those means and endsthe record, and you expect them to live up to during the trial period. are important in the year of our bicentennialtheir responsibilities. It is not appropriate to No one is suggesting that all phases of a plus one.

fan the flames of popular sentiment. As has criminal case be closed to the public, that Such social rights are not picked off thebeen pointed out by the high court, attorneys public business be conducted behind closed shelf at the 7-Eleven. We are where we areare often sources of unbridled comment on doors. There is, of course, a presumption in case by case, step by step, court by court.cases, and it is necessar to bring this source favor of openness. Closure must be justified Lawyers, judges, newsmen, citizens allof prejudicial information under control. by overrding interests. In the vast majority need to take such constitutional rights seri-The high court characterized unbridled of cases, there is no need for closure to ously. Lawyers and judges have to do so.comment as "habitual misconduct" which it ensure a fair triaL. However, under the Newsmen with their privileged positioncalled "highly censurable and worthy of extraordinar circumstances of a high pro- have the power to do so. They have a

disciplinar measures." Some persons, for file case, the interest in a fair process and a choice. They needn't do so. Where much isreasons of their own, may not understand just result may override-at least given, much is expected.any other language. temporarly-any first amendment right of It is absolutely imperative that newsmen

You must be alert to making admonitory access. with their position of privilege report fairly,instructions-reminding jurors of their re- It is not a question of censorship, but of honestly and evenhandedly. The publicsponsibilities in reference to evidence and timing. Closed proceedings are stil con- never knows when they don't do so. It is ofoutside sources of information. Most, as ducted on the record in the presence of small moment to say to someone go look atyou know, are very conscientious. An occa- counseL. That which is sealed can be un- the dusty verbatim court record to get thesional inquiry as to whether they are keeping sealed at an appropriate time, after the threat rest of the story, when the rest of the storyfaith with the court reminds them again. to a fair trial has passed. The public's as- never gets told.Advising them to bring to your attention any serted right to know is not necessarly in- All citizens, lawyers, judges, newsmenuntoward matter can be helpful in assisting compatible with the defendant's right to a need to work together to continue to protectjurors to live up to their oath. fair triaL. But sometimes it's a question of fair trial and a just judicial product. The first

Enlarge the venire. Bring in whatever when the public is entitled to know. Fairness amendment is first because it epitomizes thenumbers of persons you need to provide a to the defendant sometimes requires that the need of societies to run on adequate, accu-basis for obtaining an unpredisposed paneL. publicity come after an imparial jury has rate, evenhanded information. The first

One thing I can do for you is to make been seated and has been insulated from amendment needs to bolster the others, for-available to you a means of voir dire exam- prejudicial information. tify the others, cooperate with the others,ination which can speed up the process of Fair trial-free press presents the classic haronize with the others.asking questions, particularly of a sensitive dilemma-a choice, not just for the judge, First amendment privilege should nevernature, which wm enable those intimately but for all paries concerned including at be used to detract, diminish, taint or frus-involved in the trial to make judgments as to times the venerable, irrepressible and, at trate the purpose of the other amendments inprospective jurors. This is ordinarly done times, irresponsible fourth estate. providing due process and a just judicialby agreement of counseL. It is done in writ- The choice is not between what is right product.ing. It is done with full paricipation by and wrong. The difficult choice is between How to manage a high profie case? Icounsel in the formulation of questions and what is right and right. have talked of techniques and furnished

public commitment to prospective jurors as Do we want a press which is almost source materials to you. They help, but theyto how the information wil be handled. free? don't really answer the question.

Using it, it was possible in two half days Do we want a trial which is almost All of us, including the press, manage aplus a full day to seat a jury which was fair? high profile case by taking the constitutionpassed for cause, when questions had been As a judge, according to the cases which seriously whether we have to or not.raised as to whether it would be possible to provide our trial discipline, if there is aseat a jury at all. genuine question, we have the obligation to

Be generous in enlarging peremptory stand on the side of fair triaL. CASES

stries. Better to spend the time and energy Otherwise, we have the dubious dis- Press-Enterprise Co. v. Superior Court, 478 U.S. 1

early than to try the case again. tinction of having the high court say, as they (1986) (extending the qualified first amendmentright of access to preliminar hearngs).

Sequestration. It is such an easy word to said so eloquently in the Sheppard Case, do Seattle Times Co. v. Rhinehar, 467 U.S. 20 (1984)use. It is very difficult to sequester a jury. it again, do it again. (upholding against first amendment challenge a

18 Vol. 2, No. I

protective order barng dissemination of infor-mation gained through discovery in a civil action).

Press-Enterprise Co. v. Superior Court, 464 U.S. 501(1984) (extending qualified right of access to jurorvoir dire).

GlobeNewspaperCo. v. Superior Court. 457 U.S. 596(1982) (striking down state statute requiring clo-sure of criminal trials during the testimony of minorvictims of sex offenses).

Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555(1980) (finding a first amendment right of publicaccess to criminal trials).

Gannett Co. v. DePasquale, 443 U.S. 368 (1979)

(upholding a trial court's closure of a pretrial sup-pression hearing where all the participants in thelitigation agreed that the hearng should be closedto protect the defendants' fair-tral rights).

Nebraska Press Association v. Stuar, 427 U.S. 539

(1976) (striking down a court order prohibiting thereporting of a criminal defendant's confessions oradmissions and other facts "strongly implicative"of the accused).

New York Times Co. v. United States, 403 U.S. 713(1971) (upholding the district courts' refusal toenjoin newspapers from publishing the "Pentagonpapers" and in the process reaffrming the heavypresumption against the constitutionality of priorrestraints of expression).

Sheppard v. Maxwell, 384 U.S. 333 (1966) (over-tuming the defendant's conviction due to massive,pervasive and prejudicial publicity-a good exam-ple of how not to manage a high profie case).

Estes v. Texas, 381 U.S. 532 (1965) (reversing aconviction because of the televising of the de-fendant's criminal tral over his objections).

Irvin v. Dowd. 366 U.S. 717 (1961) (overtuming aconviction on due process grounds because of jurorprejudice caused by pretrial publicity).

Society of Professional Journalists v. Secretar of

Labor, 616 F. Supp. 569 (D. Utah 1985) (finding aconstitutional right of access to certain formal ad-ministrative proceedings), appeal dismissed andopinion vacated, 832 F.2d 1180 (10th Cir. 1987).

Society of Professional Journalists v. Bullock, 743P.2d 1166 (Utah 1987) (setting out the steps a trialcourt should follow in determining whether to closea pretrial proceeding and overturning an orderdenying access to pretrial competency proceedingswhere the proper procedure was not followed).

KUTV, Inc. v. Wilkinson, 686 P.2d 456 (Utah 1984)(setting out the standards for orders restraining

pretrial publicity and upholding the trial court'sorder restraining the media's dissemination of in-formation about a defendant's alleged connectionswith organized crime until after the jury retired).

Kears-Tribune Corp. v. Lewis, 685 P.2d 515 (Utah1984) (finding that the public has a limited right ofaccess to preliminar hearings under both the fed-

eral and state constitutions and explaining the cri-teria and procedures for courts to follow indetermining whether to deny or restrict access toassure a fair trial).

KUTV, Inc. v. Conder, 635 P.2d 412 (Utah 1981)(vacating an order closing proceedings to deter-mine whether a prosecutor had violated a prior,valid secrecy order).

Other Sources

American Bar Association. Standards for CriminalJustice, ch. 8 (2d ed. 1978 & Supp. 1986).

Federal Rule of Criminal Procedure 53 (regulation ofconduct in the court room).

A. Friendly & R. Goldfarb, Crime and Publicity: TheImpact of News on the Administration of Justice(1967).

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Prnciples and Guidelines for News Reporting (1981)(published and distrbuted by the Utah State Bar,Salt Lake Co. Bar Ass'n., Deseret News, Salt LakeTribune, KSL-TV News, and KUTV News).

Principles and Guidelines for News Reporting (reviseddraft, June 15, 1988).

Report of the Committee on the Operation of the JurySystem on the "Free Press-Fair Trial" Issue, 45F.R.D. 391 (1968).

Utah Code Annotated Sect. 78-3a-33 (1987) (closureof hearngs in juvenile cases).

Utah Code of Judicial Conduct, canons 3A(7) and (8).Utah Judicial Council Rule 4-401.

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19

~,

A Practitioner's View ofJohnson v. RogersI

i

I:

I

In the recent case of Johnson v. Rogers, ithe Utah Supreme Court further clarifiedthe law in several critical areas of tort liti-gation. An excellent summary of the fullopinion is found in the November Bar Jour-nal "Case Summaries" column by WiliamHolyoak and Clark Nielsen, and wil not berepeated here.

This article addresses two parts of theSupreme Court's opinion in Johnson thatmay be of particular concern for prac-titioners and judges at the trial court level:(I) the problem that remains in instructing ajury on punitive damages, and (2) the ques-tion of applying the court's analysis to casesinvolving negligent infliction of emotionaldistress.

i. Instructing the Jury on Punitive Dam-ages'!In Johnson the trial court dismissed plain-tiffs' claims for punitive damages, ruling

. that "actual malice," "evil intent" or "mal-ice in fact" was the applicable standard. TheSupreme Court reversed and remanded,holding that the more stringent standard forpunitive damages relied on by the trial courtapplies only to false imprisonment cases.

The Court further held:The standard for punitive damages innon-false imprisonment cases is clear:they may be imposed for conduct thatis wilful and malicious or that mani-fests a knowing and reckless dis-regard toward the rights of others. 2This ruling significantly clarifies the

standard for punitive damages. However,the remainder of the opinion leaves ambigu-ity for the practitioner and trial judge facedwith drafting jury instructions. In various

paragraphs of the opinion, the SupremeCourt used the following phrases in identi-fying the underlying rationale and/or basisfor an award of punitive damages:

(A)ctual malice or reckless dis-regard of the rights of others. . .3

(O)utrageous conduct that is eitherwilful or knowingly reckless. . .4

ii

By Kevin P. McBride

KEVIN P. McBRIDE is a graduate of the Universityof Utah College of Law. He currently is a sale prac-titioner representing plaintiffs.

(C)onduct which is knowingly reck-less and exhibits a high degree ofdisregard for the safety of others. 5

(E)xtreme, outrageous and shockingbehavior. . .6

(K)nowing and reckless disregardfor the rights of others. 7

We do know from Johnson that punitivedamages may be awarded in non-false im-prisonment cases based on a "knowing andreckless disregard" standard. However,how this standard wil be perceived by ajurymay well depend on which phrase or phrasesa trial court uses in its instructions.

Continuing a critical look at languageused by the Court, there is also room toquestion the phraseology of Johnson's com-panion case, Miskin v. Carter.

8 In Miskin v.

Carer the Supreme Court affirmed the trialcourt's dismissal of a punitive damagesclaim, stating:

(P)unitive damages may be awarded

~I

only if they serve society's interest inpunishing and deterring outrageous

and malicious conduct which is notlikely to be deterred by other means.9A Miskin v. Carer instruction that puni-

tive damages are for "punishing and deter-ring outrageous and malicious conduct. . . "would likely confuse a jury also instructedunder a "knowing and reckless" standardfor awarding punitive damages. In fact, an"outrageous and malicious conduct" in-struction could easily be perceived by thejury as the "actual malice" or "malice in

fact" standard the Court tried to get awayfrom in Johnson.

The subtle distinctions in phraseologycontained in Johnson v. Rogers and Miskinv. Carter may yet give us difficulty in deriv-ing uniform standards for instructing thejury on punitive damages, and wil likely befurther clarified by the Supreme Court.

2. Applying the Court's Analysis to Neg-ligent Inflction of Emotional Distress

Cases.In analyzing the Court's position on neg-

ligent infliction of emotional distress, thepractitioner should first note that the ma-jority opinion written by Justice Durham issignificantly altered by the concurrng opin-ion authored by Justice Zimmerman andjoined by the other three justices. If therewas ever a time to read the concurring opin-ion, this is it.

In the main opinion, Justice Durham pro-posed the adoption of the "Dillon" rule,recognizing a claim of negligent inflictionof emotional distress if the plaintiff's injuryis reasonably foreseeable, which in tum isdefined by:

(1) whether the plaintiff was locatednear the scene of the accident; (2)whether the emotional trauma to theplaintiff was caused by actually wit-nessing the açcident; and (3) whetherthe plaintiff and the victim wereclosely related.

10

I"~

20 Vol. 2, No. i

The concurring opinion, which is theposition of four of the justices and thereforeis the actual majority opinion, adopts the"zone of danger" rule found in Restatement(Second) of Torts Sect. 313.

The Restatement rule restrcts recovery tocases where there is, in effect, (1) negligentconduct of the defendant, (2) that threatensthe plaintiff with emotional distress likely toresult in bodily harm because of fright,shock or other emotional disturbance, (3)arising to the plaintiff out of fear for his orher own safety and (4) results in physicalinjury or ilness to the plaintiff. II

Several aspects of the opinion should beconsidered. First, even though the Johnsoncase involved a father-son relationship, itwould appear that under the Restatement

rule the relationship was not a factor to beconsidered in allowing the father a cause ofaction. The father's claim had to be based onemotional distress resulting from thefather's reasonable apprehension for hisown safety, not based on the emotionaldistress a father might naturally suffer byseeing his son injured. Under the Re-statement rule, only victims directly in theline of injury, i.e., "direct victims," are

allowed a cause of action. Bystanders facedwith no personal threat of harm, i.e., "sec-ondar victims," are not allowed a cause ofaction.

The second thing to consider is that al-though the concurrng opinion adopted theRestatement rule, Justice Zimmermannoted:

At some future date, we may de-termine that there is merit in some ofthe other approaches surveyed in Jus-tice Durham's opinion. However, un-til we have had experience with thecause of action, I conclude that it isbest to take the more conservative

approach and adopt the Restatement

rule as written. 12

This suggests to the plaintiffs' bar thatwhen a client would have a legitimate claimfor negligent inflction of emotional distressunder a broader standard, the attorneyshould seriously consider bringing thatclaim and argue for application of the Dilonrule favored by Justice Durham or a broaderforeseeabilty rule adopted by other courts.Justice Zimmerman seemed to suggest thatwe are heading in that direction.

Finally, the language of the concurrngopinion, together with Justice Durham'sposition in the main opinion, suggests thatthere may be some room for re-examiningthe adoption of a loss-of-consortium claim,rejected by the Supreme Court in Hackfordv. Utah Power & Light CO.13 The majority

opinion in Hackiord, authored by JusticeZimmerman, refused to recognize the Mar-

ried Woman's Act as providing a loss-of-consortium claim for spouses. The opinionwas based in significant part on the potentialdifficulty in drawing a line between spouseclaimants and potential other claimants whosuffer secondar emotional har, such aschildren, in-laws, lovers and close friends. 14

In the concurrng opinion in Johnson, Jus-tice Zimmerman refers to Hackford andstates that he has:

(S)erious concerns about the theo-retical rationality of any limits thatcan be imposed on liability for neg-ligent infliction of emotional

distress. 15

The current theoretical distinction be-tween Hackford and Johnson is main-tainable as long as the Court continues toallow recovery only to direct victims underthe Restatement rule, not to bystanders. TheCourt does not have to engage in a line-drawing process under the Restatement

zone-of-danger rule, because no recovery isallowed to any secondar victims. How-ever, if the Court expands the standard fornegligent inflction of emotional distress toallow recovery to bystanders, there wouldbe no theoretical distinction between anemotional distress claim resulting from fearfor the safety of another, and an emotionaldistress claim for loss of consortium re-

sulting from injury to another. Both plain-tiffs would be secondar victims. The Courtwould then be engaged in a line-drawingprocedure, which would logically compelthe same procedure be applied to loss-of-consortium cases.

Again, the opinions in Johnson suggest

that claims for negligent infliction of emo-tional distress to secondar victims of alltypes may be recognized by the SupremeCourt in the future. Therefore, such claimsshould be seriously considered by the plain-tiffs' bar under the appropriate set of facts.

*Robert Henderson is gratefully acknowledged for hisideas regarding punitive damages.

J 90 Uta Adv. Rep. 3 (Aug. 25, 1988).

2Id. at4.3Id. at 5.4Id. at 5.5Id. at 5.6Id. at 5.7Id. at 12.890 Uta Adv. Rep. 19 (Aug. 25, 1988).9Id. at 20.

w 90 Uta Adv. Rep. at 9.JJ See Restatement (Second) of Torts Sect. 313, Commentd.

(Emphasis added).12 Johnson at 13.13 740 P.2d 1281 (Utah 1987).J4 Id. at 1286.15 Johnson at p.13.

January i 989 21

The Political Action Disclosure Act

During the 1988 General LegislativeSession, the Utah State Legislatureenacted Senate Bil No. 177, titled "Politi-cal Action Disclosure Act." A review of1988 election records demonstrates thatthere are some compliance problems perthose governed by the Act. Any lawyer whoadvises political action committees or cor-porations on political matters should beaware of the scope of this Act.

By Gordon D. Strachan and Gar R. Thorup i

!,

HISTORYIn 1985, an Election Law Task Force was

created by the State Legislature to study

Utah election laws. One of the Task Force'ssubcommittees, chaired by former Rep.James Moss (R), was assigned to studypolitical action committees. After studyingthe matter, that subcommittee proposedlegislation which Rep. Moss sponsored asHouse Bil No. 90 in the 1986 legislativesession. That proposal passed the House butdied in the Senate Rules Committee. In

1987, a similar proposal was sponsored byRep. Craig Moody (R), as House Bil No.276; however, this bil failed to pass eitherhouse. Both the 1986 and 1987 proposals

were actively supported by Lt. Gov. ValOveson, Utah's chief election officer.

During the 1986 general election, theDemocrats made significant gains in thelegislature, particularly in the House wherethey gained 13 seats. In addition, moresubtle changes affected the makeup of the1987 Legislature when several incumbentRepublicans lost primary battles. None-theless, the Republicans maintained controlof these seats. Much of the upheaval wascredited to certain political action com-mittees which aggressively paricipated. inthe campaigns of many legislators.. In the aftermath of the Legislature's sig-

nificant 1987 education-related tax in-crea~es, a grass-roots movement sprang intoexistence seeking public support for four

initiative petitions: one to reduce propertytaxes; one to roll-back the 1987 tax in-creases; one to allow tax credits for sending

GORDON D. STRACHAN graduated from theUniversity of Southern California in 1965, A.B.,having attended Cambridge University in 1964, andreceived his law degree in 1968 from Boa1t Hall Schoolof Law, University of California at Berkeley.

children to private schools; and one to re-quire disclosure of contributions made tocandidates by political action committees.The last initiative proposal was patternedafter House Bil No. 276 which failed dur-ing the 1987 Legislature. The apparent goalof the initiative was to require political ac-tion committees to disclose their true in-volvement in elections and their influenceover candidates.

In partial response to the grass-roots

movement, and possibly as an attempt topacify it, the legislature moved in 1988 toenact a disclosure law patterned, in largemeasure, after the initiative petition. Pro-posed as Senate Bil No. 177, this bil,sponsored by Sen. Jack Bangerter (R), waseventually enacted as the "Political ActionDisclosure Act" and is codified at UtahCode Ann. Sect. 20-14a-l etseq. (1953), asamended. As a result of this enactment, thesimilar initiative petition was withdrawn.The "Political Action Disclosure Act" re-

GARY R. THORUP received his bachelor of artsdegree in political science in 1977, magna cum laude,from the University of Utah. He obtained his lawdegree in 1980 at the University of Utah College ofLaw and his LLM. (Taxation) from the New YorkUniversity School of Law.

Both Mr. Strachan and Mr. Thorup practice law atPrnce, Yeates & Geldzahler, where they are involved,among other things, in lobbying and other politicalmatters for their clients.

quires disclosure of certain election financeinformation by certain legal entities. It isimportant to understand its basic concepts inorder to best advise clients on complianceissues.

ANALYSIS OF THE POLITICALACTION DISCLOSURE ACT

Utah was one of the last states to adopt alaw requiring political action committees(PACs) and corporations to disclose con-tributions made to campaigns for state of-fice. Federal law and many states alsoimpose some limits on the amount whichmay be contributed to individual candi-dates. Unlike those othedaws, Utah's Poli-tical Action Disclosure Act does not purportto restrict or prohibit campaign con-tributions in any fashion. Its sole intent is to

22 VoL. 2, No. i

~

I

require the disclosure of contributions madeto political action committees and of ex-penditures made by political action com-mittees and corporations to candidates forcertain political offces.

The Act is comprised of six sections, themost important of which is section two (2),which provides the operational definitionsgoverning the Act. The key definitions ofthe Act are of the terms "candidates," "cor-poration" and "political action committee."The term "candidate is defined in Sect.20-14a-2(2) as " . . . any person who files adeclaration of candidacy for the office ofgovernor, lieutenant governor, state audi-tor, state treasurer, attorney general, statesenator, state representative, state school

board or local school board." This term isimportant because the only contributions orexpenditures for which the Act requiresdisclosure are those made to a candidate.Inasmuch as no person becomes a candidatefor purposes of the Act until a "declarationof candidacy" statement is filed pursuant toUtah Code Ann. Sect. 20-4-9 (1953), asamended, presumably no contributions orexpenditures made prior to the filing of thedeclaration need be disclosed. Similarly, ifexpenditures are made in lobbying endeav-ors or contributions are made to a candidatefor an office not designated in the Act, nodisclosure is required. Examples of con-tributions and expenditures not subject tothe Act's disclosure requirements are: (1)the purchase of tickets to the Governor'sBall. The ball is an annual event and is heldwhether or not an incumbent governor everfiles a declaration of candidacy for re-election at the next general election. Gen-erally, this event is held prior to the time apotential candidate is required to file a dec-laration of candidacy; (2) contributions

made to state legislators and other elected orappointed state officials who seek state ornational leadership positions such as

Speaker of the House or President of theNational Governor's Conference; (3) gen-eral lobbying expenditures made to affectlegislation; (4) contributions made to sup-port or defeat ballot proposals; and (5) con-trbutions to non-designated elected officessuch as county and city offices.

The only entities required by the Act todisclose contributions and expenditures are"political action committees" and "cor-porations." Disclosure may apparently beavoided if an entity can avoid being classi-fied as either a corporation or a politicalaction committee, as defined in the Act.

Generally, a "political action committee" is" . . . an entity, or any group of individualsor entities. . . that solicits or receives con-tributions. . . or makes contributions to in-fluence. . . any person to refrain from voting

~.~

or to vote for or to vote against any candi-date. . .." Specifically excluded from thisdefinition, however, are: (1) political par-ties; (2) individuals; (3) corporations; (4)

related individuals contributing from jointchecking accounts; and (5) entities pro-viding goods and services to a candidate orcandidate committee in the regular course ofits business and at the same price offered tothe general public.

A "corporation" is generally any kind ofbusiness organization that is registered as acorporation or is authorized to do businessin Utah and which makes any expenditure toa candidate out of corporate funds. A cor-poration does not include, however: (1) anindividual; (2) a sole proprietorship; (3) a

parnership; or (4) a corporation's politicalaction committee. It is relatively easy toavoid the disclosure requirements under

these definitions. For example, if, ratherthan contributing directly to a candidate, apolitical action committee were to make acontribution to a political party which, byprevious agreement, donates a similar dollar

The only entities requiredby the Act to disclosecontributions andexpenditures are"corporations. "

amount to a candidate, no disclosure isrequired of either the political action com-mittee or the political party. The politicalaction committee is exempt because thecontribution was not made to a candidate.The political pary is exempt because politi-cal paries are specifically excluded fromthe definitions of a corporation or a politicalaction committee under the Act. The onlydisclosure of any par of the transaction

would appear in the candidate's financialreport as a contribution received from theparty. This theoretical ploy may have beenused during the past election. The recordson file at the Lt. Governor's offce disclosethat a large political action committee madethree substantial contributions to one of themajor political parties which, co-incidentally, made identical dollar-amountcontributions within a day or two later to oneof its candidates who had been endorsed bythe same political action committee whichmade the original contribution. Of course,the Lt. Governor's offce does not have

access to the details of the transaction, but itwould appear that either the political action

committee or the candidate did not want thepublic, the press or the opposing candidatesto know of the contributions.

In the event a political action committeeor a corporation does make or intends tomake a contribution to, or an expenditure onbehalf of a candidate, they should be ap-

prised of the disclosure requirements im-

posed by the Act. First, if the entity is apolitical action committee, it must fie a"statement of organization" with the Lt.Governor within seven days of its receipt orexpenditure of at least $750 in any calendaryear. The definition of the term "ex-penditure" is quite broad and includes apurchase, payment, distribution, loan, ad-vance, deposit, gift, a contract, promise oragreement to make an expenditure, personalservices rendered without charge or at a

discount and goods offered at a discount.The "statement of organization" requiresdisclosure of the names and addresses of thecommittee, its officers, the entity it rep-resents, any affliated organizations, the

committee's treasurer or chief financialofficer and of each member of the com-mittee. Second, if the entity is either apolitical action committee or a corporationwhich expends at least $750 in any calendaryear for declared candidates, it must filefinancial disclosure reports five days pre-ceding a primary election, five days pre-ceding a general election and within 30 daysfollowing a general election. The report

must disclose the source of any funds

received as contributions and the identity ofany candidate, candidate campaign com-

mitteeor political action committee receiv-ing expenditures from the reporting entity.The only exception to this reporting re-quirement is for contributions received bypolitical action committees in amounts of$150 or less, which contributions are re-quired to be aggregated rather than sep-

arately reported.Any person violating the provisions of the

Act may be subjected to criminal prosecu-tion as a Class B misdemeanor; however, nocivil penalties are prescribed.

WHAT THE ACT DOES NOT DOPrior to the enactment of the Disclosure

Act, the "Corrpt Practices in Elections"act, Utah Code Ann. Sect. 20-14-1 et seq.(1953), as amended, already imposed cer-tain reporting requirements on persons be-coming candidates for certain politicàloffices; however, it does not appear that anyreal attempt was made by the Legislature tomake the disclosure Act provisions con-sistent with the existing law. For instance,under the "Corrpt Practices in Elections"act, the term "candidate" does not includestate and local school board candidates as

January 1989 23

does the Disclosure Act, but it does view a board candidates do not have to fie at all. unofficial, review of candidate financialperson as a candidate if the person receives Under the Disclosure Act, the PACs and statements and have shown interest and wilcontributions or makes expenditures "with a corporations contributing to these races are be allowed to do the same type of review ofview to bringing about the candidate's required to disclose the contributions in a PAC and corporation disclosure statements.nomination or election." Therefore, an un- timely fashion. While recognizing that the current law isdeclared candidate who is "testing-the- not perfect, Lt. Gov. Val Oveson believes itwaters" is required to report contrbutions REVIEW OF THE FIRST is premature to suggest amendments to thereceived; however, the political action YEAR'S COMPLIANCE Disclosure Act for the 1989 General Legis-committee or corporation which actually Utah's recently enacted Disclosure Act lative Session. Rather, he wil review com-made the contribution need not report until does not appear to be patterned after any pliance problems identified during thisafter the person files a declaration of can- paricular state's campaign finance legis- election year and, hopefully, prepare somedidacy, if ever. lation. Consequently, the first interpreta- "technical" correction amendments for

Under the Disclosure Act, the terms tions of its provisions wil be made initially submission in the 1990 General Legislative"contrbution" and "expenditure" include by Lt. Gov. Val Oveson and his legal coun- Session. These amendments could be en-express, legally enforceable contracts, seL. Certain inquiries have already been acted and be in effect prior to the 1990

promises or agreements to make a con- submitted to and answered by the Attorney general election,tribution or an expenditure, however; the General's office. One potential change in Utah election lawCorrpt Practices Act includes within its Although only a parial review of this might be the creation of an independent,

definition of "contribution" and "ex- election year's filings has been performed, non-elected election commission, as is usedpenditure," all contracts, promises or it is clear that the law is not completely by the federal system and by a numberagreements, whether express or implied and understood and compliance is spotty. For of states. Lt. Gov. Oveson is not yet pie-whether or not legally enforceable. In ad- instance, one national labor union reported pared to advocate an independent electiondition, political action committees and cor- that it raised and expended approximately commission, but is wiling to study theporations are required, under the Disclosure $370,000 nationwide, however, it only ex- issue. One disadvantage to continuing theAct, to file reports of contributions and pended $1 ,00 on behalf of one Utah candi- election monitoring functions in an electiveexpenditures within five days of a primar date and identified no Utah contributors offce is that the staff is subject to changeelection, within five days of the general since they all contrbuted less than $150. each time political tides change. Any "insti-election, and within 30 days after the gen- Utah regulators indicate they have no need tutional memory" which a professional stafferal election; however, under the Corrpt for the national information. In addition, could provide is lost with the outgoing lieu-Practices Act, candidates for governor, lieu- one of the candidates for governor declared tenant governor and his staff. Another po-tenant governor, state auditor, state trea- on his financial report that his own cor- tential problem with the current system issurer and attorney general are required to poration either expended or loaned in excess the risk that politically active corporate cli-fie reports on July 10, Oct. 10, Dec. 10 and of $340,000 to his campaign; however, the ents may make good faith attempts to com-on the fifth day preceding a general election. corporation itself has failed to file a dis- ply with the Disclosure Act, but may findAs a result of the staggered fiing periods, closure statement. themselves subject to prosecution at thecandidates, political action committees and In a recent interview with Lt. Gov. Ove- hands of a newly elected political opponent.corporations can time their contrbutions son and Deputy Lt. Gov. David Hansen,

and expenditures in order to give the great- they identified the procedures their office CONCLUSIONest advantage to a campaign while receiving would follow in monitoring for compliance The Legislature or the lieutenant gov-the least amount of negative publicity. In with state election laws: ernor should consider creating a task forcethis same regard, neither Act defines pre- I. The election staff wil be directed to to study the problems with the compliancecisely when a contribution or an expenditure make at least a cursory review of all dis- and enforcement of Utah's election laws. Inis deemed received or made. This problem closure filings to determine if a good faith addition, attempts should be made to edu-came to light when a candidate for state attempt has been made to comply. cate the public as to their statutory duties

auditor held a New York fund-raising ac- 2. The election staff wil perform some under the Disclosure Act, including thetivity and failed to report certain con- random cross-checking of candidate finan- promulgation of interpretive rules.tributions on the candidate's next filing cial statements with PAC and corporationreport. The candidate's rationale was that disclosure statements. If discrepancies are

the fund-raising organizers had not yet found notices wil be sent to PACs andturned the money over to the candidate's corporations to rectify discrepancies.campaign committee. In this instance, the 3. If glaring defects or obvious dis-

political action connittee or corporation crepancies appear which are not resolvedmay have been required to disclose the con- after inquiry, the Lt. Gov. wil transmit thetrbution made to the candidate, but the information either to the attorney general orcandidate did not yet have to report the the appropriate county attorney,receipt of the contribution. The rules for 4. The lieutenant governor recognizes

state legislative and school board races lie the current budgetar and manpower limi-'even more inconsistent. Candidates for tations of his election staff, but in light oflegislative seats are required to fie only one current economic situations, does not cur-financial report under the Corrpt Practices rently intend to seek any additional budgetAct, which is due 30 days after the final in order to perform full compliance-type

election, unless a candidate is eliminated in audits.a primar election, in which event, fiing is 5. Organizations such as Common Causerequired 30 days after the primar. School have previously provided independent, but

i~

J

24 Vol. 2, No. I

,;:.,:,,,:,,,,,,,,,,,,,,,,,'''''' \. ':. . " " STATÉ BAR NEWS . '~ ~ '.n ' .Bar Commission

Highlights

The Bar Commission met on Oct. 28 at theUtah Law and Justice Center. During themeeting, the commission:

Accepted with regret the resignation ofCommissioner Gordon L. Low and dis-cussed applicable Bylaw provisions for thefiling of the vacancy. Unanimously ap-

proved a resolution extending the com-mission's most sincere appreciation toCommissioner Gordon L. Low for hisexemplar service to the Bar in his capacityas Bar commissioner.

Ratified the action of the Executive

Committee granting limited authority of theNeeds of the Elderly Committee to lobby inopposition to the tax initiatives.

Received a report of the Law and JusticeCenter operations noting active and increas-ing event scheduling and utilization of thebuilding.

Received a report of public relations con-sultant, John Becker, concerning a newradio program for the Bar on KSL Radio tobe aired each Monday at 10:00 a.m.

Received a report of the survey under-taken by Dan Jones and Associates and

co-sponsored by the Utah State Bar, theUtah Bar Foundation, the Salt Lake CountyBar, Women Lawyers of Utah and the His-panic Bar Association. This report is sum-marzed elsewhere in this issue of the UtahBar Journal. In connection with the surveyreport, the commission approved resolu-tions to (1) announce the fact of the surveyand a general description of the survey in thenext available issue of the Utah Bar Journal;(2) publish a series of articles in the UtahBar Journal utilizing the raw data of thesurvey; (3) direct that a meeting of theco-sponsors of this survey be scheduled toanalyze the importance and opportunity fornew program and policy direction; (4) de-termine that a summary of the survey shouldbe presented to the membership at the mid-year meeting of the Bar and (5) urged thatthe Bar consider presenting an inexpensiveseminar on the subject matter of the survey

,at the Law and Justice Center.Received a report on the work of the

Constable Task Force of the Utah Com-mission on Criminal and Juvenile Justicewith discussion including representatives of

various affected groups, and thereafter re-ferred the matter for study by the Litigation

Section and the Courts and Judges Com-mittee.

Received a report of the Young Lawyer'sSection, authorizing the filing of two grantapplications by the section for partial fund-ing of the Young Lawyer's Section Law forthe Clergy Project and the video and audiopublic service announcements.

Received a report of the Executive Direc-tor on various administrative matters, not-ing an interim report of the Fee ArbitrationCommittee, proposed leases for the UtahBar Foundation and American ArbitrationAssociation offices in the Utah Law andJustice Center and approved a proposedpolicy change developed by the CLE Ad-visory Committee.

Approved the name change of the Cor-poration Section to become known as theBusiness Law Section of the Utah State Bar.

Received a report of the Delivery of LegalServices Committee recommendingchanges in the design ofthe Lawyer ReferralService Program and approved the conceptand design of the changes which includeimplementation of a modest means paneL.

Received the report of the LegislativeAffairs Committee including a researchmemorandum regarding lobbying policiesfor the Bar. Approved a policy based on thelegal analysis set forth in the report with anamendment to add a provision for a two-thirds vote of the Bar Commissioners pres-ent and voting at a commission meeting inorder for the Bar to take a position on a

legislative matter. Further information con-cerning this policy wil be published else-

where in the Utah Bar Journal.Received the report on discipline matters

from Bar Counsel, acting on proposed pri-vate reprimands, reviewing status infor-mation on certain formal complaints,approving the reinstatement of Mr. PaulLandes of Stockton, Calif., and received astatus report on the new Supreme CourtAdvisory Committee on the Rules of Pro-fessional Conduct.

Received a report on bar admissions,

approving waivers relevant to the MPREexam for certain applicants. Received areport of the grievance hearing panel andapproved recommendations of the panel onfour grievance petitions. Reviewed a peti-tion for waiver for educational requirementsfor admission to the Bar and denied the

petition based on provisions of the appli-cable rule.

Received and committed for further study

proposed amendments to Rule Three sub-mitted by Steven Henriod on behalf of anapplicant.Received a report of the Budget and

Finance Committee, authorized the nego-tiation of a line of credit necessar for effec-tive financial management of the Bar for thetransition period with appropriate controlson the use of said line of credit.

Received a report on pending litigation bythe Litigation Oversight Committee, notingin particular the recent Third Circuit Courtof Appeals case upholding the constitution-ality of the mandatory Bar.

Received a report of ABA delegate Nor-man Johnson on actions taken by the ABAHouse of Delegates at its annual meeting inToronto in August.

Received a report of the executive direc-tor on the pending visit to Utah by ABAPresident-Elect Stanley Chauvin and certainhigh-ranking members of the ABA.

Met in joint session with the ExecutiveCommittee of the Salt Lake County BarAssociation, reviewing the current projectsof the Salt Lake County Bar, including itsluncheon series, the Christmas dinnerdance, the community relations project andlawyer assistance project and a proposedsurvey of members of the Bar who reside inSalt Lake County to be undertaken in thenear future. President Kasting reviewed forSalt Lake County Bar offcials current ac-tivities and programs of the Utah State Barand the Utah Law and Justice Center. Fur-ther discussion included the habeas corpusrepresentation in Salt Lake County and theproblem of attorney appointments for theThird District Court, out of which dis-cussion it was agreed that the County Barand the State Bar would explore the de-velopment of training sessions for attorneysso appointed to enable appointees to fulfiltheir professional responsibilities in a com-petent manner.

NOTE: A full version of all Bar Commission meet-ings and the agendas for each monthly meeting areavailable for inspection at the office of the executivedirector.

¡0,

Notice

Any mail to be received by the FourthDistrict Court in and for Utah County, Stateof Utah, should be directed to the followingaddress: Fourth District Court Clerk, 51 S.Unjversity, Room 108, Provo, UT 84601.

II

January 198925

Seven BYU ProfessorsAppointed to EliteLaw Organizations

Seven BYU Law School professors haverecently received appointments to elitenational and international legal organiza-

tions.H. Reese Hansen, associate dean of the

law school and professor of law, has beenappointed to the National Conference ofCommissioners on Uniform State Laws. J.Clifton Fleming, associate dean of the lawschool and professor of law, and ProfessorsConstance Lundberg, Douglas Floyd and

Lynn Wardle have been appointed to mem-bership in the American Law Institute. Pro-fessor Douglas Parker has been named to theexecutive committee of the Jewish LawAssociation. Professor Stephen G. Wood, aformer associate dean of the law school, hasbeen named to the leadership of the Admin-istrative Law and Regulatory Practice Sec-tion of the American Bar Association.

The American Law Institute (ALI), inwhich Professors Fleming, Lundberg,

Floyd and Wardle received membership,

was organized in 1923 "to promote the

clarfication and simplification of the lawand its better adaptation to social needs."Founders of the organization included ElihuRoot, Harlan Fiske Stone, who later servedas chief justice of the United States SupremeCourt, Benjamin Cardozo and Learned

Hand.To fulfil its purpose, the Institute has

produced the Restatement of Law series.These important legal works attempt to ar-ticulate the current status of the laws of theUnited States in paricular areas. The Re-statements have been cited as substantiveauthority by federal courts and state courtsin all 50 states.

Of the approximately 640,000 lawyers inthe United States, only about 2,100 havebeen invited to membership in the ALI.

The National Conference of Commis-sioners on Unjform State Laws, to whichDean Hansen was nominated, is composedof four commissioners from each state, theDistrict of Columbia and Puerto Rico.

The conference was founded in 1892 tobring about, by voluntary state action,greater unanimity in the law prevailingthroughout the United States. When found-ea the conference included participantsfrom only seven states. Membership sincethat time has expanded to all states.

Since its inception, the conference hasdrafted over 200 uniform laws on numerous

subjects and in various fields of law. Inaddition to their work in drafting the uni-form acts, commissioners are charged withthe responsibility to encourage passage ofthe uniform acts by the legislatures of theirrespective states.

Professor Wood's leadership assignmentin the Administrative Law and RegulatoryPractice Section of the ABA caps a longhistory of service to the American Bar As-sociation. He has been active in the Admin-istrative Law and Regulatory PracticeSection for several years. He also served aschair of the Immigration, Naturalization andAliens Committee and the Civil Rights andEmployment Discrimination Committee,and as vice chair of the International and

Comparative Administrative Law Com-mittee and the Continuing Legal EducationPrograms Committee.

Professor Parker is the only non-Jew toserve on the executive committee of the

Jewish Law Association. The Associationincludes members from throughout theworld. The executive committee is com-

posed of approximately nine members, in-cluding two from the United States. TheAssociation holds biannual conferences,

with every other conference held in IsraeL.Professor Parker has prepared an ency-

clopedic dictionar of Jewish law, a Jewish

law textbook and a volume of the JewishLaw Annual that abstracted all articles onJewish law published in the United Statesbetween 1980 and 1985. He is currentlyabstracting aricles from 1985 to 1988. Healso spent a year on the Hebrew UniversityFaculty of Law in Jerusalem as a visitingresearch professor in 1983.

Federal Bar Seminar

Presented by top-rate faculty, including allfederal district judges in Utah. This programwil include substantive presentations,

break-out sessions and complete referencematerials. Topics wil include Tax Fraud,Grand Jury Representation, Defense Con-tractor Fraud, RICO, and other areas ofinterest to both the seasoned criminal

practitioner as well as the civil practitionerwho is encountering these issues with moreregularity than in the past. Luncheon in-cluded.Date: Feb. 10, 1989Place: Salt Lake City, UtahTime: 9:00 a.m. to 5:00 p.m.

For registration and fee information, callMarlyn at 359-4100.

BYU Sponsors TradeBill Conference

On Jan. 13 and 14, BYU Law School, inconjunction with BYU's Kennedy Centerand School of Management and a number ofprominent law firms, wil sponsor a con-

ference on the recently enacted OmnibusTrade Bil. The Trade Bil is the mostsweeping trade legislation in half a century,and virtually no aspect of American eco-nomic life wil be left unaffected by it.

Among the topics to be addressed at theconference wil be trade law revision, en-couragement of exports, international tech-nology trade, intellectual property rights,international banking and others.

The conference wil feature a number ofthe leading experts on the Trade Bil, in-cluding Alan Holmer-Deputy U.S. TradeRepresentative; Jean Anderson-SpecialAssistant to the Undersecretar, U.S. De-partment of Commerce; and RussellMunk-Assistant General Counsel Inter-national, Deparment of Treasury.

A $50 fee wil be charged for materialsand other conference costs. For additionalinformation, please contact CarolynStewarat 378-6384.

Notice of DecisionRe: Process Servers

Process served by private process serversand unauthorized individuals, other than asummons, complaint and subpoena, aresubject to being quashed or invalidatedunder the Declaratory Judgment renderedby Judge John A. Rokich in Utah StateConstable's Association v. Richard Heine-cke, et aI., C86-5298, Third Judicial Dis-trict Court of Salt Lake County, dated Jan.29, 1988. This class action suit defined thedefendant class as private process serversand unauthorized individuals serving legalprocess, court orders, and court documents,other than a summons, complaint and sub-poena. The judgment imposes a permanentinjunction restraining the members of theclass from serving any process other than asummons, complaint and subpoena. Theruling carefully analyzes all types of processand clearly delineates what process can beserved by members of the defendant class.To avoid having service quashed or in-validated, attorneys should research thiscase and utilize authorized process servers,including sheriffs and constables, for theservice of their process. If you have ques-tions, contact Ralph C. Petty, 531-6686.

26Vol. 2, No. I

Claim of the Month bers made financial contributions, the Utah's lawyers. The Utah Bar Foundationfinances of the Foundation and the number efforts have been made possible with greatof projects that could be accomplished were help from its offcers and trustees. The cur-

ALLEGED ERROR OR OMISSION very small. rent officers and trustees are Richard C.The insured is alleged to have failed to The long-standing Judicial History Pro- Cahoon, president; Hon. Norman H. Jack-

adequately protect his client in the sale of a ject recently resulted in the publication of son, vice president; H. Michael Keller,garbage disposal business. The Federal Judiciar in Utah by Clifford L. secretary/treasurer; David S. Kunz, trustee;

Ashton, covers the history of the terrtorial Ellen M. Maycock, trustee; Stephen B. Ne-RESUME OF CLAIM federal judges for the terrtory of Utah 1848 beker, trustee; David E. Salisbury, trstee.

The client owned a garbage disposal to 1896 and United States District Judges for Past presidents include: Calvin Behlebusiness which had the collection franchise the District of Utah 1896 to 1978. (Copies (1963 to 1964); Junius Romney (1964 tofor a city and county. Client agreed to sell to are available through the Foundation at a 1965); Earl Tanner (1965 to 1966 and 1978buyer with the sale contingent on a franchise cost of $15.) This project was the result of to 1980), Joseph Jones (1966to 1971), Hon.extension by the city. The city insisted that generous contributions from Calvin and J. Thomas Greene (1972 to 1974), David E.the franchise be put out to bid. The client! Hope Behle and the C. Comstock Clayton Salisbury (1975 to 1978), Hon. George W.seller and buyer decided to enter into an Foundation. Additional historical works on Latimer (1980 to 1982) and Richard C.

agreement whereby the prospective buyer Utah's judges continues. Cahoon (1982 to present). Congratulationspaid seller $2,000 for the right to purchase In 1975, the Foundation, under the di- on your 25th anniversar!the business at the agreed-upon price. This rection of President J. Thomas Greene,option was to remain open until after the received a grant for the TULIP project,

New Jones Pollfranchise was awarded. otherwise known as The Utah Legal Infor-The franchise was awarded to the pros- mation Project. Many other projects were

Reflects Differences inpective buyer who then declined to exercise analyzed, but lack of funds prevented the

the option, Foundation from developing them. Attitudes andThe client claims that the insured should In 1983, the Utah Supreme Court ap-

have protected the client by requiring the proved the Foundation's petition to imple- Experiences of Utahbuyer to purchase the business if the fran- ment the Interest On Lawyers Trustchise was awarded. The client claims that he Accounts program (lOLTA). IOLTA pro- Lawyerswas not fully apprised of the difference vided the necessar financial base to allowbetween an option and a purchase agree- the Foundation to accomplish many of itsment. long-standing goals by supporting law-

The Utah State Bar Commission hasrelated, public interest programs. UnderHOW CLAIM MIGHT IOLTA, the Foundation receives the interest received and reviewed a compilation of dataHAVE BEEN AVOIDED from the trust accounts of paricipating Utah from a comprehensive survey of Bar mem-

This claim might have been avoided if the lawyers. The IOLTA program is now in its bership to identify differences in attitudesinsured had discussed the effect of an option fifth year and has distributed over and experiences in the legal profession. Theversus a purchase agreement. Although, in $408,454.75 in grants to such causes as data was collected by Dan Jones & Associ-this case, the insured insists the option was Legal Aid Society, Legal Center for the ates to allow comparsons on the status andfully explained to the client, there is no Handicapped, Utah Legal Services and the perceptions of white male attorneys, femaledocumentation to that effect in his file. Utah Law-Related Citizenship Education attorneys, attorneys of minority/ethnic des-

Without documentation, the case comes Project. The Foundation has also sponsored cent and handicapped attorneys.down to a swearng contest which the in- the public information series "Legal Briefs" The Bar co-sponsored the survey with thesured attorney usually does not win. on KUED Channel 7 which is hosted by Utah Bar Foundation, the Salt Lake County

Judge J. Dennis Fredrick. Bar Association, Women Lawyers of UtahThe Foundation awards grants for the and the Hispanic Bar Association. The

25th Anniversary of the purposes of promoting legal education and Needs of Women and Minorities Com-increasing knowledge and awareness of the mittee, under the leadership of Kathleen

Utah Bar Foundation law in the community, assisting in the pro- Barett and Louise Knauer, worked directlyviding of legal services to the disadvan- with Dan Jones & Associates in the de-

The Utah Bar Foundation is now cel-taged, improving the administration of velopment of the survey. Ms. Barett pre-justice and serving other worthwhile law- sented the findings to the Bar Commission

ebrating its 25th year of community service related public purposes. Anyone desiring a in November.since its incorporation on Dec. 13, 1963. grant from the Foundation must make appli- The survey began in July 1988, initiallyThe incorporators of the Foundation were cation before May 31 for consideration for drawing on three focus groups in which 39Calvin Behle, Junius Romney, Earl Tanner, distribution of funds in July of that year. attorneys paricipated. Their input greatly

Charles Welch, Jr. and James E. Faust. Appncations may be obtained from the assisted in the development of a question-These incorporators envisioned that the Foundation. naire which was administered by telephoneFoundation would be able to support com- This Fall, the Foundation hired its first interviews with a randomly selected samplemunity legal education and legal assistance employee and established an office at the of 200 female attorneys and 200 white maleto the disadvantaged through gifts, dona- Law and Justice Center. This wil allow the attorneys. The Jones also attempted totions, bequests, devises and membership Foundation to serve the public and its mem- interview all minority and handicapped at-contributions. The Foundation's mem- bers more effectively. torneys in Utah, and ultimately completedbership was declared to be all members of The Foundation's efforts have served the 34 interviews with minority members of thethe Utah State Bar. Although a few mem- community well and reflected positively on Bar and eight with handicapped attorneys.

January 1989 27

I,

I

According to Bar President Kent M.Kasti~g, the data reveals the wide range ofexpenences and often divergent opinionsand expectations held by members of theBar. For example, white male and handi-

capped attorneys rank "satisfying thecli~nt" as the top priority of personal goals,whIle female attorneys consider the "in-tellectual stimulation" of law as most im-port.ant. On the other hand, "being ofse~ic~ to society" surfaces at the top of~inonty attorneys' list of goals and objec-tives.

The study also reveals that it isn't unusualfor attorneys to change jobs. With the ex-ceptio~ of female attorneys, approximatelytwo-thirds of the respondents switched em-ployers at least once since entering the lawprofession. Slightly over half ofthe femalesdid so. Of course, women are also morelikely to have attended law school morerecently than male attorneys, and differ-ences in values or career patterns may re-flect this factor.

Among t~ose attorneys who change em-ployers, white males tended to cite betteropportunities (20 percent) dissatisfactionwith job or boss (12 percent), or a desire topractice. solo (10 percent). Female lawyerswho switched employers were often dissat-isfied with the former job or boss (16 per-cent), move~ to a different state (14 percent)or were looking for a better opportunity (12percent).

Mr. Kasting said the study is valuable inhellnng ~o design and implement programswhich will serve the varing needs of Utahattorneys.

An overview of the study wil be pre-sented at the mid-year meeting oftheBar inSt. George on March 16, 1989, and futureissues of the Utah Bar Journal wil includearicles focusing on paricular areas of inter-est suggested by this study.

DISCIPLINECORNER

PRIVATE REPRIMANDSI. An attorney was privately repri-

manded for violating Rule 8.4(c) for en-g~ging in. conduct involvingmisrepresentatIon by stating that he would~ake or had already made payments to a

title company, which payments were notforthcoming for a period of four years.

2. For negotiating a settlement check

contrary to instructions from opposingcöunsel, and for failing to release a lien priorto .negotiating ~he check, an attorney wasprivately reprimanded for violating DR1-102(A)(~), for conduct involving mis-

representatIon.

3. For failing voluntarily to notify the

court, law enforcement or the prosecutor

afte~ learning that he had unknowinglyreceived stolen funds as a portion of hislegal fee, and for failing to return any of thelegal fee representing the stolen funds afterhe became aware that they were stolen,although the attorney directed his clients tomake immediate repayment to the victims ofany and all of the stolen proceeds which theyhad paid to him for attorney's fees, an attor-ney was privately reprimanded for violationof DR 1-102(A)(5) and (6) for conductprejudicial to the administration of justiceand conduct adversely reflecting on his fit-ness to practice law.

4. An attorney was privately repri-manded for neglecting a legal matter en-t~~ted to ?im under DR 6-101(A)(3) byfaihng to file a complaint or bring his cli-ent's matter to some type of resolution for aperi~d of four years, failing formally toterminate representation of the client or in-dicate to the client that the case lacked

merit, and failing to respond to oral andwritten communication from the client in-quiring as to the status of the case.

5. An attorney was privately repri-m~nded for violation of DR 1-102(A)(4) formisrepresentation for failure to pay for

photographic evidence ordered in antici-p~tion of trial and actually used at tral, forfailure to respond to a small claims judg-ment against him, and for the use of theapp~llate process in an effort to delay the

abihty to execute on the judgment.

DISBARMENTJohn H. McDonald has been disbared

from the practice oflaw in the state of Utaheffective Nov. 8, 1988, for violating: DR9-102(B )(3) and (4) for failure to render anappropriate accounting with two clients andfailure to remit monies owing to theWorkers' Compensation Fund; DR2-1 lO(A) (2) for prejudicing a client's inter-est by fa!ling to return property and papersto .the chent .~pon termination of represen-tatIon and faihng to apprise the client of thecurrent status of his pending actions; DR6-.1?I(A)(~) for inadequate preparation byfaihng to timely and appropriately resist aMotion for Summary Judgment; DR7-101 (A)(2) and (3) for intentionally failing~o car out a contract of employment and

intentionally causing prejudice to the clientby failng to communicate with the clientregarding the status of the action and there-after performing legal services not author-iz~d by the ~lient; DR 1-102(A)(4) formisre~resentatIon a~d deceit in representingto a chent that medical bils were paid fromsettlement proceeds when a hospital bil wasnot paid and continuing therèafter to rep-

re~~nt that the bil would be paid and infaihng to return to a client a portion of stockproceeds which the attorney sold and whichbelonged. to t.he client; and DR 1-102(A)(6)by e~gaging in conduct adversely reflectingon fitness. to practice by engaging in a pat-tern of misconduct as outlined above,

Mental DisabilityLaw is Focus ofABA Handbook

The American Bar Association's Mentaland Physical Disability Law Reporter hasreleased an updated and expanded versionof its handbook, "Mental Disability Law: APrmer." This third edition focuses on sub-stantive mental disability law topics high-lighting and citing the relevant case

decisions and federal legislation over thepast 15 years.

Th~. 75-page booklet explains to legalpractItioners how to represent and com-municate with persons who have mentaldisabilitie~; the meanings of key medical,psychological and disability-related termi-nology; and reasons attorneys or advocateswould want to represent disabled clients aspar of their legal practices.

The Prim~r is designed for lawyers, ad-vocates and Judges new to this area of lawlaw students, and graduate students and

professionals in related disciplines.Issues examined in the Primer include

determin~tion in. employment; housing andother social services; the right to treatmentand th~ righ~ to refuse treatment; the right to

educatIon; involuntar civil and criminal

commitments; outpatient commitment; sub-~titu~ decision-making, including guard-

ians?ip; and professional liability.Single copies of the Primer are available

ror $10; for orders of 10 or more, the chargeis $6.50 per copy. There is a $3 charge perorder for postage and handling. Checks

should be made payable to "ABA/FJE," andorders or inquiries should be directed to theABA Commission on the Mentally Dis-~bled, 1800MStreetNW, Suite 200, Wash-ington, D.C. 20036.

EDITOR'S NOTE: Review copies of "Mental Dis-ability Law: A Prmer" are available by contactingPatrcia McCormck at (202) 331-2240.

28 VoL. 2, No. i

Litigation Regort and DgdateNov. 15, 1988

The August/September 1988 issue of the Utah State Bar Journal contained a Litigation Report published for the purpose of informing ourmembers as to what litigation had been tïled against your Association, its staff, officers and Commissioners. Your Bar Commission believes.it to be most important to keep members informed of the status of any such pending litigation on a regular basis. The following information isintended to update you as to additional developments which have occurred in relation to individual cases and to inform you of new litigationfied against the Bar. Similar updated reports using the same format wil appear on a regular basis in future issues of the Utah Bar Journal.

SUMMARY OF LITIGATIONPLAINTIFF (COUNSEL) AND CAUSE OF ACTION COURT/JUDGE COUNSEL CURRENT STATUSDATE OF FILING FOR BAR

1. Wendy W. Krough (Brian A 1983 Civil Rights action for wrongful U.S. Dis!. C!. J. C. Burdick, USB and individualBarnard) Fld. 11/17/87 (1, termination seeking a declaration that Jenkins, C- C. Kipp, R. commissioners dismissed as Ps

the USB is a state agency, $30,000 in 87-0991-J Rees on USB's Motion to Dismiss. Trialcompensatory damages, $500,000 in scheduled for Feb. 27-28, 1989,punitive damages and attorney's fees for remaining Ds Hutchinson,and costs. Basset, & Nesset Sale; $4,804.55

paid toward insurance deductible.

2. Wendy W. Krough (Brian Plaintiff's challenge to the extent of U.S. Dis!. C!. J. C. Burdick, Stipulation by parties to continueBarnard) Fld. 1/25/88 (1) continuing insurance coverage under Winder, C-88-52W C. Kipp, R. insurance coverage at the

COBRA alleging that the USB is a state Rees employee's expense pendingagency, $10,000 compensatory wrongful termination lawsuit anddamages and $10,000+ punitive pending a decision re: the extentdamages, costs and attorney's fees. of continuing insurance coverage.

3. Wendy W. Krogh (Brian Unemployment compensation appeal Utah Ind. C. Burdick Board of Review affirmed ALJ'sBarnard) Fld. 11/30/87 seeking unemployment benefits. Commission/Board decision holding that USB fired

of Review, claimant for just cause; no appeal88-BR-157 has been fied; decision is finaL.

Case resolved in USB's favor.

4. Brian Barnard (Pro se) Fld. Disclosure of Bar staff salaries under Third Dis!. C!. S. C. Burdick, Summary judgment granted in2/8/88 (1, 4) the Utah Information and Practices Act Wilkinson, R. Burbidge, favor of P requiring specific

seeking a declaration that the USB is a C-88-0578 and S. C. Kipp salary information to bestate agency, injunctive relief and $100 Crt. disclosed, denying damages,to $1,000 exemplary damages, costs attorney's fee claims andand attorney's fees. declaring USB to be a state

agency; cross appeals filed andUSB's Motion to Stay Executionof the Judgment granted on5/20/88; all appeal briefs fied-

waiting scheduling of oralargument; $6,706.09 paid ingeneral attorney's fees to USBattorneys.

5. Brian Barnard (Pro se) Fld. Action for injunctive and declaratory Third Dis!. C!. J. R. Burbidge, Discovery and P's Motion for2/16/88 (1) relief to prevent USB from suspending P Brian, C-88-0801. C. Kipp, R. Judgment on the Pleadings and/

for refusing to provide certain Rees or Motion for Summary Judgmentinformation on the licensing form and to pending without date; on 6/14,determine whether certain licensing USB's Motion to Stay grantedform information is "private" pending appeal of #4 above;information. It also seeks a declaration $2,311.30 paid toward insurancethat the USB is a state agency, deductible.injunctive relief and $100 to $1,000exemplary damages, costs andattorney's fees.

6. Brian Barnard (Pro se) Fld. Attempt to reopen the lawsuit settled U.S. Dis!. C!. J. G. Hanni 6/3/88-udge Sam granted

3/21/88 (1) approximately 1 year ago re: publishing Sam, C-88-02395 USB's Motion for Summaryletters to the editor in the Bar Letter; and 10th Cir. Judgment dismissing thecurrent action seeks declaratory relief complaint; P filed an appeal tofor deprivation of first amendment rights 10th Cir.; on 9/9/88, Appellant'sfor failure of the State Bar to publish a brief filed; USB brief filed; caserecent proposed letter to the editor from awaiting scheduling; $5,000 paidP. Action was brought pursuant to 42 toward insurance deductible.USC 1983 seeking a declaration that theUSB is a state agency, $10,000 +compensatory damages, $5,000punitive damages against eachdefendant and attorney's fees andcosts.

January 1989 29

SUMMARY OF LITIGATIONPLAINTIFF (COUNSEL) AND CAUSE OF ACTION COURT/JUDGE COUNSEL CURRENT STATUSDATE OF FILING FOR BAR

7. Brian Barnard, Brad Parker Civil rights action challenging use of U.S. Dis!. C!. J. C. Kipp, R. Answers filed on behalf of Bar(Pro se) Fld. 5/1/88 (e) mandatory dues for discretionary bar Greene, C- Rees Executive Dir. of Bar, and

functioning as violation of first and 14th 88-379A. Case Commissioners. P served 221Amendments, injunctive relief, attorney's reassigned to J. interrogatories on USB.fees and costs. Burciaga, New Mex. Interrogatories and subparts total

U.S. Dis!. Crt. 1,000 and cover period of 1935 topresen!. USB filed Motion forProtective Order based on cost torespond but is voluntarilyproviding as much information ascan reasonably be located.

8. Ernest and Sharon Bailey; USB's alleged breach of fiduciary duty U.S. Dis!. C!. J. C. Kipp, R. USB's Motion to Dismiss,(John Borsos) Dennis and Reta for failure to discipline Richard Calder Winder, C- Rees previously under advisement,Job (Pro se) Fld. 12/16/87, and/or adequately warn P's of Mr. 87-1062W granted on 8/2/88 holding that12/21/87 (1, 5) Calder's alleged incompetency seeking C-87-1069J. U.S. Dis!. Crt. has no jurisdiction

Writ of Mandamus and $500,000 in over 0 by virtue of 11thdamages (Jobs) and $800,000 in Amendent nor does Dis!. Crt.damages (Baileys). have subject matter jurisdiction.

Time for appeal has run; caseresolved in USB's favor;$2,900.03 paid in attorney's fees toUSB attorneys.

9. Ernest and Sharon Bailey USB's alleged breach of fiduciary duty Third Dis!. C!. J. C. Kipp, R. D's Motion to Consolidate this(John Borsos) Fld. 12/16/87 (1, 5) for failure to discipline Richard Calder Wilkinson, Rees action with the companion state

seeking Writ of Mandamus and C-87-8124. action and Motion to Dismiss$800,000 in damages, a "state agency" currently pending; Ps have takendeclaration, attorney's fees and costs. no further steps to prosecute.

10. Dennis and Reta Job (John USB's alleged breach of fiduciary duty Third Dis!. C!. J. C. Kipp, R. USB's Motion to Consolidate thisBorsos) Fld. 12/17/87 (1. 5) for failure to discipline Richard Calder Rokich, C- Rees action with companion state

seeking Writ of Mandamas and 87-08173. action; Motion to Dismiss$500,000 in damages, a "state agency" currently pending; Ps have takendeclaration, attorney's fees and costs. no further steps to prosecute.

11. Myron Hamilton (Pro se) Fld. Civil rights action claiming the State Bar U.S. Dis!. C!. C. Kipp, R. USB's Motion for Summary3/2/88 (1. 6) is depriving P of his constiutional right J. Winder, Rees Judgment granted on 10/5/88,

to represent himself. (USB filed an C-88-1755. Magistrate Boyce noting that nounauthorized practice of law action cause of action was stated andagainst P in state court in 2/88 for action was frivolous. Appeal timerepresenting third parties.) Seeking a has run; case resolved in USB's"state agency" declaration, injunctive favor.relief, $10,000 + in damages, attorney'sfees and costs.

12. Ronald O. Neerings February 1988 unsuccessful Bar Exam Third Dis!. C!. C. Kipp, R. P has filed Motion for Partial(Brian Barnard) Fld. 6/9/88 (1, 7) applicant's action against USB for J. Sawaya, Rees Summary Judgment; USB will be

releasing Bar examination information C-88-3807. filing Motion for Summaryseeking a "state agency" declaration, Judgment; both motionsinjunctive relief, $10,000 + compensatory scheduled for hearing on 12/5/88;damages, $100 to $1,000 in punitive discovery is completed.damages, attorney's fees and costs.

13. Richard Tyree, Joseph A purported class action (600 member) Third Dis!. C!. C. Burdick USB has not yet been served;Bonacci (Pro se) Fld. 5/23/88(9) lawsuit claiming that USB committed J. Wilkinson, other named 0 filed Notice of

nonfeasance and participated in C-88-4239. Removal to U.S. Dis!. C!. onracketeering by failng to take action 10/25/88.during a four-year period when AssistantU.S. Attorney was admitted to practicein federal court but was not yet admittedto practice in State of Utah; Ps seeking$500,000 per class member anddisbarment of USB members assistingin Dance's "unauthorized" practice oflaw.

30 Vol. 2,.No. ¡

FOOTNOTES ON SUMMARYOF LITIGATION

i These complaints allege that the Utah State Bar is a govern-

mental entity, i. e., a state agency. The relief requested ineach of those suits can only be granted if the Utah State Bar isfirst found to be a state agency. That underlying issue, aparfrom the other substantive issues, e.g., release of salarinformation, licensing form information, negligence in dis-ciplining Mr. Calder, has significant implications for theUta State Bar with regar to the ultimate control and regu-lation of the Bar. The Commissioners have unanimouslymade the decision to aggressively defend these lawsuits.

2 Employee terminated Nov. 16, 1987, at 12 noon, complaint

signedNov. l6,1987,andfiedNov. 17, 1987,atlO:43a.m.

J All information related to relationship of USB and UUC was

published in USB News Letters prior to the date suit wasfied, e.g., March 1987.

4 Salar ranges provided by USB to plaintiff prior to suit being

fied in a letter to plaintiff dated Dec. 9, 1987.i.e. Executives, $32,00 to $62,00

Administrators, $19,00 to $27,500Support Staff, $13,00 to $17,500

5 A fonnal complaint is currntly pending against Mr. Calder

which is being prosecuted by special counsel, David Leta; adisciplinar tral was held Nov. 14 and 15, 1988.

6 The USB is presently plaintiff in three unauthorized practice

of law cases. No counterclaims have been fied. Defendantsar David Browne, Lawrence Jacobsen and Myron Hamilton

(See # 13 above).

7 The plaintiff in this action is not the Ronald E. Nehring who is

an active member in goo standing of our Bar. The plaintifftook and passed the July 1988 Bar Examination and wasadmitted to the Bar in October 1988.

8 This case was filed after a United States DistIict Cour for the

Distiict of Wisconsin declared the integrated Bar of Wis-consin unconstitutional. That decision is on appeal to theSeventh Circuit. All briefs are in and the case has beenargued. The USB along with 15 other states joined in anAmicus Brief. A decision is expected in December 1988 orJanuar 1989. On Sept. 12,1988, the US. Cour of Appealsfor the Third Circuit in the case ofHollar v. Virgin Islands(CA3, No. 87-3487) held that the integrated Bar of the VirginIslands was constitutionally permissible.

9 Ps are incarcerated in federa prison and were prosecuted by

Wayne Dance, assistant US. Attorney (who is the othernamed defendant) durng a period in which the US. Dist. Crt.admitted Mr. Dance to practice in US. Dis!. Crt. priortohisadmission to the Uta State Bar.

SUMMARY OFINSURANCE COVERAGE

With the exceptions of the unauthorizedpractice of law cases, the defense of each ofthe above lawsuits has been tendered to ourOfficers and Directors' liability insurancecarrer, the Home Insurance Co. That com-pany has accepted each defense except themost recent case of Tyree v. USB (see item# 15 above). It is expected that defense willbe kept in house. Our present policy pro-vides coverage for $1 milion in claims.However, our coverage also requires a$5,000 deductible on each claim. Paymentstoward those $5,000 deductibles have beenmade by your Association to the HomeInsurance Company as invoices on eachparicular case have been received.

As of this date, five lawsuits filed againstyour Association have been resolved in itsfavor. The total amount paid toward ourdeductible and general attorney fees on all

lawsuits to date is $23,823.84. That sumdoes not reflect time spent by Bar Counsel,her staff, nor USB staff in responding to thelawsuits.

CONCLUSIONYour Bar Commission wil continue to

defend where appropriate and address allpending lawsuits in accord with the di-rectives of our Association and welcomesany comments and suggestions that any ofour members may have. We also wil con-tinue to regularly update you on the status ofall pending litigation.

THE UTAH STATE BARCOMMISSION (531-9077)

Utah Lawyers for the ArtsHosts Series of

"Meet the Artist" Receptions

Utah Lawyers for the Arts wil host the firstin a series of "Meet the Artist/Wine andCheese Receptions" on Thursday, Jan. 26,1989. The reception wil be from 5:30 to7:30 p.m. on the 15th floor of Van Cott,Bagley, Cornwall & McCarhy, 50 S. Main,Salt Lake City, Utah.

Ririe-Woodbury Dance Company wil behighlighted at the inaugural reception.

Ririe-Woodbury wil introduce its membersand aristic staff, make a brief presentationand run a performance video. Ririe-Woodbury Dance Company has receivedworldwide recognition for the spirit of aris-tic innovation evident in all its works and anongoing commitment to community ars,education and dance awareness. The com-pany has invigorated audiences throughoutEurope, Asia, South Africa, South Amer-ica, Canada, the Virgin Islands and nearlyevery state in the United States Shirley Ririeand Joanne Woodbury, currently cel-ebrating a 25-year association, have drawnnational attention as modem dance chor-eographers and performers, and have

spawned a new sophisticated generation ofdance enthusiasts, choreographers andteachers.

Please note the reception on your cal-endars and plan to attend. If you have anyquestions concerning the reception or UtahLawyers for the Arts, please contact GuyKroesche or David Arrngton at Van Cott,Bagley.

Advanced Coursefor Legal

Secretaries OfferedThe "Advanced Course for Legal Sec-retares," which is an offcial course of theNational Association of Legal Secretares,

wil be taught winter quarer at the Univer-

sity of Utah College of Law. The course issponsored by the Salt Lake Legal Sec-

retares Association and wil be held Jan. 4to March 15, 1989, in Room 105 of theCollege of Law on Wednesday eveningsfrom 6:15 to 9:15 p.m.

Marsha L. Gibler, PLS, legal educationchairman of the Salt Lake Legal SecretaresAssociation, announces that the course wilinclude litigation, criminal procedures,

legal research, contracts/torts, estate plan-ning, wils and probate, federal appellateprocedure, state appellate procedure, realestate and bankptcy.

A NALS Certificate of Completion wilbe awarded to students who meet all courserequirements. Payment of the $98 regis-tration fee may be mailed to the Salt LakeLegal Secretares Association, P,O. Box25, Salt Lake City, Utah 84110-0025.

For further information, contact MarshaL. Gibler, PLS, at 531-7870.

II LEGAL RESEARCH, INC.

~ ~ 1431 26th StreetOgden, Utah 84401

(801) 392-3979/393-1095

Legal Research, Inc., provides re-search and support servces to theUtah attorney.

Discover how any attorney can tapinto the assets and strengths of alarge law firm and use "big farm"benefits of legal research and ser-vice assistance without the need tohire additional personneL.

Use Legal Research, Inc. for thatimportant case which, or for thatclient who, needs additional legalservice, without undertaking theongoing obligation of additionalpersonneL.

Use Legal Research, Inc. to obtaintop-quality research and supportresults quickly and increase the pro-fessionalism of your practice.

January 1989 31

Utah Advance ReportsNow with summaries!

Now, the Utah Advance Reports also includes briefsummaries of each case. The summaries are found on thefirst page of each issue. Just scan the summaries, and goright to the cases that are vital to your particular practice.

Subscribe now! Call:SLC: 364-2633 PROVO: 226-6876

Elsewhere in Utah 1-800-992-2633

CODE. CoLaw Publishers

P.O. Box 1471, Provo, Utah 84603

By Willam D. Holyoak

andClark R. Nielsen

PRESUMPTION OF JOINTOWNERSHIP OF PROPERTY IN

A MARITAL PARTNERSHIP

The Supreme Court (Justice Durham)reversed an allocation by the Court ofAppeals of a substantial amount of cashbetween the surviving husband and the es-tate of his deceased wife. The money wasfound by the husband in a roasting pan in thecouple's kitchen, after his wife's death.

Both had made financial contributions to theoperation of the household. Refusing to

award the money to the wife's estate, theCourt of Appeals had opined that the burdenof proving ownership was improperlyplaced upon the husband because the estate,as claimant, failed to initially establish aprime facie case of ownership. (See Estateof Gorrell v. Gorrell, 740 P.2d 267, 268(Ct. App. 1987). Ignoring the issue of theinitial burden of proof, the Supreme Courttreated the marital relationship as a partner-ship wherein resources are pooled and ex-penses shared. Absent proof of actualownership by either party, the property isrebuttably presumed to be owned equally byhusband and wife, as tenants in common.Estate of Gorrell, 95 Utah Adv. Rpt. 10(Sup. Ct., Nov. 8, 1988).

PRIORITY OF SECURITYINTEREST ON MOTOR

VEHICLE REGISTRATIONSThe Court of Appeals (1. Bench) affirmed

the trial court's summary determination ofcompeting ownership interests in a horsetrailer registered by certificate of title withthe State Motor Vehicles Division. Theplaintiff lender had pedected a security in-terest in the trailer and was listed as a lien-holder on the title to "a 1980 horse trailer,"with a VIN "84057."

Later, defendant Young purchased thesame trailer at a sheriff's sale, with her titledescribing the trailer as a "1977" model'with a VIN of "084057." The panel con-cluded that the discrepancies in the modelyear and the serial number, where a "lead-ing" zero was omitted, were not so mis-

leading as to prevent the purchaser at

sheriff's sale from discovering the plain-tiff's prior security interest. Therefore, the

Wiliam D. Holyoak

pedected security interest took priority overa subsequent sheriff's title because a pur-chaser at a judicial sale acquires only thetitle that the debtor had. Basin Loans, Inc.v. Utah State Tax Comm 'n, et a1., 95 UtahAdv. Rpt. 23 (Ct. App., Nov. 14, 1988).

Attorneys should recognize the impact ofthis and other such decisions on computersearches of information filed with govern-ment agencies. A search wil be inaccurateif the information requested is not identicalto the data stored. For example, under somedata storage systems, inclusion of "leadingzero" in an identification number may benecessar to accurately disclose the existingnumber. Deletion of a "leading zero" mayprevent retrieval of the information or mayproduce inaccurate data, adhering to thecomputer maxim: "Garbage In--arbage

Out."

COURT OF APPEALSJURISDICTION ON EXTRADITION;

SUMMARY DISPOSITIONPer curiam, the Law and Motion Panel of

the Court of Appeals held that its jur-isdiction under Utah Code Ann. Sect.78-2a-3(2)(g) (1988) includes an attempt byan Idaho fugitive to prevent his return toIdaho by extradition. Appeals "involving acriminal conviction" include habeas corpusproceedings to fight extradition. The courtalso articulated standards by which a casemay be considered for summary dispositionunder Rule 10, R. Utah Ct. App., either onits own motion or that of a party.

1. Orme dissented from the panel's rulingon the sua sponte issue of jurisdiction.Mario Hernandez v. Hayward, 96 Utah

Adv. Rpt. (Ct. App., Nov. 18, 1988).

Clark R. Nielsen

EVIDENCE-JUDICIALNOTICE OF JUDGMENT

A court may not take judicial notice of ajudgment in another case. The judgmentmust be placed into evidence by its pro-ponent. Thus held the Court of Appeals (1.Bilings) in ruling that the juvenile court

improperly took judicial notice of thefather's homicide conviction in terminatinghis parental rights.

The error was, however, harmless, asthere was other adequate evidence that thefather was himself an unfit parent.

State, in Re C. Y., et a1. v. Yates, 96 UtahAdv. Rpt. (Ct. App., Nov. 18, 1988).

DUI-TRAFFIC STOPSAND MIRANDA WARNINGS

The United States Supreme Court, percuriam, held that an ordinary traffc stop

does not rise to the level of a custodial stopor formal arrest requiring a Miranda warn-ing. Therefore, the defendant's commentsand admissions to the police officer thatdefendant had been drinking, which weremade after being stopped but before formalarrest and warning, were properly admittedat triaL. Penns. v. Bruder, Docket 88-161,57 U.S.L.W. 3311 (U.S. Sup. Ct., Nov. 1,1988).

January 1989 33

Silent But Significant Changes

One of the most significant events af-fecting the administration of the dis-trict courts in the state's history wil likelygo unnoticed. Unnoticed, not because it isunimportant, but because the practitionerand the citizen dealing with the courts wilnot likely see any outward sign of change.

Since statehood, the district courts havebeen county-funded. While judges and re-porters are paid by the state, all other sup-port staff, with few exceptions, and courtfacilities are county provided.

Even though the working relationshipbet~~en the judges and the elected countyofficials have been amicable regarding theoperation of the court, and any differencesthat arose were for the most par resolved,the financing system grew to be antiquatedand diffcult for the county employees whohad to work within the system. Not only, forexample, were court clerks subject to "twomasters" so to speak, the elected court clerkand the judge, but the county clerk was aseparate official elected by the people andnot subject to the direct supervision of thedistrict court judges.

In the early days of the judiciar, there

were only the district courts and the Su-preme Court as courts of record and ofcourse, the Supreme Court was state-fuddedin its entirety since inception. As new levelsof court were added, such as trial and ap-pellate courts of limited jurisdiction, they

34

By Judge Timothy R. Hanson

JUDGE TIMOTHY R. HANSON was appointed tothe Third District Court in 1982 by Gov. Scott Math-eson. He received his law degree from the University ofUtah in 1970 and was a managing offcer in the lawfirm of Hanson, Russon, Hanson & Dunn from 1970until his appointment to the bench. He is currently amember of the Utah Judicial Council, the JudicialCouncil's Gender and Justice Task Force and the UtahSupreme Court Advisory Committee on Rules of Evi-dence.

were state-funded courts. Court clerks andpersonnel in those systems were state em-ployees, directly responsible to the judge orjudges and/or a state-funded court ex-ecutive. '

Those in many quarters believed that thedistrict court should be in the mainstreamand should become a full parner in thestate's judiciar. Also, it is difficult to com-prehend how we could hold judges account-able for the manner in which the courtoperated when they had no substantial sayover the administrative personnel upon

whom they relied for support. These con-cerns were particularly true as the statebecame more urban and the rural districtsbecame closer to the major metropolitancenters of the state through modern trans-portation and communication.

In an effort to respond to these growingconcerns, in January 1986 the state's Ju-dicial Council created a commission to

study the district courts and make recom-mendations as appropriate for improve-ment. The commission was chaired by stateSen. Kay S. Cornaby, with Judge J. DennisFrederick of the Third Judicial District act-ing as vice chair. On the commission wereother legislative, judicial and executiveleaders. In addition to state governmentrepresentatives, the commission also wasmade up of key county government, UtahState Bar and citizen representatives.

In September 1986, following substantialin-depth study and testimony from variousinterested persons, the commission issuedits report. While the report dealt with manyareas of concern regarding the operation ofthe district courts, the principal issue wasstate funding. The other issues identified inthe report and dealt with by the commissionwere closely intertwined with the concept ofstate funding.

The Judicial Council, upon receipt of thecommission's report, directed that appro-priate implementation legislation be draft-ed, and a bill was filed in the 1987

legislature. In view of the then present andcontinuing economic climate, the JudicialCouncil determined that the bil needed a

proposal for funding and worked out such aplan, which was included in the proposedlegislation.

Unfortunately, for reasons that are not

relevant here, the legislature did not act onthe proposed state funding of the districtcourts, and the proposal failed in the 1987session.

State funding of the distrct courts re-mained as the No. I priority of the JudicialCouncil in the 1 988 legislative session. Newmethods of funding and other necessarycompromises were developed, and modi-fied legislation was submitted. The legis-lation was successful in 1988 and wasidentified as Senate Bil 146, and known asthe "District Court Act." The legislation hasbeen codified into varous sections of theUtah Code as applicable, but is primarlyfound in Section 78-3-11. 5, Utah CodeAnn., 1953 as amended, and following sec-tions.

The legislation provided that the variouscounties had the option of joining the statesystem. All counties, with the exception ofSevier County, have opted to have the dis-trict court in their county state funded. Gen-erally speaking, the counties are financiallybenefited by the state takeover. The de-cisions as to whether or not to join the statesystem in some counties were diffcult inthat political and historical issues presentedimportant considerations. While thecounties lost the revenues generated by thedistrict courts, such as it is, they also wererelieved of the funding requirements.

The timetable for implementation of statefunding under Senate Bil 146 was a phased-in process. Facilities wil be assumed by thestate on July 1, 1988, and county personnelcome aboard as state employees on Jan. I,1989.

During the phase-in period, the StateCourt Administrator's Office logged untoldhours dealing with county officials on thenuts and bolts of the transfer, includingdiffcult personnel problems primarly cre-ated because of the switch in employers. Forthe most part, the transition has gone

smoothly. Logistical problems and per-sonnel difficulties stil remain, but likelywil be worked out with time and experi-ence.

Accordingly, as of Jan. 1, 1989, all per-sons who work in direct support of thecourts, those people employed through theCourt Administrator's Office or those per-sons who work in the court clerks' officesare Utah State employees. All facilitieswhich house the courts are either state-owned or state-leased, including the fur-niture and furnishings contained therein.

The benefit of the overall operation inboth urban and rural districts is that every-one in a paricular office works for the sameentity, to wit: the state. As manpower re-quirements fluctuate, personnel can be tem-porarily reassigned to assist as the needdictates. Duplication of positions that ex-isted under the former system can be elimi-nated, and those positions are being

consolidated where appropriate, reducingcosts and expense. While there is no moveto unify the courts into a single trial courtsystem, consolidation of administration ishighly desirable and one of the principalgoals of the new system.

In asking the legislature to pass SenateBil 146 , the judiciar indicated to the legis-lators that taxpayer money could be savedthrough administrative consolidation. Evenat the early stages of the transition, that isoccurrng. The judiciar is committed to

wise utilization of available tax dollars, andstate funding of the district courts providesanother vehicle to reach that end.

In anticipation of the Jan. 1, 1989, as-

sumption of county personnel into the statesystem, varous actions have taken place inthe district courts. In Salt Lake and othersimilarly situated counties, the traditionalelected county clerk who has heretofore

served as clerk of the court wil no longerserve in that capacity. An appointed clerk ofthe court wil serve each district court loca-tion. These clerks' single duty wil be ef-ficient operation of the court clerks' offices,and they are responsible to the judge or thejudges in their paricular district and super-visors from the Court Administrator's Of-fice.

Clerks' offices are being reorganized totake advantage of the special talents that keycourt personnel possess and, where appli-cable, uniform administrative policies andprocedures wil apply.

The end result should be more efficient,more responsive and more productive dis-trict courts. Even though it wil not be ahighly visible change in the way the distrct

courts do business, it should allow the dis-trict court line personnel, as well as admin-istrators, to provide better service to theattorneys practicing before the districtcourts in this state, and ultimately benefittheir clients who seek resolution of theircases in the district courts.

Time is money (every hour is po-tentially billable)

You're not a bad reader. . . butyou've slowed down. And thatmeans money lost.

TODAY, you need to read morewith better comprehension andwithout falling asleep. How?

TODAY, you can sign up for thenext Efficient Reading For LegalStaff and Professionals, a 7week, 14 total hour class set tobegin January 18.

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OBJECTIVE: increase readingrate and comprehension in tech-nical materials by a factor of at least1 00 percent.

This Utah State Bar class is legalreading specific, but the skillslearned and the materials you takewith you may be one of the bestoverall investments of time and alittle money that you will ever make.

CONTACT: Sydnie KuhreLaw and Justice Center, 531-9077.SPACE iS LIMITED.

January 1989 35

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Whatever your age, wherever you live, you can make yourjourney through life healthier and happier and live longerby taking part in a regular program of vigorous exercise.Run,jog, walk, swim, play tennis, bicycle, work-out. Watchyour diet. Changing your life style will change your life.Try it. . Prenl's CouncilWrite Fitness, ' on Physial FitncssWashington, DC 20201 and S¡ts.

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36 Vol. 2, No. i

i 989 Legislative PreviewAn Analysis of the Composition of the 48th Legislature

and Selected Issues It Will Likely Consider

When the 1989 General Session of theUtah Legislature convenes on Janu-ary 9, 1989, twenty of its 104 seats will beoccupied by new legislators. Seventeen ofthe 75 seats in the House of Representativeswil change hands, as eight Republicans

replace fellow Republicans, four Repub-

licans sit in seats previously held by Demo-crats, and five Democrats take seats

previously held by Republicans. The resultis a net gain of one seat by the Democrats,leaving the balance of power in favor of theRepublicans by a margin of 47 to 28, stil aconsiderable majority, but insufficientwithout bipartisan assistance to effect thetwo-thirds majority required to take such

actions as suspending procedural rules, cut-ting off debate, overriding gubernatorial

vetoes, adopting early effective dates forlegislation, and acting on proposed con-stitutional amendments.

The new House of Representatives willalso see some major changes in its lead-ership. Nolan E. Karras (R-Weber) wil replace Glen E. Brown (R-Rich, Morgan,

Summit, Wasatch) as Speaker of the House,Craig Moody (R-Salt Lake) wil move intoRep. Karras' former position as majorityleader, David M. Adams (R-San Juan,Grand) wil replace defeated alene S.Walker as majority whip, and Byron R.Harard (R-Utah) wil replace retired JackF. DeMann as majority assistant whip. On

By Douglas A. Taggar

DOUGLAS A. TAGGART graduated cum laudefrom the Brigham Young University Law School in1978. He has practiced law in California and Utah,served as Associate General Counsel for the Utah

Legislature and currently is Counsel for Beneficial LifeInsurance Company. He is a member of the LegislativeAffairs Committee of the Utah State Bar and is theLegislative Report Editor for the Utah Bar JournaL

the Democratic side of the aisle, Mike Dmi-trich (D-Carbon, Emery, Grand) wil retainhis position as minority leader, Frank R.Pignanelli (D-Salt Lake) wil replace BlazeD. Wharton (D-Salt Lake) as minoritywhip, and Brent H. Goodfellow (D-Salt

Lake) wil remain as minority assistantwhip.

In the Senate, three of its 29 seats wilchange hands. Of these, two wil be held byRepublicans replacing other Republicans,

and one wil be held by a Republican takinga seat previously held by a Democrat, re-sulting in a net gain of one seat by theRepublicans to increase its majority to 22 to7 (over 75 percent of the Senate). No

changes wil be made in the Senate lead-ership. Arnold Christensen (R-Salt Lake)wil remain as Senate president, Cary G.Peterson (R-Juab, Milard, Sanpete,Wayne, Piute, Sevier, Beaver) will be ma-jority leader, and Dix H. McMullin (R-SaltLake) wil be majority whip. W. Rex Black(D-Salt Lake) wil remain as minority leader

and Eldon A. Money (D-Utah) wil be mi-nority whip.

At the date of this writing, chairmen andmembership of the legislative committeeshave not yet been assigned.

Several major issues of general interest tomembers of the Bar have been proposed forconsideration at the 1989 General Session.A few of these proposals are summarizedbelow.

PUNITIVE DAMAGES. The Tort andInsurance Reform Task Force (the "taskforce") created during the 1988 Legislatureand comprised of 19 members appointed bythe President of the Senate and the Speakerof the House, after studying several pro-posal relating to the issue of punitive dam-ages, endorsed proposed legislationl thatwould permit punitive damages to be awar-ded "only if compensatory or general dam-ages are awarded and it is established byclear and convincing evidence that the actsor omissions of the tortfeasor are the resultof wilful and malicious or fraudulent con-

duct." This limitation would not apply if theclaim arose out of the tortfeasor's operationof a motor vehicle while voluntarily intoxi-cated, presumably leaving such cases to bedecided without regard to the existence ofcompensatory damages2 based upon theplaintiff's ability to prove by a pre-ponderance of the evidence3 that the de-

January 1989 37

fendant acted with "knowing and recklessindifference and disregard toward the rightsof others."4 Evidence of the tortfeasor'sfinancial condition would not be admissibleuntil liability for punitive damages has beendetermined, and 50 percent of any punitivedamages in excess of $20,000 would bepayable to the state after payment of attor-neys' fees and costs.

MANDATED DEMAND FOR JUDG-MENT. Another proposed bill5 studied bythe task force would implement a "demandfor judgment" procedure in civil actions inorder to discourage the filing of non-

meritorious claims and encourage earlysettlement of those that are meritorious byrequiring paries to seriously evaluate theircases and make reasonable offers of settle-ment early in the course of the litigation.This procedure requires the plaintiff to makea demand for judgment against each de-fendant within 90 days after commencinghis action. If he does not do so, his case issubject to dismissal with prejudice. If hemakes the demand and it is not accepted bythe defendant, and if the final judgmentequals or exceeds the amount of the de-mand, the defendant must pay interest onthe amount of the demand (less the amountof any counteroffer proposed by the de-

fendant and rejected by the plaintiff) fromthe date the demand was made. If the judg-ment is less than the amount of the demand,it wil be reduced by the amount of attor-neys' fees and costs incurred by the de-

fendant after the date of the demand, andthese reductions wil be taken into accountbefore computing the plaintiff's attorneys'fees.

PRODUCT LIABILITY. The task forceendorsed proposed legislation' that wouldrepeal the statute of repose contained inUtah's Product Liability Ace that was de-clared unconstitutional by the Utah Su-preme Court in 1985.8 The proposed bilreplaces the faulty statute of repose with aprovision that "a manufacturer or productseller is not subject to liability to a claimantfor harm under (the act) if the manu-facturer or product seller proves by a pre-ponderance of the evidence that the harmwas caused after the product's useful safelife had expired." "Useful safe life" is re-buttably presumed to be 10 years, subject tovarous exceptions and limitations such aswhere a longer warranty is given, inten-tional misrepresentation or fraudulent con-cealment is involved, the injury-causing

aspect of the product was not reasonably

discoverable during the 1O-year period or

the har caused during that period did not

manifest itself until after that time. Theproposed bil establishes a two-year statuteof limitations from the time both the har

and its cause should have been discovered.Standards of liability of manufacturers andsellers of products are also set forth.

OTHER TORT REFORM ISSUES. Thetask force also examined issues relating tomedical malpractice, the collateral sourcerule and limits on non-economic damages.Although none of the proposals relating tothese matters received the approval of thetask force, they are issues that are likely toresurface during the legislative session.

GRAND JURIES. The Legislative Ju-diciar Interim Committee endorsed a pro-

posed bil9 relating to the operation and

financing of grand juries. The bil wouldplace grand juries under the supervision ofthe Court of Appeals, give them statewidepowers, increase the number of members tonot less than nine nor more than 15 (witheight votes being required to return an in-dictment), require warnings to persons whoare subjects or targets of grand jury inves-tigations, allow witnesses to have counselpresent, permit grand juries to receive evi-dence without regard to the formal rules ofevidence (although an indictment may notbe returned solely on the basis of incom-petent hearsay), allow witnesses to present

exculpatory evidence and require prosecu-tors to disclose any such evidence, andrequire a finding of clear and convincingevidence (rather than evidence that would"justify a conviction by a jury trial"lO) be-fore an indictment may be returned.OTHER CRIMINAL INVESTIGATION

AND PROSECUTION PROPOSALS.Other proposed bils would revise the sub-poena powers of prosecutors in conductingcriminal investigations so as to be consistentwith standards recently set forth by the UtahSupreme Court, 1 1 provide for use rather thantransactional immunity, 12 provide for the

appointment of a special prosecutor in cer-tain circumstances13 and change the existingcounty attorney system to a district attorneysystem.

14

VISITATION RIGHTS. Proposals re-garding the visitation rights of non-custodialparents are also expected to come before theLegislature. One of these proposals

i' would

require the payment of child support into atrust fund if visitation is denied. Anotherl'would provide for the negotiation of custodyand visitation issues with a counselor andthe representation of a child's interests by acounselor and attorney.

CHILD SUPPORT. The Legislature isexpected to act on proposals to modify thestate's child support guidelines. Althoughadvisory guidelines are currently in place, 17the state wil lose federal funding unless itimplements, by October I, 1989, a re-buttable presumption that the guidelines areapplicable absent a specific court finding to

the contrary. 18

JUSTICE COURTS. A bil'9 has beenproposed that would provide for the jur-isdiction and operation of justice courts andthe appointment, training and compensationof justice court judges.

JUDICIAL SALARIES. The Executiveand Judicial Compensation Commission hasrecommended that judicial compensation beraised by increasing the salares for Associ-ate Justices of the Supreme Court to$80,000 per year, with other judges' sal-aries proportionately increased based on thepercentage schedule set forth in U.C.A.Sect. 67-8-2. It is expected that this recom-mendation wil be made to the Legislature asa par of its appropriation process.

Most of the legislative proposals dis-cussed above have been embodied in bils tobe introduced when the Legislature con-venes. However, as of the date of this writ-ing, none of the bils has been prefied by asponsoring legislator or given an identifyingnumber. Obviously, these bils wil change,and others wil emerge, as the varous dy-namics of the legislative process are ap-plied.

Interested members of the Bar would bewell advised to follow these and other legis-lative proposals as they develop, and areencouraged to get involved in the legislativeprocess by providing such input as theyconsider appropriate.1 "Punitive Damages Amendments," 1989 General Session,

Nov. 15, 1988, Draft (Offce of Legislative Research and

General Counsel).2 Nash v. Craigco, Inc., 585 P.2d 775, 778 (Utah 1978).J Wilson v. Oldroyd, 267 P.2d 759, 765 (Utah 1954).

4 Johnson v. Rogers, 90 Utah Adv. Rep. 3, 4 (Aug. 25, 1988).5 "Mandated Demand for Judgment," 1989 General Session,

Nov. 28, 1988, Draft (Offce of Legislative Research and

General Counsel).6 "Products Liability Amendments," 1989 General Session,

Nov. 18, 1988, Draft (Offce of Legislative Research and

General Counsel).7 Utah Code Annotated Sect. 78-15-1 et seq.8 Berr ex rel. Berr v. Beech Aircraft Corp., 717 P.2d 670

(Utah 1985).9 "Grand Jury Reform." 1989 General Session, Sept. 20, 1988

Draft (Offce of Legislative Research and General Counsel).io Utah Code Annotated Sect. 77-11-5.11 "Subpoena Powers," 1989 General Session, Sept. 20, 1988,

Draft (Office of Legislative Research and General Counsel);see In Re: Matter of Criminal Investigation, Seventh DistrctCourt No. CS-L. 754 P.2d 633 (Utah 1988).

12 "Prosecution Immunity Amendments," 1989 General Ses-

sion, Sept. 8, 1988, Draft (Offce of Legislative Researchand General Counsel).

IJ "Special Prosecutor Amendments," 1989 General Session,

Oct. 5, 1988, Draf (Offce of Legislative Research and

General Counsel).14 "Prosecution Revisions." 1989 General Session, Dec. 14,

1988, Draft (Offce of Legislative Research and General

Counsel).15 "Visitation Rights," 1989 General Session. Sept. 20, 1988,

Draft (Offce of Legislative Research and General Counsel).16 "Child Custody and Visitation Amendments," 1989 General

Session, Sept. 20, 1988, Draft (Office of Legislative Re-search and General Counsel).

17 Uta Code of Judicial Administration, Rule 4-904.1842 U.S.C.S. Sect. 667(b), as amended by P.L 100-485

(1988).19 "Justice Court Amendments," 1989 General Session, Nov.

3, 1988, Draft (Offce of Legislative Research and GeneralCounsel).

38Vol. 2, No. I

: STATE BAR CLE CALENDAR' .~FRANCHISE SECTION SEMINAR

The Franchise Section of the Utah State Barannounces a Continuing Legal Education Sem-inar open to all attorneys to be held at the UtahLaw and Justice Center. There wil be an experi-enced faculty covering basic franchise topics ofinterest to all attorneys including:

Problems of franchising from the perspectiveof the franchisor, David E. Neff; overview offederal and state disclosure and registration re-quirements, C. Jeffrey Thompson; franchisor-franchisee ongoing relationships andtermination, Professor Lionel H. Frankel; using

trademark, patent and trade secret agreements,

Vaughn W. North. There will be printed materialthat wil be of value to you in your practice.

Date:Place:Fee:Time:

Jan. 12, 1989

Utah Law and Justice Center$658:30 a.m. to 1:30 p.m.

BAD FAITHINSURANCE LITIGATION

A live via satellte program demonstrating

litigation techniques and a substantive update oftlÌe case law in this emerging area of the law.Presents material as a working knowledge forboth insurance defense counsel and plaintiff'scounseL.

Date:Place:Fee:Time:

Jan. 19, 1989

Utah Law and Justice Center$13510:00 a.m. to 2:00 p.m.

JOINT VENTURESA live via satellte course covering essential

drafting techniques and counseling con-

siderations for handling joint ventures suc-

cessfully. Cover all the bases and avoid potentialmalpractice claims with the information and

techniques discussed in this course.

Date:Place:Fee:Time:

Feb. 9, 1989

Utah Law and Justice Center$13510:00 a.m. to 2:00 p.m.

RECENT DEVELOPMENTSIN COMMERCIAL LAW

A live via satellite program covering athorough update on UCC developments. Thiswil be especially for practitioners who have nothad occasion to handle UCC matters in recentyears and involves an article analysis and appli-cation of the UCC for today's practitioners.

Date:Place:Fee:Time:

Feb. 28, 1989

Utah Law and Justice Center$1608:00 a.m. to 3:00 p.m.

MERGERS AND ACQUISITIONS:TECHNIQUES AND STRATEGIES

A live via satellte program covering the prac-tical and technical problems of structuringmergers and acquisitions. This program is de-signed for corporate finance lawyers, financing

professionals and business executives.

Feb. 14, 1989

Utah Law and Justice Center$1608:00 a.m. to 3:00 p.m.

DESIGN ANDCONSTRUCTION CONTRACTS

A live via satellite program covering case lawand litigation strategies in construction contractcases. Contract interpretation, pary identifica-tion, development and use of documentar evi-dence, and expert witnesses will be featured.

Date:Place:Fee:Time:

Date:Place:Fee:Time:

Feb. 23, 1989

Utah Law and Justice Center$13510:00 a.m. to 2:00 p.m.

LEGISLATION AS A REMEDYHave you been frustrated in your practice of

law because of an ambiguous, unfair, or archaiclaw? Plan to attend a seminar presented by theUtah State Bar in conjunction with the Office ofLegislative Research and General Counsel andlearn more about the legislative process, abouthow to make positive changes in the law, andabout how you can use legislation to resolverecurring problems with the law.

In this seminar a Utah legislator will reviewthe legislative process; legislative counsel willpresent an overview on how to draft legislation;and a panel of experienced lobbyists wil answeryour questions and describe how to successfullyshepherd a bil through the legislature. Thisseminar includes an excellent handbook.Date: March 2 I, 1989Place: State Capitol-Salt Lake City,

Utah Room 403$251:00 p.m.

Fee:Time:

PERSONAL AND ESTATEPLANNING FOR THE ELDERLY

As the population ages, the market for estateplanning and other legal services for the elderlywill continue to expand rapidly. General prac-titioners and others interested in adding estateplanning for the elderly to their practice re-pertoire will be interested in this estate planningcourse which covers recent techniques and legalramifications of paricular interest to elderly cli-ents.

Date: Jan. 26, 1989Place: Utah Law and Justice CenterFee: $135Time: 1000 a.m. to 2:00 p.m.

WHAT YOU NEED TO KNOW ABOUTTHE NEW TAXPAYER BILL OF RIGHTS

A live via satellte program on the new Om-nibus Taxpayer Bil of Rights, passed by Con-gress at the end of October 1988 in response to abroadly held view that some additional pro-tections were needed for taxpayers in our federaltax system. This new law wil have a substantialimpact on taxpayers, practitioners, Internal Re-venue Service employees and accountants aswell.

Date:Place:Fee:Time:

Feb. 2, 1989

Utah Law and Justice Center$13510:00 a.m. to 2:00 p.m.

DATE

CLE REGISTRATION FORMTITLE LOCATION FEE

,

Franchise Section Seminar L & J Centero Jan. 12

o Jan. 19

$65

$135Bad Faith Insurance,Litigation L & J Center

$135o Jan. 26 Personal and Estate Planning for L & J Centerthe Elderly

o Feb. 2 What You Need to Know About L & J CenterThe New Taxpayer Bil of Rights

$135

o Feb. 9 $135Joint Ventures L & J Center

$160o Feb. 14 Mergers and Acquisitions: Techniques L & J Centerand Strategies

o Feb. 23 $135Design and Construction Contracts L & J Center

L & J Center $160o Feb. 28 Recent Developments inCommercial Law

Total fee(s) enclosed $Make all checks payable to the Utah State Bar/CLE

Name Phone Firm or Company

Address City, State and ZiP American Express,MasterCardlVISAExpiration Date

January 1989 39

\ . THE FINAL SAY

by M. Karlynn Hinman

When I was young, my father would re-gale and amaze us with his recitations-more properly, kitchen sinkperformances--f the great Shakespeare

speeches, proclaimed with spirit and dryhumor. He came from a time when edu-cation included memorizing things.

My favorite was always Hamlet, prob-ably because I was young and it soundedstrange and complex. I thought it verygrown up to be included among its listeners."Aye, there's the rub." I thought my fatherbrilliant because he could explain what thatmeant.

My own education was part of later, moremodem times. I read, but not nearly somuch as my parents thought proper. I hardlymemorized a thing. I did get as far as "Alas,poor Yoric," but there isn't a lot of mileagein that line without the rest-even at thekitchen sink.

Many of us were blessed by somethingcalled English 10 1, an Introduction toShakespeare. We all read Lear and Hamletand even some of the comedies. There was apaper due somewhere during the semesterabout the role of the fool in Shakespeare.

That has all come back to me since joiningthe Journal committee. The fool has takenon a new and more immediate meaning.

Only a fool would accept the assignmentto be funny on command. Surely, that isbeyond the capability of a mere lawyer. Wecan be aggressive and surly and dramatic (orat least melodramatic) virtually on com-mand. We regularly and arrogantly exposeour innermost intellectual processes to theworld, whether before juries or judges,whether orally or in a brief on a most eso-teric point of law. .

We even submit aricles to the Journal, tobe read by our peers--r at least the editorswho determine whether to put us in print.We tum from an intricate dispute over realestate boundares to the vagares of sum-mary judgment to a confrontation with afederal alphabet agency, hardly batting aneye. But be funny on command? Few of ushave the talent-as that inner voice screamswhile we bravely make the effort. There aresome Clarence Darrows and even somePortias among us, but few Jack Bennys.

Humor is a funny thing and that is not justa redundancy. It varies with culture and withage, both the years and the era. A 5-year-oldloves the simplest and siliest knock, knock:who's there? Grr! Grr who? Grrandpa!Eleven-year-old girls giggle at everything.Greeks apparently laughed at obscene car-icatures, and the pun is universal and some-times, mistakenly I think, called low.

Humor can be painful, sophisticated, ed-ucational, bawdy, subtle, truthfuL. Any-thing and anyone can be its subject. Terrblyfunny ethnic jokes are frowned upon inproper circles. Purple grape and elephantjokes have had their vogue. They fade andthen revive, mutated by new jargon and aclever tongue. Humor can be a wordlesspicture or a one-liner accompanying acommon occurrence. It may be a troop ofRoman soldiers, marching to their drill ser-geant's cadence: Hup, II, II, IV.

In our profession, it may be the wildcircumstances of a case which boggle themind and tickle the wit, the occasional wordplay of a sagacious judge, the cartoon of thejudge donning robes and asking, "Mirror,mirror on the wall, who's the fairest of usall?" The dimensions of humor are boundedonly by the wit and the imagination of the

viewer, the reader or the auditor.But how to be funny? On command?

Surely you must be joking! Shakespeare's

fools must have known, but their professionwas hazardous. At least we know that poor

Yoric had gone to his grave. What was hislast word? Who knows. At least he wastender and kindly toward the young princewho felt kindly toward him.

Those who follow in his footsteps canonly hope for like kindness-and, per-

chance, a lot of help in providing a last wordhere. This time, an essay; perhaps next

time, something funny-but always the

undertone from Midsummer's Night:"Alas, what fools these mortals be."

A LETTER NOT TO THE EDITOR

The recently revived hearings on com-pensation to Southern Utah radiation vic-tims led Mr. I.M. Woolley to thank Dan S.Bushnell, who represented a group of CedarCity sheepmen whose sheep and lambs weredecimated after above-ground nuclear test-ing. Mr. Bushnell took the cases to theUnited States Supreme Court, where theywon three of the four needed votes for certi-0rari in claims involving fraud on the courtand constitutional tort. The letter from Mr.Woolley is reproduced here.

Dear Dan:

Ewe wil no doubt be surprised to receivethis letter since we are not often herd from.One of our young ramikins, R.U. WoolleyII, wool deliver our message to ewe byShofar. He comes with a bag full of goodwishes for ewer dame; our ewesteem is to belane at ewer feet. Indeed, ewe do us honorwhen ewe wear our threads. People call usstupid, but it didn't take us four years at auniversity to get our sheepskin. Ewe hu-mans' interest in sheepskin has put us in thesacrificial role. But on balambs, we stilhave hope for the human race. Ewe wil nothave herd "baa humbug" from us, and wehope to knit a friendship. But to the issues atfoot.

It was shear pleasure watching ewe shep-herd our case through the courts. Thanks fortyring to get us a gnu triaL. It behooves us allto offer praise and not just Basque in

radiated glory.As ewe well know, we went to court like

lambs to the slaughter. We expected judges

40 VoL 2, No. I

r:i

on a woolsack, but we got some woolly-

headed thinking. We knew litigation was agambol, but we never expected to confrontsuch baaad men and lyres. We never saw somany black sheep. We saw each mutton thestand; we remember those past oral argu-ments with dismay.

How could they be so tallow? We herdeverything; we knew they were trying tofleece us. Snow wonder we've been upset.Wood ewe please tell us why they tried sohard to make us look sheepish, grinning allthe while?

For years we have lived with our lamben-tations. We knew we were lost; we neededhelp in the worsted way. We were thepitcher of despair; it was hard to be meek,but you didn't let them pull the wool overewer eyes!

It was no fun getting clipped in the wildand wooly West, but we had our tum to tryto ram it down their throats. We know howoften ewe stayed up past ewer bedtime,

studying in the lamblight.Ewe cared. Even though we lost, we can

no longer be folded, stapled and spindled.

Ewe never thought our tail of whoa was buta yam. Our pens are humbled, we have noflocked wallpaper, but no one stands mouton the issues we raised. Our hearts areMar.

By the way, are ewe sure ewe didn't go toYale? We'll buy ewe a drink at Morr'ssome day. Ewe might like the mead. a well,one does run into a lot of bleating hears upthere, but Leicester day than before.

Let us not ramble a-bout; we were proudto see ewe goat to it. You really tried tolambaste those crooks. We'll always bethere, uncloven behind ewe, because eweare all wool and a yard wide. We wilremember ewe tenderly-it has been liketwo sheeps passing in the night.

Sincerely ewers,

The Sheep

By I.M. Woolley

--.~I--.I.....;¡-

Editor's NoteThis new Bar Journal section, dedicated

to providing humorous insights into law andlife in general wil be published 0 oc-cassionally, 0 regularly, 0 seldom (pleasecheck preference) as the demand and, moreimportantly, the supply of appropriate mate-rial dictates. Accordingly, your input ofhilarious, amusing, droll or witty, an-ecdotes, stories and material is earestlysolicited. Attribution of authorship (or thewithholding thereof in maintenance of ano-nymity, wil be cheerfully provided for allmaterial published-or, if you wish, attri-bution wil be withheld pending a deter-

mination of reader reaction to the materiaL.In any case, please let us hear from you-oris it ewe?

January 1989

Support America's colleges. Because college is more than a placewhere young people are preparing for their future. It's where America ispreparing for its future.

If our countr's going to get smarter, stronger - and more competitive- our colleges and universities simply must become a national priority.

Government. Business. And you. We're all in this together. Becauseit's our future.

So help America keep its competitive edge with a gift to the college ofyour choice -and you'll know you've done your part.

Give to the college of your choice.~A""""01_"- COUNCllfORAIOTOIOUUllION ~

41

CLASSIFD ADS

For information concerning classifiedads, please contact Paige Holtry at theUtah State Bar, 645 S. 200 E., Salt LakeCity, UT 84 i i i, or phone 53 i -9077.

POSITIONS SOUGHTAttorney with over 10 years' experience

in tax, real estate, corporate and generalbusiness law seeks position with Salt LakeCity firm. Please reply: Box 9056, Salt LakeCity, UT 84109.

I would like to work with an expert-someone highly skiled in either tax, ER-ISA, bankruptcy, securities, etc. I am a paststate supreme court clerk and a member ofthe Utah State Bar. For further informationor suggestions, please contact the Bar of-fice.

Expanding estate planning and tax firm isseeking a full-time attorney with 0 to 3years' experience. Send resume to Mitton &Burningham, 36 S. State, Suite 1200, SaltLake City, UT 841 i 1.

Need to fil a legal assistant position? CallJob Bank, Joy Nunn, 521-3200. Job Bank isa service to the legal community by theLegal Assistants Association of Utah

(LAAU). No fees are involved.

POSITIONS AVAILABLEMedium-size firm in south valley needs

aggressive associate with 1 to 2 years' liti-gation experience. Firm practices generalcivil litigation with strong emphasis on em-ployee side labor, employment and dis-crimination actions. Salary commensuratewith experience.

Multistate, Salt Lake City based lawfirm, offers a unique merger opportunity forhard working, competent and profitable at-torneys or small firms. Let our managementand marketing styles benefit you startingtoday. If you desire the added prestige andincome potential which can come from as-sociation with Salt Lake's fastest growinglaw firm please forward your personal orfirm resume to Kent Cramer, % Adamson,Clark and Gil, 2100 University Club Build-

ing, 136 E. South Temple, Salt Lake City,UT 84111.

The Utah Attorney General's Office ex-pects to fil an opening for an antitrust en-forcement lawyer. From 2 to 6 years inpractice, with experience in antitrust andtrial work preferred. A background in eco-nomics and business is also helpfuL. Wilassist in developing major antitrust actionsunder state statute, both civil and criminaL.Initial screening wil be by resume only.Send a current resume within 10 days indi-cating interest to Utah Attorney General, %Paul M. Tinker, 236 State Capitol, SaltLake City, UT 84114.

FURNITURE AND BOOKS FOR SALEUtah Code Annotated, Michie Hard-

bound Edition, complete with SupplementalPocket Parts. Best offer. 581-1211.

i 988 Martindale-Hubbell National Law-yers Directory, complete set, never used,best offer. 581-121 i.

Classic lawyers bookcases, 2 sets of 5stackable shelves with glass doors, from lateJudge Wilis Ritter's estate. $250 each orbest offer. 581-1211.

Four sets of Utah Code Annotated (1953as amended), complete and up to date,excellent condition. Tracy Richards,

363-3300.

Complete set United States Code Service(USCS), up to date, excellent condition.Janice, 544-4221.

ALR second, third and fourth, completewith ALR Digest to third and fourth Federaland Index to Annotations. Excellent condi-tion. Janice, 544-4221.

OFFICE SPACE AVAILABLE350 S. 400 E. Attorney wanted to share

large, deluxe office space with 2 other attor-neys. Non-smokers only. Ample parking,utilities, library, conference room and re-ceptionist included in $400 per month. Call364-4200 or 531-1900.

Share prime office space at 175 E. 400 S.in Salt Lake City. Includes furnishings,

telephone and receptionist. An ideal ar-rangement for an attorney who needs a niceoffice two or three days a week. $250 permonth. No deposit or lease required. CallSteve at 350-9102.

Attractive office and location in Salt LakeCity with other well-established prac-

titioners. $440 per month also includes re-ception services, phones, photocopying,conference room and parking. Secretarial,FAX and telex services are available,together with some overflow work, if de-sired. Call us at 487-7834.

559 E. South Temple. Attorney wanted toshare offce suite with 3 other attorneys.

Price is negotiable based on needs. Referralwork available. Contact Reid Russell orLouise Knauer at 532-1601.

330 E. 400 S. Attorney wanted to sharelarge office suite with 2 other attorneys.

$300 per month. Utilities and telephonesystem included. Free parking. Recep-

tionist, copier, word processor and libraryavailable. Call 322-5556.

MISCELLANEOUSSmall business law firm seeks to buy

practice of retiring individual or other busi-ness law practices in Salt Lake City area.Will also consider mergers. Replies remainstrictly confidentiaL. Reply Box Y."

Volunteer attorneys are needed to act ashearing examiners before administrativehearings conducted by Salt Lake City Cor-poration. Hearings wil involve business

license denials and revocations as well asother municipal issues. Interested personsshould contact Larry V. Spendlove, As-sistant Salt Lake City Attorney, Salt LakeCity Hall, 324 S. State Street, Suite 510,Salt Lake City, UT 84111, (801) 535-7788.

DONATIONSLOOKING FOR A TAX DEDUCTION!

The Utah Bar Foundation is in need of atypewriter and computer. If you or your firmwould be interested in donating either ofthese items to the foundation, please contactKay Krivanec, Utah Bar Foundation office,at 531-9077.

42Vol. 2. No. I

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