-: SJC-12730, in the matter of Gregory M. Olchowski.
Chief Justice: Ms. Mulligan, good morning.
-: Good morning, your honors.
I'm Maureen Mulligan, I represent the IOLTA Committee
and I'll be speaking on behalf
of the appellants this morning.
May it please the court.
The question before the court today is
what happens with unidentified IOLTA funds,
and who gets to control the disposition of those funds?
The committee contends that this court
has the authority to do so, because this court
established the IOLTA accounts and has
the ultimate authority to regulate the practice of law.
In that regard, this court has the power
to control the disposition of the unidentified funds.
In prior bar proceedings before single justices
of this court, the court has already issued
a number of orders on petitions from lawyers,
from commissioners appointed by the court,
and the client security board to distribute
unidentified funds to the IOLTA committee.
-: Does that seem like a wash?
Because there are instances where this court
has ruled on unidentified funds, and then there are
other instances when we don't know about it.
And the DBO doesn't know about it, and the banks report
and it goes to the treasury.
-: Well, the fact that the banks report IOLTA accounts
to the treasury, I think has absolutely no baring
on how this issue should be resolved.
Under the terms of the abandoned property statute,
the banks, and other companies, and other entities
that hold funds that may be abandoned--
-: I guess on a grander scale, my question is more
past practice really shouldn't govern,
'cause they have a past practice and there's
another past practice that doesn't really resolve the issue.
-: Well, there is a practice of this court,
I take your point, your honor.
We think that it does impact the decision
because the court is clearly aware of the
abandoned property statute, yet has issued orders.
-: Really? Or is it just that
the treasury department hasn't sort of
come forward until this case?
It was sort of uncontested, what was being done before.
And for once, the treasury department got involved,
intervened, and now we have the issue joined
for really the first time.
Isn't that really where we are?
-: I appreciate that that's where we are, your honor.
And although the treasury claims that it's
governance of IOLTA accounts through
the abandoned property statute has an incidental effect
on the practice of law, or an incidental effect
on the judiciary's control over the practice of law.
That's really not the case, I mean,
they're clearly in your lane in this regard.
-: On that score, do you still win
if we don't accept your statutory interpretation argument?
-: I'm sorry, I couldn't hear that.
-: Do you still win?
So suppose we don't accept your argument
about whether or not this comes within the parameters
in a broad sense of the abandoned property law.
But, we also have that you started out
with our independent authority to regulate the practice
of law, we set up IOLTA, we set up these mechanisms.
So, even if it comes within the purview of the statute,
the money still can go to the committee.
-: Absolutely, your honor. -: As a softball.
(laughing)
-: And I really appreciate that.
But, as you have so eloquently explained,
the oversight of IOLTA funds by this court
is really critical to the protection of clients,
attorney client confidences, the ethical obligations
of lawyers and the maintenance of public trust
in the practice of law.
And what we have learned through the treasury's brief--
-: Is it that much of a softball, because I'm just wondering
if he's put some spin on it too.
So let me take it one step further.
Say it is covered by the statute, it's abandoned property.
But it's somebody's property and it can be identified.
This court's never taken anyone else's principle, have we?
I mean, I understand we take the interest
and put it in the IOLTA account.
We've never gone the next step and taken the actual amounts
and put it in the IOLTA account.
Have we?
-: No.
One of the problems with the way--
-: It seems a little different.
So I'm a client of one of these lawyers,
I've given you a thousand dollars
and you didn't do the work, and I want it back now.
And I actually am out there and somebody can find me.
Do our Super Intendant's powers empower us
to take back money away from that person now?
-: Absolutely not, your honor.
If the identity of the owner of the funds is known,
then those funds should be returned to the person
that gave them to the lawyer.
-: But isn't the treasury saying, I can find them.
I may be able to find that person?
And I do it better than you do, IOLTA.
-: So the way the treasury attempts to find people
under their regulations and under their research,
and it's stated very clearly in their brief
that the way they attempt to find owners of IOLTA accounts,
is they look at attorney-client fee agreements,
and they look at attorney-client documents.
And so what's happening here, is that they are invading
the attorney-client privilege, which is
one of the most important parts
of the attorney-client relationship.
And what we have found, or what we now know
through the affidavits that have been submitted
to the court by the treasury, is that
not only is the treasury doing this research,
but they have hired a third party vendor
to manage the abandoned property accounts.
And that third party vendor has the opportunity
to go in and look at attorney-client fee agreements
and attorney-client documents
in order to determine the owner.
And so this is a problem,
because that is part of what this court regulates
in terms of regulating the practice of law.
And the treasury's attempt to intrude
on the attorney-client relationship, and frankly,
the attorney discipline if there's something going on
where that's not just a negligent accounting,
but there's some other type of misaccounting by a lawyer,
that should be governed by the systems
that have been set up by this court,
to look at the oversight of the practice of law.
-: But I'm confused, but again, I don't mean to be difficult,
I just don't understand it.
So the treasury department,
the lawyer's given up, right?
There's no attorney-client relationship anymore,
there's no work being done, right?
What we're dealing with is trying to give the money back.
Is the attorney-client relationship
still in place at that point?
Is there still a privilege for that client?
And basically, you took my thousand dollars,
you put it in the IOLTA account,
I'm just trying to get a sense of whether this is
really an attorney-client issue,
or is it just a giving money back issue?
-: So in order to answer that, your honor,
can I step back just a little bit and talk about
the creation of IOLTA accounts?
I'm sure the court's familiar,
but just to make sure we're all on the same page.
When an IOLTA account for an attorney is opened,
the purpose of the IOLTA account is to deposit money
that's gonna be held by the lawyer
or the law firm on a short-term basis.
So in my IOLTA account, I might have funds from one client,
or I could have funds from 25 clients.
And it's all pooled, and it's all mixed in.
And when the lawyer deposits that money with the bank,
the bank has no idea who's money that is.
-: Aren't we just dealing with the
merged accounts in this case?
We're not dealing with the individual accounts, right?
'Cause there would be a name on those.
-: Correct, we're just dealing with IOLTA accounts,
which is different than a trust account
in the name of a client, so the IOLTA accounts--
-: Aren't we just dealing with the IOLTA accounts
where you put together a bunch of people's money
as opposed to again, but maybe I'm misunderstanding--
-: That is the definition of an IOLTA account, your honor.
An IOLTA account is a pooled account with
multiple clients' funds in the account,
and those are the accounts
that we're talking about here today.
Clearly, if an attorney has a client trust account,
there's a client name on that account,
the attorney would always know to whom that money belongs.
But, there's a very intricate method of accounting
that attorneys are supposed to adhere to
in order to keep a record of which client,
or in fact, sometimes third party.
For example, in a real estate closing a bank
might give money to a law firm
that gets deposited into the IOLTA account.
There's a very detailed system of accounting
that the law firms are supposed to go to
to know who's money is in that pooled account.
Because the only person that has the information,
or should have the information, as to who's money
is deposited in that account is the lawyer.
So, when the treasury says in response to your question,
don't they have better resources to find people?
The way these IOLTA accounts are listed
on the treasury's gofindmoney.com website,
is they're listed as the IOLTA account
of Jane Lawyer, for example.
So, they're not listed as Mary Smith's money
which is how other accounts are listed
on the gofindmoney.com website.
So, there's no real way for an individual to say,
oh, there's my money on that list.
-: But if an individual knew they had given money
to an attorney and they see that,
doesn't that tell them they should ask the registry?
The treasury, I mean.
-: But what happens at that point, is the treasury
then begins to look at attorney documents,
at attorney-client agreements, at client documents--
-: The client is coming forward and asking them to do that,
there's really no client and attorney issue.
-: Possibly, but I think that the client
should not be forced to disclose issues
that were formally confidential just to prove
that there's money in the account--
-: Can you compare for me how the treasury
would go about identifying somebody,
which I would guess that's the publication,
but who's responsible for the IOLTA account
after the attorney's out of business?
-: When the attorney goes out of business,
per order of this court, the IOLTA accounts
are supposed to be closed.
-: Okay, who's supposed to close them, the lawyer?
-: The lawyer's supposed to close the IOLTA account.
-: So if the lawyer didn't close this IOLTA account,
and the IOLTA account exists, why does not
the bar discipline agency, the board of bar overseers
take care of it?
-: One of the processes that the board of bar overseers
has in place, is that it appoints commissioners
to look into identifying to
whom the funds may belong in the IOLTA account.
And in fact, the court, this court,
has also appointed commissioners to do that same thing.
-: In this case, it was impossible, right?
-: Correct, it was impossible to fig--
-: The investigator who looked at it,
nobody could figure it out?
-: Correct, the lawyer's accountant looked at it
and couldn't figure it out,
and the office of bar councils' accountant looked at it--
-: My memory is of the ones where the banks
reported directly to the treasury,
there were sum 58 instances where people
had claimed their funds, correct?
-: Correct.
-: So we have to compare that to what happens
with commissioners to see how successful commissioners
are in return of unclaimed funds, right?
-: Well, it's not an apples to apples comparison,
because what we don't know, for the accounts
that have been turned over to the treasury,
is we don't know whether all of the moneys in those accounts
are actually unidentified funds.
That information hasn't been provided.
So it's possible that there's information
either through the attorney, that certain moneys
in those accounts can be identified.
So, we don't know that, we don't know if the treasury
has gone out and found 58 people who's money
were in the IOLTA accounts and actually were not identified,
or if people came forward, or if lawyers came forward,
and said, that's my account,
I have not had any communications with the bank
in X amount of time, but it's an active account,
I haven't had reason to deposit any money
in that account in the last three years.
-: And you argued it was an active account because the fact
that the interest was going to IOLTA anyway?
-: Certainly, so if we're looking at the statute itself,
I think up until this point, we've been saying
if the statute applies, why should this court
still have authority?
And let me just wrap that up in one sentence,
this court should have the authority
because it has the authority to regulate
the practice of law.
But if you wanna turn to the statute--
-: Yeah, I don't think frankly
that's a great argument for you.
-: How is it that the principle going to the general fund
interferes with the regulation of the practice of law?
-: It's not the principle going to the general fund
that's interfering with the practice of law,
it's the method by which the treasurer's attempting
to reunite the owners of the funds
with the funds themselves.
And I'm repeating myself, but as I said earlier,
in order to do that, what they are doing
is looking at materials that are confidential
between the lawyer and the client.
-: Now, how are they doing that?
-: I only know what has been
in the treasury's brief, your honors.
So from the brief, how they describe it,
is they look at attorney-client relationships,
or excuse me, fee agreements or attorney-client documents.
It's not clear to me whether they contacted
individual lawyers to do that, whether that information
is being provided by the client, I don't know at this point.
-: But if the treasury department just put on their website,
we have the following IOLTA accounts
from attorneys Jones, Smith and Brown,
and then they have
this little part of their website that does that,
does that violate any attorney-client privilege?
-: We're not claiming that the--
-: They're just going one step further than you are.
And I hate to say, you're a little bit
the fox guarding the hen house, right?
They have more incentive of returning that property
than maybe you do.
Because you're gonna make use of that,
they're going to give it back.
I mean, I'm not saying you're doing it
for improper purposes.
But I don't see a problem if the goal is to return
the property to the person who owns it.
I understand if you take it to the treasury,
no one's getting it back.
But if the goal is who can make the best effort
to return the property, I'm not sure who that is,
but you don't put out broadcasts, right?
You don't have the IOLTA account website,
here are all the lawyers who's accounts we have wide open,
right? -: No, but what the--
-: They could do that, right?
-: What the bar has in the oversight of the practice of law
is the office of bar council, the board of bar overseers,
the IOLTA Committee, and the client security board.
The way the statute works, these accounts
that are determined abandoned, if there's been a notice
to the owner of the account that hasn't gotten
to the owner of the account.
But every lawyer has an up-to-date address
with the registry because--
-: Aren't we dealing with a problematic professional?
A lot of these cases, like this case
is a good example, right?
I can't remember, was this guy disciplined?
-: This man was disbarred.
-: He was disciplined, then it's turned over to a lawyer
who does his best to find out who these things belong to.
But then he just says oh, I can't find it.
But the treasury department's saying hey,
we can take this one step further, we can publicize,
I don't know how they do it,
and they may just do exactly what you're doing
and then turn it over to the general fund.
That may be different, but I'm not sure
I see an attorney-client problem
with trying to give the money back.
-: Well, if you read the orders that have been issued
by the single justices in this court, transferring the money
to IOLTA committee, the commissioners that have been
assigned to look at this issue actually go back
and look at the financials from the lawyer,
the lawyer's files to determine,
was there a settlement made that wasn't paid to someone?
Was there a retainer made
that wasn't given back to someone--
-: I understand they've done a conscientious job,
but the treasury has a different approach.
They literally have this website and advertising saying,
there's money out there to be found,
we can all look up our names
and see if there's any money out there.
Now, this is a little more complicated 'cause it's a lawyer,
but it just seems like they're making a greater effort
to return the money than you are.
And it's not your money or our money,
it's some person's money.
-: But the fact of advertising the money,
because these are pooled accounts and no one knows
who's money is in there, the only place that there could be
a record of that money would be in the lawyer's files.
Not just their accounting records.
-: There's another place, which is the client can say,
you know, I gave Joe Schmoe money and he never
gave it back to me, nor did he perform any services.
I just see that there's an account out there
with his name on it.
Count me in.
-: That client can also go to the office of bar council,
the board of bar overseers--
-: He doesn't know there's money out there, does he?
-: Well, by virtue of the fact that there's an IOLTA account
posted on the treasury's website, that doesn't show
any prior client that his or her money
may be in that account.
So, if the client has a beef with a lawyer
because he or she didn't get their money back,
there's a mechanism for them to go--
-: So you're the better vehicle, you say?
-: Correct. -: Okay, thank you.
Mr. Casey.
-: Good morning, your honors, and may I please the court.
Tim Casey, Assistant Attorney General,
on behalf of the treasury.
-: So is the treasury looking at attorney-client
privilege information, because that seems to be
the concern that that would constitute touching on
the regulation and practice of law.
Are you going through information
between the attorney and the client?
-: It is not, your honor.
The attorney-client privileged communications
or attorney-client confidence is simply not necessary
for the treasury in order to validate and pay out
on a claim, or a client to come forward and say,
by looking on, for example, the treasury's website,
findmassmoney.com.
If they see their attorney's IOLTA account
is on the unclaimed property website,
they could submit materials to the treasury
that don't implicate the attorney-client privilege.
For example, a cancelled check to the attorney.
Public court filings that establish
the existence of an attorney-client relationship.
Those are the kinds of thing that treasury would look for
in order to validate and pay out on a claim.
-: I used to be a criminal defense attorney,
many of my clients were individuals
who were under investigation but were never charged.
If I had an IOLTA account and there was money left over,
would all of the individuals have to identify themselves
as clients of a particular criminal defense attorney,
to the treasurer in order to get the money back?
-: Your honor, well, I would first note that ordinarily,
the existence of an attorney-client relationship
is not privileged or confidential,
but if a client was concerned about
disclosing that information in order to get money
from an IOLTA account, I think the treasury
would accept other information in order
to validate and pay out--
-: Individual would have to say that I'm a client
to a particular criminal defense attorney?
-: That's right--
-: Is that not a problem by itself?
If an individual turns out to never have been charged
with a crime to be going to the treasurer and saying,
for whatever reason, I chose to go to this
criminal defense attorney and now I'm seeking money
back from that criminal defense attorney?
-: Your honor, I'm not sure that that is a problem,
for a client to come forward and say
I was represented by attorney Smith,
I don't have to necessarily disclose
the nature of the engagement.
That's probably not even relevant
to the existence of a valid claim.
But to say I was represented by this attorney,
I paid the attorney a thousand dollars,
and I never got that money back,
and I understood that I was going to get that money back.
-: Is it a problem where if the banks report to the treasury
and say we have abandoned funds, all these instances
and the board of bar overseers never receives
that disciplinary proceedings can't be instituted?
-: It's a good question, your honor,
and I think the answer is we simply don't know.
The mere facts of banks reporting and transmitting
these funds to the treasury is not by itself
indicative of professional misconduct.
-: Is it something the board would like to look at,
you would think?
-: It might be, and it certainly can see what's available
on the treasury's website, to see the IOLTA accounts
that have been reported and transmitted to the treasury.
-: Let me ask you a global question.
If you win on the statutory interpretation argument,
and these could be considered abandoned property,
could we still rule against you?
-: You could only rule against the treasury
by including that 200-A, in this respect,
violates the separation of powers
by fundamentally interfering with this court's
authority over the practice of law.
And as you know from our brief, we assert that
that simply is not the case here.
-: Do we have to go all the way to article 30,
couldn't we say as a matter of our
Super Intendant's authority, because we established IOLTA,
we get to establish what happens to abandoned funds?
-: I'm glad you asked that, because this court
has repeatedly observed, and we didn't cite
this line of cases because as you know, we assert
there's absolutely no conflict in this instance
between 200-A and rule 1.15,
or this court's authority over the practice of law.
But the general rule that this court applies,
is in the event of a conflict between a statute
and a court rule, the statute supersedes the rule.
The legislature all the time, by statute,
imposes court filing costs, sets deadlines to take action
in court, and I would submit that those types of statutes
are actually, in some ways, closer to this court's
core judicial function, it's supervision over how
litigants can initiate and maintain litigation.
Here, and I think this is really important,
Chapter 200-A does not impose a substantive requirement
on attorneys for how they are supposed to safeguard
or maintain client funds.
And if I could give an example that I think might implicate
separation of power's concerns, if 200-A or a statute
were to, in some way, relax or impose
a different obligation on lawyers with respect to management
or safeguarding a client fund.
Let's say it allowed, for whatever reason,
lawyers to co-mingle their own personal funds
with client funds.
In that instance, in the event of a conflict,
the court's rules would prevail because that is
part and parcel of this court's authority
to Super Intendant practice of law.
Here, 200-A imposes no such requirement, it simply says
if after diligent efforts have been exhausted,
the owners of this property cannot be identified,
where should the money go?
It should go, just like any other form of property
under deposit governed by 200-A section 3,
it should be reported and transmitted to the treasury.
And I wanna emphasize that the treasury is not seeking
to displace, in the context of
professional disciplinary proceeding,
any of the infrastructure that Ms. Mulligan
and the amicus talk about.
So for example, in this case, the office of bar council
had a financial investigator who subpoenaed bank records
and tried to identify the owners of these IOLTA funds.
Treasury is not seeking to displace that process.
In fact, in many instances, certainly in the
professional disciplinary context, it makes good sense
for the BBO, the office of bar council
to undertake that investigation, to try to find out
who are the owners of these IOLTA funds.
But, the question presented by this case is simply,
once those efforts have been exhausted
and the owners cannot be identified,
where should those funds go?
And treasury submits that it should be treated
as unclaimed property, principley because,
and I hope everyone agrees that with this principle,
that the paramount objective should be
to reunite this property
with their owners whenever possible.
And the infrastructure that the treasury has in place,
in the form of it's website,
in the form of regular publication in state
and local newspapers, attendance of community events.
-: Isn't that a different question then?
It sounds like, who is the best,
it seems like you say you're better at reuniting IOLTA funds
with their proper owner than they are.
I'm not sure that's as obvious.
-: Because treasury is--
-: Is that true?
-: Because--
-: Yes it is, I think.
I don't have the--
-: That supposes that we get to pick who's better at it,
as opposed to the statutory constitutional argument
that you just made.
-: Fair enough, but to the extent the court is interested in
or concerned about, who has sort of
a core competence in a particular--
-: No, I'm trying to figure out who, by statue or law is,
because you're making a different argument.
'Cause you're taking the property too, in the end.
So, I'm not sure your taking argument
is any better than their taking argument.
You're just taking it for the state,
they're taking it for IOLTA.
-: Right, and if the policy argument is we get to decide,
we may wanna decide that MWAC gets the money,
or the charities we've designated,
so that's really not the argument before us, it's--
Tim: Right.
-: You've gotta somehow say that the statute turns this over
to the treasury department to find the owner
of the abandoned property, as opposed to IOLTA.
I thought your argument was there's a certain stage
in the statute where they don't just get to
declare abandoned property, there's another step
the statute says that turns us over to the treasury.
'Cause if it's a takings argument, and you just want it
for the state as opposed to IOLTA, I don't know
if you win on that.
-: Well, your honor, the consensus in the case law
is that unclaimed property laws to not
constitute an unconstitution.
So, our argument, first of all, is that 200-A requires
this property to be reported and transmitted to the treasury
just like any other form of property on deposit
with a holder in Massachusetts, and our position is also
that first of all, this in no way conflicts with rule 1.15
or this court's authority over the practice of law.
In fact, it harmonizes with, and furthers rule 1.15
because to the extent that rule addresses principle
as opposed to interest, it requires that
attorneys return these funds to clients promptly
upon demand and without delay.
-: Let me ask you, lets assume that we were to,
after this hearing, amend 1.15 to specifically address
the disposition of unclaimed principle.
Is that within our authority?
-: Your honor, then that would be a conflict
with chapter 200-A, and if--
-: Which part of it would be a conflict?
If we were to say, let's sort of sketch it out, okay?
Let's imagine that we followed the process
which is presently in place.
If it's determined that the owners cannot be found,
a commissioner shall be appointed by the BBO,
who shall conduct an investigation
to make all diligent efforts to identify
the owners of the property.
Are we barred from doing that?
-: Your honor, I would say that that amendment
to the rule would be inconsistent with chapter 200-A.
Justice Kafker: How?
-: Because 200-A requires that the funds be reported
and transmitted to the treasury.
-: I haven't spoken about what happens,
I've only spoken about the procedure to determine
whether or not the funds are gonna be unclaimed.
-: I'm sorry, your honor, if I was unclear about that--
-: I'm sketching a proposed rule, okay?
The funds appear to be, there's no apparent owner.
The BBO appoints a commissioner.
Commissioner does due diligence to attempt
to identify the owner of the property,
are we barred from amending the rule to do that?
-: No. In fact,
that is what happens typically in these kinds of
bar disciplinary proceedings.
-: So let's assume we then add to the rule
that if the various steps that would be taken
and after a finding is made that it is,
that the owner can not be determined,
that we would then declare that we will make
a public declaration that there are apparently
unclaimed funds in the IOLTA account
of attorney Jane Smith.
Are we barred from doing that?
-: No, you're not.
-: Okay, and if then a final determination is made
that no person has come forward and that these funds
are unclaimed, are we barred then from saying
that the unclaimed funds go to IOLTA?
-: That last directive would be inconsistent with 200-A,
and the statute would supersede the rule.
-: Well, you're saying more than that, you're saying that
if the principle were to go to the AOLTA Committee,
that would actually be a violate of the separation of power.
-: It would be in conflict with the legislatures directive.
-: Okay, but that's not what you said in your brief, you also
said that if the principle were to go to
the AOLTA Committee, that raises
constitutional problems as well.
-: It does, and I wanna be clear, I'm not saying
there's a definitive constitutional violation
in that circumstance, but there are constitutional concerns
with making sure that these funds are returned
to their rightful owners whenever possible.
And if they are not returned, if an owner comes forward
and those funds aren't returned, there could be
a takings problem, there could be a first amendment problem.
I'm not saying there is definitively, but I am saying
that treating these as unclaimed property
subject to 200-A is not only required by
that statutory structure, but it best avoids
any constitutional problem because treasury
is best positioned and its infrastructure is best set up
to reunite property with--
-: Can I ask you ask you a question?
Can I ask you a question, I'm just very confused.
If at the end of the process, suppose that the treasury
has the abandoned property of the fund
and cannot locate anyone, then it goes to
the general treasury, right?
-: Yes, it does.
-: Can somebody come back later and get it back?
Tim: Yes. Justice Lenk: They can.
-: The claimant can get the funds back at any time.
A certain portion of it remains in a reserve
called the unclaimed property fund, up to $500,000.
Then some of it may go to the stabilization fund
and the balance goes to the general fund.
But those funds are always available to a claimant.
There's no statute of limitations and the fund is not
a limit on the claimant's ability to--
-: Could we do that too, under our rule?
-: You could, but--
-: And then we would be in the position just as well as you.
-: You would, you would be creating essentially,
an entirely redundant architecture by the IOLTA Committee.
-: Don't we have that under the CSP?
-: No, I don't purport to be an expert in that area,
but that is entirely a matter of grace,
whether clients are refunded for claims of fraud
or misconduct by an attorney.
It exists, but it may not necessarily make the client whole.
Here, if there is a valid claim for the full amount
of the funds, then from the treasury,
the client will receive the full amount of the funds.
-: I'm going through the statute, looking at
the various provisions.
Bank deposits, security deposits, life insurance proceeds,
dividends, property from dissolution,
sums payable on cashier's checks,
amounts payable of the demutualization.
All of them would indicate that the apparent owner
would be identified in some public,
or in some discernible way.
Is IOLTA a unique animal in terms of an account?
Is there anything in the statute which you think
would be comparable to an IOLTA account,
which you say would cover it?
-: Well, your honor, we assert that the fact of the identity
of the owner being unknown does not take it out of
the purview of unclaimed property.
-: Tell me the language of the statute
that would incorporate this?
I mean, generally you identify bank deposits,
bank account in the name of Joe Blow,
is there any other animal that says an account
by an attorney which may contain funds
of dozens, hundred, thousands of potential clients?
Which is what an IOLTA account is?
-: Right, there's not, of course.
But there are all kinds of property that aren't specifically
listed in chapter 200-A that are nonetheless
subject to its requirements.
This court said in the John Hancock case,
that the unclaimed property laws intended to apply
to all kinds of unclaimed and unidentified property.
-: You have anonymous accounts as well,
outside of IOLTA. -: That's right.
And the entire system, the reporting form, the regulations,
and it's in our brief, the statutory language.
There are references to, for example,
the identity of the owner if known.
The address of the owner if available.
There are references throughout the law and the regulations
and the treasury's forms that contemplate
that the owner will not be known.
-: So tell me the world, if you win.
Tell me what happens with regard to the IOLTA account
with Joe Blow if you win.
-: So if the court were to rule in favor of treasury,
nothing changes except that in a disciplinary proceeding
like the one that gave rise to this appeal,
after efforts have been exhausted
to identify the owner of those--
Justice Kafker: By whom?
-: By the BBO, by the office of bar council,
by anyone involved in the disciplinary proceeding.
And by the attorney too.
Those efforts can continue, and as I indicated,
the treasury's not seeking to displace--
-: You're saying that once that whole process is completed
and they reach the determination that it's abandoned,
we can't identify anyone, chapter 200-A turns that over to
the treasury because that's who gets to deal
with this category of property.
-: That's right, and not only is that required by 200-A,
but treasury is the best position based on
what they've been doing for over 50 years.
-: And do those constitutional cases you referred to
describe treasury in that respect,
and that's why it's constitutional for you
to take the property and not constitutional for others?
Which case should we read on that, by the way?
-: Your honor, they're in a footnote to my brief,
they're typically state supreme court cases.
This is footnote 24.
But, they say that because these unclaimed property laws
really just involve a kind of state-taking,
in theory, temporary custody of the property
where it always remains, rather than title to the property,
where it remains always available to the client
or to the owner to make a claim.
There is no taking of property.
-: So the BBO has done it's efforts, can not find somebody,
then what happens?
Then you would publish it and say IOLTA account of Joe Blow,
somebody comes forward to say that might be my money.
And then what do you do?
-: Then there would be an assessment of the owner's claim,
and if it's validated, their money would be--
-: An assessment by whom, doing what?
-: By the treasury.
They would receive whatever documents--
-: Doing what?
There's already been an exhaustive effort
in order to identify clients, and you say you don't even
publish unless those efforts have been exhausted,
so, what is your person gonna do
that has not already been done?
-: I don't mean to suggest that there's gonna be
an entirely new investigation,
the analysis that the treasury is going to be
simply as between the putative owner and the treasury.
The treasury's gonna say what documentation
do you have to prove that this was your attorney,
and that you paid the money that you haven't received back.
And so the client will submit that documentation,
the treasury will access it, and if it concludes
that it's valid, then it will pay out on the claim.
-: And that documentation may include
attorney-client communications?
-: It could potentially, but treasury's position
is that it's unnecessary for a client
to disclose attorney-client confidence
in order to establish the existence
of an attorney-client relationship
and validate the claim on which treasury would pay.
It's unnecessary for treasury to receive
confidential communications, legal advise,
opinion work product, or anything like it.
A canceled check might do, an engagement letter might do,
a public court filings in which the council is appearing
on behalf of the client, those are the kinds of things
that would do to establish the attorney-client relationship
and result in a payment.
-: It's gotta be an engagement letter
or a canceled check, right?
If it's client funds, if it's a retainer?
-: I would think that the client would have to submit
something or make some kind of attestation about the amount
of the money that was paid over to the attorney.
-: And that goes to the chief's first question,
that you know, there's a healthcare fraud investigation
with their lawyer, and I don't want the world to know
that I was subject to an investigation?
-: Well, I think treasury is of the view that it's
not necessary to receive an attorney-client--
-: Is the treasury accepting just the check?
If there's a check between the claimant and the lawyer,
are they saying that's enough to prove that it was paid?
-: I think it likely would be enough.
-: How is it gonna be enough?
So I have a client who pays $25,000 as a retainer
for the healthcare investigation Justice Gaziano describes,
you only get whatever work, that's a retainer for work done.
So, you'd have to do more than just say I paid $25,000,
the amount of the account may not be,
the person may have done a lot of work.
-: They may have, and so I think--
-: So how are you gonna show that the money in the account
is yours, when in fact there may have been
$25,000 worth of work done for that client?
-: Well, again, I think the client, and you're right,
it may be necessary to submit more, but I don't think,
I think the client could submit some kind of attestation
to say I paid $500, as an aside of $25,000 retainer,
presumably it would be of a kind of, you know,
that's an amount, and for a duration that would likely
result in that money being placed in a client trust
rather than an IOLTA account.
-: I'm not so sure of that.
-: In any event,
the client can submit some, again an attestation,
some kind of evidence to say
I paid the lawyer this amount, and I only got this amount
of service, or I expected to receive X amount
of money back, I never did.
-: Isn't it possible for you to work with IOLTA
at that point, since they probably can get the information
you would need to figure out what amount was owing?
-: Yes, that's possible, now they're raising a concern
that we would come into possession of a confidential--
-: Well, that's why you would work with them.
-: Yeah, treasury certainly would, and there's no reason
why the parties can't work together.
-: 'Cause I'm just, from what I can understand,
IOLTA's doing active looking around, right?
And once that's exhausted, the treasury sort of
does a passive type of thing and here's the information,
if anybody figures it out, excellent.
But it's just listed, right?
-: It's listed, and all kinds of outreach is done
to the community in Massachusetts to try to
encourage people to come forward
and make claims for that property.
That, I think, is something that
if this money goes to IOLTA, or if it goes to a new entity
designated by the court, that the court would need to
consider whether some of those responsibilities,
at least with respect to these IOLTA funds,
need to be undertaken by that entity.
Some kind affirmative outreach to remind clients
that they may have money, and they should make a claim
in order to get their money back.
Whether it be news paper publication,
or a searchable internet database.
Those kinds of things that the treasury has been doing
for years to try to reunite owners with their property.
-: But again, IOLTA's already tried stuff.
And, so, if the real goal is to make sure that the money
is reunited with the person who it belongs to,
I don't see why two sides can't work together,
if that's really what you wanna do.
If somebody comes to you saying I wanna claim that money,
you could work with them to verify that it belongs to them.
-: I think we could.
I don't think anything about what you said, your honor,
is inconsistent with what we're proposing.
That the IOLTA Committee do it's part
during it's part of the process,
the BBO and the office of bar council do it's part
during it's part of the process,
to try to identify the owners of these funds.
That's laudable work, and it's important,
and I hope everyone agrees that that's
the paramount and partitive here.
But once those owners cannot be identified
after a diligent search, that money should be put in a place
where it can always remain available to clients,
should they come forward at a later point
and make a valid claim.
And 200-A not only requires that,
but it best accomplishes that.
-: Okay, thank you. -: Thank you, your honors.