WEBVTT
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SJC-12730, in the matter of Gregory M. Olchowski.
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Ms. Mulligan, good morning.
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Good morning, your honors.
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I'm Maureen Mulligan, I represent the IOLTA Committee
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and I'll be speaking on behalf
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of the appellants this morning.
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May it please the court.
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The question before the court today is
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what happens with unidentified IOLTA funds,
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and who gets to control the disposition of those funds?
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The committee contends that this court
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has the authority to do so, because this court
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established the IOLTA accounts and has
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the ultimate authority to regulate the practice of law.
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In that regard, this court has the power
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to control the disposition of the unidentified funds.
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In prior bar proceedings before single justices
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of this court, the court has already issued
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a number of orders on petitions from lawyers,
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from commissioners appointed by the court,
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and the client security board to distribute
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unidentified funds to the IOLTA committee.
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Does that seem like a wash?
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Because there are instances where this court
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has ruled on unidentified funds, and then there are
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other instances when we don't know about it.
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And the DBO doesn't know about it, and the banks report
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and it goes to the treasury.
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Well, the fact that the banks report IOLTA accounts
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to the treasury, I think has absolutely no baring
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on how this issue should be resolved.
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Under the terms of the abandoned property statute,
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the banks, and other companies, and other entities
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that hold funds that may be abandoned--
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I guess on a grander scale, my question is more
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past practice really shouldn't govern,
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'cause they have a past practice and there's
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another past practice that doesn't really resolve the issue.
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Well, there is a practice of this court,
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I take your point, your honor.
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We think that it does impact the decision
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because the court is clearly aware of the
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abandoned property statute, yet has issued orders.
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Really?
Or is it just that
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the treasury department hasn't sort of
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come forward until this case?
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It was sort of uncontested, what was being done before.
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And for once, the treasury department got involved,
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intervened, and now we have the issue joined
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for really the first time.
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Isn't that really where we are?
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I appreciate that that's where we are, your honor.
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And although the treasury claims that it's
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governance of IOLTA accounts through
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the abandoned property statute has an incidental effect
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on the practice of law, or an incidental effect
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on the judiciary's control over the practice of law.
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That's really not the case, I mean,
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they're clearly in your lane in this regard.
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On that score, do you still win
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if we don't accept your statutory interpretation argument?
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I'm sorry, I couldn't hear that.
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Do you still win?
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So suppose we don't accept your argument
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about whether or not this comes within the parameters
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in a broad sense of the abandoned property law.
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But, we also have that you started out
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with our independent authority to regulate the practice
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of law, we set up IOLTA, we set up these mechanisms.
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So, even if it comes within the purview of the statute,
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the money still can go to the committee.
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Absolutely, your honor.
As a softball.
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(laughing)
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And I really appreciate that.
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But, as you have so eloquently explained,
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the oversight of IOLTA funds by this court
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is really critical to the protection of clients,
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attorney client confidences, the ethical obligations
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of lawyers and the maintenance of public trust
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in the practice of law.
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And what we have learned through the treasury's brief--
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Is it that much of a softball, because I'm just wondering
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if he's put some spin on it too.
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So let me take it one step further.
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Say it is covered by the statute, it's abandoned property.
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But it's somebody's property and it can be identified.
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This court's never taken anyone else's principle, have we?
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I mean, I understand we take the interest
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and put it in the IOLTA account.
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We've never gone the next step and taken the actual amounts
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and put it in the IOLTA account.
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Have we?
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No.
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One of the problems with the way--
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It seems a little different.
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So I'm a client of one of these lawyers,
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I've given you a thousand dollars
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and you didn't do the work, and I want it back now.
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And I actually am out there and somebody can find me.
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Do our Super Intendant's powers empower us
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to take back money away from that person now?
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Absolutely not, your honor.
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If the identity of the owner of the funds is known,
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then those funds should be returned to the person
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that gave them to the lawyer.
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But isn't the treasury saying, I can find them.
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I may be able to find that person?
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And I do it better than you do, IOLTA.
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So the way the treasury attempts to find people
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under their regulations and under their research,
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and it's stated very clearly in their brief
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that the way they attempt to find owners of IOLTA accounts,
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is they look at attorney-client fee agreements,
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and they look at attorney-client documents.
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And so what's happening here, is that they are invading
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the attorney-client privilege, which is
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one of the most important parts
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of the attorney-client relationship.
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And what we have found, or what we now know
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through the affidavits that have been submitted
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to the court by the treasury, is that
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not only is the treasury doing this research,
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but they have hired a third party vendor
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to manage the abandoned property accounts.
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And that third party vendor has the opportunity
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to go in and look at attorney-client fee agreements
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and attorney-client documents
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in order to determine the owner.
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And so this is a problem,
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because that is part of what this court regulates
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in terms of regulating the practice of law.
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And the treasury's attempt to intrude
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on the attorney-client relationship, and frankly,
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the attorney discipline if there's something going on
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where that's not just a negligent accounting,
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but there's some other type of misaccounting by a lawyer,
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that should be governed by the systems
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that have been set up by this court,
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to look at the oversight of the practice of law.
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But I'm confused, but again, I don't mean to be difficult,
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I just don't understand it.
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So the treasury department,
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the lawyer's given up, right?
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There's no attorney-client relationship anymore,
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there's no work being done, right?
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What we're dealing with is trying to give the money back.
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Is the attorney-client relationship
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still in place at that point?
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Is there still a privilege for that client?
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And basically, you took my thousand dollars,
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you put it in the IOLTA account,
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I'm just trying to get a sense of whether this is
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really an attorney-client issue,
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or is it just a giving money back issue?
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So in order to answer that, your honor,
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can I step back just a little bit and talk about
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the creation of IOLTA accounts?
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I'm sure the court's familiar,
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but just to make sure we're all on the same page.
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When an IOLTA account for an attorney is opened,
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the purpose of the IOLTA account is to deposit money
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that's gonna be held by the lawyer
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or the law firm on a short-term basis.
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So in my IOLTA account, I might have funds from one client,
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or I could have funds from 25 clients.
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And it's all pooled, and it's all mixed in.
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And when the lawyer deposits that money with the bank,
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the bank has no idea who's money that is.
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Aren't we just dealing with the
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merged accounts in this case?
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We're not dealing with the individual accounts, right?
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'Cause there would be a name on those.
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Correct, we're just dealing with IOLTA accounts,
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which is different than a trust account
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in the name of a client, so the IOLTA accounts--
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Aren't we just dealing with the IOLTA accounts
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where you put together a bunch of people's money
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as opposed to again, but maybe I'm misunderstanding--
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That is the definition of an IOLTA account, your honor.
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An IOLTA account is a pooled account with
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multiple clients' funds in the account,
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and those are the accounts
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that we're talking about here today.
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Clearly, if an attorney has a client trust account,
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there's a client name on that account,
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the attorney would always know to whom that money belongs.
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But, there's a very intricate method of accounting
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that attorneys are supposed to adhere to
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in order to keep a record of which client,
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or in fact, sometimes third party.
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For example, in a real estate closing a bank
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might give money to a law firm
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that gets deposited into the IOLTA account.
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There's a very detailed system of accounting
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that the law firms are supposed to go to
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to know who's money is in that pooled account.
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Because the only person that has the information,
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or should have the information, as to who's money
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is deposited in that account is the lawyer.
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So, when the treasury says in response to your question,
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don't they have better resources to find people?
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The way these IOLTA accounts are listed
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on the treasury's gofindmoney.com website,
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is they're listed as the IOLTA account
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of Jane Lawyer, for example.
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So, they're not listed as Mary Smith's money
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which is how other accounts are listed
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on the gofindmoney.com website.
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So, there's no real way for an individual to say,
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oh, there's my money on that list.
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But if an individual knew they had given money
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to an attorney and they see that,
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doesn't that tell them they should ask the registry?
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The treasury, I mean.
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But what happens at that point, is the treasury
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then begins to look at attorney documents,
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at attorney-client agreements, at client documents--
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The client is coming forward and asking them to do that,
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there's really no client and attorney issue.
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Possibly, but I think that the client
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should not be forced to disclose issues
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that were formally confidential just to prove
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that there's money in the account--
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Can you compare for me how the treasury
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would go about identifying somebody,
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which I would guess that's the publication,
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but who's responsible for the IOLTA account
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after the attorney's out of business?
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When the attorney goes out of business,
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per order of this court, the IOLTA accounts
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are supposed to be closed.
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Okay, who's supposed to close them, the lawyer?
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The lawyer's supposed to close the IOLTA account.
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So if the lawyer didn't close this IOLTA account,
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and the IOLTA account exists, why does not
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the bar discipline agency, the board of bar overseers
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take care of it?
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One of the processes that the board of bar overseers
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has in place, is that it appoints commissioners
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to look into identifying to
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whom the funds may belong in the IOLTA account.
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And in fact, the court, this court,
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has also appointed commissioners to do that same thing.
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In this case, it was impossible, right?
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Correct, it was impossible to fig--
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The investigator who looked at it,
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nobody could figure it out?
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Correct, the lawyer's accountant looked at it
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and couldn't figure it out,
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and the office of bar councils' accountant looked at it--
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My memory is of the ones where the banks
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reported directly to the treasury,
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there were sum 58 instances where people
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had claimed their funds, correct?
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Correct.
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So we have to compare that to what happens
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with commissioners to see how successful commissioners
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are in return of unclaimed funds, right?
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Well, it's not an apples to apples comparison,
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because what we don't know, for the accounts
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00:12:10.484 --> 00:12:14.155
that have been turned over to the treasury,
262
00:12:14.155 --> 00:12:19.155
is we don't know whether all of the moneys in those accounts
263
00:12:19.596 --> 00:12:22.210
are actually unidentified funds.
264
00:12:22.210 --> 00:12:24.120
That information hasn't been provided.
265
00:12:24.120 --> 00:12:27.280
So it's possible that there's information
266
00:12:27.280 --> 00:12:31.416
either through the attorney, that certain moneys
267
00:12:31.416 --> 00:12:34.370
in those accounts can be identified.
268
00:12:34.370 --> 00:12:37.380
So, we don't know that, we don't know if the treasury
269
00:12:37.380 --> 00:12:40.300
has gone out and found 58 people who's money
270
00:12:40.300 --> 00:12:42.967
were in the IOLTA accounts and actually were not identified,
271
00:12:42.967 --> 00:12:47.690
or if people came forward, or if lawyers came forward,
272
00:12:47.690 --> 00:12:49.733
and said, that's my account,
273
00:12:51.040 --> 00:12:54.140
I have not had any communications with the bank
274
00:12:54.140 --> 00:12:56.050
in X amount of time, but it's an active account,
275
00:12:56.050 --> 00:12:58.610
I haven't had reason to deposit any money
276
00:12:58.610 --> 00:13:00.810
in that account in the last three years.
277
00:13:00.810 --> 00:13:05.299
And you argued it was an active account because the fact
278
00:13:05.299 --> 00:13:08.490
that the interest was going to IOLTA anyway?
279
00:13:08.490 --> 00:13:11.115
Certainly, so if we're looking at the statute itself,
280
00:13:11.115 --> 00:13:14.480
I think up until this point, we've been saying
281
00:13:14.480 --> 00:13:16.950
if the statute applies, why should this court
282
00:13:16.950 --> 00:13:18.163
still have authority?
283
00:13:19.010 --> 00:13:21.970
And let me just wrap that up in one sentence,
284
00:13:21.970 --> 00:13:23.470
this court should have the authority
285
00:13:23.470 --> 00:13:26.300
because it has the authority to regulate
286
00:13:26.300 --> 00:13:28.133
the practice of law.
287
00:13:29.370 --> 00:13:31.630
But if you wanna turn to the statute--
288
00:13:31.630 --> 00:13:32.880
Yeah, I don't think frankly
289
00:13:32.880 --> 00:13:34.480
that's a great argument for you.
290
00:13:36.510 --> 00:13:40.240
How is it that the principle going to the general fund
291
00:13:40.240 --> 00:13:43.420
interferes with the regulation of the practice of law?
292
00:13:43.420 --> 00:13:45.310
It's not the principle going to the general fund
293
00:13:45.310 --> 00:13:46.810
that's interfering with the practice of law,
294
00:13:46.810 --> 00:13:49.410
it's the method by which the treasurer's attempting
295
00:13:49.410 --> 00:13:52.330
to reunite the owners of the funds
296
00:13:52.330 --> 00:13:54.564
with the funds themselves.
297
00:13:54.564 --> 00:13:57.711
And I'm repeating myself, but as I said earlier,
298
00:13:57.711 --> 00:14:00.670
in order to do that, what they are doing
299
00:14:00.670 --> 00:14:04.810
is looking at materials that are confidential
300
00:14:04.810 --> 00:14:07.290
between the lawyer and the client.
301
00:14:07.290 --> 00:14:09.050
Now, how are they doing that?
302
00:14:09.050 --> 00:14:10.760
I only know what has been
303
00:14:10.760 --> 00:14:13.300
in the treasury's brief, your honors.
304
00:14:13.300 --> 00:14:16.700
So from the brief, how they describe it,
305
00:14:16.700 --> 00:14:20.220
is they look at attorney-client relationships,
306
00:14:20.220 --> 00:14:24.180
or excuse me, fee agreements or attorney-client documents.
307
00:14:24.180 --> 00:14:26.270
It's not clear to me whether they contacted
308
00:14:26.270 --> 00:14:28.660
individual lawyers to do that, whether that information
309
00:14:28.660 --> 00:14:31.800
is being provided by the client, I don't know at this point.
310
00:14:31.800 --> 00:14:35.230
But if the treasury department just put on their website,
311
00:14:35.230 --> 00:14:37.770
we have the following IOLTA accounts
312
00:14:37.770 --> 00:14:41.143
from attorneys Jones, Smith and Brown,
313
00:14:44.370 --> 00:14:45.320
and then they have
314
00:14:45.320 --> 00:14:47.823
this little part of their website that does that,
315
00:14:49.360 --> 00:14:52.840
does that violate any attorney-client privilege?
316
00:14:52.840 --> 00:14:55.256
We're not claiming that the--
317
00:14:55.256 --> 00:14:58.580
They're just going one step further than you are.
318
00:14:58.580 --> 00:15:00.860
And I hate to say, you're a little bit
319
00:15:00.860 --> 00:15:02.953
the fox guarding the hen house, right?
320
00:15:04.700 --> 00:15:07.870
They have more incentive of returning that property
321
00:15:07.870 --> 00:15:10.070
than maybe you do.
322
00:15:10.070 --> 00:15:12.900
Because you're gonna make use of that,
323
00:15:12.900 --> 00:15:15.033
they're going to give it back.
324
00:15:16.330 --> 00:15:18.520
I mean, I'm not saying you're doing it
325
00:15:18.520 --> 00:15:19.720
for improper purposes.
326
00:15:19.720 --> 00:15:23.790
But I don't see a problem if the goal is to return
327
00:15:23.790 --> 00:15:26.500
the property to the person who owns it.
328
00:15:26.500 --> 00:15:30.180
I understand if you take it to the treasury,
329
00:15:30.180 --> 00:15:31.930
no one's getting it back.
330
00:15:31.930 --> 00:15:35.060
But if the goal is who can make the best effort
331
00:15:35.060 --> 00:15:38.840
to return the property, I'm not sure who that is,
332
00:15:38.840 --> 00:15:42.120
but you don't put out broadcasts, right?
333
00:15:42.120 --> 00:15:44.190
You don't have the IOLTA account website,
334
00:15:44.190 --> 00:15:48.300
here are all the lawyers who's accounts we have wide open,
335
00:15:48.300 --> 00:15:50.320
right?
No, but what the--
336
00:15:50.320 --> 00:15:51.950
They could do that, right?
337
00:15:51.950 --> 00:15:56.950
What the bar has in the oversight of the practice of law
338
00:15:57.650 --> 00:16:00.890
is the office of bar council, the board of bar overseers,
339
00:16:00.890 --> 00:16:03.440
the IOLTA Committee, and the client security board.
340
00:16:05.050 --> 00:16:07.490
The way the statute works, these accounts
341
00:16:07.490 --> 00:16:11.350
that are determined abandoned, if there's been a notice
342
00:16:11.350 --> 00:16:16.003
to the owner of the account that hasn't gotten
343
00:16:17.580 --> 00:16:18.890
to the owner of the account.
344
00:16:18.890 --> 00:16:23.890
But every lawyer has an up-to-date address
345
00:16:23.930 --> 00:16:26.850
with the registry because--
346
00:16:26.850 --> 00:16:29.450
Aren't we dealing with a problematic professional?
347
00:16:33.170 --> 00:16:34.760
A lot of these cases, like this case
348
00:16:34.760 --> 00:16:36.180
is a good example, right?
349
00:16:36.180 --> 00:16:38.380
I can't remember, was this guy disciplined?
350
00:16:38.380 --> 00:16:39.213
This man was disbarred.
351
00:16:39.213 --> 00:16:42.820
He was disciplined, then it's turned over to a lawyer
352
00:16:42.820 --> 00:16:47.300
who does his best to find out who these things belong to.
353
00:16:47.300 --> 00:16:49.403
But then he just says oh, I can't find it.
354
00:16:51.670 --> 00:16:52.990
But the treasury department's saying hey,
355
00:16:52.990 --> 00:16:57.083
we can take this one step further, we can publicize,
356
00:16:58.240 --> 00:16:59.800
I don't know how they do it,
357
00:16:59.800 --> 00:17:02.240
and they may just do exactly what you're doing
358
00:17:02.240 --> 00:17:04.450
and then turn it over to the general fund.
359
00:17:04.450 --> 00:17:08.240
That may be different, but I'm not sure
360
00:17:08.240 --> 00:17:10.040
I see an attorney-client problem
361
00:17:10.040 --> 00:17:12.410
with trying to give the money back.
362
00:17:12.410 --> 00:17:16.870
Well, if you read the orders that have been issued
363
00:17:16.870 --> 00:17:21.786
by the single justices in this court, transferring the money
364
00:17:21.786 --> 00:17:24.340
to IOLTA committee, the commissioners that have been
365
00:17:24.340 --> 00:17:27.340
assigned to look at this issue actually go back
366
00:17:27.340 --> 00:17:31.190
and look at the financials from the lawyer,
367
00:17:31.190 --> 00:17:32.930
the lawyer's files to determine,
368
00:17:32.930 --> 00:17:35.670
was there a settlement made that wasn't paid to someone?
369
00:17:35.670 --> 00:17:36.950
Was there a retainer made
370
00:17:36.950 --> 00:17:38.829
that wasn't given back to someone--
371
00:17:38.829 --> 00:17:40.570
I understand they've done a conscientious job,
372
00:17:40.570 --> 00:17:43.690
but the treasury has a different approach.
373
00:17:43.690 --> 00:17:47.560
They literally have this website and advertising saying,
374
00:17:47.560 --> 00:17:49.420
there's money out there to be found,
375
00:17:49.420 --> 00:17:51.470
we can all look up our names
376
00:17:51.470 --> 00:17:53.210
and see if there's any money out there.
377
00:17:53.210 --> 00:17:55.700
Now, this is a little more complicated 'cause it's a lawyer,
378
00:17:55.700 --> 00:17:59.660
but it just seems like they're making a greater effort
379
00:17:59.660 --> 00:18:01.773
to return the money than you are.
380
00:18:02.780 --> 00:18:04.549
And it's not your money or our money,
381
00:18:04.549 --> 00:18:08.300
it's some person's money.
382
00:18:08.300 --> 00:18:11.263
But the fact of advertising the money,
383
00:18:11.263 --> 00:18:15.210
because these are pooled accounts and no one knows
384
00:18:15.210 --> 00:18:18.180
who's money is in there, the only place that there could be
385
00:18:18.180 --> 00:18:21.630
a record of that money would be in the lawyer's files.
386
00:18:21.630 --> 00:18:22.990
Not just their accounting records.
387
00:18:22.990 --> 00:18:26.696
There's another place, which is the client can say,
388
00:18:26.696 --> 00:18:30.365
you know, I gave Joe Schmoe money and he never
389
00:18:30.365 --> 00:18:33.450
gave it back to me, nor did he perform any services.
390
00:18:33.450 --> 00:18:35.590
I just see that there's an account out there
391
00:18:35.590 --> 00:18:37.110
with his name on it.
392
00:18:37.110 --> 00:18:38.630
Count me in.
393
00:18:38.630 --> 00:18:41.700
That client can also go to the office of bar council,
394
00:18:41.700 --> 00:18:42.921
the board of bar overseers--
395
00:18:42.921 --> 00:18:46.030
He doesn't know there's money out there, does he?
396
00:18:46.030 --> 00:18:49.010
Well, by virtue of the fact that there's an IOLTA account
397
00:18:49.010 --> 00:18:51.650
posted on the treasury's website, that doesn't show
398
00:18:51.650 --> 00:18:54.310
any prior client that his or her money
399
00:18:54.310 --> 00:18:55.870
may be in that account.
400
00:18:55.870 --> 00:19:00.610
So, if the client has a beef with a lawyer
401
00:19:00.610 --> 00:19:03.550
because he or she didn't get their money back,
402
00:19:03.550 --> 00:19:05.993
there's a mechanism for them to go--
403
00:19:05.993 --> 00:19:08.180
So you're the better vehicle, you say?
404
00:19:08.180 --> 00:19:11.253
Correct.
Okay, thank you.
405
00:19:14.060 --> 00:19:14.893
Mr. Casey.
406
00:19:22.980 --> 00:19:24.660
Good morning, your honors, and may I please the court.
407
00:19:24.660 --> 00:19:26.720
Tim Casey, Assistant Attorney General,
408
00:19:26.720 --> 00:19:27.950
on behalf of the treasury.
409
00:19:27.950 --> 00:19:31.470
So is the treasury looking at attorney-client
410
00:19:31.470 --> 00:19:34.010
privilege information, because that seems to be
411
00:19:34.010 --> 00:19:37.370
the concern that that would constitute touching on
412
00:19:37.370 --> 00:19:38.940
the regulation and practice of law.
413
00:19:38.940 --> 00:19:41.333
Are you going through information
414
00:19:41.333 --> 00:19:44.200
between the attorney and the client?
415
00:19:44.200 --> 00:19:45.860
It is not, your honor.
416
00:19:45.860 --> 00:19:50.860
The attorney-client privileged communications
417
00:19:50.920 --> 00:19:54.050
or attorney-client confidence is simply not necessary
418
00:19:54.050 --> 00:19:57.070
for the treasury in order to validate and pay out
419
00:19:57.070 --> 00:20:01.070
on a claim, or a client to come forward and say,
420
00:20:01.070 --> 00:20:04.130
by looking on, for example, the treasury's website,
421
00:20:04.130 --> 00:20:05.990
findmassmoney.com.
422
00:20:05.990 --> 00:20:08.140
If they see their attorney's IOLTA account
423
00:20:08.140 --> 00:20:13.080
is on the unclaimed property website,
424
00:20:13.080 --> 00:20:14.870
they could submit materials to the treasury
425
00:20:14.870 --> 00:20:16.870
that don't implicate the attorney-client privilege.
426
00:20:16.870 --> 00:20:20.560
For example, a cancelled check to the attorney.
427
00:20:20.560 --> 00:20:23.037
Public court filings that establish
428
00:20:23.037 --> 00:20:26.680
the existence of an attorney-client relationship.
429
00:20:26.680 --> 00:20:29.400
Those are the kinds of thing that treasury would look for
430
00:20:29.400 --> 00:20:31.630
in order to validate and pay out on a claim.
431
00:20:31.630 --> 00:20:34.270
I used to be a criminal defense attorney,
432
00:20:34.270 --> 00:20:36.190
many of my clients were individuals
433
00:20:36.190 --> 00:20:38.790
who were under investigation but were never charged.
434
00:20:39.630 --> 00:20:44.630
If I had an IOLTA account and there was money left over,
435
00:20:44.630 --> 00:20:48.970
would all of the individuals have to identify themselves
436
00:20:48.970 --> 00:20:51.460
as clients of a particular criminal defense attorney,
437
00:20:51.460 --> 00:20:53.860
to the treasurer in order to get the money back?
438
00:20:56.280 --> 00:20:59.710
Your honor, well, I would first note that ordinarily,
439
00:20:59.710 --> 00:21:01.740
the existence of an attorney-client relationship
440
00:21:01.740 --> 00:21:03.950
is not privileged or confidential,
441
00:21:03.950 --> 00:21:06.930
but if a client was concerned about
442
00:21:06.930 --> 00:21:10.610
disclosing that information in order to get money
443
00:21:10.610 --> 00:21:13.159
from an IOLTA account, I think the treasury
444
00:21:13.159 --> 00:21:15.760
would accept other information in order
445
00:21:15.760 --> 00:21:19.140
to validate and pay out--
446
00:21:19.140 --> 00:21:21.740
Individual would have to say that I'm a client
447
00:21:21.740 --> 00:21:23.840
to a particular criminal defense attorney?
448
00:21:25.730 --> 00:21:26.737
That's right--
449
00:21:28.162 --> 00:21:30.220
Is that not a problem by itself?
450
00:21:30.220 --> 00:21:33.460
If an individual turns out to never have been charged
451
00:21:33.460 --> 00:21:38.370
with a crime to be going to the treasurer and saying,
452
00:21:38.370 --> 00:21:40.810
for whatever reason, I chose to go to this
453
00:21:40.810 --> 00:21:43.020
criminal defense attorney and now I'm seeking money
454
00:21:43.020 --> 00:21:45.070
back from that criminal defense attorney?
455
00:21:46.070 --> 00:21:49.120
Your honor, I'm not sure that that is a problem,
456
00:21:49.120 --> 00:21:50.620
for a client to come forward and say
457
00:21:50.620 --> 00:21:53.500
I was represented by attorney Smith,
458
00:21:53.500 --> 00:21:55.250
I don't have to necessarily disclose
459
00:21:55.250 --> 00:21:56.260
the nature of the engagement.
460
00:21:56.260 --> 00:21:57.600
That's probably not even relevant
461
00:21:57.600 --> 00:22:00.800
to the existence of a valid claim.
462
00:22:00.800 --> 00:22:03.090
But to say I was represented by this attorney,
463
00:22:03.090 --> 00:22:05.290
I paid the attorney a thousand dollars,
464
00:22:05.290 --> 00:22:08.130
and I never got that money back,
465
00:22:08.130 --> 00:22:10.680
and I understood that I was going to get that money back.
466
00:22:10.680 --> 00:22:15.680
Is it a problem where if the banks report to the treasury
467
00:22:15.850 --> 00:22:19.040
and say we have abandoned funds, all these instances
468
00:22:19.040 --> 00:22:22.430
and the board of bar overseers never receives
469
00:22:23.564 --> 00:22:28.370
that disciplinary proceedings can't be instituted?
470
00:22:28.370 --> 00:22:29.840
It's a good question, your honor,
471
00:22:29.840 --> 00:22:32.280
and I think the answer is we simply don't know.
472
00:22:32.280 --> 00:22:36.960
The mere facts of banks reporting and transmitting
473
00:22:36.960 --> 00:22:40.980
these funds to the treasury is not by itself
474
00:22:40.980 --> 00:22:44.230
indicative of professional misconduct.
475
00:22:44.230 --> 00:22:46.100
Is it something the board would like to look at,
476
00:22:46.100 --> 00:22:47.584
you would think?
477
00:22:47.584 --> 00:22:52.220
It might be, and it certainly can see what's available
478
00:22:52.220 --> 00:22:54.890
on the treasury's website, to see the IOLTA accounts
479
00:22:54.890 --> 00:22:59.246
that have been reported and transmitted to the treasury.
480
00:22:59.246 --> 00:23:01.320
Let me ask you a global question.
481
00:23:01.320 --> 00:23:05.880
If you win on the statutory interpretation argument,
482
00:23:05.880 --> 00:23:10.120
and these could be considered abandoned property,
483
00:23:10.120 --> 00:23:12.083
could we still rule against you?
484
00:23:14.010 --> 00:23:16.650
You could only rule against the treasury
485
00:23:16.650 --> 00:23:20.313
by including that 200-A, in this respect,
486
00:23:21.480 --> 00:23:23.180
violates the separation of powers
487
00:23:23.180 --> 00:23:25.250
by fundamentally interfering with this court's
488
00:23:25.250 --> 00:23:26.900
authority over the practice of law.
489
00:23:26.900 --> 00:23:29.140
And as you know from our brief, we assert that
490
00:23:29.140 --> 00:23:31.410
that simply is not the case here.
491
00:23:32.420 --> 00:23:34.470
Do we have to go all the way to article 30,
492
00:23:34.470 --> 00:23:35.580
couldn't we say as a matter of our
493
00:23:35.580 --> 00:23:39.480
Super Intendant's authority, because we established IOLTA,
494
00:23:39.480 --> 00:23:42.080
we get to establish what happens to abandoned funds?
495
00:23:44.860 --> 00:23:46.620
I'm glad you asked that, because this court
496
00:23:46.620 --> 00:23:50.380
has repeatedly observed, and we didn't cite
497
00:23:50.380 --> 00:23:52.500
this line of cases because as you know, we assert
498
00:23:52.500 --> 00:23:54.710
there's absolutely no conflict in this instance
499
00:23:54.710 --> 00:23:57.840
between 200-A and rule 1.15,
500
00:23:57.840 --> 00:24:00.600
or this court's authority over the practice of law.
501
00:24:00.600 --> 00:24:02.400
But the general rule that this court applies,
502
00:24:02.400 --> 00:24:05.870
is in the event of a conflict between a statute
503
00:24:05.870 --> 00:24:09.327
and a court rule, the statute supersedes the rule.
504
00:24:09.327 --> 00:24:13.053
The legislature all the time, by statute,
505
00:24:13.920 --> 00:24:17.940
imposes court filing costs, sets deadlines to take action
506
00:24:17.940 --> 00:24:20.790
in court, and I would submit that those types of statutes
507
00:24:20.790 --> 00:24:24.715
are actually, in some ways, closer to this court's
508
00:24:24.715 --> 00:24:29.715
core judicial function, it's supervision over how
509
00:24:29.760 --> 00:24:33.450
litigants can initiate and maintain litigation.
510
00:24:33.450 --> 00:24:36.410
Here, and I think this is really important,
511
00:24:36.410 --> 00:24:41.190
Chapter 200-A does not impose a substantive requirement
512
00:24:41.190 --> 00:24:44.450
on attorneys for how they are supposed to safeguard
513
00:24:44.450 --> 00:24:47.280
or maintain client funds.
514
00:24:47.280 --> 00:24:50.810
And if I could give an example that I think might implicate
515
00:24:50.810 --> 00:24:54.520
separation of power's concerns, if 200-A or a statute
516
00:24:54.520 --> 00:24:58.050
were to, in some way, relax or impose
517
00:24:58.050 --> 00:25:01.810
a different obligation on lawyers with respect to management
518
00:25:01.810 --> 00:25:03.640
or safeguarding a client fund.
519
00:25:03.640 --> 00:25:06.200
Let's say it allowed, for whatever reason,
520
00:25:06.200 --> 00:25:09.350
lawyers to co-mingle their own personal funds
521
00:25:09.350 --> 00:25:11.030
with client funds.
522
00:25:11.030 --> 00:25:13.970
In that instance, in the event of a conflict,
523
00:25:13.970 --> 00:25:16.910
the court's rules would prevail because that is
524
00:25:16.910 --> 00:25:19.110
part and parcel of this court's authority
525
00:25:19.110 --> 00:25:21.720
to Super Intendant practice of law.
526
00:25:21.720 --> 00:25:26.610
Here, 200-A imposes no such requirement, it simply says
527
00:25:27.580 --> 00:25:30.180
if after diligent efforts have been exhausted,
528
00:25:30.180 --> 00:25:33.900
the owners of this property cannot be identified,
529
00:25:33.900 --> 00:25:35.920
where should the money go?
530
00:25:35.920 --> 00:25:38.460
It should go, just like any other form of property
531
00:25:38.460 --> 00:25:41.340
under deposit governed by 200-A section 3,
532
00:25:41.340 --> 00:25:44.650
it should be reported and transmitted to the treasury.
533
00:25:44.650 --> 00:25:48.290
And I wanna emphasize that the treasury is not seeking
534
00:25:48.290 --> 00:25:50.566
to displace, in the context of
535
00:25:50.566 --> 00:25:53.260
professional disciplinary proceeding,
536
00:25:53.260 --> 00:25:57.790
any of the infrastructure that Ms. Mulligan
537
00:25:57.790 --> 00:26:00.368
and the amicus talk about.
538
00:26:00.368 --> 00:26:03.067
So for example, in this case, the office of bar council
539
00:26:03.067 --> 00:26:06.381
had a financial investigator who subpoenaed bank records
540
00:26:06.381 --> 00:26:09.482
and tried to identify the owners of these IOLTA funds.
541
00:26:09.482 --> 00:26:14.100
Treasury is not seeking to displace that process.
542
00:26:14.100 --> 00:26:16.737
In fact, in many instances, certainly in the
543
00:26:16.737 --> 00:26:19.652
professional disciplinary context, it makes good sense
544
00:26:19.652 --> 00:26:22.770
for the BBO, the office of bar council
545
00:26:22.770 --> 00:26:25.458
to undertake that investigation, to try to find out
546
00:26:25.458 --> 00:26:29.690
who are the owners of these IOLTA funds.
547
00:26:29.690 --> 00:26:32.640
But, the question presented by this case is simply,
548
00:26:32.640 --> 00:26:34.610
once those efforts have been exhausted
549
00:26:34.610 --> 00:26:37.420
and the owners cannot be identified,
550
00:26:37.420 --> 00:26:39.060
where should those funds go?
551
00:26:39.060 --> 00:26:41.370
And treasury submits that it should be treated
552
00:26:41.370 --> 00:26:44.119
as unclaimed property, principley because,
553
00:26:44.119 --> 00:26:47.455
and I hope everyone agrees that with this principle,
554
00:26:47.455 --> 00:26:49.747
that the paramount objective should be
555
00:26:49.747 --> 00:26:51.790
to reunite this property
556
00:26:51.790 --> 00:26:54.010
with their owners whenever possible.
557
00:26:54.010 --> 00:26:56.880
And the infrastructure that the treasury has in place,
558
00:26:56.880 --> 00:26:58.120
in the form of it's website,
559
00:26:58.120 --> 00:27:00.100
in the form of regular publication in state
560
00:27:00.100 --> 00:27:03.503
and local newspapers, attendance of community events.
561
00:27:04.965 --> 00:27:06.583
Isn't that a different question then?
562
00:27:07.430 --> 00:27:10.230
It sounds like, who is the best,
563
00:27:10.230 --> 00:27:14.650
it seems like you say you're better at reuniting IOLTA funds
564
00:27:14.650 --> 00:27:18.010
with their proper owner than they are.
565
00:27:18.010 --> 00:27:20.823
I'm not sure that's as obvious.
566
00:27:23.890 --> 00:27:24.830
Because treasury is--
567
00:27:24.830 --> 00:27:25.663
Is that true?
568
00:27:25.663 --> 00:27:26.496
Because--
569
00:27:26.496 --> 00:27:27.530
Yes it is, I think.
570
00:27:27.530 --> 00:27:28.920
I don't have the--
571
00:27:30.930 --> 00:27:34.540
That supposes that we get to pick who's better at it,
572
00:27:34.540 --> 00:27:37.010
as opposed to the statutory constitutional argument
573
00:27:37.010 --> 00:27:37.843
that you just made.
574
00:27:37.843 --> 00:27:40.990
Fair enough, but to the extent the court is interested in
575
00:27:40.990 --> 00:27:43.860
or concerned about, who has sort of
576
00:27:43.860 --> 00:27:45.680
a core competence in a particular--
577
00:27:45.680 --> 00:27:49.980
No, I'm trying to figure out who, by statue or law is,
578
00:27:49.980 --> 00:27:53.013
because you're making a different argument.
579
00:27:55.130 --> 00:27:57.993
'Cause you're taking the property too, in the end.
580
00:27:59.010 --> 00:28:01.080
So, I'm not sure your taking argument
581
00:28:01.080 --> 00:28:03.220
is any better than their taking argument.
582
00:28:03.220 --> 00:28:04.660
You're just taking it for the state,
583
00:28:04.660 --> 00:28:06.060
they're taking it for IOLTA.
584
00:28:08.049 --> 00:28:11.210
Right, and if the policy argument is we get to decide,
585
00:28:11.210 --> 00:28:13.730
we may wanna decide that MWAC gets the money,
586
00:28:13.730 --> 00:28:15.430
or the charities we've designated,
587
00:28:15.430 --> 00:28:17.780
so that's really not the argument before us, it's--
588
00:28:17.780 --> 00:28:18.838
Right.
589
00:28:18.838 --> 00:28:23.020
You've gotta somehow say that the statute turns this over
590
00:28:23.020 --> 00:28:26.515
to the treasury department to find the owner
591
00:28:26.515 --> 00:28:30.343
of the abandoned property, as opposed to IOLTA.
592
00:28:32.200 --> 00:28:35.190
I thought your argument was there's a certain stage
593
00:28:35.190 --> 00:28:38.720
in the statute where they don't just get to
594
00:28:38.720 --> 00:28:41.590
declare abandoned property, there's another step
595
00:28:41.590 --> 00:28:44.740
the statute says that turns us over to the treasury.
596
00:28:44.740 --> 00:28:48.620
'Cause if it's a takings argument, and you just want it
597
00:28:48.620 --> 00:28:50.640
for the state as opposed to IOLTA, I don't know
598
00:28:50.640 --> 00:28:52.100
if you win on that.
599
00:28:52.100 --> 00:28:56.520
Well, your honor, the consensus in the case law
600
00:28:56.520 --> 00:28:58.820
is that unclaimed property laws to not
601
00:28:58.820 --> 00:29:00.803
constitute an unconstitution.
602
00:29:04.070 --> 00:29:07.850
So, our argument, first of all, is that 200-A requires
603
00:29:07.850 --> 00:29:10.910
this property to be reported and transmitted to the treasury
604
00:29:10.910 --> 00:29:13.730
just like any other form of property on deposit
605
00:29:13.730 --> 00:29:18.730
with a holder in Massachusetts, and our position is also
606
00:29:18.988 --> 00:29:23.330
that first of all, this in no way conflicts with rule 1.15
607
00:29:23.330 --> 00:29:25.160
or this court's authority over the practice of law.
608
00:29:25.160 --> 00:29:30.150
In fact, it harmonizes with, and furthers rule 1.15
609
00:29:30.150 --> 00:29:32.550
because to the extent that rule addresses principle
610
00:29:32.550 --> 00:29:34.980
as opposed to interest, it requires that
611
00:29:34.980 --> 00:29:37.740
attorneys return these funds to clients promptly
612
00:29:37.740 --> 00:29:39.709
upon demand and without delay.
613
00:29:39.709 --> 00:29:42.722
Let me ask you, lets assume that we were to,
614
00:29:42.722 --> 00:29:47.722
after this hearing, amend 1.15 to specifically address
615
00:29:49.112 --> 00:29:53.260
the disposition of unclaimed principle.
616
00:29:53.260 --> 00:29:54.710
Is that within our authority?
617
00:29:55.880 --> 00:29:58.270
Your honor, then that would be a conflict
618
00:29:58.270 --> 00:30:00.676
with chapter 200-A, and if--
619
00:30:00.676 --> 00:30:03.473
Which part of it would be a conflict?
620
00:30:05.860 --> 00:30:09.430
If we were to say, let's sort of sketch it out, okay?
621
00:30:09.430 --> 00:30:13.470
Let's imagine that we followed the process
622
00:30:13.470 --> 00:30:15.093
which is presently in place.
623
00:30:17.673 --> 00:30:22.673
If it's determined that the owners cannot be found,
624
00:30:23.350 --> 00:30:25.903
a commissioner shall be appointed by the BBO,
625
00:30:27.310 --> 00:30:30.250
who shall conduct an investigation
626
00:30:30.250 --> 00:30:34.630
to make all diligent efforts to identify
627
00:30:34.630 --> 00:30:36.871
the owners of the property.
628
00:30:36.871 --> 00:30:39.070
Are we barred from doing that?
629
00:30:39.070 --> 00:30:42.426
Your honor, I would say that that amendment
630
00:30:42.426 --> 00:30:46.065
to the rule would be inconsistent with chapter 200-A.
631
00:30:46.065 --> 00:30:46.898
How?
632
00:30:46.898 --> 00:30:51.260
Because 200-A requires that the funds be reported
633
00:30:51.260 --> 00:30:52.460
and transmitted to the treasury.
634
00:30:52.460 --> 00:30:54.040
I haven't spoken about what happens,
635
00:30:54.040 --> 00:30:56.750
I've only spoken about the procedure to determine
636
00:30:56.750 --> 00:30:58.470
whether or not the funds are gonna be unclaimed.
637
00:30:58.470 --> 00:31:01.170
I'm sorry, your honor, if I was unclear about that--
638
00:31:02.800 --> 00:31:05.253
I'm sketching a proposed rule, okay?
639
00:31:06.087 --> 00:31:10.023
The funds appear to be, there's no apparent owner.
640
00:31:11.456 --> 00:31:13.290
The BBO appoints a commissioner.
641
00:31:13.290 --> 00:31:15.930
Commissioner does due diligence to attempt
642
00:31:15.930 --> 00:31:17.860
to identify the owner of the property,
643
00:31:17.860 --> 00:31:22.860
are we barred from amending the rule to do that?
644
00:31:23.350 --> 00:31:24.960
No.
In fact,
645
00:31:24.960 --> 00:31:29.010
that is what happens typically in these kinds of
646
00:31:29.010 --> 00:31:29.994
bar disciplinary proceedings.
647
00:31:29.994 --> 00:31:34.994
So let's assume we then add to the rule
648
00:31:35.640 --> 00:31:40.640
that if the various steps that would be taken
649
00:31:41.620 --> 00:31:45.163
and after a finding is made that it is,
650
00:31:48.160 --> 00:31:50.810
that the owner can not be determined,
651
00:31:50.810 --> 00:31:54.597
that we would then declare that we will make
652
00:31:55.855 --> 00:31:58.880
a public declaration that there are apparently
653
00:31:58.880 --> 00:32:01.190
unclaimed funds in the IOLTA account
654
00:32:01.190 --> 00:32:03.340
of attorney Jane Smith.
655
00:32:03.340 --> 00:32:05.131
Are we barred from doing that?
656
00:32:05.131 --> 00:32:06.400
No, you're not.
657
00:32:06.400 --> 00:32:09.910
Okay, and if then a final determination is made
658
00:32:09.910 --> 00:32:14.910
that no person has come forward and that these funds
659
00:32:14.950 --> 00:32:19.870
are unclaimed, are we barred then from saying
660
00:32:19.870 --> 00:32:22.733
that the unclaimed funds go to IOLTA?
661
00:32:23.690 --> 00:32:27.790
That last directive would be inconsistent with 200-A,
662
00:32:27.790 --> 00:32:30.510
and the statute would supersede the rule.
663
00:32:30.510 --> 00:32:33.170
Well, you're saying more than that, you're saying that
664
00:32:33.170 --> 00:32:36.320
if the principle were to go to the AOLTA Committee,
665
00:32:36.320 --> 00:32:40.513
that would actually be a violate of the separation of power.
666
00:32:41.920 --> 00:32:46.110
It would be in conflict with the legislatures directive.
667
00:32:46.110 --> 00:32:48.800
Okay, but that's not what you said in your brief, you also
668
00:32:48.800 --> 00:32:52.730
said that if the principle were to go to
669
00:32:52.730 --> 00:32:54.740
the AOLTA Committee, that raises
670
00:32:54.740 --> 00:32:57.360
constitutional problems as well.
671
00:32:57.360 --> 00:33:00.730
It does, and I wanna be clear, I'm not saying
672
00:33:00.730 --> 00:33:02.660
there's a definitive constitutional violation
673
00:33:02.660 --> 00:33:05.730
in that circumstance, but there are constitutional concerns
674
00:33:05.730 --> 00:33:09.359
with making sure that these funds are returned
675
00:33:09.359 --> 00:33:12.380
to their rightful owners whenever possible.
676
00:33:12.380 --> 00:33:16.010
And if they are not returned, if an owner comes forward
677
00:33:16.010 --> 00:33:17.940
and those funds aren't returned, there could be
678
00:33:17.940 --> 00:33:21.720
a takings problem, there could be a first amendment problem.
679
00:33:21.720 --> 00:33:24.210
I'm not saying there is definitively, but I am saying
680
00:33:24.210 --> 00:33:27.990
that treating these as unclaimed property
681
00:33:27.990 --> 00:33:30.640
subject to 200-A is not only required by
682
00:33:30.640 --> 00:33:33.580
that statutory structure, but it best avoids
683
00:33:33.580 --> 00:33:36.380
any constitutional problem because treasury
684
00:33:39.050 --> 00:33:42.310
is best positioned and its infrastructure is best set up
685
00:33:42.310 --> 00:33:44.507
to reunite property with--
686
00:33:44.507 --> 00:33:45.592
Can I ask you ask you a question?
687
00:33:45.592 --> 00:33:47.770
Can I ask you a question, I'm just very confused.
688
00:33:47.770 --> 00:33:50.820
If at the end of the process, suppose that the treasury
689
00:33:50.820 --> 00:33:53.740
has the abandoned property of the fund
690
00:33:55.300 --> 00:33:57.660
and cannot locate anyone, then it goes to
691
00:33:57.660 --> 00:33:59.310
the general treasury, right?
692
00:33:59.310 --> 00:34:00.207
Yes, it does.
693
00:34:00.207 --> 00:34:02.290
Can somebody come back later and get it back?
694
00:34:02.290 --> 00:34:03.820
Yes.
They can.
695
00:34:03.820 --> 00:34:06.440
The claimant can get the funds back at any time.
696
00:34:06.440 --> 00:34:08.320
A certain portion of it remains in a reserve
697
00:34:08.320 --> 00:34:12.043
called the unclaimed property fund, up to $500,000.
698
00:34:12.043 --> 00:34:15.090
Then some of it may go to the stabilization fund
699
00:34:15.090 --> 00:34:17.350
and the balance goes to the general fund.
700
00:34:17.350 --> 00:34:20.778
But those funds are always available to a claimant.
701
00:34:20.778 --> 00:34:24.810
There's no statute of limitations and the fund is not
702
00:34:24.810 --> 00:34:27.070
a limit on the claimant's ability to--
703
00:34:27.070 --> 00:34:29.020
Could we do that too, under our rule?
704
00:34:30.600 --> 00:34:33.440
You could, but--
705
00:34:33.440 --> 00:34:36.390
And then we would be in the position just as well as you.
706
00:34:37.290 --> 00:34:39.380
You would, you would be creating essentially,
707
00:34:39.380 --> 00:34:43.030
an entirely redundant architecture by the IOLTA Committee.
708
00:34:43.030 --> 00:34:44.780
Don't we have that under the CSP?
709
00:34:46.230 --> 00:34:51.230
No, I don't purport to be an expert in that area,
710
00:34:51.340 --> 00:34:54.960
but that is entirely a matter of grace,
711
00:34:54.960 --> 00:34:59.960
whether clients are refunded for claims of fraud
712
00:35:00.560 --> 00:35:02.610
or misconduct by an attorney.
713
00:35:02.610 --> 00:35:06.500
It exists, but it may not necessarily make the client whole.
714
00:35:06.500 --> 00:35:09.020
Here, if there is a valid claim for the full amount
715
00:35:09.020 --> 00:35:12.830
of the funds, then from the treasury,
716
00:35:12.830 --> 00:35:16.130
the client will receive the full amount of the funds.
717
00:35:16.130 --> 00:35:18.150
I'm going through the statute, looking at
718
00:35:18.150 --> 00:35:19.560
the various provisions.
719
00:35:19.560 --> 00:35:22.430
Bank deposits, security deposits, life insurance proceeds,
720
00:35:22.430 --> 00:35:24.470
dividends, property from dissolution,
721
00:35:24.470 --> 00:35:26.470
sums payable on cashier's checks,
722
00:35:26.470 --> 00:35:28.560
amounts payable of the demutualization.
723
00:35:28.560 --> 00:35:31.713
All of them would indicate that the apparent owner
724
00:35:31.713 --> 00:35:34.900
would be identified in some public,
725
00:35:34.900 --> 00:35:37.083
or in some discernible way.
726
00:35:38.910 --> 00:35:42.450
Is IOLTA a unique animal in terms of an account?
727
00:35:42.450 --> 00:35:44.630
Is there anything in the statute which you think
728
00:35:44.630 --> 00:35:47.800
would be comparable to an IOLTA account,
729
00:35:47.800 --> 00:35:50.580
which you say would cover it?
730
00:35:50.580 --> 00:35:55.580
Well, your honor, we assert that the fact of the identity
731
00:35:56.630 --> 00:35:59.780
of the owner being unknown does not take it out of
732
00:35:59.780 --> 00:36:01.420
the purview of unclaimed property.
733
00:36:01.420 --> 00:36:03.970
Tell me the language of the statute
734
00:36:03.970 --> 00:36:07.480
that would incorporate this?
735
00:36:07.480 --> 00:36:10.079
I mean, generally you identify bank deposits,
736
00:36:10.079 --> 00:36:13.053
bank account in the name of Joe Blow,
737
00:36:14.130 --> 00:36:18.290
is there any other animal that says an account
738
00:36:18.290 --> 00:36:21.230
by an attorney which may contain funds
739
00:36:21.230 --> 00:36:25.700
of dozens, hundred, thousands of potential clients?
740
00:36:25.700 --> 00:36:27.270
Which is what an IOLTA account is?
741
00:36:27.270 --> 00:36:29.590
Right, there's not, of course.
742
00:36:29.590 --> 00:36:31.930
But there are all kinds of property that aren't specifically
743
00:36:31.930 --> 00:36:34.880
listed in chapter 200-A that are nonetheless
744
00:36:34.880 --> 00:36:36.110
subject to its requirements.
745
00:36:36.110 --> 00:36:38.180
This court said in the John Hancock case,
746
00:36:38.180 --> 00:36:42.070
that the unclaimed property laws intended to apply
747
00:36:42.070 --> 00:36:45.510
to all kinds of unclaimed and unidentified property.
748
00:36:45.510 --> 00:36:47.193
You have anonymous accounts as well,
749
00:36:47.193 --> 00:36:49.790
outside of IOLTA.
That's right.
750
00:36:49.790 --> 00:36:53.160
And the entire system, the reporting form, the regulations,
751
00:36:53.160 --> 00:36:56.910
and it's in our brief, the statutory language.
752
00:36:56.910 --> 00:37:00.840
There are references to, for example,
753
00:37:00.840 --> 00:37:03.610
the identity of the owner if known.
754
00:37:03.610 --> 00:37:06.465
The address of the owner if available.
755
00:37:06.465 --> 00:37:09.650
There are references throughout the law and the regulations
756
00:37:09.650 --> 00:37:12.180
and the treasury's forms that contemplate
757
00:37:12.180 --> 00:37:14.240
that the owner will not be known.
758
00:37:14.240 --> 00:37:17.090
So tell me the world, if you win.
759
00:37:17.090 --> 00:37:19.870
Tell me what happens with regard to the IOLTA account
760
00:37:19.870 --> 00:37:21.600
with Joe Blow if you win.
761
00:37:21.600 --> 00:37:25.710
So if the court were to rule in favor of treasury,
762
00:37:25.710 --> 00:37:30.110
nothing changes except that in a disciplinary proceeding
763
00:37:30.110 --> 00:37:33.130
like the one that gave rise to this appeal,
764
00:37:33.130 --> 00:37:36.050
after efforts have been exhausted
765
00:37:36.050 --> 00:37:38.790
to identify the owner of those--
766
00:37:38.790 --> 00:37:39.800
By whom?
767
00:37:39.800 --> 00:37:43.230
By the BBO, by the office of bar council,
768
00:37:43.230 --> 00:37:46.150
by anyone involved in the disciplinary proceeding.
769
00:37:46.150 --> 00:37:47.993
And by the attorney too.
770
00:37:50.050 --> 00:37:52.320
Those efforts can continue, and as I indicated,
771
00:37:52.320 --> 00:37:54.440
the treasury's not seeking to displace--
772
00:37:54.440 --> 00:37:57.260
You're saying that once that whole process is completed
773
00:37:57.260 --> 00:38:00.330
and they reach the determination that it's abandoned,
774
00:38:00.330 --> 00:38:04.730
we can't identify anyone, chapter 200-A turns that over to
775
00:38:04.730 --> 00:38:08.040
the treasury because that's who gets to deal
776
00:38:08.040 --> 00:38:10.170
with this category of property.
777
00:38:10.170 --> 00:38:13.240
That's right, and not only is that required by 200-A,
778
00:38:13.240 --> 00:38:15.650
but treasury is the best position based on
779
00:38:15.650 --> 00:38:17.667
what they've been doing for over 50 years.
780
00:38:17.667 --> 00:38:20.087
And do those constitutional cases you referred to
781
00:38:20.087 --> 00:38:22.842
describe treasury in that respect,
782
00:38:22.842 --> 00:38:25.330
and that's why it's constitutional for you
783
00:38:25.330 --> 00:38:28.700
to take the property and not constitutional for others?
784
00:38:28.700 --> 00:38:30.837
Which case should we read on that, by the way?
785
00:38:30.837 --> 00:38:33.927
Your honor, they're in a footnote to my brief,
786
00:38:33.927 --> 00:38:36.520
they're typically state supreme court cases.
787
00:38:36.520 --> 00:38:38.193
This is footnote 24.
788
00:38:41.110 --> 00:38:45.397
But, they say that because these unclaimed property laws
789
00:38:45.397 --> 00:38:48.673
really just involve a kind of state-taking,
790
00:38:49.930 --> 00:38:52.900
in theory, temporary custody of the property
791
00:38:52.900 --> 00:38:56.610
where it always remains, rather than title to the property,
792
00:38:56.610 --> 00:38:58.890
where it remains always available to the client
793
00:38:58.890 --> 00:39:01.560
or to the owner to make a claim.
794
00:39:01.560 --> 00:39:04.310
There is no taking of property.
795
00:39:04.310 --> 00:39:09.310
So the BBO has done it's efforts, can not find somebody,
796
00:39:10.360 --> 00:39:11.543
then what happens?
797
00:39:13.460 --> 00:39:17.891
Then you would publish it and say IOLTA account of Joe Blow,
798
00:39:17.891 --> 00:39:22.891
somebody comes forward to say that might be my money.
799
00:39:24.480 --> 00:39:25.500
And then what do you do?
800
00:39:25.500 --> 00:39:30.500
Then there would be an assessment of the owner's claim,
801
00:39:31.470 --> 00:39:34.210
and if it's validated, their money would be--
802
00:39:34.210 --> 00:39:36.630
An assessment by whom, doing what?
803
00:39:36.630 --> 00:39:37.730
By the treasury.
804
00:39:37.730 --> 00:39:39.230
They would receive whatever documents--
805
00:39:39.230 --> 00:39:40.063
Doing what?
806
00:39:40.063 --> 00:39:43.530
There's already been an exhaustive effort
807
00:39:43.530 --> 00:39:47.195
in order to identify clients, and you say you don't even
808
00:39:47.195 --> 00:39:50.510
publish unless those efforts have been exhausted,
809
00:39:50.510 --> 00:39:53.540
so, what is your person gonna do
810
00:39:53.540 --> 00:39:55.430
that has not already been done?
811
00:39:55.430 --> 00:39:57.320
I don't mean to suggest that there's gonna be
812
00:39:57.320 --> 00:39:59.410
an entirely new investigation,
813
00:39:59.410 --> 00:40:01.320
the analysis that the treasury is going to be
814
00:40:01.320 --> 00:40:04.560
simply as between the putative owner and the treasury.
815
00:40:04.560 --> 00:40:07.390
The treasury's gonna say what documentation
816
00:40:07.390 --> 00:40:11.220
do you have to prove that this was your attorney,
817
00:40:11.220 --> 00:40:15.000
and that you paid the money that you haven't received back.
818
00:40:15.000 --> 00:40:19.110
And so the client will submit that documentation,
819
00:40:19.110 --> 00:40:22.450
the treasury will access it, and if it concludes
820
00:40:22.450 --> 00:40:24.547
that it's valid, then it will pay out on the claim.
821
00:40:24.547 --> 00:40:26.410
And that documentation may include
822
00:40:26.410 --> 00:40:30.591
attorney-client communications?
823
00:40:30.591 --> 00:40:34.510
It could potentially, but treasury's position
824
00:40:34.510 --> 00:40:36.660
is that it's unnecessary for a client
825
00:40:36.660 --> 00:40:38.480
to disclose attorney-client confidence
826
00:40:38.480 --> 00:40:40.220
in order to establish the existence
827
00:40:40.220 --> 00:40:42.260
of an attorney-client relationship
828
00:40:42.260 --> 00:40:44.830
and validate the claim on which treasury would pay.
829
00:40:44.830 --> 00:40:47.880
It's unnecessary for treasury to receive
830
00:40:47.880 --> 00:40:50.850
confidential communications, legal advise,
831
00:40:50.850 --> 00:40:53.383
opinion work product, or anything like it.
832
00:40:53.383 --> 00:40:57.440
A canceled check might do, an engagement letter might do,
833
00:40:57.440 --> 00:41:02.440
a public court filings in which the council is appearing
834
00:41:03.100 --> 00:41:05.420
on behalf of the client, those are the kinds of things
835
00:41:05.420 --> 00:41:08.197
that would do to establish the attorney-client relationship
836
00:41:08.197 --> 00:41:10.810
and result in a payment.
837
00:41:10.810 --> 00:41:12.240
It's gotta be an engagement letter
838
00:41:12.240 --> 00:41:14.260
or a canceled check, right?
839
00:41:14.260 --> 00:41:17.393
If it's client funds, if it's a retainer?
840
00:41:19.030 --> 00:41:22.320
I would think that the client would have to submit
841
00:41:22.320 --> 00:41:25.507
something or make some kind of attestation about the amount
842
00:41:25.507 --> 00:41:29.326
of the money that was paid over to the attorney.
843
00:41:29.326 --> 00:41:31.400
And that goes to the chief's first question,
844
00:41:31.400 --> 00:41:34.383
that you know, there's a healthcare fraud investigation
845
00:41:34.383 --> 00:41:37.890
with their lawyer, and I don't want the world to know
846
00:41:37.890 --> 00:41:40.313
that I was subject to an investigation?
847
00:41:42.370 --> 00:41:47.370
Well, I think treasury is of the view that it's
848
00:41:47.800 --> 00:41:50.387
not necessary to receive an attorney-client--
849
00:41:51.440 --> 00:41:53.490
Is the treasury accepting just the check?
850
00:41:53.490 --> 00:41:58.490
If there's a check between the claimant and the lawyer,
851
00:41:59.540 --> 00:42:02.630
are they saying that's enough to prove that it was paid?
852
00:42:02.630 --> 00:42:05.661
I think it likely would be enough.
853
00:42:05.661 --> 00:42:06.494
How is it gonna be enough?
854
00:42:06.494 --> 00:42:10.760
So I have a client who pays $25,000 as a retainer
855
00:42:10.760 --> 00:42:13.974
for the healthcare investigation Justice Gaziano describes,
856
00:42:13.974 --> 00:42:18.210
you only get whatever work, that's a retainer for work done.
857
00:42:18.210 --> 00:42:22.203
So, you'd have to do more than just say I paid $25,000,
858
00:42:22.203 --> 00:42:24.330
the amount of the account may not be,
859
00:42:24.330 --> 00:42:26.470
the person may have done a lot of work.
860
00:42:26.470 --> 00:42:27.510
They may have, and so I think--
861
00:42:27.510 --> 00:42:32.510
So how are you gonna show that the money in the account
862
00:42:33.950 --> 00:42:36.687
is yours, when in fact there may have been
863
00:42:36.687 --> 00:42:40.870
$25,000 worth of work done for that client?
864
00:42:40.870 --> 00:42:44.120
Well, again, I think the client, and you're right,
865
00:42:44.120 --> 00:42:47.410
it may be necessary to submit more, but I don't think,
866
00:42:47.410 --> 00:42:49.930
I think the client could submit some kind of attestation
867
00:42:49.930 --> 00:42:54.930
to say I paid $500, as an aside of $25,000 retainer,
868
00:42:55.430 --> 00:42:57.900
presumably it would be of a kind of, you know,
869
00:42:57.900 --> 00:43:00.540
that's an amount, and for a duration that would likely
870
00:43:00.540 --> 00:43:02.860
result in that money being placed in a client trust
871
00:43:02.860 --> 00:43:04.781
rather than an IOLTA account.
872
00:43:04.781 --> 00:43:06.483
I'm not so sure of that.
873
00:43:07.440 --> 00:43:08.273
In any event,
874
00:43:10.394 --> 00:43:15.350
the client can submit some, again an attestation,
875
00:43:15.350 --> 00:43:17.216
some kind of evidence to say
876
00:43:17.216 --> 00:43:22.216
I paid the lawyer this amount, and I only got this amount
877
00:43:24.930 --> 00:43:29.270
of service, or I expected to receive X amount
878
00:43:29.270 --> 00:43:30.590
of money back, I never did.
879
00:43:30.590 --> 00:43:32.750
Isn't it possible for you to work with IOLTA
880
00:43:32.750 --> 00:43:35.953
at that point, since they probably can get the information
881
00:43:35.953 --> 00:43:40.677
you would need to figure out what amount was owing?
882
00:43:42.390 --> 00:43:47.300
Yes, that's possible, now they're raising a concern
883
00:43:47.300 --> 00:43:50.690
that we would come into possession of a confidential--
884
00:43:50.690 --> 00:43:52.396
Well, that's why you would work with them.
885
00:43:52.396 --> 00:43:57.396
Yeah, treasury certainly would, and there's no reason
886
00:43:57.630 --> 00:43:59.430
why the parties can't work together.
887
00:43:59.430 --> 00:44:02.530
'Cause I'm just, from what I can understand,
888
00:44:02.530 --> 00:44:06.300
IOLTA's doing active looking around, right?
889
00:44:06.300 --> 00:44:10.220
And once that's exhausted, the treasury sort of
890
00:44:10.220 --> 00:44:13.760
does a passive type of thing and here's the information,
891
00:44:13.760 --> 00:44:17.790
if anybody figures it out, excellent.
892
00:44:17.790 --> 00:44:20.750
But it's just listed, right?
893
00:44:20.750 --> 00:44:22.960
It's listed, and all kinds of outreach is done
894
00:44:22.960 --> 00:44:25.750
to the community in Massachusetts to try to
895
00:44:25.750 --> 00:44:27.020
encourage people to come forward
896
00:44:27.020 --> 00:44:29.079
and make claims for that property.
897
00:44:29.079 --> 00:44:31.086
That, I think, is something that
898
00:44:31.086 --> 00:44:34.240
if this money goes to IOLTA, or if it goes to a new entity
899
00:44:34.240 --> 00:44:38.220
designated by the court, that the court would need to
900
00:44:38.220 --> 00:44:40.760
consider whether some of those responsibilities,
901
00:44:40.760 --> 00:44:42.820
at least with respect to these IOLTA funds,
902
00:44:42.820 --> 00:44:46.010
need to be undertaken by that entity.
903
00:44:46.010 --> 00:44:49.760
Some kind affirmative outreach to remind clients
904
00:44:49.760 --> 00:44:53.921
that they may have money, and they should make a claim
905
00:44:53.921 --> 00:44:55.810
in order to get their money back.
906
00:44:55.810 --> 00:44:57.430
Whether it be news paper publication,
907
00:44:57.430 --> 00:44:59.945
or a searchable internet database.
908
00:44:59.945 --> 00:45:02.710
Those kinds of things that the treasury has been doing
909
00:45:02.710 --> 00:45:07.360
for years to try to reunite owners with their property.
910
00:45:07.360 --> 00:45:11.003
But again, IOLTA's already tried stuff.
911
00:45:12.390 --> 00:45:16.410
And, so, if the real goal is to make sure that the money
912
00:45:16.410 --> 00:45:20.420
is reunited with the person who it belongs to,
913
00:45:20.420 --> 00:45:25.420
I don't see why two sides can't work together,
914
00:45:25.620 --> 00:45:28.330
if that's really what you wanna do.
915
00:45:28.330 --> 00:45:33.010
If somebody comes to you saying I wanna claim that money,
916
00:45:33.010 --> 00:45:35.410
you could work with them to verify that it belongs to them.
917
00:45:35.410 --> 00:45:36.631
I think we could.
918
00:45:36.631 --> 00:45:40.290
I don't think anything about what you said, your honor,
919
00:45:40.290 --> 00:45:42.000
is inconsistent with what we're proposing.
920
00:45:42.000 --> 00:45:46.120
That the IOLTA Committee do it's part
921
00:45:46.120 --> 00:45:47.530
during it's part of the process,
922
00:45:47.530 --> 00:45:50.270
the BBO and the office of bar council do it's part
923
00:45:50.270 --> 00:45:52.040
during it's part of the process,
924
00:45:52.040 --> 00:45:55.040
to try to identify the owners of these funds.
925
00:45:55.040 --> 00:45:57.540
That's laudable work, and it's important,
926
00:45:57.540 --> 00:45:59.570
and I hope everyone agrees that that's
927
00:46:00.443 --> 00:46:01.670
the paramount and partitive here.
928
00:46:01.670 --> 00:46:05.300
But once those owners cannot be identified
929
00:46:05.300 --> 00:46:08.310
after a diligent search, that money should be put in a place
930
00:46:08.310 --> 00:46:11.360
where it can always remain available to clients,
931
00:46:11.360 --> 00:46:13.120
should they come forward at a later point
932
00:46:13.120 --> 00:46:14.650
and make a valid claim.
933
00:46:14.650 --> 00:46:16.820
And 200-A not only requires that,
934
00:46:16.820 --> 00:46:18.320
but it best accomplishes that.
935
00:46:19.730 --> 00:46:21.803
Okay, thank you.
Thank you, your honors.