We Have Moved!

Posted December 1, 2008 by The Legal Intelligencer
Categories: Uncategorized

Welcome to The Legal Intelligencer Blog.

Our blog has moved to the address below. All previous posts from this blog are available at our new location.



Delaware County Jump Starts Open Records Law

Posted September 10, 2008 by The Legal Intelligencer
Categories: Government

Delaware County was so excited about Pennsylvania’s recently adopted Open Records Law that it decided to speed up the process.

The County Council adopted a resolution Tuesday to provide for early implementation of the law, effective immediately. The state law doesn’t go into effect until Jan. 1, 2009.

“We are adopting the state’s new policy earlier than is required at the county level to expand our current policy to allow the public to benefit now from the changes,” County Council member Christine Fizzano Cannon said in a statement. “Council is committed to providing open access to public documents, which enables residents to have a better understanding of county government transactions.”

The benefits of the new law, Fizzano said, are the presumption that a record is a public record, a shift in the burden of proving a record is public and the ability to make requests electronically.

Exemptions to the Open Records Law include autopsy reports (with the exception of the name and manner of death), 911 tapes, written records of internal deliberations, information that would jeopardize computer security and personal information such as homes addresses and social security numbers, according to the statement.

The resolution establishes County Clerk Anne Coogan as the open records officer. The new open records policy is posted on the county’s Web site and a request form is also available.

— Gina Passarella, Senior Staff Reporter

City Files for Reargument in SugarHouse Case

Posted September 5, 2008 by The Legal Intelligencer
Categories: Casinos

The City of Philadelphia asked the Pennsylvania Supreme Court today to re-hear arguments in a recently decided case that ruled the city has power to convey state owned riparian lands beneath the Delaware River.

The petition claims the court ruled in favor of HSP Gaming on an issue that wasn’t included in oral arguments and in which no evidence was presented.

The court, in HSP Gaming v. City of Philadelphia, had ruled a 1907 law transferred the power to issue licenses for use of the land to the city. It ruled former Mayor John F. Street’s administration had the right to issue a license to HSP Gaming for the building of SugarHouse Casino and ruled Mayor Michael Nutter’s administration did not have the power to revoke that license because the casino owner’s relied on it.

In its application for re-argument, the city said that while it disagreed with the court’s finding that the power granted to the city in 1907 remained with the city, it respected the court’s thoughtful, lengthy analysis on that point.

The city instead argued that there was no evidence to prove HSP Gaming had an entitlement to or reliance on the license issued by the Street administration.

The court’s conclusion that HSP Gaming detrimentally relied on the license ignores the facts, the city argued, that there was no hearing or fact finding to provide evidence of its reliance and that a license issued in error is always revocable. The city also argued that a license granted by the state to use lands held in trust by the state for the public is inherently revocable.

“The General Assembly’s mandate to establish casino gaming throughout this commonwealth as expeditiously as possible should not mean that normal rules requiring parties to prove their cases by a preponderance of the evidence subject to cross-examination are simply to be discarded,” the petition argued. “Nor does it mean that century old case law is simply to be ignored; nor does it justify a radical rewriting of property and public lands law.”

In asking for re-argument, the city said the issue of its ability to revoke the license was “expressly excluded from the oral argument.”

The application was filed by City Solicitor Shelley R. Smith, law department attorney Mark R. Zecca and Pepper Hamilton attorneys Amy Ginensky, A. Michael Pratt, Robin P. Sumner and David V. Dzara.

~Gina Passarella, Senior Staff Reporter

Premature Notices of Appeal

Posted September 5, 2008 by The Legal Intelligencer
Categories: Appellate Law, Bruce Merenstein

Categories: Appellate Law; Bruce P. Merenstein

A recent decision by the 3rd U.S. Circuit Court of Appeals adds to the confusion involving an already muddled area of the law: premature notices of appeal.

It is a fundamental principle of federal appellate practice that, with certain narrow exceptions, appeals only lie from final judgments.  Thus, a notice of appeal filed before a final judgment is entered generally is considered premature and ineffective to confer appellate jurisdiction on a court of appeals.  Yet, this seemingly straightforward rule is complicated by exceptions outlined in the federal rules and contradictory rulings by the federal courts of appeals.  And the 3rd Circuit’s recent decision in the case of DeJohn v. Temple University only adds to the confusion.

Rule 4 of the Federal Rules of Appellate Procedure governs the timeliness of notices of appeal in federal court.  Rule 4(a) provides that notices of appeal must be filed within 30 days after entry of judgment, but then sets forth two exceptions.  First, under Rule 4(a)(2), when a notice of appeal is filed after a trial court announces a decision, but before the court actually enters judgment, the notice is treated as if it were filed on the date that the court subsequently enters judgment.  Second, under Rule 4(a)(4), where a party files a notice of appeal before a trial court disposes of any post-trial motions, the notice of appeal becomes effective upon the trial court’s disposition of the last post-trial motion — in the words of the committee notes to the rule, the notice of appeal “ripens” at that time.

The presence of these two exceptions might appear to foreclose other exceptions to Rule 4(a)’s requirement that all notices of appeal be filed within 30 days after entry of final judgment.  But 25 years ago, the 3rd Circuit created a broader exception in Cape May Greene Inc. v. Warren.  In Cape May Greene, the plaintiff filed a notice of appeal after summary judgment was entered against it but before a cross-claim filed by one of the defendants was resolved.  Two months after the plaintiff filed its premature notice of appeal, the parties stipulated to dismissal of the remaining cross-claim.  The 3rd Circuit held that, absent prejudice to the appellee, the premature notice of appeal could ripen upon entry of final judgment and confer jurisdiction on the court over an appeal from that final judgment.

Eight years later, in FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., the Supreme Court was called upon to interpret the exception in Rule 4(a)(2) and held that, “Rule 4(a)(2) permits a notice of appeal from a nonfinal decision to operate as a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment.”  Some courts of appeals have interpreted this language from FirsTier as limiting the scope of the exceptions to Rule 4(a)’s requirement that notices of appeal be filed after final judgment has been entered.  Under these courts’ decisions, a notice of appeal filed from a decision that does not dispose of all claims by all parties (such as the one in Cape May Greene granting summary judgment on some but not all claims) does not ripen upon the subsequent entry of a final judgment.

The 3rd Circuit, however, reaffirmed its Cape May Greene exception eight years after FirsTier was decided, in Lazy Oil Co. v. Witco Corp.  In Lazy Oil, objectors to a class action settlement filed a notice of appeal 29 days after the district court entered an order approving the settlement, but more than two months before the district court approved an allocation plan for the settlement and entered final judgment in the case.  The 3rd Circuit raised sua sponte the issue of its appellate jurisdiction, but concluded that the Supreme Court’s decision in FirsTier had not altered the Cape May Greene doctrine.  Finding the premature notice of appeal ripened upon entry of final judgment two months later, the court held that the two exceptions in Rule 4 were not the only situations in which “a premature notice of appeal will become effective at a later date.”

The expansive view of the premature notice of appeal doctrine set forth in Cape May Greene and Lazy Oil has been adhered to in numerous subsequent 3rd Circuit cases.  As recently as last October, a panel of the 3rd Circuit invoked these cases and, while expressing some skepticism about the expansive view, noted that the court was “bound by our prior interpretation regarding the scope and effect of Rule 4 unless and until we revisit that determination en banc.”  In that case, DL Resources, Inc. v. FirstEnergy Solutions Corp., the court held that it had jurisdiction over a final judgment when the notice of appeal was filed after the trial court fixed liability but before it determined the amount of damages and entered final judgment.

Despite this continued adherence to the Cape May Greene doctrine, a panel of the 3rd Circuit issued a decision last month that took a much more limited view of the premature notice of appeal doctrine.  In DeJohn v. Temple University, the court held that a notice of appeal filed after disposition of a particular claim but before determination of damages for that claim was premature and did not ripen upon the award of damages and entry of final judgment.  Thus, the premature notice of appeal was ineffective to confer appellate jurisdiction on the court over an appeal from the award of damages.  The court failed to mention either Cape May Greene or Lazy Oil, or to distinguish the cases such as DL Resources that specifically held that a notice of appeal filed after a determination of liability but before an award of damages ripened upon entry of the damages award and final judgment.  Instead, the court cited Rule 4(a)(2) and FirsTier, and implied (contrary to the holding in Lazy Oil) that Rule 4(a)(2) sets forth the only situation in which a premature notice of appeal will ripen upon entry of final judgment.

The 3rd Circuit’s recent decision in DeJohn only adds to the uncertainty regarding premature notices of appeal that arose from the Supreme Court’s decision in FirsTier and the 3rd Circuit’s adherence to the Cape May Greene doctrine in Lazy Oil.  This confusion is unlikely to abate until the 3rd Circuit addresses the premature notice of appeal issue en banc or the Supreme Court resolves the circuit split that has followed its decision in FirsTier.

This posting is intended only to inform, not to provide legal advice; and readers should seek professional advice for specific applications of the information.

Bruce P. Merenstein
Schnader Harrison Segal & Lewis LLP

Estate Planning for Deferred Compensation

Posted September 4, 2008 by The Legal Intelligencer
Categories: Robert H. Louis, Trusts and Estates

Many executives receive, as part of their compensation packages, arrangements that provide compensation at a later date, often dependent on achieving corporate goals, such as income or sales levels.  Payments may be made after a few years or at retirement or termination of employment.  Funding may be from the employer’s general funds, through a fund set aside or through life insurance.

Most executives receive their payments during life and treat them as ordinary income or capital gains, depending on the structure used.  But deferred compensation arrangements often have a provision for payment in the event of the executive’s death.  Depending on the particular arrangement, the deferred compensation arrangement can be a significant portion of the executive’s estate.

In most deferred compensation arrangements, there will be a provision for naming a beneficiary to receive deferred compensation after the executive has died.  Like qualified retirement plans, IRAs and life insurance, the determination of who receives the benefits is made pursuant to the beneficiary designation rather than the executive’s will (unless the executive has named the estate as the beneficiary).  The beneficiary designation is really a form of will, because it governs the disposition of assets at death.  It should be planned as another element of the executive’s overall estate plan.  Questions of tax deferral and disposition of assets must be viewed by looking at the will as well as the various beneficiary designations.  Many people forget to combine these documents when planning their estates, and most people can’t find their beneficiary designations and have forgotten what they say.  In fact, if a lawyer keeps a copy or the original of a client’s will, the same file should contain a copy of all beneficiary designations.

Speaking of deferred compensation, a new and extensive regulatory framework was enacted in 2004, providing rules for deferred compensation arrangements of all types and including significant penalties if those rules are not followed.  Because of the extensive nature of those rules, and the hundreds of pages of regulations issued to interpret the new statute, the Treasury and IRS gave several extensions of the time period to bring arrangements into compliance with the new law.  That extension of time to assure compliance, which includes a grace period to make changes in arrangements, will come to an end on December 31, 2008.  That means that there are only a very few months before all deferred compensation arrangements must be brought into compliance.  In doing so, it’s first necessary to decide what arrangements exist, and then to decide whether and how they should be changed.  This is a big task, and lawyers whose clients have deferred compensation arrangements need to check now to see that the compliance process is under way

Robert H. Louis
Saul Ewing

Departed BI Shareholder, Recruiter Respond to Article

Posted September 3, 2008 by The Legal Intelligencer
Categories: Firm News

In an article written last month by The Legal’s sister publication, the Legal Times, several former Buchanan Ingersoll & Rooney shareholders were critical of the firm’s expansion strategy and claimed Pennsylvania-based management gave satellite offices little support. The firm had seen the departure of a number of high-level practice group leaders and office heads since 2007, leaving it more than 30 lawyers fewer this year than last.

In an article in The Legal Tuesday, Buchanan Ingersoll CEO Thomas L. VanKirk went through the names of the majority of the attorneys who left, offering explanations for each. In response to comments by the firm’s former recruiter, Jerome Kowalksi, who said every attorney at Buchanan Ingersoll who has the ability to move has his or her resume out there, VanKirk said Kowalski was no longer used by the firm because he brought them nothing but “dogs.”

Kowalski wasn’t immediately available for comment by press time last week, but he did get in touch with The Legal Tuesday.

“If I brought them dogs,” he said, “rest assured they were all of the finest pedigree.”

VanKirk also commented that William O’Connor and a group of attorneys who left the firm’s New York office took a bankruptcy practice that was operating at an unprofitable level. O’Connor was also unavailable last week but in an interview Tuesday said he and the firm signed non-disparagement agreements. He said he was disappointed to see what he said was the second time VanKirk violated the agreement, referring to comments in the respective articles in the Legal Times and The Legal.

According to O’Connor, he was the second most profitable partner at the firm at the time of his departure.

— Gina Passarella, Senior Staff Reporter

More on Buchanan Ingersoll’s Financials in Early 2008

Posted September 2, 2008 by The Legal Intelligencer
Categories: Firm News

The article in today’s Legal on Buchanan Ingersoll & Rooney’s focus on national expansion and the firm’s reaction to criticisms by former shareholders focused a lot on the firm’s growth strategy over the past few years, particularly since the Klett Rooney merger. So much so that the financial numbers mentioned in a recent article by our sister publication Legal Times, and reaction to those stats, didn’t make it into the story.

So we bring them to you now… with a little commentary from firm management and former shareholders.

The Legal Times reported in early August on an internal business report from Buchanan Ingersoll that seemed to paint a bleak financial picture of the firm in the first few months of the latest fiscal year.

According to the shareholder business report cited by Legal Times, about one quarter of the firm’s attorneys hit their billable hour targets as of May and the average associate hours fell below 1,650. That put Buchanan Ingersoll at about $10.5 million shy of its billing goals, according to the article. The firm was also left with 35 fewer lawyers and lobbyists after a number of high-level departures.

The Legal Times reported that the firm’s unused value, which the article described as the deficit in work for its lawyers, exceeded $16.4 million in the first few months of the year. And practice areas such as intellectual property, employment law and financial institutions missed budget projections by margins between 8 and 13 percent.

As he did with the Legal Times, Buchanan Ingersoll CEO Thomas L. VanKirk told The Legal the firm is still ahead on a bottom-line basis, bringing in 3.4 percent more in revenue this year compared to the same time period last year. He said the report referenced in the Legal Times article encompassed from Feb. 1 to May 31 of 2008. VanKirk also pointed out to The Legal that the increase in revenue over last year was done with about 30 fewer attorneys. He said the firm’s value numbers have also been on the rise, which doesn’t usually happen in the summer months.

VanKirk said the firm as a whole has cut back on the number of attorneys, but no layoffs occurred. He said that, as with every year, there were some performance related layoffs. There was no single practice group affected, he said.

One former shareholder questioned the firm’s management after the Klett Rooney merger, looking particularly at the firm’s ability to make some tough financial decisions.

The former shareholder pointed to the Newark offices as an example. Buchanan Ingersoll had a Princeton office before its merger with Klett Rooney and the former shareholder said management “didn’t have the heart” to get rid of the nearby – and what the former shareholder said wasn’t really profitable – Newark, N.J. office that came with the Klett Rooney deal. The former shareholder said part of the Klett Rooney deal was a promise to keep that office open for a time.

Buchanan Ingersoll sometimes will let the wrong attorneys go while keeping those who might not be a good fit, the former shareholder said.

Another shareholder that has since left the firm had said it would be tough for the firm to suggest none of the departing lawyers were good attorneys. While some may not have been a great fit, the shareholder said they were all pretty much national attorneys with strong practices.

“Any firm has natural attrition, but when you look deep into the exits … there’s something systemically wrong,” the shareholder said.

~Gina Passarella, Senior Staff Reporter