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BANKING Bank liable for tax effect of investment decision A bank was liable for the adverse tax consequences of its failure to invest the funds of an Iraqi general pursuant to his instructions, the Georgia Supreme Court held on April 14. Namik v. Wachovia Bank of Georgia, No. S04G0857. General Ibrahim Ali, an Iraqi national, purchased a six-month $2.65 million certificate of deposit from Wachovia Bank of Georgia. Ali instructed the bank to invest the proceeds only in U.S. government issues. When the certificates matured in 1989, the bank was unable to locate Ali for investment instructions, and thus, invested the funds in an income tax-free money market fund. The bank learned later that Ali had been arrested upon his return to Iraq and had died in prison. Ali’s estate was forced to pay approximately $1.5 million in estate tax and interest. The beneficiaries of Ali’s estate sued Wachovia, alleging it breached its fiduciary duty because, had it invested the funds as directed by Ali, the estate taxes would have been avoided. A trial court held for the beneficiaries, but an intermediate appellate court reversed. The beneficiaries appealed. Reversing, the Georgia Supreme Court held that there was no error in the trial court’s judgment that the bank was liable for breaching its fiduciary duty. The court said: “The Court of Appeals’ focus in its opinion on the lack of specific statutory requirements to consider estate tax consequences or to be aware of tax laws which it labels ‘obscure’ misses the point. Notwithstanding the absence of such specific statutory requirements, the evidence authorized the trial court to find . . . that a trustee in Wachovia’s position should have been aware of the consequences of not following Ali’s instructions and of investing as it did.” Full text of the decision CIVIL PRACTICE No federal say on actions started before new law The Class Action Fairness Act of 2005 does not create federal subject-matter jurisdiction for actions filed in state court prior to its enactment, the 10th U.S. Circuit Court of Appeals held on April 11. Pritchett v. Office Depot Inc., No. 05-0501. Romia Pritchett filed a class action complaint against Office Depot in Colorado state court on April 2, 2003, alleging failure to pay overtime to overworked assistant store managers. On Feb. 18, 2005, Congress enacted the Class Action Fairness Act, which includes two sections-28 U.S.C. 1332(d) and 1453-that expand subject-matter jurisdiction of federal courts over certain class actions. On March 1, 2005, two weeks before the scheduled trial date, Office Depot removed the case to Colorado federal court, citing jurisdiction pursuant to the new act. But the district court granted the plaintiffs’ motion to remand. Office Depot petitioned the 10th Circuit for leave to appeal. The 10th Circuit denied the petition for lack of subject-matter jurisdiction on March 18, then published its opinion on April 11, explaining that the act’s amendments apply to actions “commenced” on or after the act’s enactment. The court looked at presumptions, legislative history, prior precedent on “commencement” and public policy. It agreed with the plaintiffs that this class action “commenced just once, when it was initially filed in state court,” before the act’s enactment, rejecting Office Depot’s claim that a pre-existing state court action is “commenced” in federal court on the date of removal. Full text of the decision CONSTITUTIONAL LAW No constitutional breach in board’s invocation Neither a county board of supervisor’s nonsectarian invocation nor its refusal to allow a witch to give the invocation violated the U.S. Constitution, the 4th U.S. Circuit Court of Appeals held on April 14. Simpson v. Chesterfield County Bd. of Supervisors, nos. 04-1045 and 04-1141. The Chesterfield County, Va., Board of Supervisors maintained a list of religious leaders of various denominations who were invited to deliver nonsectarian invocations at the board’s meetings. Cynthia Simpson, a self-proclaimed witch and member of the Reclaiming Tradition of Wicca, asked to be added to the list, but the board refused. Simpson sued in federal court, arguing that the board’s refusal violated the establishment clause of the First Amendment to the U.S. Constitution because it impermissibly advanced Judeo-Christian religions. In addition, she argued that it violated her First Amendment rights as well as the equal protection clause of the 14th Amendment. A district court held for Simpson on her establishment clause claim, but held for the county on the remaining claims. Both sides appealed. Affirming in part and reversing in part, the 4th Circuit held for the county on all claims. The court held that the invocation was not intended to be a forum for exchanging views, public discourse or the exercise of religion. In addition, the court held that the nonsectarian invocation complied with the requirements of the U.S. Supreme Court’s 1983 decision in Marsh v. Chambers. The court said, “Because the policy does not ‘proselytize or advance any one or disparage any other faith or belief,’ we believe it fits within the Supreme Court’s requirements for legislative prayer.” Full text of the decision CRIMINAL PRACTICE No common law right of access to grand juries There is no common law right of an individual to present evidence or testimony unilaterally of a crime to a grand jury, the New Jersey Supreme Court ruled on April 11 in a matter of first impression. In the Matter of the Grand Jury Appearance Request by Larry S. Loigman, No. A-51-04. Larry Loigman, an attorney, twice sent letters to the Monmouth County grand jury saying he had information from a client on irregularities in the local operation of a state-run program. Loigman offered to appear before the grand jury to provide detailed information, but a judge told him that it was inappropriate to communicate directly with the grand jury, and that he should instead contact the local prosecutor. Loigman filed a petition with the same judge for an affirmation that Loigman had a right, duty and obligation to inform the grand jury about the crime. The judge rejected his petition, but the appeals court reversed, declaring that citizens have a right of direct access to the grand jury, subject to judicial screening. The New Jersey Supreme Court reversed, holding that here is no historical or constitutional right for private prosecutors, i.e., citizens. The state’s public prosecutors are entrusted with the duty to bring meritorious complaints of potential criminal conduct. Requiring citizens to go through state prosecutors provides judicial oversight and weeds out frivolous complaints. Full text of the decision FAMILY LAW Same-sex marriages barred in Oregon Same-sex marriages are not allowed under Oregon’s statutes or its constitution, the Oregon Supreme Court ruled on April 14. Li v. Oregon, No. S51512. The Multnomah County Board of Commissioners ordered the local records division to issue marriage licenses to same-sex couples. Approximately 3,000 licenses were issued, and marriage ceremonies for the applicants were held, but the state registrar refused to register the documents, saying that they were invalid under the Oregon law regulating marriages. Nine of the same-sex couples and various civil rights organizations sued the state seeking a declaration that the marriage laws were unconstitutional. The trial court found the law to be unconstitutional and the appeals court certified the issue to the state high court. While the appeal was pending in 2004, Oregon voters adopted a constitutional amendment stating that the state’s “policy” defined marriage as being between one man and one woman. The Oregon Supreme Court reversed. The primary statute, which allows marriage “by males . . . and females,” does not explicitly limit marriages between same-sex couples, but when read in context of the other statutes in the section, there is “no doubt” that marriage in Oregon is limited to opposite-sex couples. Furthermore, though the amendment refers only to the state’s “policy,” it nonetheless has the force of law. Thus, statutory law prior to the amendment prohibited same-sex marriages, and the 2004 amendment will bar same-sex marriages in the future. Full text of the decision GOVERNMENT DA must pay phone company for records A district attorney seeking certain phone records must pay the phone service provider for them, under the Electronic Communications Privacy Act, the 7th U.S. Circuit Court of Appeals held on April 12. Ameritech Corp. v. E. Michael McCann, No. 04-2262. Michael McCann, the district attorney for Milwaukee County, Wis., demanded that Ameritech, a phone service provider, give it certain terminating automated message accounting reports (terminating AMA reports), which are phone records that have been expensive for Ameritech to create and provide. Ameritech sued the DA to enforce 18 U.S.C. 2706, part of the Electronic Communications Privacy Act, which requires any “governmental entity” that demands certain phone company information to pay for the expense of its provision. A Wisconsin federal court ruled that the DA must comply with Section 2706 whenever it governs, but didn’t specify when it does. Ameritech appealed. The 7th Circuit vacated and remanded. The issue was whether terminating AMA reports fall within an exemption in Section 2706(c), which requires free provision of records or other information “maintained by” a common carrier that relate to telephone toll records. The circuit court held that the exemption does not apply, chiefly because the DA sought reports that Ameritech does not “maintain” but “must create on demand.” Full text of the decision IMMIGRATION LAW Denial of continuance violated right to counsel An immigration judge abused his discretion and violated an incarcerated alien’s right to counsel by allowing him only five days to obtain counsel in a removal proceeding, the 9th U.S. Circuit Court of Appeals held on April 14. Biwot v. Gonzales, No. 03-71456. Jona Biwot, a Kenyan national studying at a college in Washington state, was involved in a campus brawl and convicted of assault. As a result, the Immigration and Naturalization Service began removal proceedings. Biwot, who was incarcerated, attempted to obtain counsel, but legal service providers told him it would take up to two weeks to get him a lawyer. Nevertheless, giving Biwot only five days to obtain counsel, an immigration judge proceeded with the removal proceeding, and determined that Biwot was removable and ineligible for relief. Biwot appealed to the Board of Immigration Appeals, which held that it lacked jurisdiction because Biwot had told the immigration judge he would not appeal. Biwot petitioned for review to the 9th Circuit. The 9th Circuit held Biwot’s waiver of his right to appeal was not a “considered and intelligent” waiver and granted his petition for review on the denial of counsel claim. The court held that allowing Biwot only five days to obtain counsel while he was incarcerated violated his right to counsel. The court said, “Under these circumstances, denial of a continuance was an abuse of discretion because it was tantamount to denial of counsel.” Full text of the decision LEGAL PROFESSION Lawyer-client privilege applies to agency counsel The attorney-client privilege applies to state agencies and their in-house counsel even where that counsel is not an assistant attorney general, the Ohio Supreme Court ruled on April 13. State ex rel. Leslie v. Ohio Housing Finance Agency, No. 2004-0105. As chief of compliance for the Ohio Department of Development, attorney Mark Leslie’s duties included conducting ministerial functions for the Ohio Financing Agency. After Leslie was terminated, he brought a complaint in the Ohio Court of Appeals against the agency and other officials for violating certain laws, including the granting of unauthorized loans. Leslie requested a writ of mandamus to force the respondents to cease their illegal activities. In his reply to the respondents’ motions to dismiss, Leslie attached various documents, including legal advice from in-house counsel to agency staff. The respondents sought to strike and seal documents protected by attorney-client privilege. The court of appeals followed its 1996 opinion in State ex rel. Olander v. French holding that there is no attorney-client privilege between a state agency and its in-house counsel unless the attorney is a member of the attorney general’s office. The Ohio Supreme Court affirmed in part and reversed in part. Rejecting Olander, the court explained that the objective of the attorney-client privilege is to further full and frank communication between attorneys and their clients. The privilege applies to government agencies and employees, who would otherwise be at a disadvantage in litigation. Full text of the decision

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