ALBANY - Attorneys representing several New York City bar groups will argue in the state’s highest court tomorrow that the city should not be allowed to adopt a plan the groups insist will undermine their role in the assigned-counsel program.

The high-profile Matter of the New York County Lawyers’ Association v. Bloomberg, 155, is one of 31 cases the Court of Appeals will hear in a two-week round of arguments that begins today. Decisions will follow starting in the middle of October.

The court also will take up Matter of Galasso, 170, in which a lawyer is challenging his two-year suspension for failing to properly supervise his brother, his law firm’s bookkeeper, who embezzled millions of dollars from clients.

In January 2011, the Bloomberg administration proposed in Chapter 13 of the Rules of New York City to revise the city’s long-standing 18-B plan to create “conflict agencies” assigned to represent indigent defendants who cannot be represented by any of seven main legal services providers.

Since 1965, those cases have been assigned by judges to private attorneys; there currently are about 1,000 such lawyers. The city argues that its plan would be more efficient. The bar groups counter that services would deteriorate and fear the income of 18-B attorneys would decline.

But the legal argument the court will consider is whether the city is ignoring the bar groups’ statutory role in the assignment program. That claim so far has been rejected at both the trial level and at the Appellate Division, First Department.

“The only significant change that was made to the City’s indigent defense plan by Chapter 13, to which petitioners object, is that the City has opened up what had once been a virtual monopoly by private attorneys of conflict cases…making such cases available to institutional providers,” Assistant Corporation Counsel Julian Kalkstein argues in the city’s brief.

Kalkstein suggested that the bar groups oppose the plan because it “could result in less reliance on private, essentially freelance attorneys assigned from the Criminal Defense Panels which are administered in accordance with the bar associations’ plan, and greater reliance on institutional providers, with attendant economies of scale and increased accountability” for taxpayers.

The city maintains that it has the authority to award contracts for legal services based on competitive bidding and that the Bloomberg plan, contrary to what the bar groups argue, continues to call for a “blended” system of institutional providers and private attorneys under the bar association plans.

Jonathan Pressment, an attorney for Haynes and Boone, will argue for the bar groups that the Bloomberg plan runs counter to Article 18-B, §722, of the County Law, which allows assignment of cases to a legal services group or according to a plan devised by the local county bar associations. The assignment of cases is up to judges under the 1965 local law, not political entities such as a mayor’s administration, Pressment will contend.

Should the Bloomberg plan go into effect, the role of the county bar associations “will be shrunk to that of a servant, bound to administer a so-called ‘bar plan’ that they did not create, to which they do not agree and which has been foisted upon them by respondents,” Pressment argues.

In addition to the New York County Lawyers’ Association, the opponents of the city’s plan include the four outer-borough bar groups.

Zoe Jasper of Satterlee Stephens Burke & Burke also will argue on behalf of intervenors the New York Criminal Bar Association and Anastasios Sarikas, an 18-B provider.

Jasper called the Bloomberg plan an “astounding act of executive hubris.”

Manhattan Supreme Court Justice Anil Singh (See Profile) and a 3-2 First Department panel upheld Bloomberg’s revision of 18-B procedures, though the First Department majority said the plan risks the loss of a “dramatic” number of experienced attorneys to the “obvious detriment of the criminal justice system” (NYLJ, March 16).

Implementation of the plan has been stayed pending resolution of the court battle.

Lawyer’s Suspension

On Sept. 11, the court will consider the fairness of a two-year suspension given to attorney Peter Galasso of Galasso, Langione, Catterson & LoFrumento by an Appellate Division, Second Department, disciplinary panel. Galasso was suspended for failing to prevent his brother from embezzling more than $4 million from his firm’s clients.

The disciplinary committee cited Galasso’s failure to exercise “appropriate vigilance” over the activities of his brother, Anthony, at the Garden City firm.

The suspension has been stayed pending the appeal’s outcome.

Peter Galasso argues in papers submitted to the court by Jeffrey Catterson that the disciplinary committee, in essence, is requiring attorneys to be “insurers of all escrow deposits” by punishing him for the actions of his brother. If his suspension stands, Galasso said lawyers will be reluctant to hold escrow funds on behalf of clients and the clients of all lawyers will suffer as a result.

He also notes that he cooperated in the investigation of his brother, who is in prison.

The grievance committee for the Ninth Judicial District responded that Peter Galasso failed to “take any meaningful responsibility” for safeguarding funds his firm was holding as fiduciary for clients.

Galasso failed to detect thefts perpetrated by his brother over a 30-month period, in one case involving more than 90 online money transfers from just one escrow account, Matthew Lee-Renert argues for the committee.

Lee-Renert says the recommended sanction is not unprecedentedly harsh, and the suspension is in keeping with a long tradition of attorneys receiving significant punishment for failing to prevent or detect the “invasion” of escrow funds held in their name.

Galasso “simply was held to the standards of responsibility that have been established in order to regulate the profession and protect the public,” the grievance committee’s brief says.

Exotic Dancing

Other matters before the Court include:

• Matter of 677 New Loudon Corporation v. New York State Tax Appeals Tribunal, 157, in which the court will take up tomorrow the question of whether exotic dancing is a “dramatic or musical arts” performance with admissions fees exempt from the sales tax.

The case involves Nite Moves, a suburban Albany adult club which is disputing its liability for nearly $125,000 in sales taxes plus interest on general admission charges and for private “couch dances” offered patrons.

A hearing officer for the state Division of Taxation, based largely on the testimony of an anthropological expert, ruled that the dances are “live dramatic choreographic performances” exempted from sales taxes under state statutes (NYLJ, March 26, 2009).

But both the Tax Appeals Tribunal and the Appellate Division, Third Department, held that the exotic dancing is not “art” and, thus not eligible for exemptions.

• On Sept. 11, the court will review People v. Harris, 174, a controversial murder case from Tioga County in which Calvin Harris was twice found guilty of killing his wife, Michele, even though neither her body nor a murder weapon were ever found.

Harris was convicted both times largely on the strength of DNA evidence identifying splattered blood found in the Harrises’ kitchen and garage.

Calvin Harris’ first conviction in 2007 was set aside in Tioga County Court after a witness came forward to say he had seen Michele with a younger man who was not her husband on the night she disappeared. That version of events was corroborated by another witness, who died before a second trial could be held.

Harris was convicted of second-degree murder a second time in 2009. A 3-1 Third Department panel upheld the conviction over the objections of the dissenter, who said the blood splatters were not extensive enough to indicate a fatal injury and that numerous errors were made by the trial judge, including the seating of a juror who admitted to having a suspicion about Harris’ guilt during voir dire (NYLJ, July 29, 2011).

• The Court will hear arguments today in Hudson Valley Federal Credit Union v. New York State Department of Taxation and Finance, 154, about whether federal credit unions are exempt from New York’s mortgage recording tax. Supreme Court and the First Department both ruled the credit union was liable for the tax based on Court of Appeals rulings in 1939 and 1959.

In an amicus curiae brief, the government argues federal credit unions are not subject to the mortgage recording tax under congressional decree and U.S. Supreme Court precedent.