#5 Spring 1990
l POSITION PAPER OF THE ASSOCIATION FOR
OBJECTIVE LAW IN OPPOSITION TO
MANDATORY PRO BONO (Part 2)
l DISTRIBUTION CAMPAIGN FOR MANDATORY
PRO BONO POSITION PAPER
l "EXPERT" TESTIMONY
l PROPOSITION 103 REVISITED
l THE RACKETEERS
l IN BRIEF
l MANDATORY IOLTA IN MARYLAND
l ABA HOUSE OF DELEGATES ADOPTS PRO-
1990 page 1
POSITION PAPER OF THE ASSOCIATION FOR OBJECTIVE LAW IN OPPOSITION
TO MANDATORY PRO BONO
(Continued from the Winter 1989 Issue of the Newsletter)
In the previous
issue of the Newsletter, TAFOL published the first installment
draft of its position paper in opposition to mandatory
pro bono. In recent years a movement has been underway to force
lawyers to provide their services to indigents free of charge (that
is, to provide their services "pro bono publico" from
the Latin "for the public good"). In its position paper
TAFOL makes clear its opposition to this movement, stating that
mandatory pro bono is immoral as an infringement on a lawyer's
absolute right to choose the work he wishes to undertake and that
mandatory pro bono is unconstitutional. In the following continuation
of the position paper, TAFOL raises objections to mandatory pro
bono on practical grounds.
C. Mandatory Pro Bono Is Impracticable.
objections to mandatory pro bono have been raised. Certain of
those objections, and additional practical objections,
are summarized below. The practical problems are serious, self-perpetuating
and self-expanding. They flow directly from the fact that mandatory
pro bono is a system of forced labor by unwilling lawyers on
1. The implementation
of mandatory pro bono will necessitate the creation of a complex
bureaucracy. Bar associations will have to
gear up to make sure that every lawyer serves his time. They will
have to develop guidelines for mandatory pro bono, such as when
a lawyer may be excused from serving (and who has the power to
excuse him) as well as punishments for lawyers who refuse or fail
to serve adequately. Bar associations, if they wish to make sure
that the supposed "unmet legal needs" of
the poor are indeed met and that lawyers do not attempt merely
to offer their services to causes in which they believe,
will have to establish elaborate systems for registering the "needs" of
indigent individuals and matching them with the conscripted attorneys.
2. There will undoubtedly be difficulty in matching particular
legal problems with available lawyers who have appropriate expertise.
The legal problems likely to be presented are not those with which
all lawyers are familiar. Not every lawyer is knowledgeable in
the areas of landlord-tenant law, civil rights, or welfare entitlements.
3. The legal services provided will not be of high quality. They
will be sloppy because they will be provided by lawyers without
any expertise in the relevant area of the law, because lawyers
will not be working for themselves, because they will not, in many
cases, believe in their client's cause, because they will be resentful.
The point is proved by one glance at the goods produced in any
totalitarian state, where the workers do not work for themselves,
cannot keep the product of their labor, and are not free to direct
their own careers or lives.
4. The substantive
law will be immensely complicated by mandatory pro bono, and
there will be much litigation on the new issues.
For example: What are the standards of care for lawyers rendering
mandatory pro bono service? If a lawyer is not in control of the
matters on which he works, can he be held responsible for ignorance
of the relevant area of law? (If he is not responsible, it is easy
to imagine what level of service will be rendered.) One would expect
an increase in malpractice suits by mandatory pro bono clients---for
which more pro bono attorneys will be needed.
1990 Page 2
5. Who will
determine what is or is not pro bono, and by what standard? Will
every demand of an indigent person for legal
aid be fulfilled?
Will there be a screening process by which legal demands are
evaluated for colorable merit
or "need"? And if so, who will perform the evaluation?
What happens when a lawyer has a moral objection, a
conscientious objection, to a particular matter, such as
the pursuit of welfare benefits? Will lawyers not only be
to work without
pay but also for causes or clients they feel deeply are immoral?
If conscientious objection is permitted, what proof of his
convictions will the objector be required to adduce? Who
will judge the bona
fides of the conscientious objection?
6. The "unmet legal needs" of
the indigent will explode, in large part because substantive
law issues will expand but also
simply because legal services will be free. Persons who never dreamed
of instituting legal proceedings will do so because they will see
no reason not to do so, and the demand for free legal services
will skyrocket. Just such a situation has occurred as a result
of Medicare, where there has been a skyrocketing demand for medical
services (and a proportional increase in medical costs). At the
same time, voluntary pro bono service will decline. Lawyers have
only so much time, and mandatory pro bono will consume a significant
amount of the time that would otherwise have been spent in volunteer
work---work which would have been enthusiastically chosen, which
would have expressed the lawyer's convictions and which the lawyer
would have felt qualified to perform.
Mandatory pro bono would violate the rights of lawyers. It would
subvert basic principles of rights in general, and for everyone.
Ultimately, it would not help the indigent with their legal problems.
For these reasons, The Association for Objective Law opposes mandatory
pro bono and urges that all proposals for mandatory pro bono be
DISTRIBUTION CAMPAIGN FOR MANDATORY PRO BONO POSITION PAPER
TAFOL plans to distribute its position paper on mandatory pro
bono to bar association committees and other bodies considering
the adoption of mandatory pro bono programs. TAFOL also plans to
distribute the position paper to a variety of professional and
general interest publications. We encourage TAFOL members to alert
us to the existence of bar committees and other bodies which might
be suitable recipients of the position paper, and invite suggestions
for publications to be placed on the distribution list.
We are enclosing with this issue of the TAFOL Newsletter a separately
printed copy of the position paper. Feel free to make copies of
the position paper and distribute them as you think appropriate.
In the Summer
1989 issue of the Newsletter, a short article reported on a case
products liability law. The article explained
that a plaintiff can win a products liability suit without proving
any negligence on the part of the defendant. The plaintiff does
need to show that the product had some type of "defect," and
that the defect caused the plaintiff’s injury. In order to
convince the jury on these points, the plaintiff often relies heavily
on a so-called expert, who may testify, for example, on the effects
of radiation on those living near Three Mile Island, or on "emerging" scientific
evidence of something or other.
v. Witco Chemical Corp., 225 N.J. Super. 485, 542 A.2d
975 (1988), was a typical case. The plaintiff was the wife of Ronald
Rubanick, who had died of colon cancer. Mrs. Rubanick claimed that
her husband's cancer was caused by exposure to chemicals containing
polychlorinated biphenyls (PCBs) manufactured by Monsanto Chemical
Corporation and sold to Witco, where Rubanick had worked. Mrs.
Rubanick sued Witco and Monsanto, among others. Her only evidence
that Rubanick's exposure to PCBs at Witco was the cause of his
cancer was to be expert testimony by Earl Balis, a cancer researcher.
What type of evidence would Dr. Balis offer? Dr. Balis planned
to testify to the following: (1) a higher-than-expected incidence
of cancer at Witco; (2) animal studies involving PCB ingestion;
(3) one study in a journal of industrial medicine, and (4) the
variance of cancer types in a PCB-exposed population. One can only
imagine the quality of the statistical evidence offered. (This
is an age when findings of human carcinogenicity are made on the
basis of feeding to mice grotesquely massive amounts of chemicals
no human or mouse normally ingests at all.) On this basis, Dr.
Balis proposed to testify that, in his opinion, Rubanick died as
a result of exposure to PCBs at Witco.
1990 Page 3
produced expert testimony rebutting the charges that such PCB
exposure causes cancer, evidence that Rubanick's
cancer must have been contracted before Rubanick was allegedly
exposed to PCBs,
evidence that Witco employees had normal blood
levels of PCBs and (as far as can be determined from the
court's opinion) evidence that Rubanick's only exposure to
any chemical containing PCBs consisted of rolling 45 drums
substances through a "contaminated" area.
In the area
of products liability, the forces of change in substantive law,
premises and breakdowns in scientific standards
have often resulted in the admission of testimony every bit as
baseless as that offered by the plaintiff in the Rubanick case.
In such cases, each side puts an "expert" on the stand;
both experts present their opinions; the lawyers attempt to show
the shortcomings of the other side's experts; and the confused
jury, having been instructed that fault is not at issue, having
watched an impressive-sounding expert expound on "emerging" evidence,
believing in their heart of hearts that business cares nothing
for the ordinary guy or that the party with more money should pay,
may find against a defendant who is innocent even given debased
substantive standards. Indeed, in a case such as the Rubanick case,
the harm extends much further. Once Monsanto loses a case in which
it is found that PCB exposure causes cancer, Monsanto may be precluded
by principles of collateral estoppel from disputing this in subsequent
cases brought by other plaintiffs.
There is some
good news. The wheel is turning a bit, and some courts have refused
to admit expert evidence which does not meet
minimum standards. In the Rubanick case, the judge rejected the
plaintiff’s expert witness on Monsanto's motion. The court
found that the proffered testimony had insufficient scientific
basis, and that the expert had brought little to court other than
his credentials and his subjective opinion.
PROPOSITION 103 REVISITED
As reported in the Summer 1989 issue of this Newsletter, Proposition
103 was adopted by the voters of California on November 8, 1988,
in order to force insurance companies to provide automobile insurance
on terms the companies would not accept voluntarily. One part of
the Proposition provided that an insurance policy could be cancelled
only for nonpayment of premium, fraud or material misrepresentation,
or a substantial increase in the hazard insured against. In Calfarm
Insurance Co. v. Deukmejian, 48 Cal. 3d 805, 771 P.2d 1247,
258 Cal. Rptr. 161 (1989) the insurance industry attacked the provision
because it impaired the obligation of contracts. The California
Supreme Court rejected the attack largely because an insurance
company could avoid renewing its contracts by discontinuing its
business in California.
company seeking to withdraw from California must comply with
Code Sections 1070-1076. Section 1071.5 requires
the withdrawing company to "discharge its liabilities to residents
of [California] . . . [and] cause the primary liabilities under
[policies in force] to be reinsured and assumed by another admitted
insurer." California's Commissioner of Insurance is required
to examine the books of the withdrawing company to make sure Section
1071.5 is followed.
The day before the election at which voters adopted Proposition
103, five related insurance companies sent the California Department
of Insurance their applications to withdraw as insurers in California.
These applications were contingent on the passage of Proposition
103. The companies also notified the Department of their intention
not to renew any private passenger automobile insurance policies.
The day after the election, the companies began issuing notices
of nonrenewal to their policy holders.
The Department resisted the companies' applications. After extensive
negotiations and an administrative hearing, the Commissioner determined
that the companies had violated Proposition 103 by issuing the
blanket notices of nonrenewal. She ordered the companies to renew
all automobile policies not exempted by the terms of Proposition
103. She also imposed a penalty of $10,000 for each day the companies
failed to comply.
took the position that an insurance company could refuse to renew
a policy only after it received permission to withdraw
from California, following a process she characterized as "lengthy
and detailed." Under Section 1071.5, the company would first
have to find another company willing to assume each of its policies.
Of course, the second company would be required to renew them ad
infinitum unless it withdrew and found another taker.
The companies sought relief in the California Supreme Court. A
bare majority (4-3) of the court in Travelers Indemnity Co.
v. Gillespie, 50 Cal. 3d 82, 785 P.2d 500, 266 Cal. Rptr. 117 (1990),
refused to accept the Commissioner's argument:
If the Commissioner's
understanding were accurate, it is difficult to see how an
policies in force could ever leave the state. Notices of
issued before cancellation of the insurer's certificate would
1990 Page 4
under the mandatory renewal provision, but an insurer could not
withdraw with automobile policies in force
action taken to service
those policies after withdrawal, including
presumably the sending of nonrenewal
notices, would constitute
the illegal transaction of business by the nonadmitted insurer.
ruled that "once
the withdrawal process has been properly commenced . . . the
applicant has the particular status
of a withdrawing insurer and may terminate its outstanding automobile
policies by nonrenewal."
Three dissenters adopted the Commissioner's argument. They argued
that the language of Proposition 103 was clear. As long as an insurance
company does business in California, it cannot refuse to renew
policies. And until the Commissioner issues a certificate of withdrawal,
the company is doing business in California. (No one addressed
the question of how the state could force the companies to renew
even one contract without impairing the obligation of the contract.)
expressed great concern that, since "[m]arket
assistance plans and joint underwriting authorities require advance
planning," the time between the application to withdraw and
the time when the application would be granted was necessary to
allow the Commissioner to find alternate coverage for the customers.
No such concern was expressed for the insurance companies.
An interesting and important point arose during the hearing process.
After the evidence was taken at the administrative hearing, the
hearing officer took the matter under submission. The parties then
submitted briefs outlining their respective positions. The Commissioner
announced that she had read all briefs and the decision of the
hearing officer and then announced her decision. Afterwards, the
companies requested that she disclose the decision of the hearing
officer, and she refused. This refusal was approved by the California
its protests of abusive criminal prosecutions under the Racketeer
and Corrupt Practices Act ('RICO"),
The Wall Street Journal recently shone a particularly bright spotlight
on this dangerous law. RICO, a federal statute passed in 1970,
was intended to aid in the fight against organized crime which
infiltrated and corrupted legitimate businesses. But RICO is so
broad that prosecutors have been able to use it as the basis for
bringing crushing, criminal proceedings against purely legitimate
makes it unlawful for any person, through a "pattern
of racketeering," to acquire or maintain any interest in or
control over an enterprise engaged in or affecting interstate commerce
or to invest income received from a pattern of racketeering in
such an enterprise. The statute defines "racketeering activity" to
include such crimes as murder, arson and robbery, but also mail
fraud and wire fraud (basically, fraud effected by any use of the
mail or by wire, radio or television) and securities fraud. A "pattern
of racketeering" is simply two or more acts of racketeering
RICO charge is no laughing matter. Aside from the possibility
and the forfeiture of the proceeds of the racketeering
activity and any interest in the legitimate "enterprise" obtained
through racketeering activity, a RICO defendant is subject to an
unusual provision. RICO provides for the sweeping pretrial (even
pre-indictment, in some cases) restraints on the assets of the
legitimate enterprise. (There is, incidentally, a civil cause of
action under RICO for any person injured by a violation of the
Act. To encourage the assertion of claims, winning plaintiffs in
civil RICO actions are awarded treble damages and costs, including
is broad, and it has often been broadly interpreted by the courts.
Moreover, certain of its predicate crimes (mail
fraud, wire fraud and securities fraud) are, as described by The
Wall Street Journal, "notoriously open-ended." The consequence?
Not only may a business or an individual be charged with a securities
law violation, for example, that should not be illegal to begin
with, but if the "crime" is a predicate crime under RICO,
the defendant may be subject to pretrial restraints and
penalties that could cow even the most determined resisting---and
into plea bargaining and settling. It is RICO that is widely blamed
for the demise of Princeton/Newport Partners, an investment
firm forced into dissolution before a trial of the
(primarily tax-related) charges against it. Indeed, many
believe that RICO charges and the threat of pretrial restraints
against Drexel Burnham Lambert, resulting in a $650 million settlement,
were a significant factor in that firm's demise.
Street Journal article focused on an excerpt from a transcript
of an FBI wiretap of Boston mob leader Gennaro Angiulo and his
1990 Page 5
that shows how RICO has been turned on its head to attack legitimate
businesses more often than the mob (who,
by the way,
are making most of their money doing things that should not
be illegal either!):
Zannino: We're a shylock [loan shark].
Angiulo: We're a shylock.
Angiulo: We're a [expletive] bookmaker.
Angiulo: We're selling marijuana.
Zannino: We're not infiltrating.
Angiulo: We're illegal here, illegal there . . .
arsonists. We're every [expletive] thing.
Angiulo: So what?
Angiulo: The law does not cover us, is that right?
Zannino: We're not infiltrating legitimate businesses.
Angiulo: I wouldn't be in a legitimate business for all
the[expletive] money in the world.
companies around the nation are beginning to offer "Caller
ID" to their subscribers. Caller ID is an optional service
that allows you, when your phone rings, to display the number of
the phone from which the incoming call is being placed. The number
appears on the electronic display of a small box that the subscriber
buys for less than $100. The service itself costs less than $10
The phone company can also supply subscribers with a dial-in code
that will block the display of their own number when they are placing
outgoing calls. If such codes were made universally available,
however, they would obviously defeat the effectiveness of Caller
The first people to apply for the blocking codes would
be the crank callers and obscene callers against whom Caller ID
is so effective.
raging in legislatures and living rooms throughout the nation
whether Caller ID is a good idea. Opponents point
out that to know a phone number is to know an address, thanks to
widely available "criss cross" directories that list
phone numbers in numerical order, with associated names and addresses.
They note that many persons---victims of rape and others calling "hot
lines" for help, police informants, battered spouses in hiding, "whistleblowers" reporting
criminal activities---legitimately seek anonymity when making phone
calls. In addition, they point to the adverse consequences of a
system that would enable commercial enterprises to know exactly
who is calling to ask whether certain items are in stock, or what
their price is.
The advantages of Caller ID are obvious. Not only is it a convenient
way to screen incoming phone calls, but it also permits the victims
of obscene and harassing calls to turn the tables on their cowardly
there is no "right" answer to whether Caller
ID is good or bad. Different subscribers may prefer different options,
each for perfectly legitimate reasons. It is this kind of problem
that the institution of private property is so well designed to
solve. If telephone companies were entirely private competing enterprises,
they would be free to offer or not offer Caller ID according to
what their market research revealed about their customer preferences.
Some companies might offer it, and some might not. Eventually,
the economic choices of the consumers, who are paying for the services,
would decide the issue.
It is time
for citizens to take back from government the authority that
has been ceded to government over the years as to private
economic matters. State
1990 Page 6
have no more business holding hearings on Caller ID than on whether
Crest toothpaste should come in a tube or
MANDATORY IOLTA IN MARYLAND
"IOLTA" stands for "interest on lawyer trust accounts." Lawyer
trust accounts are the escrow accounts into which lawyers place
clients' funds in order to avoid mixing those funds with the attorneys'
funds. The interest on such accounts,
while generally insignificant as to any given client' money, may
in the aggregate amount to a meaningful sum. Of course, the exact
dollar figures depend on each lawyer's practice.
General Assembly, at the behest of pro bono activists, recently
a law forcing banks to pay over, without consulting
attorneys or their clients, the interest on small lawyer trust
accounts (usually those yielding less than $50 in interest) to
the Maryland Legal Services Corporation, an umbrella organization
that funds various pro bono groups. This program is called "mandatory
IOLTA." (California has had mandatory IOLTA for about eight
Mandatory IOLTA is wrong because it improperly interferes with
the contractual relations between attorney and client, who should
be free to negotiate ownership of the interest.
Mandatory IOLTA is a particularly sneaky tax that has proven suited
to its purpose in Maryland. In 1989, mandatory IOLTA yielded $3.5
million for pro bono groups in Maryland, compared with $1 million
in 1988 when the IOLTA program was voluntary.
In the legislative session just concluded, certain legislators
attempted to repeal the law, but for non-fundamental reasons. The
objections raised were that (1) the money was used to fund suits
by prisoners against the state, and (2) the program put a heavy
compliance burden on banks relative to lawyers. Mandatory IOLTA
is fundamentally wrong because it violates private, consensual
relations between attorneys and clients. Attorneys must begin to
stand up for their rights and stop apologizing for making money.
ABA HOUSE OF DELEGATES ADOPTS PRO-ABORTION STANCE
At its mid-year
meeting in Los Angeles in February, 1990, the American Bar Association's
policymaking House of Delegates voted
to oppose legislation and any other governmental action that would
interfere with a pregnant woman's constitutional right, in consultation
with her physician, to terminate a pregnancy "at any time
before the fetus is capable of independent life," or thereafter
if necessary to protect the woman's life or health. The
debate over the abortion issue was heated, but the final
vote indicated that the delegates favored the pro-abortion
position by 238 to 106.
Several influential members of the ABA threatened to resign from
membership if the delegates adopted a pro-abortion stance, and
one of them, the ABA's treasurer, made good his threat and resigned
his office and ABA membership almost immediately after the vote.
While the position adopted by the House of Delegates falls short
of recognizing a woman's absolute right to terminate a pregnancy,
it is significantly pro-abortion, and is therefore encouraging.
It is also noteworthy that membership in the ABA, unlike membership
in integrated state bars, is not mandatory, and that individuals
such as the ABA's ex-treasurer who oppose a policy adopted by the
House of Delegates are free to resign or forego membership without
loss of licensure.
Copyright © 1990
The Association for Objective Law. All rights reserved. The Association
for Objective Law is a Missouri non-profit
corporation whose purpose is to advance Objectivism, the philosophy
of Ayn Rand, as the basis of a proper legal system.