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January 1980 Vol. 14, No.1
THE OFFICIA LPUBLICATION OF THE ARKANSAS BAR ASSOCIATION
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Arkansas Lawyer SPECIAL FEATURES
Cover: The Justice Tree 52 Reverse Discrimination After Stephen W. Jones Bakke and Weber Philip K. Lyon . 4 Sources of Information in Tom H. Davis 12 Aircraft Crash Cases Arikansas Corporate Franchise ....James E. McClain, Jr. 18 Tax Act of 1979 Legal Services for the Don M. Hollingsworth 34 Poor in Arkansas Bertram S. Silver 36 Corporate or Partnership Psychological Overlay in .Dr. John Ewing Harris 42 Worker's Compensation Book Review: The Negligence Case: 28 Comparative Fault by Henry Woods 0
OFFICERS E. Harley Cox, Jr., President
Phillip Carroll, President-elect James A. Buhry, Secretary-Treasurer
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Robert L. Jones, III David R. Malone Thomas D. Ledbetter Tom B. Smith Robert G. Serio LeRoy Froman William C. Bridgforth Dennis Shackleford Clint Huey Christopher Barrier Webster L. Hubbell Gus B. Walton, Jr.
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Phillip Carroll Wayne Boyce James A. Buttry W. Russell Meeks, III John F. Stroud Herschel H. Friday
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President's Report Eo Hartey Cox, Jr. 2 C. R. Huie 40 Juris Dictum. 22 Legal Economics Law School News 20 B. Tarkington 30 Oyez-Oyez In Memoriam .48 Executive Council Notes James A. Buttry 32 IBC Service Directory , .•................. 25 Lawyer's Mart C. E. Ransick 51 Addenda ............•. Conlext W. Christopher Barrier 8 AICLE News Claiboume W. Patty, Jr. 49 The Arkansas Bar Foundation Boyce Love 3 Paul D. Williams 33 Tax Tips Robert R. Keegan 10 Advising Innovators 0
EX OFFICIO E. Harley Cox, Jr.
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The Arkansas Lawyer (USPS 546-040) is published quarterly by the Arkansas Bar Association, 400 West Markham, Uttle Rock, Arkansas 72201. Second class postage paid at little Rock, Arkansas. Subscription price to non·members of the Arkansas Bar Association $6.00 per year and to members $3.00 peryaar included in annual dues. Any opinion expressed herein is that of the author, and not necessarily that of the Arkansas Bar Association, The Arkansas Lawyer, or the Editorial Committee. Contributions to The Arkansas Lawyer are welcome and should be sent in two copies to the Arkansas Bar Genter, 400 West Markham, Little Rock, Arkansas 72201. All inquiries regarding advertising should be sent to The Arkansas Lawyer. above address.
January 1980/Arkansas Lawyer/1
PRESIDENT'S REPORT by E. HARLEY COX, JR.
ONCE SAVED ALWAYS SAVED? Many devout Christians differ on the answer to the question "If you are 'saved', can you fall from grace?" The basis of this difference appears to be whether a person having reached a state of salvation in his relationship to God can ever "fall from that grace" so as no longer to be saved, The answer of some to the question is that a person who has received the salvation of God cannot lose that relationship, and if they sUbsequently indicate by their actions that they are no longer Christlike, they were not really saved in the first place. Arkansas has accepted the premise that (with some extreme exceptions) once a lawyer is licensed he is always a lawyer. That privilege accorded under our law and by the public gives him the right to perform difficult and complex acts necessary in commercial and interpersonal relationships for money. The fact that after he is licensed the lawyer does not keep himself abreast of changes in the law or perform adequately the responsibility entrusted to him by the public does not cause him to lose his standing as a lawyer unless he goes to the extreme of dishonesty necessary to cause his disbarment. This kind of conduct by lawyers cannot be supported under the premise that if he is licensed and subsequently does not properly carry out his responsibility to the public he shouldn't have ever been licensed in the first place.
It is for this very basic reason that I have recently changed my opinion regarding mandatory continuing legal education. Certainly, to require that lawyers demonstrate they have participated in some formal legal training as a condition to their continued licensing is no guarantee of their competence. But it can hardly be disputed that this is much better than no assurance at all that lawyers are maintaining their skills. In other words, it is at least a step in the right direction. MANDATORY CONTINUING LEGAL EDUCATION? Don Schnipper, Chairman of the Legal Education Committee, has been studying the general subject of mandatory continuing legal education, and at my request, that Committee is considering whether your Association should recommend the adoption of a rule by t~,,, Arkansas Supreme Court requiring some form of continuing legal education as a condition to maintenance of a license to practice law. Fortunately, we have able men giving attention to this important concern. 2/Arkansas Lawyer/January 1980
It is my belief that the persons who read this item in the Arkansas Lawyer would not be affected in any direct way by a rule requiring continuing legal education as a condition to continuing the practice of law. The (hopefully) small number of lawyers who would be directly affected by this rule probably include principally lawyers who are not really engaged in the active practice but who occasionally "dabble" in the practice. My opinion is that the profession of law is too complex and involves too great a public interest to allow persons to "dabble" in the area without a commitment to maintaining competence. Any lawyer who has practiced for more than ten years when looking back realistically over that time will find that the law practice, as well as the law which it involves, has changed drastically in that time. It continues to change at an ever increasing rate, and the knowledge of a lawyer informed about the laws of today in two years will be obsolete unless he has added to his knowledge from exposure to some formal continuing legal education processes.
WHAT YOU SEE IS WHAT YOU GET Your Association is dedicated to keeping the standards of the legal profession in Arkansas at the highest level. There is no room for sluggards or crooks in the practice of law, and it is time that we not only eliminate anyone who falls close to those categories but that we make this fact very evident to the public. Each time a lawyer deals incompetently or dishonestly with his clients' affairs, the reputation of every lawyer is tamished and the profession suffers. Tragically, when the profession suffers, our entire system of government suffers in the eyes of the persons it serves. The great trust given to lawyers must not be violated by our lack of will or energy. Your Association will continue to be active in three areas: (1) To eliminate from the profession those lacking in commitment and integrity; (2) To assist those (the great majority) of the Bar who want to make themselves better servants of their public trust; and, (3) To make this effort very clear to the public. Your involvement in these commitments is essential to their success.
ARKANSAS BAR fOUNDATION by Boyce Love Chairman
SHOULD THE FOUNDATION CONSIDER USE OF INTEREST FROM ATTORNEY TRUST ACCOUNTS TO FINANCE PUBLIC SERVICES? Several state Bar Foundations around the country are currently adopting, working on, or considering programs whereby attomey trust accounts are set up to produce interest, which is paid to the foundation, or some other suitable organization, and used for public good. When I first heard about such plans, I was not favorably impressed if the money in the trust accounts, which belongs to clients, produces interest, why shouldn't the interest go to the clients rather than for some purpose that a lawyers' group has decided is for the public good? I have never been 100% comfortable with the public paying for county law libraries, and, at first blush, this idea of using interest produced by investment of client funds for lawyer designated purposes seemed to me to be a breach of the obligation of the lawyer to his client. However, as so often happens, now that I've leamed more about it, I'm having second thoughts. In March of 1978 the Florida Supreme Court approved a plan whereby interest eamed on Florida attomey trust accounts could be used by the Florida Bar Foundation for specified public service activities. In re Interest on Trust Accounts, 356 So. 2d 799 (Fla. 1978). The Court authorized the money to be used: (1) to provide legal aid to the poor; (2) to provide for the adequate delivery of legal services to all members of the public; (3) to augment the clients' security fund with a view toward full reimbursement; (4) to fund a more expeditious and efficient grievance mechanism; (5) to provide student loans; (6) to improve the administration of justice; and (7) for such other programs for the benefit of the public as are specifically approved by the Court from time to time. Florida was the first state in the United States to adopt such a plan, but several states have such plans under consideration and several other countries have used such programs for years. There is a recent article in the Idaho Law Review, Volume 15, Page 219 (1979), which discusses the whole idea in some detail including an analysis of the Florida plan and the proposed Idaho plan. The writers point out that seventeen jurisdictions have such plans in effect at the
present time, including every Canadian province, and England is currently considering the adoption of such a program. British Columbia is held out as a very successful and well-accepted program. It began as a voluntary plan in 1970 and became mandatory in 1974. There are approximately 2700 lawyers in the province and since 1975 about $2,100,000 have been paid annually for use in the pUblic service programs of the Law Foundation of British Columbia. The most obvious objection to this plan is that it may take money that rightfully belongs to a client and put it to pUblic use. However, the Idaho writers point out that most of the money that goes into attomey trust accounts are there for such short periods of time or in such small amounts that it is not feasible to establish a separate, identifiable, interestbearing account for such deposit. As a result, such funds are commingled in checking accounts and produce no interest. These are the funds that are the target of such programs. Large amounts that are to remain in attomey trust accounts for more than brief time will not be included in the programs. Such sums should be put on interest for the benefit of the client. The Idaho writers point out there are a number of problems in the implementation of such programs. Some of the problems are: (1) lawyer cooperation (in voluntary programs the lawyers have to be convinced of the benefits of the program and that it is not too great a burden on the attomey-c1ient relationship); (2) conflict with banking laws; (3) resistance from the banking world; (4) ethical considerations; (5) tax problems; (6) notice requirements; and (7) limitations on the use of funds. Although there are a number of serious and somewhat complex considerations and questions to be resolved in the fonmulation and adoption of such a plan, the Law Review authors suggest answers to most. Apparently, Florida and numerous other jurisdictions have found solutions and provide models for others. If the plan truly uses client money that would have produced no interest otherwise and if the interest is used solely for public good and in no manner that can be described as for the good of the lawyers, then the major objections are removed, and I for one am willing to look further into the possibilities of such a plan for Arkansas and our Bar Foundation. I plan to discuss it with our Board of Directors at first opportunity. If you have comments on the subject, let me hear from you.
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January 1980/Arkansas Lawyer/3
REVERSE DISCRIMINATION AFTER BAKKE AND WEBER By Stephen W. Jones and Philip K. Lyon Affirmative action plans have become an area of increasing concem to employers. The spectre of Title VII' lawsuits has led many employers to adopt affirmative action plans in an effort to correct racial imbalances in their wOrkforces before litigation occurs. Also, all contractors or subcontractors with the federal government' are required to adopt affirmative action plans if their contract is for $10,000 or more' and must include goals and timetables if the contract or subcontract is for $50,000 and they have 50 or more employees. These plans must also comply with the detailed requirements of Revised Order 4, if the test of 50 employees and $50,000 is mel.' These plans almost always provide for employment goals, i.e., setting a certain percentage of minority employment as a goal, and many contain outright quotas mandating that a certain percentage of minorities and women be hired or promoted. Employers have become increasingly concemed that such plans give preferential treatment to minorities and women and that such preferential treatment constitutes illegal discrimination against whites and males. Employers see themselves caught between the proverbial "rock and a hard place." If they take measures to correct the effects of discriminatory practices against minorities and women, they will become liable to white
males for discrimination, but ifthey do nothing they will be liable to minorities and women for discrimination against them. Many of the questions concerning the possibility of "reverse discrimination" or "inverse discrimination", i.e., discrimination against white males through the use of affirmative action plans designed to remedy the continuing effects of past discrimination against minorities and women, have been answered by two United States Supreme Court cases, Board of Regents of the Univ. of Calif. v. Bakke, 438 U.S. 265 (1978) and United Steelworkers of America v. Weber, _U.S.~61 L.Ed2d 480 (1979). Further guidance has also been given through the Guidelines on Affirmative Action issued by the Equal Employment Opportunity Commission and effective on February 20, 1979.' Bakke Bakke has been one of the most publicized and least understood opinions of all time. Bakke involved a minority admission quota for the University of California at Davis Medical School. Sixteen of each year's 100 student openings were reserved for disadvantaged applicants, all of whom were always minority members. Allan Bakke was an applicant who was twice denied admission even though he had higher scores than minorities who were accepted.
Stephen H. Jones received his undergraduate degree from the University of Illinois. He graduated with high honors from the UALR School of Law where he served as the first Editor in Chief of the UALR Law Journal. He formerly worked as the Personnel Manager of the Arkansas Social Services Division and as a management and affirmative action analyst for various state agencies. He is now a member of the Labor Department in the Little Rock law firm of House, Holmes & Jewell and limits his practice to labor and employment matters. He is a member of the America, Arkansas and Pulaski County Bar Associations. He is a member of the Labor and Employment Sections of the American and Arkansas Bar Associations. He is also a member of the American Society for Personnel Administration and the Arkansas Personnel Association.
4/Arkansas Lawyer/January 1980
He sued alleging that the acceptance of lesser qualified minorities constituted a violation of Title VI of the Civil Rights Act of 1964', which requires that programs receiving federal money (as U.Cal - Davis did) not discriminate on the basis of race, color, national origin or religion in delivering its services (medical training in this case), and of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. The Supreme Court ruled, in an opinion having no clear majority, that the admissions quota was an illegal violation of Title VI and the Fourteenth Amendment' in that it discriminated against whites. The Court reasoned that while it was permissible to use race as one factor in determining admissions it could not be the only factor, as in a quota, unless there had been a prior judicial, administrative or legislative determination that the school had engaged in illegal discrimination against minorities. If such a determination of discrimination had been made, then the school could be justified in using a quota in order to correct the present effects of past discrimination. Since there was no official finding of prior discrimination by the school but instead a finding that the school had, in fact, never discriminated, it was illegal for the University to use a quota. Basically Bakke stands for the propositions that 1) affirmative action
plans can, in some circumstances, lead to "reverse discrimination", 2) quotas may not be used in a program governed by Title VI or involving state action unless there has been a prior judicial, administrative or legislative finding of discrimination, and 3) race may be used as a factor in decisionmaking where there is no such prior determination provided it is not the sole or controlling factor in the decision. Bakke did not decide whether affirmative plans in employment were violative of Title VII of the Civil Rights Act of 1964.' It also did not decide whether a "goal" was just a more subtle form of a quota as some had suggested. These and many other questions of great importance to employers were left unanswered. EEOC Guidelines on Affirmative Action In response to the Bakke decision and the growing concern over the possibility of reverse discrimination charges arising as a result of affirmative action efforts, the Equal Employment Opportunity Commission (EEOC) issued Guidelines on Affirmative Action' which state the EEOC's position on investigating such charges. The EEOC begins these revised guidelines by stating that the purpose of Title VII is to eliminate employment discrimination, that voluntary affirmative action is necessary to achieve this goal, and that, in its opinion, Congress could not have intended to expose those who have made efforts to comply with the Act to charges that they are violating the Act by trying to be affirmative. The EEOC then points out that Section 713(b) (1)" provides: In any action or proceeding based
on any alleged unlawful employment practice, no person shall be subject to any liability or punishment for or on account of (1) the commission by such person of an unlawful employment practice if he pleads and proves that the act or omission complained of was in good faith, in conformity with, and in reliance on any written interpretation or opinion of the Commission... These Guidelines are considered by the EEOC to be such an interpretation or opinion as may be relied upon under Section 713(b) (1). Therefore, if an affirmative action plan is designed in reliance upon these Guidelines or if not designed in reliance thereon still meets the standards set forth in the Guidelines, an employer will be considered as exempt from liability by the EEOC. The Guidelines provide that voluntary affirmative action is appropriate if (1) an employer's practices are determined to have an adverse impact; or (2) if affirmative action is necessary to correct the effects of past discrimination; or (3) if the available labor pool is artificially limited. Such determination must be made through a "reasonable self analysis" such as those found in Revised Order NO.4" and further, the analysis must give a "reasonable basis" for the determination. Reasonable basis exists if the self-analysis shows that one or more employment practices (1) have or tend to have an adverse effect on members of previously excluded groups or groups whose past employment opportunities have been artificially limited (which would not usually apply to white males); (2) leave the effects of past discrimina-
tion uncorrected; or (3) result in unequal treatment. The affirmative action taken must also be reasonable in relation to the problems disclosed and must, therefore, be tailored to solve the specific problems identified in the self analysis. If all these criteria are met and an EEOC "reverse discrimination" charge is filed alleging the plan violates Title VII or where the plan is asserted as a defense to the charge, the EEOC will investigate the charge with its usual procedures. However, if the plan conforms with the above described Guidelines, a finding of no reasonable cause will be issued and the Commission will advise the respondent that (1) it is entitled to the protection of Section 713(b) (1) and (2) that the finding itself is an additional interpretation or opinion under Section 713(b) (1). The overall purpose of the Guidelines is, therefore, to shield employers who engage in voluntary or federally mandated affirmative action plans from reverse discrimination charges provided that those plans satisfy these Guidelines. However, such protection is not intended to indicate that the EEOC endorses the plans as adequate to alleviate discrimination; rather, the protection only extends to charges alleging that a plan results in reverse discrimination. Further these Guidelines do not protect an employer from private lawsuits nor does compliance with the Guidelines necessarily mean that a court would not find discrimination. Weber The Supreme Court's decision in United Steelworkersof America V. Weber," issued by the Supreme Court on June 28,1979, does provide
Philip K. Lyon graduated with honors from U of A Fayetteville Law School in 1967 where he was Editor-in-Chief of the Arkansas Law Review. He is now a partner in the Little Rock law firm of House, Holmes & Jewell where he heads the Labor Department. His practice is limited to labor and employment matters. He has taught Labor Law, Govemment and Business and Collective Bargaining at LRU and UALR. He is presently teaching Labor Law at the UALR Law School. He is a member of the American, Arkansas and Pulaski County Bar Associations. He is a member of the American Bar Association's Labor and Employment Law Section and the Equal Employment Opportunity Committee as well as the Administrative Law Section. He is a former Chairman of the Labor Law Committee and Labor Law Section of the Arkansas Bar Association. He is presently serving as a member of the Labor Section's Governing Council. He is on the Board of Directors and serves as Vice-President of the Arkansas Law Review and is a member of the American Society for Personnel Administration and the Arkansas Personnel Association. He is also listed in Who's Who in American Law. January 1980/Arkansas Lawyer/S
such protection. Weber involved a Kaiser Aluminum Company training program which provided that 50% of all persons admitted to the company's skilled craft training program would be black. This program was the result of an Office of Federal Contract Compliance Programs' (OFCCP) audit and negotiations with the employee's union, the United Steelworkers of America. The purpose of the program was to correct a perceived imbalance in the racial composition of Kaiser's skilled craft workforce. While 39% of the general workforce was black, only 15% of Kaiser's overall workforce was black and only 1.8% of its skilled craft workers were black. While this is a seemingly gross disparity, it should be understood that to determine discrimination an employer should compare its workforce to the relevant labor pool of qualified workers not to the general workforce." Here the reason given for the low representation of blacks in skilled craft positions was the general unavailability of black craft workers in the general workforce. This unavailability was primarily due to the traditional segregation of craft jobs which prevented blacks from working in those fields. The Supreme Court ruled in its majority opinion that it was only deciding the narrow issue of "whether Title VII forbids private employers and unions from voluntarily agreeing upon bona fide affirmative action plans which accord racial preferences in the manner and for the purposes stated in the Kaiser-USWA plan."" Its decision was that Title VII does not prohibit all such affirmative action plans nor does it forbid all preferential treatment, including quotas. The Court held that voluntary plans are permitted by Title VII if they are designed to "break down old pattems of racial segregation and hierarchy"" or to "open employment opportunities for Negroes in occupations which have been traditionally closed to them."" In short, plans granting preferential treatment are permissible to correct societal discrimination even though the employer may not have discriminated and could not be proved to have discriminated under Title VII. Such plans, however, may not require the discharge of white workers nor may they create an "absolute bar" to the advancement of whites." Finally, a plan must be a temporary measure designed to eliminate a manifest racial imbalance 6/Arkansas Lawyer/January 1980
and not merely to maintain a racial balance." The Court distinguished Bakke on several bases. First, Bakke involved Title VI and not Title VII. Second, Bakke involved state action subject to the Constitutional provisions of the Fourteenth Amendment while Weber involved private, nongovernmental organizations not subject to the Equal Protection Clause. Third, Bakke involved a quota designed to maintain a certain racial balance not to correct a manifest imbalance. Weber can perhaps be best understood by reading Justice Blackmun's concurring opinion. Justice Blackmun saw the decision as a practical necessity for the protection of employers who would otherwise be forced to walk a "tightrope" between liability for past discrimination against blacks and liability to whites for any voluntary preferences given to blacks to mitigate the effects of past discrimination against blacks." Blackmun takes the position that employers may do voluntarily what courts and other governmental bodies could not require them to do. That is, an employer could grant preferential treatment to blacks to correct societal discrimination even though the employer had not and was not discriminating against blacks when compared to the relevant labor pool of qualified applicants, which Blackmun reaffirmed as being the proper standard for proving discrimination." Further, Blackmun states that employers may grant preferential treatment to correct gross racial imbalances caused by actions taken before Title VII took effect, that is, when such discrimination was not illegal." This is true even though such pre-Act discrimination could not place an employer in violation of Title VII." In summary, Weber permits employers to decide voluntarily to grant preferential treatment, including the use of quotas, to blacks and members of other protected classes in order to correct traditional societal discrimination not caused by the employer itself. Further, it would appear that Weber authorizes employers to hire blacks in greater numbers than their presence in the relevant labor pool of qualified applicants would dictate even though to hire whites in a proportion greater than their presence in the relevant labor pool would be prima facie evidence of illegal discrimination against blacks.
While the Court holds that Title VII permits voluntary affirmative action, the Court's analysis strongly indicates that Title VII cannot be used to require affirmative action plans. This prevents the EEOC from requiring such plans since its authority is derived solely from Title VII, but its effect on the OFCCP is less clear since that organization derives its authority not from Title VII but from Executive Order 11246 and the federal procurement power. The Court also stated that there was a line between permissible and impermissible affirmative action plans alt~ough it refused to define that line and merely stated that the Kaiser plan fell on its permissible side. This is important if for no other reason than it establishes that not all affirmative action plans will be lawful. Justice Rehnquist, in a scathing dissenting opinion, argued that the legislative history to Title VII made it clear that Title VII was not meant to permit preferential treatment to correct racial imbalances. Virtually every major supporter of the bill, including Senator Humphrey, stated that Title VII would not result in preferential treatment. In fact, had he and other supporters not made these assurances and had the language barring preferential treatment not been included. it is clear that Title VII could not have passed. Both Justice Rehnquist and Chief Justice Burger felt that majority opinion was an example of the Supreme Court's engaging in "social engineering." But, while Justice Rehnquist may be technically correct in his analysis of Title VII, it is the majority opinion, and not his, that is now the law of the land, and aboill which employers are asking, "What does it all mean?" Voluntary Affirmative Action by Private Employers It is clear that Weber and the EEOC Guidelines on Affirmative Action" permit a private employer to develop voluntarily an affirmative action plan using preferential treatment for minorities and women to correct past discrimination without being liable for reverse discrimination. An employer who develops goals and timetables or quotas designed to achieve racial balance with the relevant labor pool of qualified workers is clearly protected. It is advisable, however, that employers be cautious about going beyond that. Even though Weber
clearly permitted an employer to use general workforce rather than relevant labor pool data in establishing its goal, it is not at all certain that this view will be upheld in the future. First, no one introduced evidence as to what the representation of blacks in the relevant labor pool was, so the issue of the appropriateness of general workforce comparisons was never raised. Second, any absence of blacks in the skilled craft professions was because of blatant exclusion by unions and not just general societal discrimination. The Kaiser plan was developed with the help of its union and was included in the collective bargaining agreement between the union and Kaiser in an effort to correct the present effects of past discrimination committed directly by unions. Therefore, regardless of what was said, this was not a case of correcting just traditional, societal discrimination in which the parties had played only an indirect role. Here unions played a direct role. While this distinction was not discussed by the Court, it almost certainly played a role in its decision. This factor will not be present when the Court considers a case where the employer and union have never excluded blacks as a matter of policy or where there is no union at all. Fourth, a union exists for the purpose of representing its members and Weber was a member of the union. Therefore, Weber cannot be seen as a powerless victim of an arbitrary employer. Through his union he had real bargaining power which could be used for his protection. Since the union was in favor of and supported the training program, the program must be considered to benefit the union membership. The Court may rule differently where a white employee is not a union member and, therefore, has no input into or ability to affect employer decisions concerning affirmative action. Fifth, when establishing new principles of law in the equal employment area, the Supreme Court tends initially to state those principles in broad, sweeping language. The Court then tends to define those principles in a more limited fashion when it considers subsequent cases where its initial sweeping language is being applied to different factual circumstances. Certainly, no one can accurately predict where the Supreme Court will
go after Weber, but it is likely that it will retreat somewhat from the sweeping language of Weber to provide more protection for whites and greater limits on affirmative action. However, it does seem certain that the Court has approved voluntary affirmative action plans to correct racial imbalances in an employer's workforce. It is the authors' opinion, however, that an employer should determine any imbalance by comparison to the relevant labor pool of qualified workers and not by comparison to the general workforce population if it wishes to avoid being the victim of a future retreat from the broad position taken in Weber. Voluntary Affirmative Action by Public Employers It is not at all clear that Weber permits such voluntary affirmative action by a public employer. The Court in Weber made it clear that its opinion was limited to private employers where no Constitutional issues existed. As to pUblic employers where Constitutional issues under the Equal Protection Clause of the Fourteenth Amendment most definitely do exist, there is a substantial possibility that such preferential treatment as is permitted by Weber would be illegal as a violation of equal protection. The Court's decision in Bakke invalidating the use of race as the sole decision-making criterion would seem more applicable. Therefore, a public employer is embarking on dangerous ground if it implements an affirmative action plan granting preferential treatment to minorities and women without there having been some prior judicial, legislative or administrative determination of discrimination. If a public employer elects to take this risk, it is strongly urged to set its goals according to the relevant labor pool of qualified applicants and to avoid using general workforce statistics. Since Weber does not apply to public employers, the broad, sweeping language allowing use of general workforce data in order to correct societal discrimination is simply not relevant. It would be far safer to determine affirmative action goals according to the standards set for determining discrimination, I.e., relevant labor pool data. Mandatory Affirmative Action Weber specifically holds that Title VII may not be used to require affirma-
tive action. The question, then, becomes what effect, if any, does Weber have on affirmative action plans mandated by the OFCC P under the authority of Executive Order 11246? Since Weber deals solely with the meaning otTitle VII, and the OFCCP does not enforce Title VII but Executive Order 11246, the answer may be none although the OFCCP will almost certainly attempt to use Weber as authority for the affirmative action plans it mandates. The Court in Weber, however, emphasizes that Weber does not involve the Constitutional issues found where there is governmental action. Since the OFCCP is a federal agency and its acts are governmental action, the Fifth Amendment" may bar the OFCCP from requiring plans involving preferential treatment." While Bakke permits an employer to use preferential treatment where there has been an administrative determination of discrimination, and the OFCCP is such an administrative body, it is another question altogether whether a federal agency may require the use of such techniques. Given Justice Blackmun's concern that employers be protected, it seems unlikely that an employer could be required by the OFCCP to grant preferential trilatment to correct societal discrimination. Since the proper standard for determining discrimination is the relevant labor pool of qualified workers, it appears highly unlikely that the OFCCP could require an employer to institute a plan designed to go beyond parity with that relevant labor pool. If this analysis is correct an employer would be protected from reverse discrimination charges if the plan were required by the OFCCP but the OFCCP itself might be vulnerable for requiring them. The determination of this issue, however, must await future litigation. Conclusion Weber and the EEOC Guidelines make it clear that private employers may voluntarily use affirmative action plans granting preferential treatment to minorities and women with little risk of being liable for reverse discrimination. The key, however, is that these plans must be designed to correct imbalance and not to maintain balance. Public employers may voluntarily (continued on page 47) January 1980{Arkansas Lawyer/?
CONTEXT By W. Christopher Barrier
CAMERAS, CARING AND COPING.... Things change. Several years ago, Bob Wilkins, the South Carolina lawyer and expert on legal economics, was addressing a seminar at the Annual Meeting at Hot Springs. Bob asked the assembled group if there was anyone present who did not have "automatic typing equipment in their office." One solo practitioner timidly raised his hand and asked, "Do you mean electric?" Similarly, changes in the hardware used by television stations may have escaped a number of lawyers and account for their opposition to televising trials. The American Bar Association conducted a survey of lawyers to determine their reaction to the American Bar's opposition to cameras in the court room. Sixty-eight percent of those contacted opposed cameras in the courtroom, although a slight majority of states now permit it. The most prevalent reason for opposition was the fact that the cameras might tend to distract witnesses. Almost as many thought that television would be used to show only the more sensationai aspects of trials and nearly two-thirds of those opposing television coverage thought the presence of the cameras would encourage grandstanding by lawyers and jUdges. Presumably, part of what the opponents may have in mind is based on the television coverage of their youth, which meant a large camera, possibly even mounted on a rolling stand, with extremely bright lights, and a necessity for haVing the camera virtually in your face. The industry has now developed hand-held cameras with telescopic lenses which operate on available light, most courtrooms being brightly lighted anyway.
July. (See the Arkansas Bar Association News, September, 1979.) The Cameras in the Courtroom Committee, through chairman Dennis Shackleford, presented the recommendation in the form of an amendment to the Canons of Judicial Conduct, leaving the ultimate decision up to the Arkansas Supreme Court. The committee also proposed certain guidelines to govern the use of media equipment in the courts. The guidelines included a requirement that the various television stations "pool" their equipment and, of course, gave the trial judge the ultimate authority to administer the guidelines. As indicated, under the guidelines, it is relatively easy to envision a single, unobtrusive camera located a discreet distance away from the bench, counsel tables and jury box.
Prior Consent, Not Prior Restraint ...
Perhaps most importantly, under the guidelines, no party or other witness would be shown without their prior consent and rape victims, undercover agents, etc. would receive absolute protection. Again, the idea is that the public concept of our system of justice would be improved, along with the general understanding of how the system operates.
But, Are Juries Obsolete? "Citizens Are Entitled to
see ..."
In any event, siding with the thirty-three percent of the persons responding to the American Bar poll who believe that "citizens are entitled to see our courts in operation ...", the executive council of the Arkansas Bar Association approved the concept of cameras in the courtroom in late 8/Arkansas Lawyer/January 1980
However, Chief Justice Warren E. Burger has suggested that in a number of cases, this sort of understanding is impossible, even for the jury. Speaking at Flagstaff, Arizona, at the annual meeting of the Chief Justices of the various states, Chief Justice Burger pointed out that civil trials were lasting longer and longer, and juries were required to deal with increasingly complex problems.
------------------------
Chief Justice Burger suggested that a number of cases, such as environmental issues, might be better served by using a panel of three or more judges rather than a jury. Of course, some trials are conducted in that manner, but the Chief Justice is apparently suggesting a much broader application of the approach. (Mr. Justice Stevens' remarks in Dallas were to the same effect.) One could also infer from the Chief Justice's remarks that our judicial system, based as it is on the adversary system, is simply inadequate to deal with the number of complex issues, which may involve sophisticated economic determinations or technical considerations or even combinations of both.
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Or Is The Problem Elsewhere? These problems have also been considered by Milton R. Wessel, in his book, The Rule of Reason: A New Approach to Corporate litigation (Addison Wesley, 1976). Wessel would do away with the traditional "sporting" approach to litigation, essentially doing away with the gamesmanship and procedural maneuvering in the interest of reviewing all of the relevant facts. Interestingly, the precept which Wessell puts at the "heart" of his book is the idea that, throughout litigation "the measurement of all proposed conduct [would be] by the test of how much actions would appear on 'center stage'-as though whatever were said and done at the most secret or intimate moment were on nationwide television or on the front page of a local press, subject to view and review by even the most antagonistic adversary." Wessel may be suggesting that, if approached properly, most issues which Chief Justice Burger feels are beyond the ken of the average juror could in fact be resolved by a jury-it is our system, not the limitations of the jurors, which prevents them from getting the information they need in order to make an intelligent decision.
Problem Or Solution? In this regard, perhaps cameras in the courtroom might be part of the solution. Although certain adjustments in the way juries handle cases might be required, it is possible to envision jurors requesting the re-playing of portions of the trial, a sort of instant re-play. Of course, you would have questions as to whether they could simply re-play direct testimony without the cross-examination or the rebuttal testimony. Then too, you might have witnesses who refuse to be teievised, although a distinction might be made between televising testimony for the use of the jury and for public consumption. On a lighter side, you might have objections to re-play on the basis that television was not flattering to particular witnesses. (Remember that certain members of Congress objected to televising their deliberations when they were made to appear as if they had dark circles under their eyes, the "raccoon effect"l) Aiso, could juries request demonstrative evidence to be played back in slow motion? And what would become of certain rules if appellate courts were allowed to view the television tapes-specifically, the precept that credibility of witnesses is better weighed by the trial judge and/or jury, who have had an opportunity to observe the witnesses demeanor, etc?
"Ladies and Gentlemen of/he jury . .. and members of/he television audience . . ."
Things do change . . ..
January 1980IArkansas Lawyer/9
ADVISING INNOVATORS by Robert R. Keegan
What's In A Name?' Everyone has heard a proverb to the effect that a man's name is his most valuable possession. The same is very often true of a business enterprise, yet legal advice conceming this valuable possession is often not sought with the diligence the matter deserves. Only in the simplest case is there virtually no legal problems with the name of a business. If Harry Smith decides to go into business as Harry Smith, Plumber, then the name of his business, being the same as its proprietor, presents no problem. (Let's not stray into a discussion of a situation in which there is another Harry Smith plumber in the locality.) If Harry has a little bit of Madison Avenue in his blood and chooses to operate under the name "Handy Harry Plumbing Company", he will need to be advised on the law relating to business names. Assuming that Harry does not wish to operate his business in corporate form (and we hope he has been properly advised in this regard), then we know that Harry should comply with Arkansas Statutes ยง70-401 by recording his assumed business name "Handy Harry Plumbing Company" with the County Clerk of his County. Essentially the same procedure would be used if Harry is going to operate with his wife as a partner. If Harry operates under corporate form his corporation name will, of course, have to be accepted by the Secretary of State; getting an acceptable name for Harry's corporation in Arkansas probably won't be a big deal. We should note, however, that in other circumstances selecting a corporate name for a multi-state business and establishing rights in it in a multiplicity of states can be a big deal. Such a situation may justify calling on one of the companies that specializes in assisting lawyers in such matters. One may also note the possibility of 10/Arkansas Lawyer/January 1980
Harry's corporation being named the Harry and Alice Smith Corporation and operating under the registered fictitious name "Handy Harry Plumbing Company", Arkansas Statute ยง64-111. Whether Harry is operating as a simple proprietorship or as a corporation he probably couldn't care less if there is a "Harry Smith Plumbing Company" already in existence in some distant state. This brings out the fact that names of proprietorships, companies and corporations are in themselves deemed to be basically of local significance. Thus the existence of a distant corporation or company with the same name will not be an impediment to obtaining a corporate charter or filing a statement of use of an assumed business name with the County Clerk. For convenience such company names are sometimes referred to as trade names, but they should be distinguished clearly from trademarlks, which are not really the same at all. A trademarlk is a word or symbol used as the pUblic designation of origin for goods (or sometimes services, in which case it may be referred to as a service mark). Trademark rights are acquired by actual use of the trademarlk on the goods and, in the United States, advance reservation or registration of a trademark is not possible. Reinforcement of trademark rights in use is obtained by registration of the trademark with a State or Federal agency, or both. Federal trademark rights are usually nationwide. There is a provision for concu rrent Federal registrations of the same trademark for the same goods in different parts of the Country, but this situation is rarely encountered. Even when one seeks only registration in one state, the application usually requires a statement that the same or similar mark for similar goods is not registered In the United States Patent and Trademark Office, Arkansas Statutes ยง70-528.
To further confuse the issue it is not uncommon for a company to use the same term both as a company name or trade name and also as a trademark for goods (or services). Thus "Handy Harry" may become a trademark (service mark) for plumbing installation and repair services. Therefore, we should qualify the previous statement that there is no inherent conflict between the use of the same corporate name in two different states. This is not so if the corporate name of a dominant portion of it is also used as an interstate trademark. Of course when part of the corporate name is used as a trademark and is also registered in the United States Patent and Trademark Office by one party, then use of the same or essentially similar name anywhere in the United States by another party may give rise to a claim for trademark infringement or unfair competition. If the latecomer uses it with trademark implications or in a way likely to create confusion in the public mind then such a claim is very likely. As one would assume, foreign countries also have their trademark registration procedures. With a few exceptions foreign trademark registration and protection must be approached on a country-bycountry basis, which makes it quite expensive. Any ex1ensive discussion of foreign trademarks would naturally run to many thousands of words so only one or two points might be mentioned here. One matter of interest is that numerous foreign countries, especially in South America, grant trademark rights to the first to file an application rather than an actual user. This has given rise to a practice of trademark piracy where a rapidly growing company expanding to foreign marlkets often awakens to find that a trademarlk pirate has preempted their trademarlk in several South American countries or (continued, page 47)
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SOURCES OF INFORMATION IN AIRCRAFT CRASH CASES by Tom H. Davis
As in any other specialty, the sources of information available in the preparation of an aircraft crash case are varied and present a substantial problem to the inexperienced in this field. Depending upon the type and complexity of the case, there is an almost unlimited number of sources which should be checked. One of the first sources to be consulted is the Federal Aviation Act of 1958, and the multitude of regulations which have been promulgated thereunder. This Act is found at 49 U.S.C. 1301. Most regulations issued under this Act which are important to this subject are issued by the Federal Aviation Administration (FAA). These regulations are published in Title 14 of the Code of Federal Regulations (14 CFR) under "Aeronautic's and Space." They may also be found in the Aviation Law Reporter, a four volume Commerce Clearing House publication which provides an up-todate supplementing service including the current decisions in aviation law. CCH also publishes bound volumes of all aviation cases decided from 1822 to the present. It presently consists of 14 bound volumes with the current cases (Volume 15) contained in the loose-leaf Aviation Law Reporter. Copies of any part of the Federal Aviation Regulations (FAR) may be obtained from the Superintendent of Documents, Washington, D.C. These regulations cover in detail every facet of aviation. They have the force and effect of law, Hochrein v. U.S., 238 F.Supp. 317 (E.D. Pa., 1965); Stanley v. U.S., 239 F.Supp 973 (N.D. Ohio, 1965), and their violation would constitute negligence per se. Section 610(a) of the Federal Aviation Act of 1958 states that it shall be unlawful: 12/Arkansas Lawyer/January 1980
"(5) For any person to operate aircraft in air commerce in violation of any other rule, regulation, or certificate of the Administrator under this Iitle . . ." See also: Eastern Airlines v. Union Trust Co., 221 F. 2d 62 (D.C. Cir., 1955); San Diego Gas & Electric Co. v. U.S., 173 F. 2d 92 (9th Cir., 1949); Citrola v. Eastern Air Lines, Inc., 264 F.2d 815 (2nd Cir., 1959); Prashker v. Beech Aircraft Corp., 258 F.2d 602 (3rd Cir., 1958); Neiswanger v. Goodyear Tire & Rubber Co., 35 F.2d 671 (N.D. Ohio, E. D., 1929); Rhinehart v. Woodford Flying service, 122 W. Va. 392, 9 S.E. 2d 521; "The Role of Administrative Safety Measures in Negligence Actions," 28 Texas Law Review 143 (1949). While it may be necessary to present such regulations in certified form to the trial court, they are the subject of judicial notice. 44 U.S.C., Sec. 307; Alaska Airlines, Inc. v. Northwest Airlines, Inc., 228 F.Supp. 322 (Alaska, 1964), affirmed 351 F.2d 253 (9th Cir., 1965); Modern Federal Practice Digest, Evidence, Key No. 47. Aircraft Accident Investigation The responsibility for the investigation of all aircraft accidents in the United States except military rests with the National Transportation Safety Board (NTSB). While the NTSB is in charge of the investigation, it may delegate part of the investigation or ask assistance from an investigator from the FAA. With the exception of mid-air collisions, air carrier operation under a certificate of public convenience (FAR Part 121) and air taxi commercial operators (FAR Part 135), the NTSB has delegated to the FAA authority to investigate all accidents in-
Tom H. Davis of Austin, Texas is a nationally known authority on aviation law. Under the auspices of the Arkansas Bar Association's YLS, he discussed "Aviation Accident Law" at the Association's 81st Annual Meeting in June 1979. Davis also appeared as a featured speaker at the Association's 1971 Fall Legal Institute, talking on "Plaintiffs Preparation of an Aviation Case". On both occasions, Davis' presentations were rated "outstanding". Davis has served as ATLA 's President (197778) and Vice-Chairman, ABA's Aviation and Space Law Committee (1974-77). Davis is a Fellow of the International Academy of Trial Lawyers, and member, Lawyer Pilot Bar Association and International Society of Air Safety Investigators.
volving aerial application operations, amateur-built aircraft, or restricted category aircraft, and all nonfatal accidents involving rotorcraft, or fixedwing aircraft which have a certified maximum gross takeoff weight of 12,500 pounds or less. Department of Transportation Regulations, 49 CFR ยง831.2. These agencies have complete control over the investigation of the accident to the exclusion of all others, but are required to make and file a written report of the results of their investigation. This report contains a factual report and an analysis and conclusion report. Only the factual report is made public. The analysis and opinion portion of the report is confidential and the information and statements contained therein cannot be obtained. A copy of the factual report, including statements of witnesses and photographs, can be ob-
tained at a nominal cost by addressing a request to National Transportation Safety Board. Administrative Operations Division. Accident Inquiry Section NE-513. 800 Independence Avenue. S.W.• Washington. D.C. 20594. These reports contain a multitude of information and are vitally necessary in the preparation of any airplane crash case. Besides such information as the time. place. date. type of plane. owner. occupants and their flying experience and ratings. many reports contain a plat of the wreckage distribution and a narrative report of the facts which the investigator feels are important. This report usually contains the names or leads to witnesses and any reported contacts between the pilot and the weather bureau. flight service stations. towers or air traffic control facilities. A copy of these reports is vital to the lawyer's preparation and is a valuable source leading to admissible evidence. Sec. 701{e) of the Federal Aviation Act relates to the admissibility of the NTSB reports: "No part of any report or reports of ... any accident. or the investigation thereof. shall be admitted as evidence or used in any suit or action for damages growing out of any matter mentioned in such report or reports." The courts have been reluctant to apply Sec. 701 (e) in a strict sense. often permitting factual data and investigative conclusions from NTSB reports into evidence. The only restriction that has been imposed was opinion as to the ultimate cause of the crash. Seymour v. United States, 15 Avi. 17.141 (W.O. Tx., 1978). See also Federal Rules of Evidence §803(6) & (8); Lobel v. American Airlines, 192 F.2d 217 (2d 1951); Fidelity & Casualty Company of New York v. Franks, 8 Avi. 18.170 (D.C. Conn. 1964); American AirIines,lnc. v. U.S., 418 F.2d 180 (5th Cir.• 1969); Kline v. Martin, 345 F.Supp. 31 (D.C. Va.• 1972). NTSB employees are prohibited by regUlation (49 CFR §835.3) from testifying either in person or by way of deposition to opinions conceming the cause of the crash or otherwise giving expert testimony. FAA employees are under a similar prohibition. Department of Transportation RegUlations. 49 CFR §9.13. While the factual information obtained during the course
of the investigation. including factual evaluations embodied in the factual accident report. are discoverable through depositions. permission from the agency involved is necessary before its employees are allowed to testify. At the taking of the deposition of any such employee. an attomey representing the Government will be present to make certain the federal regulations regarding expert or opinion testimony are not violated and the person taking the deposition will be expected to furnish a copy of the deposition to the Government attorney. These reports furnish an excellent indication of what the facts were or what evidence is available, nevertheless it is still dependent upon the attorney's ingenuity, resourcefulness and efforts to reconstruct the facts of the accident into admissible evidence for presentation at the trial. For the manner in which these accident reports have been used in trial. see 23 A.L.R.2d 1360; American Airlines v. U.S., 418 F.2d 180 (5th Cir.• 1969); Berguido v. Eastern Airlines, Inc., 317 F.2d 628 (3rd Cir.• 1963); Maxwell v. Fink, 264 Wisc. 106. 58 NW. 2d 415 (1953); Aviation Enterprises, Inc. v. Cline, 395 SW.2d 306 (Mo. App., 1965) and Seymour v. U.S.,15Avi. 17.141 (W.O. Tx., 1978). Military personnel killed in the course of duty are barred from recovery from the Government, even if the accident was caused by completely independent and unrelated Govemment activity. Feres v. U.S., 340 U.S. 135.71 S.Ct. 149 (1950); U.S. v. Lee, 400 F.2d 558 (9th Cir., 1968), cert. denied. 393 U.S. 1053 (1969). However. it has been well established that the manufacturers and marketers of a product are legally accountable to those injured from defects in the product. even though the marketer did not cause the defect in the product he introduces into the stream of commerce. In effect. the courts have imposed on those involved in the production and sale of goods to the consuming public an affirmative responsibility and duty to market products safely designed and safely manufactured. The rationale behind this law of strict product liability extends as well to situations involving military products and personnel. The courts have had no difficulty in recognizing that a soldier is a consumer as much within the stream
of commerce as a housewife. Foster v Day & Zimmerman, 502 F. 2d 867 (8th Cir.. 1974); Challoner v. Day & Zimmerman, 512 F.2d 77 (5th Cir., 1977). The relationship between a manufacturer of military products and the U.S. Govemment cannot shield the manufacturer from liability. Whitaker v. Harvell-Kilgore Corporation, 418 F.2d 1010 (5th Cir., 1969), and attempts to hold the Govemment liable for indemnity or contribution have been unsuccessful. Stencel Aero Engine Corporation v. U.S., 431 U.S. 666 (1977). For more detailed information conceming this subject. see "Military Products Liability," Trial, Vol. 13 No.7. July 1977. After the crash of a military airplane. several investigations may be conducted concurrently. The Federal Aviation Act. 49 U.S.C. §1442(a) provides that where both civilian and military aircraft are involved. the investigation will be conducted by the NTSB with the participation of the appropriate military authorities. However. when the crash involves military aircraft only. the investigation is conducted by the military authorities and is governed by the regulations of the particular branch of the service involved. Usually two separate military investigations are conducted. Depending upon the service involved. the primary investigation is referred to as the Safety-Mishap Investigation Report, formerly the Aircraft Accident Report (AAR) in the Air Force. Its purpose as stated in the military regulation is to promote safety and it takes priority over all other investigations. The second investigation. formerly known as the Collateral Report in the Air Force and now called the Aircraft Accident Investigation Report, is a fact finding investigation for use in litigation, claims or disciplinary proceedings. These two investigations are conducted at the same time, but they are independent of one another. For example. see U.S. Air Force RegUlations. AFR 127-4 and AFR 110-14. While the complete collateral investigation is usually available, only edited portions of the primary accident investigation may be obtained. The military takes the position that since this investigation is to promote safety. that certain matters such as statements of witnesses. recomJanuary 1980/Arkansas Lawyer/13
mendations, Opinions and conclusions are privileged and should not be released to the public. However, the military will release the names of the witnesses and many times their statements or portions thereof are contained in the collateral report. Under the Freedom of Information Act, pursuant to 5 U.S.C. ยง552, a request should be made to the appropriate Judge Advocate General's office for the entire collateral investigation and the factual portions of the primary accident investigation. For the various services involved, request should be made as follows: Department of th& Air Force AFISC/IC Norton AFB, Cal. 92409 Department of the Army Office of Air Safety Program Allen: DATE-HRS The Pentagon Washington, D.C. 20310 United States Marine Corps Headquarters Arlington Annex Columbia Pike & Arlington Ridge Road Arlington, Va. 20370 Department of the Navy Naval Safety Center Norfolk, Va. 23510
Aircraft Information The complete history of the ownership of every aircraft is contained in records at the FAA Aeronautical Center, Oklahoma City, Oklahoma. These records are available to the public or a record search will be made by commercial companies at a nominal fee. Each plane also has an FAA approved flight manual for that specific aircraft. This shows the limitations, performance data and the normal and emergency operating procedures, as well as the aircraft's weight and balance information and the optional equipment actually installed, both when purchased and at any time thereafter. Any change that is made in the weight and balance of the aircraft by the addition of additional equipment or alteration must also be reported on a Form 337 to the FAA and is kept in their files at Oklahoma City. 14/Arkansas Lawyer/January 1980
FARs require that two log books be kept up-to-date on all aircraft. One is the engine log (one on each engine if the aircraft is multi-engine), the other is the airplane log. All repairs, inspections and alterations are required to be kept in these log books and signed and certified by the person performing such inspection or repairs. While these logs are usually kept in the aircraft and are therefore oftentimes destroyed in the crash, they may also be found in the owner's possession or in the files of the fixed base operator where the plane is hangered, or where the repairs and maintenance are done. The owner's and maintenance manual for the particular make and model of aircraft can be obtained from the manufacturer and will contain a multitude of information concerning the airplane, ~s operations, service and maintenance.
Pilot's History The Airman Certificate Branch of the FAA Aeronautical Center in Oklahoma City keeps on file the latest certificate issued to each pilot, as well as a record of all previous certificates and ratings held. Their records also contain the application made by the pilot for each certificate issued. These applications which are signed by the pilot contain information concerning his experience and flight time and training. Any violation of an FAR will likewise be found in the pilot's records.
departure and destination or any other remarks the pilot may have made in connection with that flight.
Weather Briefing and Communications With Pilot Most weather briefings are now obtained at a FAA flight service station (FSS) but the Weather Bureau will still perform some of these functions. At the weather Bureau and at the FSS a log is kept recording the date, time, aircraft number or name of the pilot requesting information on the weather, either over the phone or in person. If a visual flight plan (VFR) is filed with a FSS, either in person, over the phone or through radio communications, a record will be kept by the FSS where it is filed. They will also forward a part of the plan to the FSS at the destination. These flight plans are normally kept for only a few days, but in the event of an accident they may be kept indefinitely. Information or a copy of the flight plan may be obtained from the NTSB accident report or from the FSS where the flight plan was filed. Most ground controls, towers and approach controls have tape recordings of all communications with an aircraft. These tapes can be replayed and a transcription made from them. These tapes are likewise kept for a limited period of time, except in case of an accident. Even then copies should be requested as soon as possible.
The Aeromedical Certificate Branch of the FAA Aeronautical Center keeps a copy of the medical certificates and the application for such certificate for at least three years. If there is any medical restriction on the license, all certificates and applications are kept. This branch also keeps all correspondence and medical reports conceming the pilot, in the event he has any physical defects which appeared on his medical examination.
Wrillen records are made of all en route radio communications between an aircraft and a FSS. While these communications are normally not tape-recorded, they are recorded in a log indicating the date, time and substance of the communication. Likewise, in the event of an accident statements are usually obtained by the NTSB investigator from the FSS personnel at a time when the communication is fresh in their minds.
The pilot's personal log book shouid show in detail a day by day record of his flight experience, showing the type of plane operated, the date, type of flight and the point of
If communications are made with an air traffic control (ATC) facility, a record will have been made of such communication. In the event the plane is on an instrument flight plan
(IFR) the flight plan will be on record with ATC and the aircraft will have been in direct radio communications with some ATC facility, tower or ground control from the time the plane started taxiing until after it landed, and a recording will be available of all such communications if they are requested or obtained within a reasonable time after the accident.
There are also a multitude of publications in the field of aviation that can be used to great advantage in these cases. Without an attempt to list them ali, the FAA, the Weather Bureau, the Air Force, the Navy and other organizations concemed with aviation have printed various articles, pamphlets and books on almost any subject involved in the broad field of aviation.
Some of the fixed base operators at various airports have a two-way radio called a unicom. Very often pilots of private planes use these radios for obtaining information and relaying messages. These could likewise be a valuable source of information and should be checked.
These publications can be used not oniy to educate the lawyer handiing the case or his witnesses, but can be used effectively in cross-examining the opponent's expert witnesses. Unlike the problem that arises in the cross-examination of a doctor from medical textbooks, it would be a brave expert who refused to admit thatthe FAA orthe Air Force were not authorities in the field of aviation, or that the Weather Bureau was not an authority on weather.
Weather Information All local weather bureaus keep accurate records and logs of the weather information collected at their station. Certain stations have weather radar. These stations observe and photograph all severe weather within their range from which radar weather reports are issued. These radar weather reports would show the actual areas of heavy precipitation (usually thunderstorm activity) which were observed. Their records would show the date, time, direction, distance and intensity of such radar sounding. Certified copies of radar observations, area forecasts, terminal forecasts and the hourly weather observations at all stations, SIGMETS and PI REPS can be obtained either from the local weather bureau stations in the area or from the National Weather Records Center, Federal Building, Asheville, North Carolina. As in other cases, no one should attempt to handle an aircraft crash case without having available to him the necessary law books on the subject. The most comprehensive textbook in this field is Aviation Accident Law, published by Matthew Bender. Besides various annotations in A.L.A., there is a section on aviation in American Jurisprudence, 2d. Also see "Private Aircraft Crash Cases," The Arkansas Lawyer, January, 1973.
Moreover, the new Federal Rules of Evidence have expanded the use at trial of learned treatises in conjunction with direct examination of experts. Under Rule 803(18), statements contained in such documents may be read into evidence if the testifying expert indicates his reliance upon them and they are "established as a reliable authority by the testimony or admission of the witness or by other expert testimony or by jUdicial notice." The authority of government pUblications in the fields of military and civil aviation should be undisputed and easily established at trial. Without even attempting the impossible task of listing all such publications, a few which are representative are: I.
Hoyt, John R., As the Pro Flies (1959) McGraw-Hili Book Company, 330 W. 42d St., New York, N.Y. 10036 Olsen, J., Goldburg, A., & Rogers, M. (eds.), Aircraft Wake Turbulence and Its Detection (1971), Plenum Publishing Corporation, 227 W. 17th St., New york, N.Y. 10011
II.
MECHANICS Andresen, Jack, Fundamentals of Aircraft Flight and Engine Instruments (1969), Hayden Book Company, Inc., 50 Essex St., Rochelle Park, N.J. 07662 Borden, N. & Cake, W., Fundamentals of Aircraft Piston Engines (1971), Hayden Book Company, 50 Essex St., Rochelle Park, N.J. 07662 Zweng, Charles, Airframe and Powerplant Mechanics' Manual (1967), Pan American Navigation Service, 12021 Ventura Blvd., North Hollywood, Calif. 91604 Aviation IAerospace Fundamentals, Sanderson-Times Mirror, 115 S. Boyle Ave., Los Angeles, Calif. 90023
III. INVESTIGATION Reals, William, .D. (ed.), Medical Investigation of Aviation Accidents (1968), College of American Pathologists, 7400 Skokie Blvd., Skokie, III.
FLYING SKILLS Buck, Robert N., Weather Flying (1970), The Macmillan Company, 866 Third Ave., New York, N.Y. 10022 Davies, D.P., Handling the Big Jets (1967), ARB, Technical Publications Dept., Greville House, 37 Gratton Rd., Cheltenham, Glos., England Hoekstra, H. & Huang, S., Safety In General Aviation (1971), Flight Safety Foundation, 1800 N. Kent St., Arlington, Va. 22209
Jet Engine ... Accident Investigation (1959), General Electric, Flight Propulsion Div., Cincinnati, Ohio IV. SUPERINTENDENT OF DOCUMENTS, U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, D.C. 20402 Aviation Weather Aviation Weather Services Fatigue of Aircraft Structures Guide to Drug Hazards in Aviation Medicine Instrument Flying Handboo~ January 1980/Arkansas Lawyer/15
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Annual Fellows' Reception Friday Evening, January 18th House of Delegates' Meeting Saturday Morning, January 19th 16/Arkansas Lawyer/January 1980
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This article is the second in a series presented by the Taxation, Trust and Estate Planning Section of the Arkansas Bar Association. It is planned to make the serles a Regular Feature of The Arkansas Lawyer.
ARKANSAS CORPORATE FRANCHISE TAX ACT OF 1979 by James E. McClain, Jr.
The corporate franchise tax is one of the oldest taxes imposed by the State of Arkansas. It had its origin in Act 112 of 1911 and, in essence, is a tax imposed on domestic and foreign corporations for the privilege of doing business in Arkansas. Generally, the tax is based on the par value of the outstanding capital stock of the corporation taking into consideration the percentage of corporate assets utilized within Arkansas. Act 889 of the 1979 General Assembly, which becomes effective on January 1, 1980, (the "Act makes a substantial revision in the statutory provisions for the enforcement and collection of the corporate franchise tax. Reporting and Payment Dates. Current law provides that the franchise tax report is due on April 1 of each year and the payment of the franchise tax is due on August 10 of each year. Under the Act the reporting and payment dates are combined so that they both are due on May 1 of each year. Deletion of Notarized Statement. An unusual aspect of the corporate franchise tax as it has existed for many years is the requirement that a notarized statement be included as part of the form. This is somewhat unusual because the many other tax returns, including income tax and estate tax returns, generally involve much more money but have no requirement of a notarized statement. Under the Act there is no requirement of a notarized statement and the franchise tax reports will be treated like other tax returns and simply filed under pena~ies of pe~ury. Minimum Payment on Failure to File. The overwhelming majority of the corporations currently filing franchise tax reports in Arkansas pay the 1a/Arkansas Lawyer/January 1980
minimum fee of $11.00. Current law provides for a maximum penalty of twenty-five percent for failure to pay the franchise tax due. When this percentage is applied to the $11.00 minimum fee, the sum of the maximum penalty for failure to pay and the minimum fee equals $13.75. Under the Act if a corporation fails to file the franchise tax return and to pay the indicated tax there will be a minimum payment due of $25.00. This should encourage prompt compliance with the reporting and payment requirements of the Act in addition to compensating the State of Arkansas for the administrative expense of multiple billings to collect the amount due. State and County Officials. The Act requires all State and County officials to notify each corporation which receives a permit to conduct business in Arkansas of the requirement to register the corporation with the Secretary of State prior to conducting business. Presumably, this requirement will cause out-of-state companies doing business in Arkansas for only a short period of time to learn of the requirement of registering with the Secretary of State before conducting business in Arkansas. Carried to its logical conclusion, this should assist the Department of Finance and Administration in maintaining an accurate list of those corporations which are required to file a corporate franchise tax return. Definition of Corporation. The definition of "corporation" has been expanded by the Act to incl ude associations, joint stock companies, business trusts, and other organizations with or without a charter which constitute a separate legal entity. Specifically excluded from the definition of corporation are non-profit
â&#x20AC;˘ The author is an associate with the Spitzberg, Mitchell and Gil/law firm of Uttle Rock. He was chairman of the Taxation, Trust and Estate Planning Section's Sub-Committee on Corporate Franchise Tax. He wishes to acknowlege the invaluable contribution of time and experience to the project by the members of the Subcommittee, Clay Farar and John Tisdale. corporations, corporations exempt from the federal income tax, and partnerships formed under the Uniform Partnership Act and the Uniform Limited Partnership Act. Dissolution of Corporation. Beginning January 1, 1980 no corporation will be allowed to voluntarily dissolve without paying any present or past franchise tax that is due. Involuntary Revocation of Charter. One of the more important changes made by the act is the change in the time period after which a corporate charter will be declared forfeited. Under the Act a corporation which fails to file a franchise tax return or pay the tax by May 1 will have its corporate charter forfeited and its corporate priVileges will be revoked if
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the deliquent tax is not paid by October 1 of the same year. Procedural Provisions, Many of the procedural provisions goveming the collection of the corporate franchise tax have been deleted in their entirety. The new Arkansas Tax Procedure Act (see 13 The Arkansas Lawyer 176) replaces these provisions. This should greatly aid the administration of this tax. Why is the Corporate Franchise Tax Important? The advantages and disadvantages of doing business in the corporate form are many and in any event beyond the scope of this article. If it is assumed, however, that one desires to do business in the corporate form, then the importance of maintaining the details of the corporate existence cannot be overemphasized. For example, consider the fate of an individual who thought he was doing business through a corporation but discovers subsequent to the filing of a personal injury suit against him that his corporation has failed to pay its franchise tax and has, therefore been dissolved, leaving him operating as a sole proprietor. Maintaining of one's corporate existence is also extremely im-
portant with regard to federal income tax matters. For example, the owner of a corporation may find that the corporation's deduction for thousands of dollars of contributions to qualified pension or profit-sharing plans may be disallowed when it is determined that the corporation's charter has been declared forfeited for failure to file and pay the required franchise tax. Planning. The basic rate of taxation has not been changed under the Act. The general rule is that each corporation must pay an amount equal to eleven hundreths of one percent (0.11 %J of that proportion of the par value of its outstanding capital stock that the value of its real and personal property in the State of Arkansas bears to the total value of all of the real and personal property of the corporation. For a corporation that has all of its property within the State of Arkansas its franchise tax will be computed based upon the total par value of its outstanding capital stock. The minimum payment for a corporation is $11.00 per year, which means that the corporation must have outstanding stock with a par value of more than $10,000.00 before it will
incur a franchise tax in excess of the minimum. Prudence would seem to dictate that unless there is a pressing need to have the par value of the corporation's stock greater than $10,000.00 an effort should be made to keep it under that amount. One of the clearest examples of a planning opportunity is the case of a wholly-owned subsidiary. For example, if corporation P owns 100% of the outstanding capital stock of corporation S it would seem to make no difference (except for franchise tax purposes) whether P owned one million shares or one share so long as P owned 100%. Thus, corporation P should rearrange the capital structure of S so that the total par value of the outstanding shares of S is less than or equal to $10,000.00. All things considered, the preparers of franchise tax returns, the attorneys who litigate franchise tax issues, and the persons charged with the administration of the Arkansas Corporate Franchise Tax should find that the Act eliminates many of the inequities and uncertainties of prior law and in addition provides a workable statute for the enforcement and collection of this tax. ~
ARKANSAS LAWYERS FOR YEARS HAVE BEEN "LOOKING" FOR A NEW PUBLICATION ON ARKANSAS LEGAL FORMS. AS ONE OF THE MAJOR PROJECTS IN THE ARKANSAS BAR ASSOCIATION'S PROGRAM TO DEVELOP PRACTICE SYSTEMS FOR ITS MEMBERS, PROFESSOR ROBERT R. WRIGHT AGREED TO PREPARE THE ARKANSAS FORM BOOK. YOUR SEARCH IS OVER-ORDER YOUR COPY NOW.
THE ARKANSAS FORM BOOK ORDER FORM
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January 1980/Arkansas Lawyer/19
LAW SCHOOL NEWS Assistant Dean James K. Miller Assistant Dean Ellen Brantley
/. SCHOOL OF LAW, UNIVERSITY OF ARKANSAS, FAYETIEVILLE Dean David Epstein and Professor Steve Nickles have signed a contract with West Publishing Company to write Consumer Protection in a Nutshell. Dean Epstein has also completed work on a second edition of Debtor Law In a Nutshall, scheduled for publication by West in December. His new book, Business Rehabilitation Under the Bankruptcy Code, is also scheduled for publication by West in December. Adjunct Professor Robert A. Leflar, who serves as President of the 1978-80 Arkansas Constitutional Convention, is giving a number of talks to groups over the State, explaining the current tentative draft of the proposed new Arkansas Constitution. Professor A. M. Wilte is currently the Project Director for a National Science Foundation grant to the Arkansas Altomey General to furnish research assistance to the Arkansas Constitutional Convention. Dean David Epstein recently spoke to the Benton and Craighead County Bar Associations on developments at the law school. Assistant Professor Robert A. Fairbanks has announced the establishment of a Military Law Speaker's program to be held in conjunction with his Military Law Course. Major General Wa~er D. Reed, the Judge Advocate General, United States Air Force, and Brig. Gen. Hugh R. Overho~, the Assistant Staff Judge Advocate of the Army and a 1957 graduate of the University of Arkansas SChool of Law, are among the scheduled participants. According to Professor Fairbanks, "Generals Reed and Overho~, as do the other speakers, have a wealth of experience in their respective fields. Furthermore, their careers have reflected a rather high degree of excellence." The purpose 20/Arkansas Lawyer/January 1980
of the speaker's program is to supplement the academic study of military law with an opportunity for indepth discussion on military law issues with recognized experts. Professor Fairbanks states that "this blend of academics and of practical experience will belter prepare my students for the practice of law. Significantly, many of the military law students are planning legal careers with the various military services." Dean David Epstein has recently participated in several programs on the new bankruptcy law. Appearances have included a speech to the Springdale Rotary Club, participation in the Fall Legallnstiltute, and participation in a program for the Young Lawyers' Section of the ABA at the ABA Annual Meeting. He has also presented two one-day seminars sponsored by the National Practice
Institute. The seminars were attended by 190 lawyers at Denver, Colorado, and by 175 lawyers at Minneapolis, Minnesota. New teachers for this year include Visiting Professors Robert Hunter and Frank Skillem, Visiting Assistant Professors Michael Bailey and Karen Neeley, and Lecturers Susan Bradshaw, Jerry Glover, and Bradley Jones. The School of Law recently installed a Lexis Computerized Research System. The unit's tenminal is on-line with a library in Ohio, and is the first computerized research unit installed in the state. The new system offers lawyers computerized access to a national electronic law library. The law school will teach beginning law students in the research techniques necessary to use this system in its courses on legal bibliography.
Assistant Professor Tom Robinson is shown demonstrating the operation of the LExtS computerized research system. Observing, from the left are Professor Milton Copeland, University President Charles Bishop, Ubrarian George Skinner, Assistant Ubrarian David Cowan and Assistant Dean David Malone.
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SCHOOL OF LAW, UNIVERSITY OF ARKANSAS AT UTILE ROCK IRVING YOUNGER LECTURES AT SCHOOL OF LAW
Professor Irving Younger of Cornell University delivered the second Ben J. Altheimer lecture on Friday evening, October 19, in the South Courtroom of the Old Federal Building. The topic of Professor Younger's lecture was The Facts of a Case. After the lecture, students, faculty,and the large number of practicing attorneys who attended the lecture had an opportunity to talk with Professor Younger at a reception, co-hosted by the Arkansas Trial Lawyers Association at the Arkansas Bar Center. Professor Younger currently serves as the Samuel S. Leibowitz Professor of Trial Tactics at the Cornell Law School. He was born in New York City, received his undergraduate degree from Harvard where he was elected to membership in Phi Beta Kappa, and graduated from the New York University Law School. While at NYU, he served as Editorin-Chief of the Law Review. Professor Younger's professional career includes private practice, service as an Assistant United States Alt10rney , a term of Judge of the Civil Court of the City of New York, as well as teaching at the law schools of New York, Cornell, and Harvard Universities. Professor Younger is a nationally recognized expert in the fields of evidence and trial advocacy. He has been active in the National Institute of Trial Advocacy, serving on the faculty of Institute programs on several occasions. He is currently its Northeast Regional Director. TWO NEW MEMBERS JOIN LAW SCHOOL FACULTY Christy McCrary and Norman H. Stein were appointed to positions on the UALR School of Law faculty this fall. Mrs. McCrary is an Instructor, teaching courses in Research, Writing, and Advocacy and directing the Moot Court Competition. She holds a bachelors degree and masters from the University of Missouri and a law degree from the University of Texas. While a law student, Mrs. McCrary taught legal writing to beginning students in the University of Texas's Teaching Quizmaster Program. She was voted outstanding teaching quizmaster by students in the program. Mrs. McCrary is married to Reverend Ronald L. McCrary,
intern-curate at Trinity Episcopal Church in Pine Bluff. Norman H. Stein was appointed Assistant Professor of Law and serves as Associate Director of the School of Law's Legal Clinic. He supervises students enrolled in Legal Clinic and will also teach a course in Practice Skills. Prior to joining the UALR faCUlty, Professor Stein was a staff attorney at the University of Pennsylvania's Legal Clinic. He received his J.D. from American University in Washington and his undergraduate degree from Brooklyn College. He is married to Sheryl Dicker, who is also an attorney. CLINICAL PROGRAM RECEIVES SECOND GRANT The U.S. Department of Health, Education, and Welfare has informed the School of Law that its clinical educational program will receive a second grant under Title XI of the Higher Education Act. UALR is one of only thirty law schools receiving such funds, which are granted to encourage the development of innovative programs in clinical education. Grant funds are used to hire adjunct supervisors for the clinical programs and to otherwise enrich the program. In the School of Law's legal clinic, students represent indigent clients in court under the supervision of law school faculty members. UALR HOSTS LAW STUDENT DIVISION ROUNDTABLE The Thirteenth Circuit of the Law Student Division of the American Bar Association held its Roundtable at the School of Law, September 28-30. Law students from fourteen schools in Arkansas, Louisiana, and Texas attended this meeting. The program included a presentation on sentencing by U.S. District Judge Richard Arnold, workshops, and social events. FACULTY NOTES Dean Robert K. Walsh addressed the Sebastian County Bar Association at Fort Smith at their monthly luncheon meeting, October 1, 1979. He will head an ABA inspection team at the University of Akron Law School later this fall. Dean Walsh has been meeting with the Judicial Planning Committee of the Arkansas Supreme Court. Professor Fred Peel has completed the 1979 supplement to his book
Consolidated Tax Returns, published by Callaghan & Co. Professor Arthur Murphey has been granted an off-campus duty assignment by the University to complete work on his casebook on Service Contracts. Professor Glenn Pasvogel spoke on the New Rules of Bankruptcy at the Fall Legal Institute on September 14. Professor L. Lynn Hogue's article, Arkansas' New Choice of Law Rule of Interstate Torts: A Critique of Wallis Williams, and the "Belter Rule of Law", appeared in a recent issue of the Washington University Law Quarterly. Professor Hogue is editing a book on Health Law to be published by Aspen. Donaghey Distinguished Professor Robert R. Wright is serving as Chairman of the Zoning Committee of the Little Rock Planning Commission. Professor Wright served as Chairman of an inspection team wt)ich visited William Mitchell College of Law in St. Paul, Minnesota, September 16-19. The team will report to the Association of American Law Schools. Assistant Dean Ellen Brantley spoke on the Economic Consequences of Being Female on Tuesday, September 4 at the University of Central Arkansas. Assistant Dean Clay Patty's work with the Arkansas Institute of Continuing Legal Education is discussed in his separate artIcle in this issue. Professor Earl Maltz has pUblished an article "State Action and Statutory Liens in Arkansas: A Reply to Professor Nichols" in the fall issue of the UALR Law Journal. PROFESSOR RAOUL BERGER GIVES DONAGHEY LECTURE A lecture by Professor Raoul Berger on The Supreme Court and the Constitution opened the Donaghey Lecture Series for 1979-80 at UALR. The lecture was held at 8:00 p.m. Friday, September 28, in the South Courtroom of the School of Law. Professor Berger, who has taught at the University of California at Berkeley and held a Charles Warren fellowship in American legal history at Harvard is the author of over fifty articles and several books. Among his recent books are Executive Privilege: A Constitutional Myth, Impeachment: The Constitutional Problems, and Government by Judiciary.
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January 19BO/Arkansas Lawyer/21
(EDITOR'S NOTE: The regular columnist Fran Shellenberger is taking a leave to prepare the new OFFICE MANUAL for the 1980 Annual Meeting of the Arkansas Bar Association.)
LEGAL ECONOMICS
DIVIDING THE FIRM by Robert I. Weil, CMC Copyright (C) 1979, AMman & Welt, Inc.â&#x20AC;˘ Ardmore, PA 19003
PARTNER-A sharer; an associate in an enterprise . . . (The Living Webster) PARTNERSHIP-An association of two or more persons to carry on as co-owners of a business for profit. (Uniform Partnership Act) CO-OWNERSHIP-It includes elements of property rights (in specific assets), of management ("power of ultimate control"), and of profit sharing. (Partnerships, ALI-ABA, 1977) Most law firms impart a great deal of thought and attention to the current and future relationship of the partners. Much less consideration is given to the possibility of the firm splitting apart. Yet, this is quite often a common experience. It is too late to work out amicable and relatillely less harmful ways to separate, once an irreconcilable division between partners occurs. Historical circumstances sometimes bring together lawyers as partners who should not be partners. Not everyone works well in tandem with certain others. Partners may validly differ about many things: how to
divide profits, how much to spend, the degree of control over each other's time, the type of work to accept, retirement plans, community activity, decor of the office, how and how much to bill clients ... The list can be endless. Every new law firm has within it the seeds of division, withdrawal and dissolution. In many partnerships, some of the seeds eventually germinate, and one of more partners leave to establish rival law offices. As much thought must go into the eventuality of such occurrences as into the commonplace anticipation of retirement and death. In the absence of careful planning, all of the advantages go to the partners who elect to leave. The secessionists always have the great advantage of foreknowledge. The author personally knows of several law firms in which secessionist partners and associates have removed legal files to their homes in advance of announcing their plans. Often these are contingent fee files. In other situations, the secessionist parties have made careful advance contacts with clients they serviced in the
It is a fortunate coincidence that Altman & Weil, Inc. Management Consultants, selected The Arkansas Lawyer as one of the Bar Journals for possible pUblication of a series of articles re the legal profession and legal economics, when Fran Shellenberger needed time off to prepare the new OFFICE MANUAL for the Arkansas
22/Arkansas Lawyer/January 1980
name of the firm in order to secure their patronage for a new law office. A common occurrence when a group of partners decides to leave an established firm is to engage in open competition for the most highly regarded associates. Withdrawing partners often begin such moves in advance of announcement of the intention to leave. Contests for clients, files and employees are, unfortunately, often dis advantageous for the old firm and for the secessionists, as well. If overly assaulted by the contenders, the best of clients and employees may simply seek alternatives. No client wants to be involved in the fratricidal struggles of lawyers, and many an employee prefers to avoid such an emotional cost, especially those who have job offers readily available. There is nothing wrong with a separation when the partners cannot agree. In one recent assignment with a long client, the author suggested a separation. After a night of thought, the principal partners agreed with our suggestions. In a spirit of continued openness and without hard feelings,
Bar Association's 1980 Annual Meeting. The first of the series, "Dividing The Firm", is written by Robert I. Weil. He is a Certified Management Consultant (CMC) and a principal in Altman & Weil, Inc. The firm specializes in work with the legal profession, and has offices in Pennsylvania, California and Minnesota.
these partners were able to routinely advise their clients of the impending change, and to ask clients to designate one of the two new successor firms. The processes yielded few surprises, and no "hard sell" contacts were needed by either group. The two sets of partners themselves divided the employees, and the new firms offered positions to them as a agreed. In contrast to this, a rather large group of partners decided to leave a major firm recently. At the close of business one day, after a good deal of preliminary work, they gave written notice. It was the first information the remaining partners had-yet many clients and some associates knew of the plan in advance. The result of this maneuver was intemal warfare from which the parties may never fully recover. In planning for the possibility of a division among the partners, there are a number of considerations: 1. The language of contingent fee retainer agreements should protect the partnership against being discharged in favor of the intaking lawyer until the case is concluded. This can be done by giving the firm proportional rights to the fee for work done. 2. The partnership agreement (or its functionally equivalent agreements in a professional corporation) should carefully set forth the rights of partners who withdraw prior to normal retirement. Withdrawal to enter the private practice of law may be handled differently from other withdrawal, such as to enter government employment. 3. Ownership of files may be vested in either the partnership as a whole, or in the partner who opens or supervises the file. This can have an effect at time of withdrawal. 4. Capital accounts are always repayable on withdrawal-unless the partnership agreement contains a provision to the contrary. 5. Partners own a share in unbilled services and accounts receivable (as well as accounts payable) in proportion to their interests. But these rights, too, can be abridged by a partnership agreement. 6. Many partnerships make payments to retired partners under Section 736 of the Internal Revenue Code. These are unfunded obligations of law firms which can be estimated by an actuary, and which can
follow a withdrawing partner out of the firm. In the course of a twenty-year career as a management consultant who specializes in working for lawyers, the author has had several occasions to serve as an expert witness in law suits involving the dissolution of law firms. In each case, the experience has left the former partners joint losers. The alternative of private arbitration as a device to resolve disputes arising from a withV.LI"OSTA"
drawal or disolution is cheaper, quicker and far more private, and consequently does less damage to the parties involved. A binding arbitration clause should be considered in any partnership (or shareholders) agreement. Law firm dissolutions cannot always be avoided, and they are sometimes in the best interests of all the lawyers involved. The possibility of dissolution must be considered whenever a new firm is created~ .""v,cs
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January 1980/Arkansas Lawyer/23
Edltor's Comment: AEGIS 1$ a feature of the Arkansas Bar ASSOciation's educa-
t,onal program con路 cerning docket control and other areas 01 high fisk experience in profeSSional liability
SAFEGUARDING YOUR PROFESSIONAL FUTURE Through the administrator, Rather, Beyer & Harper, the Arkansas Bar Association is able to offer its members a comprehensive and varied program of insurance. The various insurance plans are discussed here in some detail. Related questions should be directed to Rather, Beyer & Harper, Suite 362, Prospect Building, 1501 North University, Utile Rock, Arkansas 72207 (664-8791).
PROFESSIONAL LIABILITY PLAN The Arkansas Bar Association sponsors a Professional Liability Plan for its members, underwritten by the Valley Forge Insurance Company, a member of the CNA/insurance Group of Insurance Companies. The policy fonm utilized by the company provides coverage on an "Occurrence" Basis. The Arkansas Bar is 1 of only 2 Bar Associations which are privileged to make this type of policy available to its membership. In addition to basic professional liability coverage, the policy also provides protection for personal injury, premises liability and Employee non-owned Auto coverage. The Basic policy provides protection up to $100,000 for anyone claim occurring during the policy year and up to an aggregate limit of $300,000 for all claims occurring during the policy year.
cases.
L-7-Pays accident benefits up to lifetime. Sickness benefits up to 7 years, but not beyond age 65; up to 2 years if disability commences between 63rd and 70th birthdays. Weekly Benefits Choice of benefits from $100 per week to $500 per week, depending on age of applicant. Payable weekly provides the equivalent of 13 months benefit in a 12 month period. Example-$100 per week versus $400 per month. $5,200 versus $4,800. Waiting Periods The basic policy provides benefits commencing on the 1st day of disability due to accident or the 8th day of disability or the first day of hospital confinement, whichever is earlier, if the disability is due to sickness. If the insured selects a longer waiting period, a savings in premium is effected, commensurate with the waiting period selected. The Renewal of the policy is guaranteed as long as the insured is under 70, remains a Member of the Association and the Plan is sponsored by the Association. The policy also contains provisions guaranteeing conversion to an individual policy under certain conditions, thus assuring continuous coverage.
In addition, the company offers a supplement to the basic contract, adding $1,000,000 of additional protection to the basic Policy.
The Plan also contains a schedule of dismembenment benefits and an accidental death benefit.
Limited State Securities coverage is provided in the basic policy and the insured may elect to purchase securities coverage on a State or Federal basis or a combination of the 2.
New Members of the Arkansas Bar Association who are just entering practice are eligible to receive a 5-2 policy for a minimum of $1 00 per week, irrespective of past physical history, provided application is made within 40 days after assumption of practice.
DISABILITY INSURANCE PLAN This plan is designed to provide income to the insured while disabled from either accident or illness.
A Disability Plan is also available to eligible employees of Members.
There is a choice of plans, weekly benefits and waiting periods available to the applicant.
Commercial Insurance Company underwrites this plan and has since 1947. There has never been a rate increase for benefits provided since the plan was inaugurated.
Plans L-65-Pays accident benefits up to lifetime and sickness benefits to age 65, or up to 2 years if disability commences between 63rd and 70th birthday.
FRANCHISE COMPREHENSIVE HEALTH INSURANCE PLAN
24/Arkansas LawyerlJanuary 1980
This is the endorsed plan for medical expenses incurred in
or out of the Hospital. The maximum payable under the plan is $20,000 for an accident or a sickness. There is a choice of deductibles ranging from $300 to $1000 on a per claim basis. The policy provides coverage for 80% of eligible expense incurred for the treatment of an accident or sickness. Interior limits are provided through the use of a surgical schedule providing up to $1250, a choice of Room Benefit of $50 or $70 per day and a $2000 limit on payments for expenses for treatment of mental disorders. Members under age 55 are eligible to apply for this coverage and family members may be included. Children are not covered after age 23 and coverage terminates on the insured's 65th birthday. Employees of members are also eligible to apply for this Plan. The Plan is underwritten by the Commercial Insurance Company.
ACCIDENT PLAN The Home Insurance Company underwrites the Accident Plan sponsored by the Arkansas Bar Association. The Plan is designed to provide benefits for Accidental Death, Dismemberment and Total and Permanent disability as the result of an accident. This low cost plan is issued in amounts of $25,000 to $100,000 and if the member desires he may include his spouse and other eligible members of his family. This plan is renewable to age 70.
Lawyers' Mart
20c per word $5 minimum
BOOKS FOR SALE Complete and up to date set of United States Code Annotated. Hodges, Hodges & Hodges, Box 338, Newport, Arkansas 72112, 501-523-6791.
WANTED TO BUY Two IBM Executary dictation units and one transcriber capable of using three inch belts. Harper, Young & Smith, 510 North Greenwood, Fort Smith, Ark., 72901, 782-1001.
•••••
Want to buy Arkansas Digest and Arkansas Reports or SW Reporter Arkansas Cases. Joe Villines, P.O. Box 549, Harrison, AR 72601.741-4100.
EQUIPMENT FOR SALE Complete IBM Executary Dictation and Transcribing System for two man/two secretary office. Includes: two Executary dictating units/two Executary transcribing units/one portable unit/beils, folders and tabs. Excellent condition. $500.00. Charles D. Matthews, P.O. Box 1276, Little Rock, Arkansas 72203, 501-372-0399.
LIFE INSURANCE PLAN
• •••••
The Life Insurance Plan is a term insurance plan renewable to age 70. Individual policies are issued to acceptable applicants.
For sale: IBM Executary dictator and transcriber (4 inch belt type) $200 for both, or $150 for transcriber, $50 for dictator. Walter S. Robinson III, 209 Harold, Fayetteville, AR 72701 521-4711.
The minimum policy amount is $10,000 for the attomey and $2,500 for his spouse, if insured. SUbject to underwriting, by the company, larger amounts are available and the same low rates apply. Waiver of Premium and Accidental Death Benefits are included in the policy, along with the privilege of converting to any whole life policy offered by the company, if converted prior to attaining age 68. New Members of the Arkansas Bar Association who are entering practice for the first time are guaranteed the issuance of a minimum $10,000 policy or a $20,000 policy if desired, irrespective of past physical history provided application is made within 60 days after assumption of practice. Employees of Members are entitled to participate in the Plan. This policy is issued by the First Pyramid Life Insurance Company. ...\
POSITIONS AVAILABLE Large established Tulsa, Oklahoma law firm has position available for attorney specializing in estate planning, administration and probate to join firm's rapidly expanding tax department. Tax background helpful. Up to five years experience in specialty and/or relevant distinguished academic background required. Address inquiries to The Arkansas Lawyer.
EQUIPMENT WANTED IBM belt-type dictating and transcribing unit; Selectric or Correcting Selectric typewriter. P.O. Drawer 947, Arkadelphia, Ark. 71923. 501-246-6796. January 1980IArkansas Lawyerl25
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Arkansas Eminent Domain Digest, 1964 Compiled by University of Arkansas School of law, Robert R. Wright. Project Director 266 pages, hardbound
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American Conflicts Law, Third Edition, 1977 By R. A. Leflar 688 pages, hardbound
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26/Arkansas Lawyer/January 1980
25 Volumes with 1977 Cumulative Supplements and 1978 Interim Supplement 1979 Cumulative Supplement in preparation
Probate Laws of Arkansas, 1961 Compiled by Publisher's Editorial Staff 465 pages with 1978-79 Supplement S30.00 Supplement separately 15.00 1979·80 Supplement in preparation
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BOOK
THE NEGLIGENCE CASE: COMPARATIVE FAULT by Henry Woods Lawyers Co-operative Publishing Company Rochester, New York 14603 1978
REVIEW*
This splendid synthesis of the law of comparative fault, done in 22 handcrafted chapters by Henry Woods, long standing scholar and ace trial lawyer in the field, is a sterling accomplishment. Comparative negligence is more than on the march. A surging majority of some 36 states is already committed to the divided damages rule and virtually all the rest are certain to switch within a few years. The typical comparative negligence statute has plenty of white space in it. The legislatures have left a whole hat rack of questions-unanswered questions-for the courts to come up with the answers. It is hard for the trial lawyer in his pressurecooker way of life to find his unassisted way through this misty statutory minefield of unanswered questions, and it would be legal malpractice to undertake the precarious journey without the map, compass and searchlight of Henry Woods' excellent book. What Salvador de Madariaga has said about historians is no less true for trial lawyers: "He who is nothing else but, is not even." For more than a generation Henry Woods has been a central force in progressive law reform (no sport for the shortwinded) in his own state of Arkansas, in the action-oriented programs of ATLA, and in his entire professional career (he
works like a cider press) as the best trial and appellate lawyer in Arkansas. In his wholly admirable life as a triai lawyer and scholar, Woods has proved himself to be a master of both microscope and telescope, and he has brought these special gifts to the construction of his book. The first chapter gives a solid unfrilled history of negligence law, the flowering of the fault system in the nineteenth century and its fostering of the industrial revolution by encouraging the hegemony of the regressive defenses, the "three sinister sisters" of common law: contributory negligence; assumption of risk; and the fellowservant rule, Draconian rules "sired by a medieval concept of cause out of a heartless laisse-faire" (in Professor Fleming James, Jr.'s arresting phrase). After showing the dominance throughout the nineteenth century of contributory negligence as an all-or-nothing defense, Woods then traces tne increasing number of ameliorative devices and inroads upon that federal doctrine that led to its decline and devitalization eventuating in the most effective counter to it-the movement toward comparative negligence. All through the nineteenth century, the common-law world seemed to be passing a great kidney stone, contributory negligence as an absolute de-
fense. Its elimination by the social surgery of comparative negligence removes a glaring injustice from the corpus of negligence law. Chapters two and three present the major federal resort to comparative negiigence by extending it to injuries suffered by interstate railroad workers and maritime and shoreside workers, respectively. Chapters four and five are a lucid, wise, and wideranging appreciation of the three types of comparative negligence systems prevailing in the United States, the "pure" form and the two versions of the "modified" form of comparative negligence. The "pure" form, consistently favored by Henry Woods as it was by the late Dean Prosser, benefits seriously negligent plaintiffs by allowing damages to swim upstream, the only restriction being that his recovery must be reduced in proportion to his fault. If the plaintiff's damage is $100,000 and his negligence is 90 percent of the total, he will recover $10,000. A growing number of jurisdictions have selected this approach. Florida, Alaska, California and, most recently Michigan did so by judicial decision. Mississippi, New York Rhode Island, and Washington have done so by legislation. The FELA, Jones Act, and the newly promulgated Uniform Comparative Fault Act
â&#x20AC;˘ Reprinted by permission from TRIAL MAGAZINE, June, 1979, The Association of Trial Lawers of America
2B/Arkansas Lawyer/January 19BO
(reproduced in full and sympathetically analyzed in chapter 22 of the book) also incorporate a pure system. The two modified versions, both discussed, are the old 50-50 rule that the plaintiff's contributory negligence will bar if it is as great as the defendant's (a rule now being eroded) and the New Hampshire variation under which the plaintiff may recover a percentage of his injuries so long as his fault "was no greater than"the defendant's. As Woods acutely points out, the choice between the two modified versions is critical only when precisely equal negligence is found on both sides. Yet his rich practical experience tells him that juries return the equal fault verdict frequently given the difficulty of comparing fault between, say, a driver who runs a red light and one who is concentrating on his radio dial---ilspecially when the jury returns a special verdict and is not told the mortuary meaning of a finding of 50-50 fault.
Whatever version has been adopted, the statutes are invariably short and do not confront, much less resolve,the array of problems which will emerge in each state under comparative fault. That is precisely why there was an urgent need for the Henry Woods' book to guide trial lawyers through the thickets and brambles of unanswered questions in the wake of the statutes. Among the forbidding and bristling array of unanswered problems, all discussed with consecutive and cumulative good sense in the book (chapters six to 21) are: • The role of assumption of risk, recklessness or other kinds of aggravated misconduct, and the last clear chance in the comparative fault regime (where not expressly provided in the statues); • Whether the statutes apply to wrongful death and survival actions; • Whether apportionment is to be
made by comparing faults or casual contributions; do the rules as to defendant's negligence per se, from his violation of a statute, survive comparative negligence;
• In a state where contributory negligence was not traditionally a defense to an action based on nuisance or absolute nuisance, should it be excluded as a partial defense under the statue; • Whether comparative fault applies to claims of minors and others under disability; • Mechanics of comparison and vexed problems of multiple parties; • The crucial issue-a modern day battleground-Qf whether the statute applies to reduce damages in actions based on strict products liability; • The reach and application of the statutes in space or conflict of laws; • Counterclaims and set off (vigorously opposing the allowance of set off where it constitutes an unjust windfall to a liability insurance carrier); • Submitting comparative fault issues to the jury; • Extent to which special verdicts/interrogatories should be required and should control the general verdict (Henry Woods would prefer to keep the jury free of the Laocoon-like smothering embrace of serpentine interrogatories and special verdicts); • If an auto guest claim arises in a guest statute state, should the guest's negligence be compared with defendant's more serious misconduct; • Take-charge handling of the comparative negligence case; • Appellate review of cases under comparative fault statutes; and, • A prudential scrutiny of the Uniform Comparative Fault Act, adopting the pure form of apportionment of damages which the author applauds as the rule of the future.
Notwithstanding the tenacious opposition of the insurance industry to the adoption of comparative fault, that doctrine is indeed on an accelerating
march, certain to extend its sway within a short time to the dozen or so states which have not yet approved it. Here, as welt as elsewhere in the accident law field, the insurance industry continues to look at social progress in the field, initially with hostility and ultimately with a sense of bereavement. Henry Woods has taught the legal order and the profession, however, that repudiation of contributory negligence is the beginning of wisdom.
A special word about chapter 14 of the book dealing with products liability. This SO-page discussion, distilled from the author's aged-in-thebone trial and appellate experience, immersed in all the realities of that specialized field of practice, is a book within a book, a minicourse on products liability litigation, and by itself worth more than the price of admission. Highly recommended.
Henry Woods is the schoolmaster of the Arkansas Bar. However, he has no provincial links to that great state, and for over a generation has achieved a secure place in the great community of legal scholarship unbounded by place, academy or latitude. As the present writer has some reason to know, in the writing of this praiseworthy and probing book Henry Woods has given of himself without stint or measure and largely to the neglect of health, self, family, friends, and private practice. His masterly book has been written with sincerity-a threadbare word until you reckon its true meaning. "It does not consist in saying a great deal but in saying aiL" Stark Young, a fine dramatic and literary critic, once said that, "The cost to the writer is what we remember about a play orwork of art." It cost Henry Woods much to write this book. This is what you will be remembering when you have finished reading and using this feast of learning.
January 1980/Arkansas Lawyer/29
OYEZ 路 OYEZ II by Barbara Tarkington Membership Secretary
Albert Glenn Vasser, Prescott, is one of four men chosen for inclusion in the 1979 edition of Outstanding Young Men of America and also has been recently elected to the board of directors of The Bank of Prescott. Breck G. Hopkins, Batesville, has been chosen by the U.S. Jaycees at its 1979 "Outstanding Young Man of America". Jimmy D. Joyce, Pine Bluff, has been appointed to the Juvenile Justice Advisory Group of the state Crime Commission. The International Academy of Trial Lawyers has made a grant to the College of Advocacy, Hastings School of Law in honor of Henry Woods. John S. Selig, Little Rock, is to serve as vice president of the SI. Vincent Development Foundation board of directors. Among the foundations' board members are C. R. Warner, Jr., Fort Smith and J. Gaston Williamson, lillie Rock. Charles A. Yeargan, Glenwood, has been elected to the board of directors of the Ouachita Regional Counseling & Mental Health Center, James E. Baine, EI Dorado, was recently elected vice chancellor of the Delta Theta Phi Law Fraternity. Steve Napper, N. Little Rock, has been appointed to the ABA Anti-trust Section Work Group which is preparing a manual on Criminal Anti-trust litigation. Larry C. Wallace, N. Little Rock, has been elected to the board of directors of the Twin City Bank. Jack L. Lessenberry, Little Rock, has been named president and chief executive officer of Landmark Abstract & Title Insurance Co. (former1y Lawyers Title of Arkansas, Inc.) and with Ronnie H. Minnick of Texarkana, own half interest in Landmark. William S. Arnold, Crossett, has been reelected to a second 3-year term as a member of the Board of Regents of the American College of Probate Counsel. L. T. Simes II, West Helena, has been ap30/Arkansas Lawyer/January 1980
pointed to the Consumer Protection Advisory Board. Troy L. Henry, Jonesboro, has been elected by the Arkansas Trial Lawyers Association to a two-year term as a state committeeman to the Asssociation of Trial Lawyers of America. Joe T. Gunter, Little Rock, has been promoted vice president and general counsel to Fairfield Communities, Inc. John C. Deacon of Jonesboro, William I. Prewett of EI Dorado, and James B. Blair of Springdale have been inducted into the American College of Trial Lawyers. Waymond W. Elrod, II, Little Rock, has been selected as director of the business services division for the Secretary of State's office. Judge Jim Hannah, 17th Judicial District, attended in Reno the Second Summer General Jurisdictio~eneral session conducted by the National Judicial College. David M. Clark, Batesville, has been appointed deputy prosecuting attomey for Independence County and Wesley Ketz will continue as deputy for Izard County. Neva B. Talley, Little Rock, served as a delegate to the Lawyers World Peace Through Law Biennial Conference held in Europe during October. Carl A. Crow, Jr., Hot Springs, has been named assistant attorney general in the Anti-trust division of the Attorney General's office. Kenneth Crow, Little Rock, is assistant allorney general for the Medicaid fraud division Rick Campbell, Little Rock, will serve as assistant attorney general in the litigation division. Phillip Deisch, N. lillie Rock, is assistant attorney general for the consumer protection division Mary Cochran, Little Rock, is the assistant allorney general for the division of energy conservation and rate advocacy. Robert Waldrum, little Rock, will serve as assistant attorney general in the state agencies division. Nelwyn L. Davis, lillie
Rock, will become an assistant attorney general in the criminal justice division F. Wilson Bynum, Jr., Pine Bluff, has joined the staff of Standard Brake Shoe & Foundry Company. Jack East III has become an associate of Napper, Hardin & Wood of N. Little Rock. Teresa Hughes, Beebe, has joined her husband, Thomas Hughes, in the practice of law. Howard C. Yates has joined a Morri~on law firm and the name changed to Loh, Massey & Yates, Ltd. Billy J. Hubbell has become a partner in a McGehee law firm and its name changed to Smith, Smith & Hubbell. David Maddox, Mena, has opened a private law office at 405 Mena Street. Stephen E. Morley has joined the N. Little Rock law firm of Lee & Green. Frank S. Hamlin has joined the Little Rock law firm of Eichenbaum, Scott, Miller, Crockett, Darr & Hawk. PA. In Searcy, the law firm of Hatfield and Thompson has been formed by Richard F. Hatfield and Winfred L. Thompson. Ted N. Drake has become a partner in a Pine Bluff law firm and the name changed to Bridges, Young, Matthews, Holmes & Drake. Brenda J. Vassaur, Pine Bluff, is now an associate with Bridges, Young, Matthews, Holmes & Drake. The Little Rock law firm of Spitzberg, Mitchell & Hays has been changed to Sptizberg, Mitchell & Gill. Steele Hays has withdrawn from the firm to become an associate justice of the Arkansas Court of Appeals. Allan Gates and Beverly Bassett have joined the firm of Spitzberg, Mitchell & Gill. Beresford L. Church, Jr., formerly with Spitzberg, Mitchell & Gill, has opened a private law office located at 2nd & Gaines, L.R. Michael and Connie Mayton along with John and Kathryn Cook of West Memphis have recently been admitted to practice before the U.S. District Court, Eastern District of Ark. Claude S.
Hawkins, Jr. has opened a private law office located at 386 S. Beech in Ashdown. Coy Rush has joined the Cleveland & Hixson law firm in Paris, AR. Joe K. Hardin has joined the Benton law firm of Curtis Rickard and Joe Baxter. Wilton E. Steed and Richard W. Box, Pine Bluff, have formed a partnership with offices in the National Bldg. David H. Williams, formerly with the Pulaski County Prosecuting Attorney's office, has entered into private practice with the Paul Johnson law firm in Little Rock. Carrol (C.P.) Christian, formerly with the Pulaski County Prosecuting Attorney's office, has joined the law firm of Steve Hughes of Jacksonville. Bobby Shepherd has become a member of an EI Dorado law firm and its name changed to Spencer, Spencer & Shepherd. The law firm of Linzay & Wise of Fayetteville have moved their office to the Eason Bldg. Curtis Collier, formerly with Beale AFB in California, is now located in Marianna, AR. Ray A. Waters, Jr., formerly of Little Rock, has opened his law office at Second and Locust Streets in Augusta. Hillary Rodham, Little Rock, was guest speaker at the August meeting of the Pilot Club of Pine Bluff, Inc. James E. Gresham was luncheon speaker for the Twin
Arkansas National Guard. Charles A. Banks and Dan Ritchey have formed an association to practice law in Blytheville. Carol Roddy is the new Deputy Prosecutor for Benton County. Lance Hanshaw, formerly of Little Rock, has moved to Cabot with offices located at 209 W. Elm. Floyd Clardy, III, formerly with the U.S. Attorney's office in the Western District, has joined with Jim Bob Steel of Nashville, to form the law firm of Steel & Clardy.
Lakes Association of Life Underwriters meeting held in August. Festus H. Martin, Fayetteville, was dinner speaker at the Waldron Area Chamber of commerce meeting held in September. The Craighead County Bar Association wives, in cooperation with the Attorney General's office, are implementing a local program on criminal law education. Captain David S. Taylor, Clarksville, has assumed command of Detachment I, 239th Engineer Company of the
NEW LOCAL BAR ASSOCIATION OFFICERS Benton County Bar Pres. JOHN TERRY LEE Vice-Pres. W. ASA HUTCHINSON Sec.(Treas. JOHN scon Saline County Bar Pres. Vice-Pres. Secretary Treasurer
GREG BROWN JOE HARDIN RAY BAXTER PETE LANCASTER
Jackson County Bar Pres. JOSEPH P. JAMES Vice-Pres. STEVEN G. HOWARD Sec(Treas. MAX O. BOWIE ARK. ASSOCIATION OF WOMEN LAWYERS Pres. JEANENE DELILLE Vice-Pres. REGINA LAIDLER Correspcnding Sec. ANNABELLE CLINTON Recording Sec. BETTY ANDERSON Treasurer GLADYS LUCY
READ ANY GOOD BOOKS lATELY? Read ARKANSAN A MONTHLY PORTFOLIO . .. The verdict is ... "intriguing." For only $12 a year, you will receive an engrossing portfoiioevery month. So what's the plot ... YOU.
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Arka"sa" • 12 Issues $12 • 375-5055 • Box 2535.
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January 1980/Arkansas Lawyer/31
EXECUTIVE COUNCIL NOTES by James A. Buttry Secretary-Treasurer
House of Delegates Highlights September 15, 1979-Special Meeting At its September meeting the House of Delegates dea~ with and acted on a number of important questions, some of which were quite controversial and a source of spirited debate.
Professional liability Insurance. On a matter of recurring and continual interest, the House approved the report of the malpractice SubCommittee to the effect that the Association continue to sponsor the occurrence type malpractice policy offered by CNA.
As proposed and approved, a majority of the Conmittee will always consist of lawyers. 2. By unanimously vote, rejecting the Committee Report, the House went on record in favor of the Committee's being put under Supreme Court jurisdiction and authorized to issue advisory opinions. 3. After considerable discussion, the House came out in favor of pUblication of disciplinary actions more serious than cautionary letters. Under the motion approved by the House, complaints and disciplinary proceedings would remain confidential. 4. The House voted unanimously to provide assistance to lawyers with regard to trust accounts and to publish guidelines for that purpose. 5. Following some discussion, the House went on record in favor of court proceedings for the purpose of the appointment of trustees to handle the business of lawyers no longer able to practice, due to death or to disability. This recommendation follows the recommendation of the American Bar Association Joint Committee on Professional Discipline.
Ethics and Disciplinary Procedure. With lengthy debate (and in one instance a sharply divided vote) the House took action on the recomendations of a committee report dealing with five questions of ethics and disciplinary procedure. 1. By a vote of 26 to 14 the House approved the inclusion of lay persons on the Supreme Court's Ethics and Grievances Committee.
Cameras in the Courtroom. After more than a year of Committee and Executive Council work, the House of Delegates received and approved the recommendations of the report of the Special Committee on Cameras in the Courtroom. By unanimous vote the House approved the concept of Cameras in the Courtroom, subject in a particular case to the approval of the Court and the par-
Almost all were questions that had been before the House or had been the subject of discussion in Bar circles for some time. Henry Woods. With only one dissenting vote, the House passed a Resolution commending Senators Bumpers and Pryor for choosing Henry Woods as their nominee for United States District Judge for the Eastem District of Arkansas and requesting that President Carter and Attomey General Civiletti act eXpeditiously on the nomination and send it to the Senate for confirmation as soon as possible.
32/Arkansas Lawyer/January 1980
ties, approved the necessary amendment to the Code of Pr.ofessional Responsibility for that purpose and approved the presentation of the appropriate petition to the Arkansas Supreme Court. Judicial Poli. Probably the most controversial question to come before the House was that of the so-called "Gag Rule." The matter was the subject of a lengthy debate, with motions, substitute motions, amendments and further amendments, ranging from those to the effect that the entire matter be deferred to those to the effect that the State Judicial Council be advised that absent prompt rescission of the Gag Rule resu~s of the Judicial Poll would be pUblished by the Association. During the debate Doug Smith, Chairman of the Association's Committee appointed for the purpose of attempting a generally agreeable resolution of the question, appeared before the House and reported on discussions with a like committee designated by the Judicial Council. Those discussions had been recessed just prior to his appearance. Following Doug Smith's report, the House voted, approving a substitute motion by Executive Council Chairman John Stroud, that the Judicial Poll would not be released during this calendar year and that the Association's Committee would report to the Association prior to the January meeting of the House of Delegates. This is a question, obviously, that will continue to be of active interest and will continue to be a source of lively debate before the Executive Council and the House of Delegates.~
TAX TIPS by Paul D. Williams Director, Little Rock District Internal Revenue Service
Centralized Forms Distribution This year, the tax forms distribution program will remain centralized. Instead of individual IRS offices filling large orders, all orders received from Arkansas will be processed by the IRS Forms Distribution Center, Austin, Texas. Remember that Package X will be listed among the Publications on Form 2333E. You will use the Form 2333E to request your copy of Package X. The Form 2333E will be included in Publication 1045, "Information to Preparers of Federal Tax Returns," which will be distributed to all addressees on the Director's Practitioner mailing list the first of OCtober. All orders for forms should be submitted to: Forms-P.O. Box 2923--Austin, Texas, 78761. Additional order froms (2333, etc.) may be obtained from the Lillie Rock office of IRS. Correspondence orders or orders on makeshift forms will result in delays. If you experience problems with this system, I want to know about it. You may call our Taxpayer Service Division toll-free number 1-800-482-9350, my Public Affairs Officer, Maeline Hornbeck, 378-5340, or me. I trust you will continue to give us your feedback. Filing Deficiencies The Austin Service Center has identified to us that the following filing deficiencies create an unpostable condition or delinquent account: 1. The submission of Form 5310, Application For Determination Upon Termination of a Pension or Profit Sharing Plan, does not satisfy the requirement for filing a final return. After approval of a termination, a Form 5500 series return should be filed with the Internal Revenue Service clearly indicating that it is a final return. 2. The Austin Service Center reports that the processing of Forms 5500, 55OO-C and 5500-0 is being hampered by receiving both the original return and a duplicate copy. The reason for the duplicate copy may be due to filing instructions prior to 1977, requiring that a duplicate copy for the Department of Labor be filed with Internal Revenue Service. The Internal Revenue Service and the Department of Labor have made arrangements to permit plans that are required to file annual reports and returns with both IRS and DOL to make a single filing with the IRS. 3. If there is a plan administrator, other than the plan sponsor, both the administrator's name and identification number must be on the annual return. Practitioner Institutes Eleven Practitionsr Institutes have been scheduled for the Arkansas area. This is the 21 st year Internal
Revenue Service and the Arkansas Cooperative Extension Service have jointly sponsored the Farm and Small Business Income Tax Institutes. This year a special basic income tax preparation course will be offered in addition to the refresher short course. The special course will be offered in Fayetteville on November 14, Jonesboro on November 28, and in Little Rock on December 12. The basic course is for those with little or no experience in tax preparation. The registration fee also covers attendance at the refresher short course, if beginning students want to attend all three days. A brochure containing information about the schedule and a registration form is available. I encourage you to pre-register, if possible. This will ensure that a space is available at the location of your choice. Each year we have had a sizable increase in attendance. I am delighted that we are able to again provide this fype of training for those interested throughout the State. NOTE: It is unfortunate that this issue of The Arlkansas Lawyer will be mailed out to the membership during the Course Schedule. However, the following Practioner Institutes should still be available: SCHEDULE 1979 Income Tax Institutes Oates Nov. 8-9
Town and Place Fort Smith Sheraton Inn, Butterfield Room Nov. 14-15-16 Fayetteville Fairground Horticulture Building Noy. 26-27 Forrest City First National Bank of Eastern
Arkansas Nov. 28-29-30 Jonesboro ASU Agriculture Audirorium Dec. 4-5 Magnolia SAU Harton Theatre, Main Auditorium Dec. 6-7 Hoi Springs Holiday Inn--Lake Hamihon Dec 10-11 Monticello Union Natjonal Bank Dec. 12Dec. 12-13-14 Lillie Rock State Fair & Livestock Showgrounds Arts & Crafts Building
The registration fee is $4. Pre-registration is encouraged. Make checks payable to the University of Arkansas and mail to: Peter G. Faison, Cooperative Extension Service, P.O. Box 391, Little Rock, 72203 DIRECTORY FOR TAX PRACTIONERS The new directory, September 1979, has been published to assist in dealing with personnel of the Little Rock District. Copies may be obtained from Public Affairs Officer Maeline Hornbeck, I.R.S. Little Rock District, 700 West Capitol Avenue, Little Rock, Arkansas 72201 (378-5340). January 1980/Arkansas Lawyer/33
LEGAL SERVICES FOR THE POOR IN ARKANSAS Donald M. Hollingsworth (This article was written in September, 1979, and thus it may omit some recent developments such as the specifics of legal services expansion in Arkansas during 1980). Legal services for the poor in Arkansas existed long before the establishment of the Legal Aid Bureau of Pulaski County in 1964. The providers were private attorneys who today continue to assist in this worthy goal. However, the need for representation of the poor in civil matters has exceeded private capacity. Individual attorneys and bar associations in Arkansas have made and continue to make significant contributions to the establishment and expansion of free legal services for the poor. The legal services programs in Arkansas greatly appreciate those who offer support by serving on our boards, guiding young legal services attorneys on difficult cases, handling referred cases on a pro bono basis, and participating in limited judicare. Congress, urged by various bar associations and other groups, initiated federal funding of free legal representation-first through the Office of Economic Opportunity in the 1960's, and now through the Legal Services Corporation (hereinafter LSC.) LSC was established by Congress in 1974.42 U.S.C. 2996. It is funded and regulated by Congress, and awards
grants to over 350 legal services programs in the United States. Each legal services program must comply with the 1974 Act of Congress and the LSC regulations. LSC is governed by an eleven member Board of Directors appointed by the President with the consent of the United States Senate. Hillary Rodham, a Little Rock attorney, is the current chairperson of the LSC Board of Directors. In Arkansas there are seven legal services programs which are described below. All the programs seek to fulfill the congressional mandate to provide high quality legal assistance to low-income people. Each program is a separate, non-profit corporation governed by a Board of Directors established pursuant to LSC regulations. Sixty per cent of the board members must be licensed attorneys, and 33% of the members must be low-income persons. All board members are appointed pursuant to LSC regulations and the corporate by-laws of the individual legal services program by bar associations. law schools, client groups, community organizations, and other entities which are supportive of legal services for the poor. Legal services programs are operated pursuant to Congressional and LSC requirements which are implemented by each program's Board of Directors. LSC establishes maximum
financial qualifications for eligible clients, and the Board of Directors of each legal services program sets the actual eligibility guidelines within said maximum. Only civil representation is permitted, though a narrow exception is allowed for very limited criminal representation. No fee generating cases may be handled unless strict guidelines are met, such as refusal by two private attorneys or a lawyer referral system. There are restrictions in regard to client appeals, attomey hiring, class actions, community outreach and education, and client grievance procedures. In each state a state advisory council is appointed by the governor. Some of the LSC regulations allow a degree of flexibility in order to tailor policies to local client needs. Unfortunately, even with these restrictions, federal funding for legal services has not matched the need for legal assistance in civil matters. Therefore, LSC requires each program to set priorities based on the needs of the poverty community as expressed by poor persons as well as other interested persons. To do otherwise would violate Canons six and seven. Fortunately, my own program, Central Arkansas Legal Services, has received a generous amount of assistance through pro bono representation by local private attomeys and thro.ugh the UALR Law
Don M. Hollingsworth has been the Executive Director, Central Arkansas Legal Services since September 1978. Previously, he was a staff attorney for Memphis Area Legal Services, 1972-76. He received his J. D. at Vanderbilt School of Law in 1972. He is a member of the American, Arkansas and Pulaski County Bar Associations. He is admitted to practice in Arkansas and Tennessee. During recent years, he has been active with numerous organizations concemed for the handicapped, especially children, and has received recognition for his commitment.
34/Arkansas Lawyer/January 1980
SChool Clinic in serving clients who would have been denied legal representation otherwise. In addition to insufficient funding in areas already being served, 18 Arkansas counties have no legal services programs. 1980 is the year in which it is expected that legal services for the poor will be established in the remaining unserved counties of Ar1<ansas. During August, 1979, LSC started the process of seeking applications from local groups in the bar and the communities which are interested in participating in this expansion of legal services. The 1979 expansion produced the newest legal services program in Arkansas, Legal Services of Ar1<ansas, which will provide legal assistance through a combination of staff attorneys and judicare, an experiment undertaken previously by Northwest Arkansas Legal Services and several other legal services programs in the United States. Legal Services of Arkansas (LSA) will be providing services in some 19 counties as well as housing several statewide support functions such as training and coordination.' Judicare representation will be accomplished through contractual agreements with local attorneys in the LSA counties. Local private attorneys will agree to handle certain types of cases at an hourly rate. Eligible clients will be free to choose their attorneys from the list of those who have agreed to cooperate in the jUdicare program. It is often overlooked that the private law firm and legal services face similar problems which the legal profession has not always addressed adequately. In legal services the problems can be more severe since our staff attorneys are often inexperienced and we must administer numerous federal requirements. Sound management-both financial and legal-is a necessity, and it is receiving increased attention now. Staff training and support is a continuing need which is only partially met at this time. The challenge is thus clear, for legal services should not be a training ground for inexperienced attomeys at the expense of the poor. Fortunately, it is becoming more common to find legal services attorneys with three and more years of experience in the practice of law. An aspect of legal services practice which is different from private practice (continued on page 47)
LEGAL SERVICES PROGRAMS IN ARKANSAS Poverty Population' and
Counties 5ervled In 1979
Program Northwest Arkansas Legal 8ervices 3 Building 0
530 North College Fayetteville, Arkansas 72701
45,470 Washington, Benton, Madison, Boone, Carroll, Newton, Marion, Searcy & Baxter
Phone: S01/442-0600 Douglas Wilson. Executive Director Western Arkansas legal Services
Professional Building
100 North 6th Street Fort Sm~h, Arkansas 72901 Phone: S01/785-5211
33,439 Crawford, Sebastian, SCott, Logan, Yell & Franklin
Harry Fottz. Executive Director East Texas Legal Services
20.606
Texarkana Branch Office
Miller, Lafayette, Hempstead & Little River
1425 College Drive, P.O. Box 170 Texarkana, Arkansas 75501
Phone: 214/793-7661 John Buckley, Managing Attomey East Arkansas Legal Services
66,956
Post OffICe Box 1149
Crittenden, St. Francis, Cross, Lee & Phillips
West Memphis, Arkansas 72301
Phone: S01/732-6370 Sandy Smegelsky, Executive Director Legal Services of Northeast Arkansas 202 Walnut Street Post Office Box 623 Newport, Arkansas 72212
33,770 Jackson, Independence, Lawrence, Poinsett, Randolph & Woodruff
Phone: S01/523-9892 Robert Lamb, Executive Director Central Arkansas legal Services
117,055
209 West Capitol Avenue Suite 36
Pulaski, Jefferson, Garland, Saline, Lonoke, Faulkner,
Hot Spring & Clar1<
Little Rock, Ar1<ansas 72201 Phone: S01/376-3423 Don Hollingsworth, Executive Director Legal Services of Arkansas
Post Office Box 203B Little Rock, Ar1<ansas 72203 Phone: SOl /376-801 5 Lonnie Powers, Executive Director
1
Ouachita, Columbia, Union, Calhoun, Cleveland, Grant, Bradley, Ashley, Drew, Chicot, Desha, Uncoln, Arkansas, Prairie, & Conwaya
Population figures are based upon the 1970 census (U.S. dept. of Commerce County and C~
I
97,631 Polk, Montgomery, Pike, Dallas,
Data Boo!< 1972).
tt may be several months before services are provided in all of these nineteen counties by
Legal Services of Arkansas. , NWALS has changed
~
name to Ozar1< Legal 5ervices.
The following counties will be considered for funding of legal services programs to begin January, 1980. County Poor County Poor Clay Clebume Craighead Fulton Greene
Howard Izard Johnson Mississippi
6724 3872 11278 3363 6094 2332 2301 3964
21684
Monroe Nevada Perry Pope Sevier
Sharp Stone Van Buren White
7500 3648
1918 6627 255B 2817 3272 2769 10312
January 19BO/Ar1<ansas Lawyer/35
CORPORATE OR PARTNERSHIP* or There Really Is No Choice
If you are looking at the overall profitability for yourself and expect to make money in your law practice, then, in my opinion, you should incorporate. The tax and non-tax advantages by far outweigh the disadvantages. At least if you analytically and purposely decide not to incorporate you've made a choice; but I know for a fact that many of our sisters and brethren do not incorporate because of inertia, old-fashioned concepts, procrastination or fear of the unknown. They are giving money to Uncle Sam as the stiff penalty. We've been incorporated since California allowed professional corporations. We have purposely reviewed that decision, and had outside tax and business consultants impartially do the same for us. Without dissent, there is unanimous corroboration of that eight year old decision. Let's discuss the advantages from two views: â&#x20AC;˘ Tax benefits; and non-tax advantages Profit Sharing â&#x20AC;˘ Qualified Plan/Pension Plan. (It may be considered a taxable benefit, but it's major so I put it in a separate category)
Some Tax Benefits. The benefits ennumerated below are primarily tax benefits, but may also include non-tax benefits in many cases. If you are a partner, no deduction is allowed for group term-life insurance premiums paid by you, but, as an employee (and as a shareholder), premiums on life coverage up to $50,000 are deductible to the corporation. If you need more than the $50,000, you get a further break since you personally are taxed not on the corporation's actual premium payment, but on the Treasury's artificial table of insurance costs. It's in effect discount insurance. With both these benefits the overall saving is perhaps $1 ,000 a year. All costs in group medical insurance, hospitalization and accident & health plans are deductible to the corporation and not taxed to you. These could save you about $1,200 or more a year. This is far better than you, as a partner, taking premiums paid as a personal medical deduction-if you can qualify to take it. The corporation can elect to provide your wife or estate with an excl udable death benefit up to $5,000 free of estate or income tax. As a partner you can't do so. The savings
could be up to $2,500 or more, depending on the size of your taxable estate. The professional corporation can provide reimbursement for all medical and dental expenses of selected employees including you, on a discriminatory basis; this can also be provided to your dependents at the election of the corporation. Certainly your legal partnership can't do that. This savings depends on such varying factors it can not readily be calculated. Both a tax and non-tax benefit is the coverage afforded to you by "your" corporation of Workers' Compensation, social security and state disability insurance. Two of these are deductible to the entity since you are a legitimate employee. As a partner or sole proprietor lawyer, they are either not deductible, or, if so, only on a limited basis under certain circumstances.
By choosing a corporate fiscal year different than the shareholder's own, there can be some shifting of income from a higher to a lower bracket. There are many variants of this in
-Here, the use 01 "parties," "shareholders", or "corporation" will be used precisely. .... In the next article I'll describe in more detail some tax savings, the set up and administrative organization; also, I'll briefly compare it with Keogh. .... This doesn't take into effect the higher taxes you might pay on the income from your investments in later years. For simplicity I've used a straight 500/0 lax.
36/Arkansas Lawyer/January 1980
using tax techniques. Prudent planning can legitimately and effectively lessen taxes over a two year or longer period.
Further, it is a direct benefit to the corporation and its shareholders to realize that income is taxed at a more-favorable 20% rate on the first $25,000 of taxable income and 22% of all taxable income over $25,000; with the 26% sur-tax rate only applying on taxable income over $50,000 per year. This normally compares with far higher individual rates had that amount been fully paid out to the shareholders employees in addition to their salaries. Perhaps not quite measurable, is the so-called "double-pocket" concept of both your corporation and your individually filing returns. Office, promotion, entertainment, automobile, telephone, parking, business travel, and other expenses can be reimbursed by the corporation to you; but, if not reimbursed, they can frequently be deducted personally as legitimate business expenses expended in pursuit of your vocation.
Non-Tax Benefits. There are more benefits to the shareholders from corporate existence; there are several of a non-tax type. I discount limited liability as being, in the overwhelming number of cases, of no moment (and usually so circumscribed as not "limited"), but it's a factor.
The ease of transfer of stock interest on death or withdrawal is apparent. Picture yourself handling a client's estate and making a determination of which is easier to clear up, a partnership interest or stock ownership.
I've already alluded to the tax benefit of the corporation deducting and providing social security and Workers' Compensation to you, as well as mandatory inclusion in your state disability insurance program; but the benefits beyond taxability consequences are real. They can amount in California, for example, to about $1,800 per year, plus a possibility of death proceeds under Workers' Compensation. We think there is an advantage to the streamlined business administration of a corporation over a partnership. You must and should want to keep the corporation separate from the partner's personal business for many reasons. This has an advantage in orderly handling without one partner taking undue advantage. In firms having constant turnovers, it's easier to handle; in day to day management it is easier. Problems concerning the separation of assets between partners is minimized or eliminated by corporate ownership. Voting control can be separated from the ownership of stock in a corporation, but is difficult or sometimes impossible in a partnership. Voting
trusts, revocable or even irrevocable proxies may be granted. If you are a selling senior shareholder you can sell your stock over a period of time, but retain a measure of say as a protection. Conditional proxies can be utilized for you as a retiring shareholder or to younger members coming up the line. The stock as a retiring shareholder can be held without voting interest; but it may have a real value in coverage of malpractice insurance, long-term payout, or other cogent reasons. The important point being that there's more flexibility in handling shares than in having a partnership interest.
Deferred compensation to you as a specific lawyer employee may be arranged upon a discriminatory basis. This is in addition to the qualified pension plan we'll discuss in the next chapter. Thus, the corporation may agree with you to make continued payments to you after you retire or even to your family in case of your death. All or part of this is deductible to the corporation. It may result in lessening your income during otherwise higher tax bracket periods and receiving income later when you are a lower bracket.
Profit Sharing and Pension Plans Advantage." Here I wish I could wax eloquent as I believe this advantage alone equals or exceeds all the rest. We have in our firm both allowable plans and contribute the maximum allowable amount.
BERTRAM S. SILVER, J. D. '47, Harvard Law School; B. A. '44, University of California, is a senior partner-shareholder of Silver, Rosen, Fischer & Stecher and practices in San Francisco, California; he specializes in transportation law before regulatory agencies and State and Federal appellate courts. He is the Past President of the National Motor Carrier Lawyers Association. Author of numerous articles and lecturer in his field and on business practice in the law office and is the author of "HOW TO MAKE A BETTER PROFIT IN THE LAW OFFICE-YEAR AFTER YEAR."
January 1980/Arkansas Lawyer/37
All contributions to your qualified plans are deductible to the corporation and not then taxable to the beneficiaries. As a rule of thumb, that can be up to 25% of the total earnings of all participants. So you say, "But, I don't have that much (or any) left to put in." Then I say: • read my book again thoroughly and by following its precepts, save yourself more money than that; • cut the salaries of all the partners and contribute that amount instead of trying to save outside the plans; or • go into some other business because you're not business wise suited to be a lawyer. Why is this so important? Taxable corporate income in excess of $50,000 is taxed at 48% for federal purposes plus usually a further percentage for your state income taxes. If you pay it out in salaries at the top bracket it's usually close to 50% federal-again, plus state taxes. Instead, if left to accumulate in the plans without the tax bite and drawn later; you'll either be retired or semi-retired and in a much lower bracket.
One dramatic effect of tax free accumulation and compound interest (presented on a simplistic basis) will here suffice. Assume you earn $75,000 a year from your practice, of which you save-in one form or another-$7,500. You pay more than 50% income taxes to both IRS and your state, so the $7,500 you save comes from $15,000 gross eamings before taxes. This is especially tnue since it's the last dollars and at the highest bracket. Assuming your after tax investment eams an average of only 5% per year, your savings outside the Plans will accumulate at the rate of only 2V2% net after taxes. Thus, $7,500 invested for 25 years at 2V2% will give you a nest egg of $240,000.···
avoidable. Less immediate cash and start-up costs are some reasons lawyers permanently defer the choice and transition. The extra costs of FICA, Workers' Compensation or state disability insurance, may actually be to your advantage as abovedescribed. The extra costs of Franchise Tax (State Income Tax), malpractice insurance, or maintenance of your corporation are a small trade-off for the enormous benefits derived. The possible legal risks and problems of unreasonable salary to shareholders; collapsible corporations or accumulated earnings, have not appeared. Those that braved them early were well rewarded. Those that have waited to start have lost the past years' benefit of accumulation.
If, however; you use the full $15,000 before taxes and invest it through the plans, then the corporate income and your spendable remains unchanged, since it's deductible to the corporation and not taxable to you at that time. Since the plans pay no income tax, the 5% earnings accumulate in full and will work for you at 5% instead of at 2V2% net. At the end of the same 25 years, you'd have approximately $715,000 instead of $240,000. Quite a $475,000 difference on which to later pay lower taxes.
Well, that's it in a simplistic fomn. We've lived with it, penused the advantages and disadvantages of corporate fomn and use of Profit Sharing Plan/Pension Plan and review it constantly. There's little reason for us to change our minds when we see our future retirement build and build and build.
1. Practice in a corporate fomn.
It can be your own security in retirement.
I also recognize that there are some disadvantages to the corporate form, but submit that these are either not major or with careful handling,
(Editor's Note: This is the first of two articies by Bertram S. Silver. The second will be on Pension and Profit Sharing Plans. When Silver submitted these articles for publication, we were delighted as they fit in with the 1980 Annual Meeting's
"Being somewhat prejudiced and biased, I agree with the author of all 01 his comments. I believe further that each of the items he discussed are still pertinent, but/ike a picture, it was the state olthe art at a particular time.
theme on economics of law practice. However, we requested George Plastiras
to review same for legal sufficiency. He and Harvey L. Bell authored the article, The Legal Professional Corporation In Arkansas, Fact or Fad? in The Arkansas Lawyer, June 1974. This last article was re-printed in Law Office Economics and Management, edited by Robert P. Bigelo, Plastiras' evaluation of Silver's article follows: 38/Arkansas Lawyer/January 1980
RULES:
Legislative changes have limited the advantage of the medical reimbursements beginning 1980.
One omission in the article which I leel very strong about and should be discussed, is the attorney's failure to protect himself against disability. lf the corporation purchases the disability policy, it is deductible to the corporation. In addition, the employee is not subject to
2. Use the qualified Profit Sharing Plan/Pension Plan forms of retirement benefits.
income tax as a result of the premium
payment. In the event the employee becomes disabled, and he received the benefits from the disability policy, the proceeds received are treated as income. lf the corporation chooses not to purchase the disability on the employee, and the employee pays for the premium himself; then he receives no deduction at the time of the payment of the policy. Ukewise, he would not have to report the receipt of the proceeds as income. With these few comments, I think that the articles are worthy of publishing in The
Arkansas Lawyer. ")
SPECIALIZED UNIT OF NATIONAL REPORTER SYSTEM West announces new Bankruptcy Reporter Lawyers and judges seeking a more complete bankruptcy reporting service will welcome West's Bankruptcy Reporter, a new unit of the National Reporter System. Starting in January, 1980, West will publish the first of the monthiy advance sheets for the Bankruptcy Reporter. It is expected that bound volumes will be pUblished at intervals of three to four months,
forms, bankruptcy cases of special interest, and non-bankruptcy cases which have bearing on bankruptcy matters. Case-finding will be facilitated with a Key Number Digest section, Table of Cases Reported and other tabies in
each advance sheet. A special Cumulative Key Number Digest, to be published at periodic intervals, will also be available to Bankruptcy Reporter subscribers. These pamphlets will index all cases published in each bound volume.
West's Bankruptcy Reporter will report the decisions of the U.S. Bankruptcy Courts, U.S. District Court, U.S. Courts of Appeals and U.S. Supreme Court. According to West, the new Bankruptcy Reporter will provide a unique and vital service to the bankruptcy bench and bar. Each reported case in the Bankruptcy Reporter will contain the complete text of the court opinion, a case synopsis which gives the facts, issues and rulings in brief, and headnotes which give each point of law decidec:\--{:onsistent with the format of other units of the National Reporter System. This differs from bankruptcy services which provide only a summary or condensation of decisions, or selectively include the complete text of certain decisions. Advance sheets will have added special features to help keep the bankruptcy practitioner up to date on what's new in bankruptcy law. A Bankruptcy Newsletter, at the front of each advance sheet, will give notice of newly promulgated rules and
For accuracy and research confidence you need consistency in your case faw headnoting.
West's Arkansas Cases gives you just this kind of consistency. • All cases are analyzed and head noted by a staff of highly trained and highly skilled editor! lawyers who utilize the time-tested Key Number System of classification. • Updating a case is an automatic mechanical process with the Key Number System because of its built-in consistency. Arduous searching to be sure a case has not been overruled is eliminated with West's system. • Publishing of bound volumes as well as advance sheets is done by the same publisher. There are no year or more waits to get the bound volumes your convenience demands. • Reporting accuracy is assured through West's policy of case verification before publication and a multi-phase proof-reading operation. Your practice deserves the kind of consistency West's Arkansas Cases olfers. Call Elmer P. Roberts at 501/224-5471 or write him at, P. 0 .. Box. 7659. linle. Rock. AR 722'7 today for more details . .. Including cost which you will lind 10 be amazingly low.
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January 1980/ArI<ansas Lawyer/39
~
1111
JURIS DICTUM by C.
Executive Secretary, Judicial Department
L'ENVOI Disregarding the admonition of Satchel Paige to; "Don't look back, something may be gaining on you" I, with some temerity; with a modest deg ree of pride; and on the eve of my departure from office effective December 31 of this year; think that a brief history of some of the events which occured during my tenure in office might be of passing interest to the casual reader of this column. SUNSET HEARING On September 20 the Interim Joint JUdiciary Committee of the House and Senate heard testimony from our department on the question of whether or not the office of Executive Secretary of the Judicial Department should continue to exist. I am pleased to report that the answer was unanimously in the affirmative. As I reported to the committee, it was truly "Sunset" for my personal efforts in an official capacity. but "Sunrise" for my successor in office, whoever he may be. IN THE BEGINNING Act 496 of 1965 adopted the recommendation of the Commission on the Judiciary headed by Bar leader, now Justice, John A. Fogleman, that the Chief Justice of the Arkansas Supreme Court be designated Administrative Director of all Arkansas Courts and that he select with the approval of the State Judicial Council, an Executive Secretary to assist him in performing numerous specified duties and assuming many responsibilities not generally considered at that time a part of the obligations of that office. As a result, after having been chosen by Chief Justice Carleton Harris and approved by the Judicial Council, I was swom in on July 1, 1965. INFORMATION ABOUT COURTS Prior to the establishment of the Office of Executive Secretary little was
40/Arkansas Lawyer/January 1980
R. Huie
known by the Executive and Legislative branches and the public generally of the actual workload and work accomplished by our State's Judges, and the creation of new judgeships was largely the result of local pressure on the General Assembly and the Governor. The Judiciary Commission established in 1963 having conducted an intensive survey of all Courts covering a ten year period and compiled workload statistics for that period for its report to the 1965 General Assembly had ended its existance and it was therefore of utmost importance that information concerning court operations continue to be made available to the three branches of government in order that intelligent policy decisions might be made. This, then, was the first order of business for the newly created office. Annual reports of the business of the courts have thus been made a regular function of the office and have been published for each year beginning with 1964. These reports not only cover the workload and workaccomplished business of the courts but also report important developments and changes in the court system. They are distributed to all members of the General Assembly, all major executive branch agencies, all Judges and Court Clerks; all law schools, all Arkansas Universities and Colleges; all State Court Administrators, and to our Congressional delegation. In addition, copies are available for attomeys and others interested in the structure and operation of our court system. OTHER DEVELOPMENTS While the Administrative Office of the Courts does not by any means seek or claim credit for many of the following, it assisted the Supreme Court, the Arkansas Bar Association, and the State Judicial Council in bringing to fruition the projects later described.
JUDICIAL EDUCATION The first seminar for Trial Judges was conducted in 1966 in conjunction with the Annual Meeting of the State Judicial Council. Since that time seminars have been held annually and in recent years twice a year. This program of Continuing Judicial Education has proved of value to more experienced Judges and of great benefit to JUdges assuming the bench for the first time. It also assists Judges in keeping abreast of changes and developments in statutory and case law. JUDICIAL ASSIGNMENTS The year 1966 also brought into full activity the process of assignment of Judges by the Chief Justice to Circuits developing court congestion. Assignments were also utilized when the resident Judge disqualified. Through the years this procedure has assisted significantly in achieVing a flexible administration of court activity. LOCAL COURTS In 1967 a survey and study of Municipal, City, Police and Justice Courts was initiated which resulted in the publication of two documents: first "A Survey of 1968 Activities of Courts in Arkansas trying Traffic Cases" published in 1969 and, second; "Arkansas Local Court Judges Manual" published shortly thereafter and revised in 1973. The manual has proved of benefit to local court judges and plans are underway to revise and update in 1980. These courts are a very important segment of our system and in many instances constitute the only contact the average citizen has with the system. UNIFORM RULES FOR CIRCUIT, CHANCERY AND PROBATE COURTS In 1968, the Judicial Council in cooperation with the Arkansas Bar Association petitioned the Supreme
Court to adopt "Uniform Rules for Circuit, Chancery and Probate Courts in Arkansas". The petitions were granted by the Supreme Court in February, 1969 and the Uniform Rules are now in effect throughout the State. SUPREME COURT WORKLOAD In its report of 1968 Judicial Statistics the Judicial Department staff made the following prediction: "Judging from the experience each year from 1960 through 1968, it may be reasonably assumed that the 1980 appeals to the Supreme Court will exceed 600 cases per year and the total workload will exceed 1,555 excluding motions for extension, and each Justice will be faced with the impossible task of writing between 85 and 86 opinions per year if currency is to be maintained. "It is therefore recommended that serious consideration and study be given to appropriate methods, including the establishment of an Intermediate Appellate Court, in order that action may be taken to avoid the delays experienced by other states at the Appellate Court level." In line with the forecast, 585 appeals were decided by the Court during 1978 and its total workload reached a record 1,070. Written majority opinions by each Justice averaged 77. It is now plainly evident that the activation of a Court of Appeals on July 1, 1979 came not a moment too soon. AMIC The highly acclaimed success and general acceptance of Arkansas Model Jury Instructions (Civil) inspired the Arkansas Bar Association acting through the Criminal Law Section to petition the Supreme Court to undertake the preparation of model instructions-{;riminal. As a result of this action the Supreme Court made application to the Commission on Crime and Law Enforcement for a grant under the provisions of the Omnibus Crime Control and Safe Streets Act of 1968. The letter from Chief Justice Harris to Mr. John Hickey, then Director olthe Commission, transmitting the application is here quoted in part to indicate the importance the Supreme Court attached to the funding of the project. "The project is supported by the Arkansas Bar Association, which for several years has been aware of the necessity for Model Jury Instructions in Criminal
Cases and the improvement in the administration of criminal justice such a project will accomplish when the instructions have finally been prepared and their use throughout the state implemented by rule of the Supreme Court." The project was funded and begun, but then interrupted by the passage of a new criminal code and completion was delayed. The project was finally completed and the instructions published in 1979, 10 years later. CRIMINAL CODE REVISION Following the passage of Act 400 of 1971 the Supreme Court jointly with the Attorney General established the Arkansas Criminal Code Revision Commission. Two committees, one procedural, the other substantive, were then appointed. The substantive committee appointed by the Attorney General was charged with recommending a complete revision of the substantive criminal laws. The procedural committee, appointed by the Supreme Court was charged with recommending revisions of criminal procedure. The work of the substantive committee resulted in a new criminal code, Act 280 of 1975 which became effective January 1, 1976. The work of the procedural committee resulted in new procedural rules promulgated by the Supreme Court which became effective January 1, 1976. NEW RULES OF PLEADING, PRACTICE AND PROCEDURE Act 38 of 1973 provided that the Supreme Court should promulgate rules of pleading, practice, and procedure for civil cases supplanting the then existing Code of Civil Procedure. The Court appointed the committee by per curiam orderon May 20,1974. The committee completed its work in 1977 and filed its report with the Supreme Court on November 16 of that year. The rules, adopted as modified by the Court on December 18, 1978 became effective on July 1, 1979. REALIGNMENT OF JUDICIAL CIRCUITS The realignment of Court Circuits, always a sensitive political issue, was begun by the State Board of Judicial Apportionment in 1975 in response to
a joint resolution by the Arkansas General Assembly. Work of this Board was completed with the passage of Act 432 of 1977, which, for the first time in recent history of the court system provided that Chancery Court Circuits be coterminous with Circuit Court Circuits effective January 1, 1979. Now 22 Judicial Circuits replace 19 Judicial and 18 Chancery Circuits. Three of the 22 have one Circuit Judge who also has equity jurisdiction. The judges in those Circuits are both Circuit JUdges and Chancellors as well as JUdges of the Probate Court. COURT OF APPEALS Of utmost importance to the Judicial System was the passage by the Arkansas General Assembly in 1977 of Senate Joint Resolution 5 which placed upon the election ballot in the general election of November 1978 the proposal to amend the Arkansas Constitution to permit creation of an Intermediate Court of Appeals. This amendment was approved by the voters in the 1978 general election and the new court, consisting of 6 judges came into existance on July 1, 1979. The relief to the overburdened Supreme Court is already being felt and litigants are benefitted by timely disposition of appellate cases; all of which will be documented in the departmenfs 1980 Annual Report. CONCLUSION The department has participated in many other activities but to list them all would encompass a composition of much greater length. It is therefore sufficient, I think, to mention several projects now underway which will come to fruition in the years ahead. These are: (1) The Judicial Planning Committee which is engaged in preparing short and long term plans for improvement in all phases of the court system; (2) Preparation of benchbook for Circuit Judges and Chancellors; (3) Updating of manual for local courts; and (4) Completion of an improved data gathering system which will utilize the fast developing science of electronic data processing. Thus, in farewell, I leave a progressive and forward-looking organization dedicated to its task of service and with the hope that future events will reveal that efforts thus far expended will not have been in vain.
--I
January 1960/Arkansas Lawyer/41
PSYCHOLOGICAL OVERLAY IN WORKER'S COMPENSATION By Dr. John Ewing Harris The following discourse outlines a practical approach to the evaluation and treatment of the injured employee. Psychologists can offer valuable services that could greatly enhance the success of the rehabilitation effort. Unfortunately, all too often the evaluation procedure does not prove to be illuminative but only adds to the overall cost in the rehabilitation process. It is my belief that psychological factors have received less consideration than is warranted. The mental health professions generally are not consulted until all other resources have been utilized. Psychological evaluation belongs at the beginning, not at the end of the individual treatment. To give psychologists their proper place requires major changes in long established attitudes and val ues to allow the application of knowledge that has been accumulating for a number of decades. Failure to use this knowledge is detrimental to the injured employees and their families, the administrators, judges, attomeys, and carriers. A concerted effort must be made to overcome the resistance to change and revise current priorities. Although much has been written concerning the importance of psychological factors in the evaluation of physical impairment, such factors have typically been accorded little weight in the medicolegal disability determination process. Two factors are responsible for this: (1) The non mental health experts involved in the case have difficulty in describing or even recognizing the existance of an emotional "overlay," so the psychological aspects may be precluded. (2) There is a tendency on the part of the claimant's themselves to deny or minimize the presence of any psychological factors. 42/Ar1<ansas LawyerlJanuary 1980
The physician is usually the first health professional to enter the scene after an injury has occured. He provides emergency evaluation and subsequently, d~finitive or continuing care. Unfortunately, there are times when emotional or psychological factors complicating the physical impairment may be omitted in this initial evaluation. Often recovery is hampered by these emotional factors and numerous unnecessary laboratory and radiological investigations, and frequent consultations, are run to rule out physical or organic problems. When physical factors are treated and resolved, and the claimant continues to have problems, the health professional may tell the patient," There is nothing wrong with you," or "it's all in your head," or "you'll never be able to go back to work now." These statements are toxic in themselves and are a tremendous roadblock and disservice to the injured party and the other members involved in the treatment Ire habilitation process. Many physicians focus exclusively upon physical malfunction and thereby reinforce the need of the patient to prove and support his physical disability, thereby avoiding acceptance of any phychological cause for the problem. As the recent Arkansas Legislative Joint Performance Review Committee's report on "Workers Compensation and Rehabilitation" (1978) continually pointed out, all too often we have unconsciously and, on occasion consciously, supported disability rather than healing. So many of the parties who have a vested interest in the case may request consultation for opinion after opinion to rule out a number of physical disorders. These efforts contribute to reinforcing the pathology of the claimant. The claimant goes on to develop an exaggerated and pro-
Dr. Ha"is is a clinical psychologist in private practice in Utile Rock, Arkansas. He has had extensive experience in individual psychotherapy, vocational rehabilitation, and diagnostic evaluations. He has a unique educational background. His doctorate (Ph.D.) in psychology was earned at Texas Tech. University in Lubbock, Texas. Prior to this he completed seminary with a Master of Divinity degree (M.Div.) at Texas Christian University's Brite Divinity School. Dr. Harris currently holds an appointment to the University of Arkansas Medical Sciences Campus as a clinical instructor. His postdoctoral studies include training in stress management, biofeedback, hypnotherapy, relaxation therapy, and grief counseling. He is a member of the Executive Board of the Arkansas Psychological Association and is listed on the National Register of Health Services Providers in Psychology. longed pattern of dependency. Far too often it has been my experience that the clinical psychologist is the last consultant to be approached; the last resort; when all other avenues have been explored, contact a psychologist. It is not unusual for five or six years to elaspe from the incurred injury date before the clinical psychologist is called upon. By this time the injured worker often sees the entire process as mechanical, indifferent, and confusing. He has become resentful and even hostile toward those who are sincere in their efforts to help him. At this time the resolution of the problem becomes highly improbable. Often disability is prolonged by those questionable cases and those not covered by precedent. There are
often legitimate delays before the case is decided but this further increases the nature of the problem often leading to reinforcement of the defense mechanisms of regression, primary and secondary gain. These terms are frequently bandied about in disability cases. Let me clear up the confusion in their use. (1) Regression-is the partial or symbolic return to more infantile ways of behaving or patterns of reacting. Examples are: frequent crying, temper tantrums, excessive sleep, play, severe physical illness. (2) Primary gain-is the relief from emotional conflict and freedom from anxiety achieved by a defense or coping mechanism. All of our defense mechanisms operate in the service of primary gain. (3) Secondary gain-is the external gain that is derived from any illness, such as personal attention and service, monetary gains, disability benefits, and release from unpleasant responsibility. To mitigate the effect of these three factors, the compensation system should require, make it mandatory, an early assessment of psychological function. At this stage of the disability case, there is little likelihood of a successful resolution. The injured party is in a situation that is painfUl to him and to those of his immediate environment. The system subsequently gets locked into paying off large benefits for as long as the individual lives. The point is that there was a period of time when successful psychological intervention and rehabilitation might have been achieved. A clinical psychologist's evaluation should have been utilized with the hope that the life course of the individual could have been assessed and possibly altered in order to prevent long-term incapacitation. There are significant clues during the first several weeks of an injury which if properly acknowledged could often lead to a more favorable outcome for all those concerned. In deciding whether or not to employ the services of a psychologist in a particular case the key signs include: (1) Disparity between physical evidence of damage and the amount of disability exhibited. (2) High level of anxiety associated with early depressive symptoms.
(3) Failure to improve with treatment. (4) Presence of selected personality features: (a) Between 40 and 55 years old (b) Rural background (c) 8th grade or less education (d) Grew up in an intact family with both parents present (e) Rapid transition from childhood to adulthood (f) Stable, consistent work record (g) No past medical history but currently goes from doctor to doctor (h) Restlessness, fatigability, impatience, complaints of memory loss, and social withdrawal The claimant who presents anyone of these symptoms or characteristics increases the probability of emotional problems at a later time. This is not a simple cause-effect relationship but is a composite of the typical claimant who has some degree of psychological overlay in association with their injury. Until recently, little objective evidence concerning the psychological status of claimants have been reported. In the last 10 years, however, a number of research studies have demonstrated positive findings that allows one to derive a psychological profile for the claimants who have the potential to prolong their recovery after a physical injury. Three methods of investigation have been used in these studies: (1) Studies of claimant groups with and without objective physical evidences of disability have been compared; (2) Comparisons have been made between groups of claimants with acute injuries (6 months or less duration) versus chronic injuries; (greater than 6 months) (3) Evaluation of surgical candidates with psychological tests prior to surgery has been done with the comparison of test profiles of good as opposed to poor surgical outcomes. A variety of psychological tests have been used in these studies. These tests have in common the ability to attach discrete numerical values to personality and ability characteristics. Most frequently, the Minnesota Multiphasic Personality Inventory (MMPI) has been used. It is a paper and pencil true-false questionaire that requires approximately two hours to
complete. Once test responses are obtained from the claimant, four validity scales, ten clinical scales, and a number of special scales appropriate to the clinical situation are derived. The ten clinical scales include: (1) Hypochondriasis (Hs) (2) Depression (D) (3) Hysteria (Hy) (4) Psychopathic Deviate (Pd) (5) Masculinity-feminity (MF) (6) Paranoia (Pa) (7) Psychasthenia (P1) (8) Schizophrenia (Sc) (9) Hypomania (Ma) (10) Social Introversion (Si) The four validating scales (?,L,F,K,) that can suggest either undue exaggeration or defensiveness in responding to the items. The profile pattem of the claimant's responses on these scales is used to provide a personality description of the claimant. It is important to understand that the MMPI is not a direct, self-report device in the sense that the person's answers are accepted at face value. Rahter, item responses are treated as samples of behavior, the significance of which has been established empirically. Research using the MMPI on disability claimants has shown clinically significant elevations on three of the scales: Hypochodriasis (Hs), Depression (D), and Hysteria (Hy). One study by Wiltse and Rocchio in 1975 has shown this finding held up regardless of the number of pre-existing objective, organic deficits found on pre-operative medical examinations. In this study, the combined scores on Hypochodriasis (Hs) and Hysteria (Hy) scales provided the most effective single predictor of the response to medical or surgical treatment. As the combined scale elevations rise, the probability of a good, positive response to treatment decreases. Therefore, the MMPI is a valuable laboratory adjunct regarding the psychological components of the claimant's symptoms. The test cannot precisely identify specific psychogenic factors complicating a particular case. To answer these questions, a more detailed psychological evaluation is employed. The use of a comprehensive psychological test battery is an intergal part of the total treatment of the work injured claimant. It's purpose covers at least five major areas: (1) SCREENING to determine the potential for the development of January 19BO/Arkansas Lawyer/43
non-organically based physical symptoms---<" if functional problems exist. (2) EVALUATION of the level of current functioning and future potential (3) IDENTIFICATION of past, present, of potential psycho-dynamic issues that have, or might contribute to or produce symptoms. (4) DOCUMENTATION of behavioral defects that have been shown consistently to be associated with neurological deficit and recording of abilities and coping mechanisms that the claimant has relied on in the past to meet his emotional needs. (5) OBSERVATION to provide a comprehensive series of behavioral observations to document inconsistent claimant performances which would be compatible with conscious, overtly feigned or exaggerated symptoms. So the psychological evaluation of an injured worker should include:
A.
B.
CLINICAL OR DIAGNOSITIC INTERVIEW Careful attention should be given to evaluating: (1) Pre-injury or pre-morbid psychological status (2) Reaction to stressful past events (3) Details of and reaction to the injury (4) Elucidation of stresses and conflicts in life before, at the time of, and after the accident (5) Attitudes toward employer, employees, and professionals (6) Psychological status and functioning since the accident paying close attention to primary and secondary gain, the use of pain medication or alcohol. SOCIAL HISTORY This evaluation should include: (1) Family members reactions to the injury (2) Pattems of interaction between claimant and his family before and after the injury (3) Family members estimates of claimant's level of ability, disability, and symptoms (4) Recording of the level of functioning since off work (5) History of medication of alcohol usage
44/Arkansas Lawyer/January 1980
(6) Educational, familial, and occupational history
C.
PSYCHOLOGICAL TESTING
The formal mental status examination should include: (1) Intelligence test-Wechsler Adult Intelligence Scale (WAIS) or Shipley Institute for Living. The WAIS measures two kinds of cognitive functioning, verbal and performance. Each scale has certain subtests that tap intellectual functions. The verbal scale taps the claimant's capacity to express himself in a variety of ways through the use of words. The performance scale investigates the claimant's capaicity to go about being intelligent through the use of his hands. These scores gives clues relative to his functioning and diagnosis. (2) Personality test-MMPI (3) Projective Personality Test-Rotter Incomplete Sentences Form, TAT Rorschach. These tests are based on the realization that we ascribe to other people or things what we are actually thinking and feeling. (4) Test for Memory-Graham Kendall Memory for Designs (5) Test for Organicity-Bender Visual Motor Gestalt Test, Halstead Reitan (6) Interest test-Career Assessment Inventory (CAl), Personal Career Development Profile, Self-Directed search (SDS) (7) Other tests as the situation dictates In my own clinical practice, dealing with several hundred cases, there appear to be at least five classes of persons in whom psychological complications are most likely to develop when they incur injUry in which compensation is involved. Exhaustive testing has shown little or no physical basis fordisability and treatment does not a~er the course of the claimant. Unless this situation is recognized, rehabilitation agencies and vocational counselors are led to futile activity and often are the focus of resentment and even hostility. The categories are: (1) THE HYPOCHONDRIAC These are persons who use avoidance and denial techniques to
modify painful reality and unacceptable feelings. Although they maintain some reasonable participation in interpersonal activities they are incapable of great emotional depth in their relationships with others. They appear warm and responsive but make great demands on others and use their symptoms to control the lives of the people on whom they feel dependent. The chief difficulty in helping these persons is that (1) they are solving life's problems through their symptoms, and (2) the symptoms guarantee a legal incapacity which will provide for their continued support. The disability itself continues to solve his life's problems and they have no plans to seek rehabilitation or return to any job. The injUry occurs most often between 35 and 55 years of age. Some examples of these "wom out" persons are: (A) A 50 year old man was injured when his truck went over a bump and he hit his head on the roof. After his award he stays at home taking care of his sick wife and they live off a small income. (B) A 47 year old woman drove a forklift over a pallet and was jo~ed. She lives with her much older husband in their trailer. (C) A 39 year old male auto mechanic experienced back pain when he picked up his tool tray. He now watches television, walks around his house, and reads.
THE DEPENDENT
AND IMMATURE These are persons in their adu~ years who have never matured. They are virtually incapable of accepting responsibility for themselves and avoid situations which impose responsibility upon them. They may even openly seek, and usually secure, others who will take care of them. They often have a history of repeated job changes. If they are married, the spouse is the stronger member of the family. These are persons for whom the injUry has provided a concrete "physical" reason to explain their total dependency and lack of motivation or ability to take responsibility for themselves. They have no plans even to do any meaningfUl leisure activity.
(3) THE OVERLY CONSCIENTIOUS These are persons who have had a constant struggle over independence and self-sufficiency. They have been just one step ahead of their wishes to be dependent and to be cared for by others. They were unwilling to accept such behavior on their own part and so worked overly hard and overly long, resenting it all the while. Once they are injured, they may become "retired with a purpose". These persons have plans for an active involvement in a hobby or hobbies such as: painting, gardening, fishing, or metal detecting to name a few. (4) THE DEPRESSED These persons often have self destructive impulses and may desire to injure themselves. Qualities of these persons may be: attention turned away from the world toward the self, distractability, reduced energy and diminished coordination. (5) THE SOCIOPATH These persons are self-seeking and society is viewed as an adversary to be circumvented. He may conform to regulations and laws for much of his life, but the responses are based on a short range view of immediate consequences. When such a person is in a position to manipulate others to his own advantage, as in the instance of an industrial injury, the possibility of economic gain becomes a powerful motive to exaggerate his degree of disability. Such persons may appear to have a certain charm, especially if they feel that it is to their advantage to show it. Examination of their history will show a consistent inability to manage relationships with authority figures, frequent job changes, and few or no lasting relationships. In this final category emotional complications are not likely to develop. (6) THE OPPORTUNIST They actively intend on taking up a new occupation or starting a business of their own. Examples are: training police dogs, selling real estate, gunsmithing, stone polishing, leather working, repairing small gasoline engines, or radio and
television repair. Many times troubled life situations appear in histories of injured persons, indicating that disability existed before the mishap. After the accident has occurred, this disability is linked with an apparent physical defect, and it becomes acceptable to both the person and society. Merely stating the diagnosis of the claimant in the psychological evaluation is not sufficient, since it does not furnish enough information to adequately describe the clinical picture. Judgment conceming the issue of aggravation should rest on at least three factors in the complementary evaluation; (1) PRE-EXISTING PERSONALITY The description of predisposition consists of the claimant's outstanding personality traits, which have resulted from' inheritance and development and an evaluation of the degree of this predisposition based on the claimant's past history and personality traits. The degree of predisposition is reported as none, mild, moderate, or severe. (1) None: For no predisposition evident. When the claimant shows no evidence of previous personality traits or make-up that appear related to his present functioning. (2) Mild: When the ciaimant's history reveals mild, transcient, emotional upsets or defects of intelligence which do not significantly incapacitate him. (3) Moderate: When the claimant has a personal history of partially incapacitating emotional upsets or abnormal personality traits, of defects in intelligence, which have resulted in social maladjustment. (4) Severe: When the claimant has a definite history of a mental disorder. (2) PSYCHOLOGICAL STRESS OF THE ACCIDENT While it is recognized that multicausal factors operate, the obvious, external stress of the accident is evaluated as to: type, degree, and duration. The degree of stress must be evaluated in terms of its effect on the "average man" of the society from which the claimant comes. It must not be presumed that a
particular environmental stress is severe because one or even several individuals react poorly to it. Stress is ciassified as mild, moderate, severe. (1) Severe stress-is such that the average individual when exposed to it could be expected to develop emotional problems and symptoms. Example: earthquake, fire, tornado hits the company. (2) Moderate stress-is such that some evidence of a casual relationship can be established between the symptoms and the precipitating factors. Example: business failure, or lawsuit (3) Mild stress- is such that the average individual could be exposed to it without developing psychological symptoms. (3) THE POST-INJURY LEVEL OF FUNCTIONING The measurement of the claimant's total functioning capacity should include his emotional stability, intellect, physical condition, attitudes, motivation, and training. Under some circumstances, an individual with a moderate psychological impairment may be more effective than another individual with a minimum impairment. For example: A Professor of Mathematics who has a stroke which results in loss of abstract thought, may be disabled in his chosen occupation, but could possibly work at any number of occupations not requiring this higher level cognitive functioning. Degree of impairment refers to ineffectiveness resulting from the current psychological impairment. These categories run from: (a) No impairment (b) Minimal impairment-up to 10% ineffectiveness (c) Mild impairment-up to 30% ineffectiveness (d) Moderate impairment-up to 50% ineffectiveness (e) Severe impairment-over 50% up to 100% ineffectiveness The nature of the psychological examination, the direction taken by the examiner, the kinds of questions he asks, the areas of functioning he explores are all relevant to one overriding general principle: the patient's January 1960/Arkansas Lawyer/45
claim that he is no longer what he once was. There must be change for us to consider we are dealing with a disability. An individual who is not changed, in the sense of his capacity for employment, is not "disabled." If he has suffered a long-term, chronic condition that has been with him throughout his years of employment, and he is not different now from what he was all along, he is not disabled. Certainly, he may be disabled in comparison with other people, but he is not disabled in comparison with himself at some previous time. A surprising number of psychologists evaluate patients for disability claim and arrive at a diagnosis of their current condition without taking into uccounttheir previous mental health state or level of functioning. This is true of both signs and symptoms as well as the overall diagnosis. The fact that a claimant cannot currently do simple arithmetic or cannot accurately read the paper is of importance in light of his disability claim only if he once could do simple arithmetic and accurately read the paper. The point is that the claimant's preinjury capacity in terms of occupational and social adjustment should be used as the base line for estimating the degree of impairment. Under this evaluation system the diagnosis becomes one of four factors to be considered in evaluating a case. The evidence needs to establish a casual connection between the injury and the impairment or current functioning for it to be compensable. Early in the treatment and restorative effort a psychological assessment is crucial. Here the individual is helped to accept accountability early in the treatment program. Long absences from work make it difficult to retum to work for several reasons: (1) the anxiety associated with being reaccepted into the group, (2) the tendency of the group to exclude a fellow member during his absence, (3) the concern of being able to perform one's previous or new duties, and (4) the effect of the layoff on one's sense of self-esteem while "doing nothing and not contributing." Employers and concerned professionals must be sensitive to the needs of the claimant. A number of flexible systems could be used to reintegrate the claimant involving: (1) a part-time rather than full time return to work, (2) gradual reentry, (3) retraining if nec46/Arkansas Lawyer/January 1980
essary, and the (4) discussion and contact with former friends and employees prior to his return to work. It is important to keep in mind that a detailed diagnostic evaluation test battery is not required in every case. It may be all that is needed or initially warranted is a clinical interview with accompanying psychosocial evaluation. This could identify potential factors that may impede recovery and help integrate the mechanics of the compensation process into the treatment and rehabilitation program in a positive, constructive manner. This both to the economic advantage of the employer and carrier, and to the psychological advantage of the claimant. In addition, more dialogue is needed between legal and mental health professionals to apply these principals in an humane and pragmatic manner to injured persons. If a specific treatment program is recommended by the psychologist, then the injured party should be encouraged to seek all necessary help. The therapies prescribed for psychological disorders should be equally available to the claimant without arbitrary or discriminatory limitations. Treatments such as: biofeedback, behavior modification, relaxation techniques, and hypnosis have proven to be quite beneficial. Important factors to consider are (1) redefining the patient's problem, (2) negotiating his cooperation, (3) meeting with his family, and (4) instituting general remobilization. The patient is helped to view his problems differently by (1) using his history to demonstrate that his problem is not an acute condition but a chronic one, (2) helping the patient understand that it is unrealistic to expect a medical or surgical cure and that long term drug treatment may aggravate the condition, and (3) telling the patient that a new goal-control of his problem-must be his chief concern in order to minimize his disability. Increasingly, mental health professionals are being called upon as expert witnesses for assistance in explaining mental condition. Psychologists are becoming more familiar with the law and where psychology fits into the legal process. We are now tending to be more adept at testifying in language which everyone present (inclUding the jury) can not only understand but often find clarifying or enlightening. Psychologists are pre-
senting a more objective, unbiased picture to the parties involved. Many psychologists have the knowledge and expertise to help immensely in the courtroom.
CONCLUSION An individual with an accidental injury which makes him eligible for compensation enters a strange and complicated world unlike the corresponding environs of patients or clients of any other type. To put it simply, the significance of the psychological functioning of the injured worker must be acknowledged by all members of the system. Psychologists have a great deal to offer to those involved in Workmen's Compensation cases. It is unfortunate that psychologist's services are not being used or are being misused. The appropriate application of psychological expertise is to the advantage of all parties concemed. It is pritical that all those involved must be encouraged to leam these basic psychological principles in order that all members of the system will be able to use them as an integral part of their own contributory efforts to restore, rehabilitate, or compensate the injured worker. This would significantly improve the compensation process by preventing chronic states of invalidism; and thus, eliminate the need for compensation over a long period. BIBLIOGRAPHY Baker, Max Akten. Post-traumatic disability
states: psychiatric and psychological contribu路 lions. Artc.ans.8 Lawyer, April, 1976, 42-50.
Behan, Robert C. and Hirschfield, Alexander. The accident process: I. Etiological considerations of industrial injuries. Journal 01 the American Medical Association. Vot 186, Oc~
tober. 1963, 193-194 _ _ The accident process: II. Toward a more rational treatment of industrial injuries. Joumll of the Amerk:an Medical Association, Vol. 186, October 26, 1963. 300-306. _ _ The accident process: III. Disability: acceptable or unacceptable. Journal of the American Medical Association Vol. 197, July
11. 1966, 85-89. Brill, N.W. and Glass, J. F. Workmen's Compensation for psychiatric disorders. Journal of the American Medical Association Brodsky, Carroll, Compensation illness as a retirement channet Journal of the American Geriatrics Society, Vol. 19, 197'. Browning, James L., Jr. The psychiatric expert.
Trial, February, 1979. 36-38. Buchanan, Denton, Group therapy for chronic physically ill patients. Psychosomatics, Vol.
19, No.7, July, 1978, 425-431. Chapman, A. H. The Physicians Guide to Managing Emotional Problems. Philadelphia: Lippincott, 1969.
BAKKE & WEBER (continued from page 7) implement such plans only at their own risk, however, unless found to have discriminated by some jUdicial, legislative or administrative body, including the OFCCP. Weber and Bakke, however, appear to affect the OFCCP only in that they approve of the concept of affirmative action in certain circumstances. Whether the OFCCP, as a governmental body, may constitutionally mandate their use and, if so, how far it may go are questions that must await future litigation for answers. This litigation will surely come given the current altitude of the OFCCP that its major purpose is to "save the world" and right all the "wrongs" of discrimination in the next few years. FOOTNOTES lTrtle VII of the Civil Rights Act of 1964, as amended; 42 U.S.C. 120<J0e et seq.
2Executive Order 11246, as amended by Executive Order 11375, 42 U.S.C.A. §20QOe note, provides that no federal contractor or subcontractor shall discriminate on the basis of race, color, creed, national origin or sex. '29 C.F.R. §60-1 et seq. (1978). '29 C.F.R. §60·2 et seq. (1978). '44 Fed. Reg. 4422 (to be codified in 29 C.F.R. Part 1608). '42 U.S.C. §2000d et seq. JU.S. Const. amend. XIV. The Court held that Title VI proscribes "only those raciaJ classi-
13See Hazelwood School Dist. v. United Sttes, 433 U.S. 299, 308, n. 13 (1977); Teamsters v. Un~ed States. 431 U.S. 324, 339-340, n. 20 (1977). "United Steelworkers of America v. Weber, _ _ U.S. _ _ 61 L.Ed. 2d 480, 487 (1979). nld. at 492. "Id., citing to the remarks of Senator Hubert Humphrey at 110 Cong. Rec. 6548.
fications that would violate the Equal Protection Clause or the Fifth Amendment." Board of Regents of the Univ. of Calif. v. Bakke, 438 U.S. 265,287 (1978). Therefore, a violation of Title VI is also a violation of the Fourteenth Amend· ment. '42 U.S.C. §2OOQe et seq. 8See note 5, supra. "42 U.S.C. 12OOQe-12(b) (1). "29 C.F.R. §60-2 et seq. (1978). Revised Order No.4 sets out in detail the method of devising and the content of the affirmative ac· tion plans required of government contractors or subcontractors having 50 or more employees and at least a $50,000 contract. " _ _ U.S. _ 61 L.Ed. 2d 480 (1979).
2'ld. USee Hazelwood School Dist. v. United States. 433 U.S. 299 (1977); United Airlines, Inc. v. Evans, 431 U.S. 553(1977) (holding that events occurring more than 180 days before the filing of an EEOC charge have no legal significance). 23While the Court in Weber never mentions the EEOC Guidelines on Affirmative Action, it is interesting to note that the Court's analysis and interpretaHon of the impact of Title VII on affirmative action plans is virtually identical with that found in the Guidelines. ,uU.S. Const. amend. V Board of Regents of the Univ. of Calif. v. Bakke, 438 U.S. 265, 287 (1978)'A
nld. 'lid. "Id. at 493. t(lid. at 496.
usee
PSYCHOLOGICAL
INNOVATORS
LEGAL SERVICES
(continued from page 46)
(continued from page 10)
(continued from page 35)
Group for the Advancement of Psychiatry. What price compensation? VoL 128, No.5, November, 1977.
elsewhere. As a consequence of the company's oversight, a high price often must be paid to acquire rights to market under their own trademark in certain countries. In ranging from our local plumber to the multi-national corporation it appears that we have traveled from the sublime to the ridiculous, or possibly vice versa. If there is one moral here, perhaps it should be that just as individual names have great personal importance, business names and trademarks can have great economic value. Clients should be well advised on the legal ramifications of trade name and trademark use. If problems arise that make it necessary for them to change to a different name, they will generally not be convinced that "a rose by any other name would smell --' as sweet".'
is the degree of human suffering experienced by our clients, though all attorneys serve individuals with severe problems. There is a continuing increase in the number of battered and/or abandoned spouses who come to legal services for emergency help. Low-income senior citizens bring to us a variety of complicated and interrelated legal problems. Often our clients will lack food and shelter. Recently a private attorney handled a pro bono case for CALS which involved dependency and negelect allegations, and he was amazed that our attorneys could endure this type of case on a regular basis. We are fortunate to have staff members who possess the necessary commitment to equal justice for poor persons. As legal services for the poor are made available throughout Arkansas, we will need the continuing support and advice of the bar. If we can be of assistance to you or answer questions concerning our programs, please do not hesitate to contact US.
Guze, Samuel B. et. ai, A study of conversion symptoms in psychiatric out·patients. American Journal of Psychiatry, Vol. 128, No.5, November, 1971, 643-646. Keiser, Lester. The Traumatic Neurosis, Philadelphia: Lippincott, 1968. Lerner, J. Evaluation of psychiatric disability and the concept of regression. Journal of the American Medical Association, Vol. 188, 1964, 369-370. Martin, Maurice. Psychiatric aspects of patients with compensation problems. Psychosomatics, Vol. xl, No.2, March-April, 1970, 81·84. Modlin, Herbert C. The postaccident syndrome: psychosocial aspects. American Journal 01 Psychiatry Vol. 123, No.8, 1967, 1008·1012. NaHulin, Donald H. The psychological effects of litigation on the industrially injured patient: a research plea. Indiana Medicine and Surgary. Vol 39, No.4, 1970, 26-29. Nussbaum, Kurt, et. al. An individualistic functional approach in the evaluation of psychistric disability. Mllftary Modlcln., July, 1966, 627·
630. Pilling, Loran F., et. a1. Psychologic charac· teristics of psychiatric patients having pain as a
'W. Shakesphere, Romeo and JUliet, Act II, Se. II. 21d.
presenting symptom. Canadian Medical Association, Vol. 97, AU9ust 19, 1967, 387·394. Wiltse, Leon L. Psychological testing in predicting the success of low back surgery. Orthopedic Clinics 01 North American, Vol. 6, No.1, January. 1975, 317-318. -.-\
FOOTNOTES 'The directors of the legal services programs recognize the need to maximize our limited resources through joint efforts. For example, certain accounting functions and insurance benefits may be done jointly in the fut~ January 1980/Arkansas
Lawyer/47
In Jltmoriam They /hat deal truly are HIs delight. Proverbs 12:22
Lawrence Alexander, 74, of North LitlIe Rock,dled September 30, 1979. A member of the Arkansas and American Bar Associations, Mr. Alexander was a 32-degree Mason and a Shriner. He also belonged to Magnolia Masonic Lodge 60 and the Lavy Church of Christ. Survivors Include his wife, Mrs. Mollie Wolfe Alexander; a son, Bob Uvely; a daughter, Mrs. Marilyn A. Farrow; a brother, R. B. Alexander; two sisters, Mrs. lillian B. Mackey and Mrs. Beulah Mauk; along with seven grandchildren and seven
great-grandchildren.
Bruce Bennett
BNce Bennett, 62, of EI Dorado, died August 26, 1979. The former Arkansas Attorney GeneraJ of two terms was a controv路 ersIaI figure, known for his enjoyment of playing the role of a Southern Politician. He began has political career on the local level, serving as prosecuting alUney for the 13th Judicial DIstrict from 1953-56. He served as veterans service officer in the Union County area from 1949-52, and was a World War II veteran, having been discharged from the U.S. Air Force with the rank of major. A gregarious, humorous man, as well as an outspoken segregationist, Mr. Bennett's career was highlighted with several unsuccessful attempts for Governor, the last in 1968. Survivors include his wile, Mrs. Rebecca Edwards Bennett; a son, James Bruca Bennett; a daughter, 48/Arkansas Lawyer/ January 1980
Mrs. Carl Madsen; two blOthelS, John S. Bennett and Adair 8emett; a sister, Mrs. Robert Buckalew; and four grandchildren.
Ralph W. RobIII8Ofl
Survivors include his wife, Myrtle Mcilroy Woolsey; a stepdaughter, Pat Stansbury; three sisters, Mrs. Minnie BaskIn, Mrs. Dortha Beck, and Mrs. Vema Dawson; and four brothers, William, Edgar, John Paul, and James' Woolsey.
Ralph W. Robinson, 69, of Fort Smith, died August 6, 1979. A graduate of the University of Arkansas Law School at Fayetteville, Mr. Robinson was chancallor 01 the 12th Chancary District in 1966-67. He was a member 01 the Arkansas Bar Association and the First Baptist Church at Van Buren. He Is survived by two sons, Robby Robinson and Ralph Ross; two daughters, Misses Marthe and Usa Kaye Robinson; and two grandchild-
ren. Merk E. WooIeey Mark E. Woolsey, n, olOzalk, died August 2, 1979. A longtime attorney and former state representative from Franklin Cowlty, Mr. Woolsey 88MId as chief
COInI8I for both the State Public Service Commission and State HIgtrtvay Department, appoi.b.oents made by former Governor Orval E. faubus. He was a member of the State Arkansas Supreme Court Bar Rules committee. He was also a former lay preacher, Sunday school teacher, and Sunday School Superintendent in the United Methodist Church, a 32-degree Ma-
son, and a Shriner. Prior to becoming an attorney, Mr. Woolsey was a public school teacher and superintendent. He was a member of the First United Methodist Church of Ozark.
MIDYEAR MEETING Camelot Inn, Little Rock January 17-18, 1980 OIL & GAS INSTITUTE Arlington Hotel, Hot Springs February 28, 29-March 1 WORKERS' Compensation seminar Camelot Inn, Little Rock March 23
AICLE NEWS by Claibourne W. Patty, Jr. Executive Director Arkansas Institute of Continuing Legal Education
317 REGISTRANTS ATTEND THE FALL LEGAL INSTITUTE The Fall Legal Institute, held at the Camelot Inn, Little Rock, September 13th and 14th, 1979, attracted 286 paid registrants plus 31 law faculty and law student members of the Arkansas Bar Association. The new Arkansas Form Book, authored by Professor Robert R. Wright of UALR School of Law and the new Federal Bankruptcy Code effective October 1, 1979, were the topics olthe program. During the morning registration period the sections and committees of the Arkansas Bar Association were able to convene and conduct business for the first time during the bar year. E. Harley Cox, Jr., President of the Arkansas Bar Association, spoke at the Thursday luncheon on the subject of "Problems Facing Lawyers." After an introduction by former Bar President James Sharp, Professor Robert R. Wright spent an hour describing the creation, purpose and use of the new Arkansas Form Book with the remaining time on Thursday afternoon devoted to panel discussions on the use of the Form Book in certain areas of tbe law. The first panel composed of Richard A. Williams, Thomas L. Overbey, and William Bridgeforth discussed how to use the forms for commercial transactions, contracts and formation by business entities. The second panel composed of Tom A. Buford and James A. Ross discussed how to use the forms for leases, liens, mortgages and trust deeds and other real property transactions. The program Friday was devoted entirely to the new Bankruptcy Code, and it was chaired by Allen W. Bird II,
who is also chairman of the Arkansas Bar Association Creditors' Rights Committee. Dean David Epstein gave an overview and legislative history of the new bankruptcy code, and Professor Glenn Pasvogel discussed the courts and officers, including the new bankruptcy judge, trustee, debtor in possession, examiner and various committees contemplated by the new code. Charles D. Davidson discussed the straight bankruptcy under chapter seven both voluntary or involuntary as well as the notices, meetings and examinations contemplated by this section. James G. Mixon and Jack Sims discussed representation of unsecured creditors which included stays, turnovers, preferences and set-oils. After lunch Isaac A. Scott, Jr. discussed the representation of secured creditors including the status of the trustee, repossession, sale free of liens, reclamation and evaluating colateral; and Robert J. Brown discussed the discharge of the debtor and objections and described a typical situation which would confront a bankruptcy practitioner in this respect. The program was concluded by A. L. Tenney discussing the procedures available under the new chapter 13 of the Bankruptcy Code including the preparation, treatment of creditors, discharges, confirmation and consumation; and Allen Bird discussed the procedures available under the new chapter 11 including preparation, treatment of creditors, requirements of the plan and confirmation of the plan.
The registrants at the Fall Legal Institute had the benefit of hearing a panel, most of whose members had previously conducted an intensive
three day course on the new bankruptcy code in Fayetteville early in August. The registrants at this program had the opportunity to participate in a national survey of continuing legal education sponsored by The Committee to Study the Quality of Continuing Legal on behalf of the American Law Institute/American Bar Association. This program was one of some 400 programs being surveyed during a 30 day period to obtain an overall perspective about continuing legal education in the United States. A sampling of the responses before they were returned to the educational testing service indicated that the registrants were very complementary of the understanding and presentation of the SUbject matter by the speakers. Of course it goes without saying that the dual topics of the new Arkansas Form Book and the new Bankruptcy Code were most timely and eagerly received by the bar of Arkansas.
TWENTIETH ANNUAL PRACTICE SKILLS COURSE HELD IN LITTLE ROCK The annual Practice Skills course, jointly sponsored by the Young Lawyers Section of the Arkansas Bar Association and AICLE, is one of the longest running continuous annual programs in the history of Arkansas continuing legal education. Its seniority is tied with the annual Mineral Law Institute and exceeded only by the Fall Legal Institute. The registrants, made up mostly of recent admittees to the Bar with some lawyers recently becoming active in the practice of law amounted to 110 which is a
January 1980/Arkansas Lawyer/49
record and represents 30 percent more than those attending the Practice Skills course last year. The twoand-a-half day course, held at the Camelot Inn, October 4-6, 1979, provided basic and practical instruction by practicing lawyers along with handout material including checklists and current forms used by these lawyers in their daily practice. Typical subjects covered in this course from a practical rather than a substantive law manner included: ethics and fees, real property transactions, estate planning and probate, domestic relations, representation of business clients, litigation, criminal practice, representation of creditors and debtors, economics of law practice and workers' compensation. The individual presentations and the handout material are oriented strictly toward getting the new or recently active lawyer safely in and out of the courthouse and to otherwise assist them in starting and building their law practice during an initial three year period. All of the subjects are presented "live" by at least one and more often teams of two speakers, each giving a different point of view. Some of the speakers have been recruited from the ranks of the young lawyer section, whereas others are more senior practitioners who are interested in sharing their experiences with those who have recently joined our professional ranks. This is an annual continuing legal education program which I expect to have a long and healthy existance as long as we have substantial numbers of new admittees to the Bar. ARKANSAS FEDERAL TAX INSTITUTE For the first time AICLE is going to co-sponsor the 18th ArkansasFederal Tax Institute with the Arkansas Society of Certified Public Accountants. This first rate tax program will be conducted November 15 and 16 at the Camelot Inn, Little Rock. The topics which will be discussed by prominent out-of-state speakers are the following: estate planning and lifetime gifts, family transactions as estate planning tools, estate planning for closely held businesses, current important legislative and administrative developments in federal taxation, 50 /Arkansas Lawyer/January 1980
partnerships and the use of special allocations, tax planning with Subchapter S corporations and professional corporations. In the past, the attendance by lawyers has been considerably less than that of the CPA's partly because the institute has been held in Hot Springs and partly because most lawyers do not consider themselves qualified to attend an advanced tax seminar. This year I expect the attendance of lawyers to be better since the institute will be held in Little Rock and most importantly during the past two years I have detected an increasing tax awareness on the part of practitioners and their approach to continuing legal education programs involving taxation issues. I personally encourage those attorneys who consider themselves at least to the intermediate level to consider attending this important tax seminar because the quality of the speakers is such that they can make the most complex tax concepts understandable to the registrant who is not a CPA. Furthermore I think the practitioner who is at the intermediate level of taxation expertise should not hesitate to broaden his or her horizons in this area, and should operate under the theory that "one's reach should exceed one's grasp." It is the goal of AICLE and the Taxation, Trust and Estate Planning Section of the Bar Association to upgrade the general practitioner from a basic to an intermediate level of tax awareness, and the next logical step is to aspire to attend a high quality, advanced tax seminar, especially when it is not even necessary to travel out-of-state to do so.
NEW FORMAT FOR MID YEAR MEETING The Mid Year Meeting to be held at the Camelot Inn, Little Rock, January 17-18,1980, will have a program format in which two dissimilar topics will be presented in tandem. That is, the Thursday afternoon program will concern itself exclusively with new developments in the area of criminal law and procedure; but on Friday one session will devote itself to the new supplement to the Arkansas Wills and Trusts System with emphasis
on estate planning followed by a presentation of the revision to the Arkansas Probate System with additional topics of administration of decedents' estates and postmortem estate planning discussed Simultaneously a session will be run all day Friday concerning the new Arkansas Model Criminal Jury Instructions. Attendance at these sessions will be optional and the registrants will be encouraged to indicate their preference upon registering. The session on wills and trusts will be chaired by Richard A. Williams of lillie Rock, the session on administration of decedents estates, revision of the PrObate system and postmortem estate planning will be chaired by Richard Hatfield of Searcy and the session on the model criminal law jury instructions will be chaired by William R. Wilson of lillie Rock. Each of these topics are most timely, and it was deemed advisable by the program committee of AICLE to present these topics at the same meeting in which we expect a large number of lawyers to be in attendance since it is an annual event in Little Rock. The inclusion of committee and section meetings during registration with a Bar oriented luncheon on Thursday with the House of Delegates meeting on Saturday morning will be the same as was done at the Fall Legal Institute. PROGRAMS IN PROGRESS AICLE is presently working with the Labor Law Section of the Arkansas Bar Association to present the Third Labor Law Institute to be held at DeGray Lodge on February 29 and March 1, 1980, and with the Taxation, Trusts and Estate Planning Section to hold a Tax Awareness Workshop for the general practitioner concerned with the area of trusts in Little Rock on April 25 and 26 at the Camelot Inn. In addition the Second Annual College of Trial Advocacy will be held at the UALR School of Law during May. More details will be available in the next issue of The Arkansas Lawyer as well as in future issues of the Arkansas Bar Association News Bulletin. Please be sure and mark your calendars if you are interested in these programs.
ADDENDA by C. E. Ransick Editor
ARKANSAS LAWYERS HONORED ASSISTANT JUDGE ADVOCATE GENERAL It Is with more than just pride In a member of the Arkansas Bar Association, that we publish the latest achievement of Hugh Overholt. As a matter of fact, he served with us as young JAGC Captain In Mannhelm, Germany In 1963-64, when we were the Staff Judge Advocate of the Seventh Army Support Command-then the Army's blgest general courts-martial jurisdiction.
tor in the Arkansas Public School system for over thirty years. During this period, the Overholts lived atone time or other at Mt. Pleasant, Cove, Berryville, Huntsville, Mountainberg, Heber Springs (West Side), Rison (Wood Lawn), and Eureka Springs. Hugh's mother, whose maiden name was Hall, lives in Rogers. Hugh received his BA (1955) and LLB (1975) degrees at the University of Arkansas at FayetteVille. He was a member of the Editorial Board of the Arkansas Law Review. Among his law school classmates were Dennis Shackleford, Jim Cypert, Boyce Love, et al. According to Hugh, they were known as a "motley crew". Upon graduation, he was commissioned in the USA Reserve as an officer in the JAGC. General Overholt is a graduate of the Judge Advocate General's School, the United States Army Command and General Staff College, and the Industrial College of the Armed Forces. He is a "jumping JAGC", having served with the 101 st Airborne Division and the XVIII Airborne Corps. He has received numerous awards (Legion of Merit, Army Commendation Medal, etc.). He is currently the Assistant Judge Advocate General for Military Law at the Pentagon, Washington, D.C.
Hugh Overholt has just been promoted to Brigadier General, United States Army. We know of no other Arkansas lawyer so distinguished while on active duty. General Overholt was born in Beebe, Arkansas in 1933. His father, Harold Overholt, was an administra-
Hugh is married to the former Ann Arnold of Blakely, Georgia. They and their two children, Sharon and Scott, currently reside in Alexandria, Virginia. Hugh and Ann are planning on attending the 1980 Annual Meeting of the Arkansas Bar Association. We look forward to welcoming them.
PRESIDENT, NCCUL
Past President (1970-71) John C. Deacon of the Arkansas Bar Association has been honored with another presidency-President of the National Conference of Commissioners on Uniform State Laws. He will serve a two-year term. The National Conference is a prestigious group of some 250 of the Nation's leading practicing lawyers, judges and law professors, who are selected by the States, the District of Columbia and Puerto Rico to draft uniform laws. Only one other Arkansan has served as the President of the National Conference-interesting, Deacon's father-in-law Joe C. Barrett in 1953-55. In 1973, Jack Deacon received the Outstanding Lawyer-Citizen Award of the Arkansas Bar Foundation and the Arkansas Bar Association. This award points up his wonderful legal and civil careers-we need not review his many accompiishments here. January 1980lArkansas Lawyerl51
TREASURER,ACTL
Alston Jennings was recently elected Treasurer of the American College of Trial Lawyers at its annual meeting in Dallas. He has been a member of the Board of Regents of the College-a national honorary organization of some 3,100 lawyers, open by invitation to trial lawyers with at least fifteen years of trial experience. Membership is limited to one percent of the practicing lawyers in each State. Jennings is a past president of the International Association of insurance Counsel and the pulaski County Bar Association. He received the Outstanding Lawyer Award, 1972-73, of the Arkansas Bar Foundation and the Arkansas Bar Association. DIRECTOR, AJS
The American Judicature Society has announced the reelection of Robert L. Jones, Jr. to its Board of Directors. The Society is a national member52/Arkansas Lawyer/January 1980
ship organization of lawyers, jUdges and non-lawyer citizens founded to promote the effective administration of justice through judicial improvements and court modernization. Bob Jones is a past president of the Arkansas Bar Association and the Sebastian County Bar Association. He also has been Chairman of the Arkansas Bar Foundation. In 1978, he received the Outstanding Lawyer Award of the Arkansas Bar Association and the Arkansas Bar Foundation. SPE CITATION
color in The ABA Journal, JUly, 1977, at page 966. ARKANSAS BAR FOUNDATION In Res Gestae, the Bar Journal of the Indiana State Bar Association (September 1979, page 377), the artist's rendering of the Arkansas Bar Center is shown to highlight the article, "Distinctive Fellows Program Announced for Indiana Bar". The article states, "Contemplated Foundation projects range from the basics of programs about the law to the extraordinary of an Indiana Bar Center. A program in Arkansas, which has 4,500 lawyers, led to the construction in 1974 of a six-story, $1.5 million edifice in central Little Rock. It houses the Foundation, State Bar Association and affiliated groups, and serves as a meeting place for law-oriented and civic organizations." Actually, there were only 1524 members in the voluntary Arkansas Bar Association in January 1972, when the Arkansas Bar Foundation's Second Fund Drive was started. It was at this time that the highly successful Fellows program was implemented by the Arkansas Bar Foundation.
Arkansas Attorney General Steve Clark received the Sigma Phi Epsilon Citation, the social fraternity's highest award, on August 18, 1979. This award is given every two years to distinguished alumni for career achievement. He is a past president of the ASU Chapter. THE JUSTICE TREE Lawyer Edward E. Bedwell of Fort Smith painted The Justice Tree "from memory, of the old Justice Court of Romeo BoYd, J.P. at Mansfieid". Judge Boyd held court outside under a big tree when the weather permitted. Bedwell painted himself as the young assistant prosecutor, along with the other characters as he remembered them. The Justice Tree was a "Certificate of Merit" winner in the third annual West Publishing Company lawyers' art contest conducted in 1977. The theme of the 1977 contest was "Partners in Justice". The Justice Tree is in the West Publishing Company's art collection, but is being sought by a collector of Arkansas historical articles for placement in a permanent museum in Arkansas. The painting is shown in
The Arkansas Bar Association now has about 2500 members. While some of the added 1000 members have contributed their time, talents and money to the Arkansas Bar Foundation, most have not had the chance to become involved. Foundation Chairman Boyce Love in his column in the October 1979 issue of The Arkansas Lawyer, at page 139, pointed up a drive for new Fellows. Chairman William A. Eldredge of the Committee on Selection of Fellows is handling the program. The Arkansas Bar Foundation has many worthwhile projects, as public education, the pamphlet series, oral histories, law review support, law scholarships, court standards project, writing awards, major awards (Outstanding Lawyer, etc.), legal research, seminars, etc. Douglas O. Smith of Forth Smith is Chairman of the Scholarships and Memorials Committee. Teddy Roosevelt put it well, "Every man owes part of his time and money to the profession in which he is engaged". Members may wish to contact Chairmen Eldredge and Smith. .....\
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