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July 1985Vol. 19, No. 3
LCtARKANSAS romCERS
William R. Wilson. Jr.. PresidentDon M. Schnipper. President-ElectAnnabelle D. Clinton. Sec·TreasurerDavid M. "Mac" Glover. Council Chair
Wm. A. Martin, Executive DirectorJudith Gray, Assistant Executive
Director
EXECUTIVE COUNCIL
Jack A. McNultyW. Kelvin WyrickGary NutterWilliam Russ Meeks.IIIKaye S. OberlagTom OverbeyRobert S. HargravesRobert HornbergerJoe ReedDavid SolomonStephen M. ReasonerJames A. McLarty
EX-omCIO
William R. Wilson. Jr.Don M. SchnipperDennis L. ShacklefordAnnabelle D. ClintonMartha M. MillerDavid M. "Mac" Glover
EDITOR
Ruth M. Williams
THE PUBUCATION OF THE ARKANSAS BAR ASSOCIATION
SPECIAL FEATURES REGULAR FEATURES
107 President's Report
108 Point of View/Letters
Generations in the LawW. Harold Flowers: Mentor.
112Advisor and Inspiration byAndree Roof
117 Law. Literature & LaughterToward the Bicentennial
Part II by Robert D.118Cabe and G. Ross Smith
The Grand Gulf Cases:A Summary
123by Dana Daniels Nixon
128 Lawyers' Mart
New Arkansas Bar Association 129Officers for 1985-86
130 In Memoriam
Changes in Divorce Taxation:The Tax Reform Act of 1984
132by William T. Marshall
135 Executive Director's Report
136 tYoung Lawyers' Update
137 Arkansas Bar Foundation
138 In-House News
The Arkansas Lawyer (USPS 546-040) ispublished quarterly by the ArkansasBar Association. 400 West Markham,Little Rock. Arkansas 72201. Secondclass postage poid at Little Rock.Arkansas. Subscription price to nonmembers of the Arkansas Bar Association SIS.00 per year and to members$10.00 per year included in annualdues. Any opinion expressed herein isthat of the author. and not necessarilythat of the Arkansas Bar Association. orThe Arkansas Lawyer. Contributions toThe Arkansas Lawyer are welcome andshould be sent in two copies to theArkansas Bar Center. 400 West Markham. Little Rock. Arkansas 7220 I.
All inquiries regarding advertisingshould be sent to The Arkansas Lawyerat the above address. Pat Patterson
ON THE COVER:The Arkansas Bar Association's newly elected
president. Don M. Schnipper, and his wile MaryAnn, of Hot Springs, are pictured al the HotSprings National Park's promenade on NorthMountain. Behind them slands the ArlingtonHotel on Hal Springs' Central Avenue. PresidentSchnipper assumed his position on June 8 at theclose of the Association's Annual Meeting. Other1985-86 oflicers elected are Richard F. Hatfield, ofSearcy. president-elect, Annabelle DavisClinton, of Little Rock, to a fourth term as secretary-treasurer. Richard L. Ramsay, of PineBluff. chair of the Young Lawyers' Section, andMarlin G. Gilbert, of Pine Bluff. president of theArkansas Bar Foundation. Philip E. Dixon, ofLittle Rock, was named chair of the ExecutiveCouncil by Schnipper in April.
July 1985/Arkansas Lawyer/l05
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THE PRESIDENT'S REPORT
In Honor or Defenseof the ACLU
By William R. Wilson, Ir.
There are many mundane,bread-and-butter issues facingthe organized bar which probablyneed comment; but, somehow, mymuse has nudged me to write inhonor of (in defense of?) theAmerican Civil Liberties Union.
As we all know, this organization is the favorite whipping boyof many poli ticians and the conservative media. Despite the constant abuse heaped upon it, theACLU is this country's foremostadvocate of our Bill of Rights (in atime when, as one pundit remarked, the Bill of Rights couldn'tget out of committee today).
Of course the freedoms guaranteed in our Constitution are constantly extolled, in general. in political speeches, but honoringthem in action is often a horse of adifferent color. To talk favorablyof freedom of speech in theabstract is one thing, it is quite another to defend this right when aperson wi th views obnoxious toour own speechifies in public.
We should keep in mind at alltimes that the Bill of Rights is notself-executing. Learned Hand putit beautifully:
... Liberty lies in the hearts ofmen and women; when it diesthere, no constitution, no law.no court can save it; no constitution, no law, no court can evendo much to help it ...It does not particularly disturb
me that many politicians lead (orjoin) the hue and cry of the hour.Those who drafted our Constitution expected this. On the otherhand, it does disturb me when Ihear the leaders of our professiondisparage those few lawyers whostep front and center to representthe poor, the disfranchised, thedespised.
When a citizen, without poweror position. wishes to espouse hisunpopular cause and the forces ofgovernment are brought to bearagainst him, who will step forward to represent him in securinghis rights by due process of law?Not I. for I must hie myself over toTraffic Court to earn my dailybread. Not my brother or sisterover at XYZ firm for he/she mustattend a corporate board meeting,or jet off to Washington to lobbyfor Acme Company. Then who?
We know the answer. Time aftertime idealistic ACLU lawyershave jumped into the fray. What istheir reward? It obviously isn'tmoney (even with various attorney fee statutes, it is still "porecity" for those who regularly dothis type of work). Is it for public,popular acclaim? How many cocktail parties have you attended inhonor of some young storefrontlawyer who just won a major civilrights case?
It must be the self-satisfactionthat the true advocate feels whenhe or she has stood virtually aloneby the side of some wrongedcitizen who has no other champion; and by perseverance anddogged advocacy has vindicateda right secured to this citizen byour Constitution.
Over the years, there have beenshining examples of this type ofadvocacy by lawyers with no connection with the ACLU - and [ donot discount their vital contribu-
tion. But. on a day by day, year inand year out basis, it has been theACLU (and kindred spirits) whichhas taken the lead in establishingand maintaining our freedoms forall citizens.
For my part, I salute these stalwarts who have faced the heat inthe face of every type of adversity.We who work within the organized bar must not let breadand-butter issues claim all of ourenergy. We must not look theother way with the demurrer, "Weain't got no dog in that fight." Securing to all citizens their rightsand privileges under law is the essence of our profession.
Good news from the Nation'sCapitol. A representative of theAmerican Bar Association hasadvised that all of the professionsare now in agreement regardingthe approach we should take tothe F.T.C. fight. As you may know,the American Bar Association objected to certain language whichthe American Medical Association had submitted to amend theFederal Trade Commission Reauthorization Legislation. The ABAfeared that the AMA's languagewould encourage F.T.C. attemptsat regulating the discipline procedures of the professions, ratherthan discourage it.
As it now stands, the professions are all in agreement that theproposed reauthorization legislation should simply remain silenton licensure and disciplining,and the F.T.C.'s authority in thisarea, or lack thereof. should beleft up to interpretation by thecourts. While some of us mightprefer specific language whichwould stop in trusion in this areaby the F.T.C., there is no reasonable possibility that satisfactorylanguage could be adopted as anamendment to the basic legislation. So, silence seems to be thebest course.
This session of Congress isyoung and, as things develop, themembership of the Associationwill be kept abreast of significantdevelopments. [j
July 1985/Arkansas Lawyer/107
POINT OF VIEWILETTERS
Lawyers Get a'Bum Rap'
By Lawrence H. Averill, Jr.
"The first thing we do, let us killall the lawyers." - Shakespeare.Henry VI. Part II, Act 4, Scene 2.
How many times have youheard that phrase. particularly bynon-lawyers. I bet a lot. Why arelawyers so castigated and criticized. Why do people wish thatlawyers do not exist?
I must say that personally thisbothers me a great deal. My concern is not because I am a dean ofa Law School and because I amprotecting my own domain. I feelconcerned because [ believe thatlawyers are getting a "bum rap." Ithink the legal profession is asmisunderstood as is the previously famous quote from Shakespeare. Most think that Shakespeare was castigating lawyers.In truth. Shakespeare was emphasizing the importance of lawyers to a free society. The partywho made the above quote was amember of a group which was considering an attempt to overthrowthe government and the establishment of a totalitarian regime. Thespeaker felt it was necessary toeliminate all the lawyers in orderto be successful. If the lawyers remained. freedom would remainand their scheme would fail. Inmany ways this is the same misor non-understanding about thelegal profession that exists today.
Editor's Note:Lawrence H. Averill. Jr.. is dean
of the University of Arkansas atLittle Rock School of Law. He is aformer professor of law at the University of Wyoming College of Lawand received a LL.M. /rom GeorgeWashington University and a J.D.from the American University.Dean Averill is an Academic Fellow of the American College ofProbate Counsel and a member ofthe Bars of the District of Columbia. Maryland. Wyoming andArkansas.108/Arkansas Lawyer/Ju1y 1985
Several years ago a friend whoreturned from Russia teased methat Russia might not be such abad place because it did not havemany lawyers. I was quick topoint out that the people in Russiado not have freedom of the press,freedom to work at what or wherethey want to work, freedom totravel, freedom to read what theywant to read, freedom to leave thecountry at will. freedom to be secure from unwarranted searchesand seizures. freedom to ownproperty. freedom of opportunity.etc. If you are in a society that denies these freedoms. you do notneed many lawyers.
In addition, a portion of the criticism of the legal profession is inescapable in that it is inherent inthe nature of legal work. In everycase where people are makingcontentions against other people.there is always a loser and inmany cases. particularly thosewhere settlements aIe involved,both sides may feel dissatisfiedwith the results. One's naturalreaction is to blame his or herlawyer if the result is unsatisfactory.
Furthermore as a whole. lawyers should never seek mere popularity. Just as there are winnersand losers in each dispute. anyaggressive representation of another. particularly of a controversial person or issue, will causesome or maybe most to dislike thelawyer or even lawyers in general. If a good public imagemeans we have to be liked byeveryone. we should reject it. If agood public image means the profession is honest. trustworthy andeffective. we should embrace it. Itis toward these latter attributesthat we should put our emphasisand set our goals.
The end result is that there aresome attributes of the legal profession that will never permit us tohave a good public image. This isnot to say there is nothing we cando about it. I believe that there are
at least three steps that should betaken and, if properly taken,would significantly improve theimage of the legal profession inthe eyes of the public.
Public Service
First. we must try to provide better services to the public. Withsome obvious exceptions and aneed always to improve our abilities. the legal profession as awhole does a reasonably adequate job in providing adequateskills in our litigation and technical functions. We. of course. needalways be diligent in improvingthose skills. Mandatory continuing legal education would be ameritorious step in this direction.
In addition to this type of training. we need to get actively involved in non-litigative methodsof settling disputes. Commonly referred to as alternative methods ofdispute resolution. the concept includes arbitration. negotiationand mediation. [ would urge thatthe legal profession take an activepart in honing skills related tothese matters. Clearly. legal training and the ability to separate thewheat from the chaff with regardto disputes are outstanding foundations for properly administering arbitration, negotiation andmediation. The law schools arebecoming much mOTe involved inthese techniques and the teaching of a foundation for their use isbecoming an important part oftheir curricula.
Another area of concern with regard to service to the public is of abroader nature. The legal profession is a high profile profession.This is one of its main attractionsand why many people wish to become a lawyer. I think it is very important for the legal profession tocontinue this status. In returnlawyers need to be actively involved in all segments o[ oursociety. We need to be leaders inall our activities. We need to donate our time and service to pub-
lie service and to attempt to solveproblems outside of our own economic desires. Frankly, we needto generously provide our time forpublic service endeavors. There isa motto in some service clubs thateach person should give back atleast as much as he or she takes.This clearly applies to all members of the legal profession. Mostlawyers [ believe satisfy this responsibility very well.
One specific area of service thathas recently had a decline inlawyer participation is service inthe state legislatures and stategovernments. I realize that thereare a large number of economicand political reasons for thisphenomenon. I personally feel.however, that it is damaging tothose institutions and to the public in general for lawyers not to besignificantly represented in thesegovernmental bodies and agencies. Lawyers are often criticizedfor how poor the law is and yetquite frequently we have verylittle to say as to its form or substance or both. We end up enforcing or opposing inadequatelydrafted legislation and then getting the blame for its inadequacies. The solution to this isfor more lawyers to take an activepart in state government and legislatures, both from the outsideand from the inside.
In particular, [ hope we can develop in the future more interest inmembers of the legal profession toactively pursue positions in ourlegislatures. The same point isapplicable to positions on administrative boards, as well. Certainly, the salaries for these positionsare going to have to be significantly improved before very manymembers of the legal professionwill be seeking out these positions. Consequently, I would urgethe legal profession to take an active part in attempting to improvethe salary condition of many ofthese very important public service positions in state government.
Media CommunicationThe second area that I want to
discuss concerns our need to improve the image of the legal profession in the press and othermedia. I have never understoodwhy the media appears to find
some kind of sadistic joy in criticizing the legal profession. Lawyersand the Press should be naturalallies, not enemies. You need bothto have our free society. Withoutthe free press there would be nolawyers; without lawyers therewould not be a free press.
The two professions are sometimes antagonists. however. Consider the lawyer who wishes todeny the press ready and unlimited access to a case in order toprotect a client. Consider, on theother hand, the press' call to provide the public with knowledgeabout important people andevents. Unfortunately, our relationship with the media is oftendillicult and strained.
I believe greater communication between these two institutions would greatly help to reduce the friction we often see.One suggestion that might help inthis regard would be the creation(or activation, if they alreadyexist) of joint media relations committees to specifically deal withcommunication problems. Thesecommittees will not cure the problem entirely but they should helpto reduce friction, misunderstandings and inaccuracies.
Another factor with the mediaissue is that lawyers must realizethat the media is in the businessof selling "news." Consequently,controversy and conflict are extremely newsworthy because theysell. This puts the legal professionin a particular!y visible posi tionbecause by definition controversyand conflict are a part of the profession. Although we cannot andshould not run away from thisphenomenon, we should realizeits dangers to the profession. Likeall "institutions," opinions of theindividual are not necessarily theopinions of the institution. Alllawyers should be careful to makeand maintain that distinction.
We will also have to recognizethat no matter how hard we try,media reports will not always bepresented in the manner in whichthe lawyer desires the matter tobe presented. There will alwaysbe risk in dealing with the media.It should not stop us, however,from dealing with the mediaunder appropriate circumstances.We need to learn more about the
media and how it functions. Weneed to be tolerant of both lawyerand media transgressions fromideal median exposure. Both professions must be aggressive intheir nature and aggressive action will inevitably produce undesirable results sometimes.
Lawyers' Self EsteemThird and surprisingly, we need
to gain a better opinion of ourselves. Recent studies indicatethat lawyers are as negativeabout themselves as the lay populace is. This I think is unfortunate.I believe the legal professionshould be proud of itself. Thewhole foundation of our society isbased on law and the rule of law.Lawyers have been a predominant force throughout our history.They have constantly shaped ournation's policies and actions.From the very beginning of ourcountry's existence, the lawyerand the judicial system helpedsignificantly to shape its destiny.It is no wonder that even todaymany people are seeking entryinto the legal profession becausethey feel it is the place where theaction is, and where they canmake a significant mark onsociety.
Consequently, we need to standup for ourselves. We sometimesas a group are too self-critical. Weneed to take to heart the philosophy embodied in the old saw, "[don't agree with what you say, butI will fight for your right to say it."This is the spirit of our judicialand legal system in this country.In particular, we need to be verycareful about our public utterances about other lawyers, judgesand the legal profession. Criticalcomments aTe given far greatercredence than they typically deserve.
We often assume that the laypopulace knows more than it doesabout the legal profession and itsoperations. We need to get outthere and sell our profession atevery opportunity that we can. Weare the greatest society on earthbecause of our freedoms and ourprotection of freedoms and thesemay only be maintained by astrong and independent legal profession.
Otherwise, "the first thing wedo, let us kill all the lawyers."
July 1985/Arkansas Lawyer/l09
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LETTERS
Dear Editor:The students and sponsors of
our mock-trial team want to takethis opportunity to express to youour appreciation for the recentStatewide Mock Trial Competition.Each of us is very impressed thatmembers of the Arkansas BarAssociation expended their valuable time to answer our manyquestions in telephone conversations, in coming to the highschool and providing us withadvice, information. and encouragement. in inviting us totheir law offices, and in giving ussupport through their presenceduring the mock-trial.
We realize that it is professionally dedicated persons such asyou that led the Arkansas BarAssociation to sponsor this statewide competition. We applaudthe Arkansas Bar Association andits efforts in initiating this competition. We sincerely trust that
the Association will continue tosponsor this high school competition in the future.
We admit we were disappointed in the "loss," but wegained experience through thepreporation and the participation.Moreover. we are eagerly anticipating the opportunity to be involved next year.
Again, we say "Thank you."
Sincerely,
Social Studies DepartmentArkansas High School. Texarkana
James Ward, SponsorRobert Goeller, Sponsor
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Ronald Dotson
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July 19851Arkansas Lawyer/Ill
A SeriesGenerations in the Law:
Pine Bluff Commercial
Editor's Note:Andree Roaf. of Little Rock. is
an attorney with the WoodsonWalker & Associates law firm.After nearly 12 years as a researchscientist. Roof enrolled at the University of Arkansas at Little RockSchool of Law. commuting fromPine Bluff. She graduated in 1978.Since joining the Woodson Walkerfirm she devotes 50 percent of hertime to a commercial practice.
Harold Flowers credits hisfather with initially instilling inhim the desire to be an attorney.While he was still a young boy.his father would often take him tothe Lafayette County Courthouse
home in Stamps. Among thesevisitors was Scipio Jones of LittleRock. one of the first black lawyers in Arkansas. who served asan early role model for youngHarold.
Harold Flowers' mother. an educated woman and communityleader in her own right. was referred to as "the aristocrat of blackStamps" by Maya Angelou. a native of Stamps. in her best-sellingautobiography. I Know Why TheCaged Bird Sings.' Mrs. Flowers.who was also portrayed in thefilm version of this autobiography. was further described by Ms.Angelou as "one of the few gentlewomen I have ever known". 2
W. Harold Flowers
By Andree Roof
On June 6. 1985. W. HaroldFlowers of Pine Bluff washonored as a fifty year
member of the Arkansas BarAssociation at the annual meeting of the Association in HotSprings. Harold Flowers. often referred to as the Dean of the blackbar in Arkansas. has been admitted to the practice of law inArkansas longer than any otherblack attorney in the state. Inaddition. he is the patriarch ot alamily of lawyers and mentor.advisor and inspiration to theyounger members of the blackbar. His careers as lawyer. champion for human rights and religious leader have spanned anera of dramatic social changes.especially with regard to the condition 01 black Arkansans. He hasplayed a leading role in helpingto bring about these changes.
On October 16. 1911. W. HaroldFlowers was born into a prominent family in the small town ofStamps. in Lafayette County.Arkansas. He was the oldest ofthree sons born to Alonzo WilliamFlowers. Jr.. a businessman. andBeulah Lee Flowers. a publicschool teacher. One brother.Cleon Flowers. became a physician and practices medicine inPine Bluff. His youngest brother.Curtis V. Flowers. attended TexasSouthern School of Law. graduating in 1950. He practiced law inHouston. Texas until his death in1976.
Harold Flowers' father was amanager for Universal Life Insurance Company and a state leaderof the Masons. and as a boy.Flowers was impressed by thesteady stream of prominent blackbusinessmen. leaders and professionals who visited his parents'
W. Harold FlowersMentor, Advisor and Inspiration
1I2JArkansas Lawyernuly 1985
Harold Flowers and The Freedom Pledge, 1955
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in Fort Worth, Texas.When Harold Flowers returned
to Pine Bluff as a new lawyer in1938, there were only 12 blackattorneys in the entire state. twoin Pine Bluff and the remaindersituated in Little Rock.' As ayoung lawyer, Harold Flowersplayed the role that his family upbringing. environment and educational accomplishments haddestined him to play, that of crusader for the rights 01 his people,both in and out of the court room.
Harold Flowers' experiencesover the past 50 years range frombeing warned by The Ku KluxKlan to leave Arkansas in 1952 tobeing considered by PresidentEisenhower for appointment to
luly 1985/Arkansas Lawyerll13
point for the black community inJefferson County and surroundingareas. Flowers recalls that it wassaid at that time that you neededonly three books to practice law,"an appointment book, a statutebook and a receipt book." He remained at the Masonic Temple for25 years before moving his officeto his present location, at 104South Mulberry Street in PineBluff, where he has maintained aprivate practice to the presentdate.
Although he has been a solopractitioner for most of his practice. he was associated with twoattorneys in the 1950s, Ed Trimble,now deceased, and L. CliffordDavis, now a District Court judge
W. Harold (left) and Curtis V. (right) Flowers in 1967 at National Bar Association meeting in Houston. Texas.
in Lewisville, where he wouldlisten to the court proceedingsbeing conducted there. In thosedays, the court sat only inFebruary and August. andFlowers has lond memories andyet mixed feelings about this experience. He recalls sitting in thecourtroom in February. the roomheated by a big potbellied stovesurrounded by a sandbox-like contraption to catch ashes andsparks, with blacks seated on oneside 01 the room and whites on theother. During the August term, herecalls that it was usually morecomfortable to sit outside thebuilding beneath the open courtroom windows and listen to theproceedings from a cooler vantage point. There, young Haroldwould listen to the arguments andoratory 01 local attorneys such asTillman B. Parks, then prosecuting attorney and later U.S. Congressman, and Steve Carrington,among others. He would then return home and conduct mock trials belore his young playmates,practicing the oratorical skillsand techniques he had learned.
Another early influence wasNoah Parden, a well known blackattorney whom Flowers met inEast SI. Louis, Il1inois at the age01 14.
Flowers, like many blacks 01 hisera, had to come to Little Rock tofurther his education. There heattended Philander Smith for bothhigh school and college. While atPhilander Smith, he witnessed ablack man being dragged downthe streets 01 Little Rock to belynched and recalls that this horrifying experience served tofurther strengthen his resolve tobecome an attorney. In order topursue this goaL he traveled toWashington, D.C. where he attended the Robert H. TerrellSchool 01 Law, an all black lawschooL graduating in June 1937.He returned to Arkansas InFebruary 1938, having alreadytaken and passed the ArkansasBar exam in June of 1935. He lormally opened his law office inPine Bluff in February 1938, in theMasonic Temple Building on thecorner 01 Fourth and State Streetsin Pine Bluff. This historic building housed the offices of most ofthe black professionals in PineBluff at that time, and was a focal
name in headlines across the nation during the 1940s. He recallswith special pride taking SilasHunt. the first black to attend theUniversity of Arkansas LawSchool. to Fayetteville in 1948. Hisrole in building the NAACP inArkansas was especially notable.He served as president of the
A "fiery orator:' Flowers is pictured at the First Baptist Church of Pine Bluffin the 1940's.
the U.S. Supreme Court in 1954.He has fought racism and discrimination across the U.S. and asfar afield as Cuba.
His accomplishments are toonumerous to attempt to recount.Some of the high points which hetreasures are not the celebratedcriminal trials which kept his
1141Arkansas LawyerlJuly 1985
State NAACP in 1948 and was president of the Pine Bluff Chapterfrom 1946 to 1948. during whichtime it became the largest branchever in the history of NAACP inArkansas, enrolling over 5000members. He was a founder andleader of the National Bar Association, the largest association ofblack lawyers in the U.S., andserved as its vice president in 1947and president in 1953, and continues to occupy a leadership position in this organization.' In 1938,Flowers helped to organize thefirst state bar association forblack attorneys m Arkansas,which was initially called theWonder State Bar Association.During the 1960s. with the adventof black awareness, the organization's name was changed to Arkansas Black Lawyers Association, In 1981, the association formally changed its name to the W.Harold Flowers Law Society. torecognize and honor HaroldFlowers for his service to the bar,and his pioneer work on behalf ofhuman rights. In 1977, he was thefirst black to serve as special Circuit judge for lefferson County. In1980. he was appointed Associatelustice of the Arkansas Court ofAppeals by Governor Bill Clinton.serving out the remainder of theterm of ludge George Howard, Ir.
In 1969, the tragic death of hisdaughter, Frances, led HaroldFlowers to a new calling. Long active as a layman in his church, hebecame an ordained minister inthe United Methodist Church.Continuing his role as a trailblazer, he served as the first blackpastor of an integrated UnitedMethodist Church, co-pastoringHunter Memorial United Methodist Church in Little Rock from1978 to 1981. He is now pastor ofDuncan United Methodist Churchin Little Rock. In his role as a minister, he has relentlessly crusaded for racial harmony andunderstanding in the churches ofArkansas. and his impassionedmessage has reached and toucheda new cons~ituencyof Arkansans.
Harold Flowers has had a significant impact upon all who havecome in contact with him. WileyA. Branton, formerly dean of Howard University Law School inWashington. D.C.. and now part-
I Angelou. Maya. I Know Why The CagedBird Sings. p. 77 (I9701.
z Id. 01 p. 78.1 In 1970. there were only 10 block allor
neys in the slale 01 Arkansas. Segal, Geraldine R.. Blacks In the Low. University01 Pennsylvania Press. p. 276 (983).There are now approximately 6S licensedblack allorneys in Arkansas according tothe records 01 the W. Harold flowers LawSociety.
• Blacks were denied membership in theAmerican Bar Association until after1943, when the Association passed a resolution stating that "membership in theABA shall not be dependent upon lace,creed or color." Id. at p. lB.
Juty t985/Arkansas Lawyerll15
Harold Flowers has said that hewould like to be remembered ashaving been like a "middle busterplow - one who came throughand made the soil tillable for thefiner tooled implements which followed." He describes himself as acrusading social engineer whohas helped to pave the way forblack lawyers who have comeafter him. Of the many changesthat he has surely witnessed inthe past 50 years. he believes themost significant and gratifyingchange to be that black Arkansans no longer live in a state offear. Civil rights activist. lawyer.judge. minister and religious leader. Harold Flowers has providedinspiration for young black attorneys. and has set an example ofdedicated and committed publicservice for all Arkansans. I J
FOOTNOTES
character to endear him to others.He observes that Flowers "neverspeaks unkindly about anyone"and that his strong religious faithhas enabled him to weather personal storms while maintaining apositive outlook on life.
The first in his family to pursuea legal career. Flowers has beguna family tradition that should continue for generations to come. Heand his late wife Margaret werethe parents of nine children. Theoldest son. W. Harold Flowers. Jr..attended the University of Colorado undergraduate and lawschools. and has practiced law inBoulder. Colorado since 1973. Adaughter. Stephanie Ann Flowers. attended Texas Southern LawSchool and has practiced law inHouston. Texas since 1981.Gretchen Flowers Wiggins. a second year law student at TexasSouthern University and wife ofJohn Wiggins. the president of theHouston Lawyers Association,has become the third Flowerschild to enter the legal profession.In addition to his eight survivingchildren. Flowers has ten grandchildren. Members of the Flowersfamily will surely continue to beinvolved in the legal profession inthe future. as a result of the legacyand tradition which has been established by Harold Flowers.
I
This photograph of W. Harold Flowers' children includes W. HaroldFfowers. Jr.. center. Stephanie. seated. at far left. and Gretchen. next toStephanie.
ner in a major Washington. D.C.law firm. began his legal careerin Pine Bluff. He credits his earlyassociation with Harold Flowersas having influenced him to studylaw. A high school student whenFlowers first returned to Pine Bluffto practice law. Branton recallsthat Flowers was"a gifted orator"who was frequently called upon todefend blacks accused of heinouscrimes and whose cases no otherlawyer would take. He states thatbefore Flowers' arrival. the othertwo black attorneys in Pine Bluffhad practices limited to uncontested matters. He recalls thatHarold Flowers was a fieryspeaker and civil rights advocatewho was considered extremelyradical because he "had theaudacity to advocate equal oppertunity for blacks in the 1940s."He states that Flowers travelledall over the state of Arkansassuggesting that biacks should beemployed as firemen. policemenand in other public positions. andthat he also filed several earlyschool cases in which he sought.not integration. but equality ofteachers' salaries and school facilities. which was also consideredradical in those days.
Another Jefferson County attorney who was greatly impressedby Harold Flowers was LawrenceE. Dawson. now a JeffersonCounty Chancery judge. JudgeDawson recalls that he first metFlowers in June of 1948 when hecame to Pine Bluff as a newly licensed attorney. He remembersthat Flowers had a heavy caseload and was frequently in courtlitigating cases. especiallycriminal matters. Judge Dawsonsays that. in making closingarguments to the jury. Flowers"had no equal" and that he was soimpressed with his oratoricalskills that he would often comeand sit in the rear of the courtroomwhen he knew that Flowers wasscheduled to make a closing argument. Judge Dawson says that inhis 37 years as a practicingattorney and judge. he has notknown any attorney to matchFlowers' unique abili ty to movejuries.
fn addition to being impressedwith Flowers' legal skills. JudgeDawson has found Flowers' uplifting personality and strength of
••
Consider theevidence.
You be the judge: Whatbetter location for an attorney in Little Rock is there?The Rogers Buildingstands within a block ofthe Pulaski County Courthouse, UALR Law School
• and Library, and the-' Arkansas Bar Association.
It offers a parking deck,private health club andskywalk access to theExcelsior Hotel and theStatehouse ConventionCenter Complex. And itfeatures the office spaceconsulting services offamed Andre Staffelbach-absolutely free. Werest our case.
I t
IR>DOYLE ROGERS
COMPANYCorporate Iivi1lg like llever before.
For leasillg illformatioll, COli tact till! Doyle Ragers Comp(wy, 221 West Second Strt't'f, Suitt' 800,Littl, Rock, Arkallsas 72201, (501) 375-1662.
116/Arkansas Lawyer/July 1985
Law, Literature & Laughter
My New Year's resolutions included a provision to log more billable hours. As though in response, I received a letterDecember 31 instructing me to report for jury duty on January 3.
Notwithstanding my resolution,I opted not to excuse myself underArk. Stat. Ann. §39-108(c).
Jury service is a civic duty. Besides, people, especially nonlawyers, highly resent otherpeople, especially lawyers, whotake advantage of legal technicalities.
Two weeks after orienta1ion Iwas called to the rail. After voirdire and peremptory strikes byfour lawyers whom I know, I foundmyself sitting as juror number 10.Either I have a reputation forhonesty and fair dealing, or eachside presupposed the other wouldstrike me.
As often occurs, the case wassimpler than the lengthy presentation warranted.
P took his recently-bought usedcar to D's repair shop to have hisclutch inspected. D diagnosed abrake problem covered by p's special one-year warranty. The workwas done. P drove away in hiscar. D filed a warranty claim,which was denied.
P returned to D's shop a monthlater for another problem. WhileD's employees were working onthe car D told P of the claim problem and insisted P pay the $400.00brake job bill before driving awayagain. The car was on the rack atthe time, so P had a slight edge inthe discussion.
Space limitations dictate theomission of certain details. P paidthe bill, got his car, then sued,alleging fraud (in that the brakework was not really needed) andconversion (for the refusal to release the vehicle until the allegedly fraudulent bill was paid). Pwanted his $400.00 back plus$50,000.00 punitive damages.
By Vic FlemingAlter four hours of testimony,
the judge submitted the case tous, the jury, saying, 'Tm givingyou this case without any instructions. You'll never see thishappen again. It's rare. But thelawyers have agreed to submit itto you that way." That's right! Noinstructions! Not even the preliminary AMls.
Each side's counsel then arguedthe case under the "do-right rule."Then we, the jury, retired to consider our verdict. My comradesknew I was a lawyer. One of themsaid to me, "What do we do?"
"I guess we elect a foreman.""You're elected." It was my first
political victory since eighthgrade.
Someone asked whether eachperson might state their views onthe case. Without objection Igranted that request.
For half an hour people talkedabout clutches, brakes, insurance, warranties. agency, hearsay, breach of contract, and possible reasons why the warrantorhad not been sued. The clockcrept past 5:30. I announced, "Theforeman has clearly lost control ofthe delibera1ions."
I asked for a show of hands onpunitive damages. No takers. Fora show of hands on a $400.00 verdict for P? No takers. For a defendant's verdict? Six hands. For aplaintiff's judgment of half the disputed bill? Five takers.
I singled out the person, otherthan me, who had not raised herhand at all. "What do you think?" Iasked.
She said she thought P was entitled to something, but $200.00was too much. For another fiveminutes the discussion draggedon. Jurors offered their opinionson the attorneys' preparation,mannerisms, dress. etc. It wasmost educational (unfortunately, Icannot write off the lost income).
Again I struggled to regain control. I asked whether four of the sixD-verdicters and four of the five P$200.00 verdicters would join themost recent speaker in a $100.00judgment. All five P-$200.00 folksimmediately shifted. Two of the Dverdicters conver1ed.
I then assumed the role of anauctioneer with the others. "Willyou go $100.00 for P? Will you ... ?"The second or third pointee raisedhis hand. I filled out the verdictform and passed it around for ninesignatures.
Ain't justice wonderful? 0luly 1985/Arkansas Lawyer/I 17
u Toward the Bicentennial uBy Robert D. Cabe
The proposition that schoolboards should be required to review educational materials andschool course content for the purpose of removing indecent, obscene. or inappropriate materials.thereby ensuring that teachersand materials used in the schoolswill instill social, moral. and political values of the "traditionalAmerican" variety. is. unless verycarefully limited, antithetical tothe very foundations of Americandemocratic ideals and notions.
Generally speaking, two typesof review might be undertaken bya school board. One would be anacross-the-board, top-to-boltomreview of all materials, both curricular and library; the otherwould be a case-by-case review ofspecific materials (course or library) that are called into question for whatever reason. fn thecase of the former, impracticalitybecomes a factor and suggeststhat. absent extremely unusualcircumstances, such a reviewshould not be undertaken. fn thecase of the latter, a school boardmay have to review the materialsto fulfill its general supervisory responsibility for all courses andmaterials. but the manner andmethod of the review should reflect a sensitivity to the rights,needs for opportunity for expanded learning, and capabilities of the students.
An excellent statement of therole of education in our demo-
"Toward the Bicentennial" willfeature a series of articles on FirstAmendment issues to launch the1987 bicentennial observance 01the U.S. Constitution. In this issue,Robert D. Cabe and G. Ross Smithdiscuss school board review ofeducational materials and schoolcourse content. Newspapers willbe the locus 01 Phillip Carroll andProlessor Albert M. Witte andcable television programmingwill be discussed by Robert M.Cearley, Jr .. and J. W. Dickey, Jr..in the next two issues of TheArkansas Lawyer.1I8/Arkonsas Lowyerl)uly 1985
SchoolBoardCensorshipUndemocratic andUnconstitutionalerotic form of government is foundin the concurring opinion of Justice Blackmun in Board 01 Education. Island Trees Union FreeSchool District No. 26 v. Pica, 457U.S. 853, 102 S.Ct. 2799, 73 L.Ed. 2d435 (1982):
Indeed, the Constitution presupposes the existence of an informed citizenry prepared toparticipate in governmentalaffairs, and these democraticprinciples obviously are constitutionally incorporated intothe structure of our government.It therefore seems entirely appropriate that the State use"public schools [tol ... In
culcat[e] fundamental valuesnecessary to the maintenanceof a democratic political systern." Ambach v. Norwick, 441US, at 77, 60 L. Ed. 2d 49, 99 S.SI. 1989.It is in the execution of the in
culcative function that the schoolboard must be exquisitely sensitive to not only the First Amendment rights of students, but alsoto the example they set forstudents and the message theysend when deciding issues ofcourse materials, course content.and library holdings. If the schoolboard is insensitive to these concerns and disqualifies content ormaterials with a heavy hand, itruns the risk of contradicting anddenigrating the right of freespeech and free access to ideaswhich is, by any measure, fundamental to and of prime importance in our democratic system ofgovernment.
It is helpful to examine thebreadth and depth of the inculcalive function. The most extensive
discussion is found in Ambach v.Norwick, 441 U.S. 68, 99 S. Ct. 1589,60 L. Ed. 2d 49 (1979). The issue before the court was the validity of aNew York statute which requiredU.S. citizenship (with some exceptions not relevant to the case) ofany person who wished to be certified to teach in the publicschools of the state; certificationwas required of any person employed to teach in the schools.After noting that public education"go[es] to the heart of representative government," "fulfills a mostfundamental obligation of government to its constituency," and "isthe very foundation of good citizenship," the Court turned to theinculcative function:
... Other authorities have perceived public schools as an"assimilative force" by whichdiverse and conflicting elements in our society are broughttogether on a broad but commonground. See, e.g., J. Dewey,Democracy and Education 26(1929); N. Edwards & H. Richey,The School in the American So·cial Order 623-624 (2d ed. 1963).These perceptions of the publicschools as inculca1ing fundamental values necessary to themaintenance of a democraticpolitical system have been con·firmed by the observations of social scientists . ..
441 US, at 77.The court went on to refer to the
inculcative function. but always
Editor's Note:Robert D. Cabe is a Little Rock
attorney with the Allen, Cabe &Lester law firm. Until 1981. he wasa member 01 the Wright. Lindsey &Jennings law firm in Little Rock,where he chaired the /irm's LaborLaw Section. He has served aschair 01 the state's Quality HigherEducation Study Committee andas chair 01 the Little Rock SchoolDistrict Superintendent SearchCommittee. He received a LL.B.from Duke University and a B.A.lrom Hendrix College. His twochildren, Meredith, 16, andMatthew, 13, attend Little RockPublic Schools.
limited it to those activities whichare directed to the students' understanding of and preparation for effective functioning as citizens in ademocratic society. In descriptions of or references to this function, the Court used such terms asdevelopment of "students' attitude toward government and understanding the role of citizens inour society," 441 US, at 78; influencing "the attitudes ofstudents toward government, thepolitical process, and a citizen'ssocial responsibilities," 441 US, at79; and promotion of "particularvalues and attitudes toward government," 441 US, at 79, n.lO.
Thus, the teaching and provision of materials regarding sociaL moral and political values isa proper function and responsibility of the school board, to theextent of this specific and narrowly defined function: that which isnecessary to enable students toappreciate the benefits, duties,and responsibilities of citizenshipin a democratic society. Thewholesale review of all materialsto eliminate those which might,by some unspecified definition,be "obscene, indecent, or inappropriate" is a horse of anothercolor, is wide of the mark, and istotally unjustified.
In the first place, the concept ofobscenity or indecency is necessarily in the eye of the beholder,and is one with which the UnitedStates Supreme Court has struggled on many occasions withouthaving arrived at any particularlyhelpful definitions.
There is also a practical problem because of the nature ofschool boards, certainly inArkansas, and in other states, aswell. School board members areunpaid public servants who haveby and large, neither the time, thetraining, nor the inclination to undertake such a review. In virtuallyevery school district. the initial decisions regarding course materials, course content. and libraryacquisitions are made by educational professionals hired toperform those and other functions. To expect that a schoolboard member should take thetime to master the details and actually review all such materials isan unwarranted assumption and
imposition on the time of such officials.
If school boards did not rely onprofessionals to perform thesetasks, they would become so hopelessly mired in detail that the taskwould not be done, or would bedone superficially and poorly. fnaddition, the likelihood of findingany objectionable materials is notgreat. certainly not in the case oftextbooks. By and large, textbooks are written in such a way asto appeal to as many school systems as possible and to be as unobjectionable as possible; thepublishers' profit motives assurethat this is so.
Some of the same considerations apply with respect to libraryacquisitions. Most acquisitionsare the result of a number of factors: teacher requests for materials to supplement course materials; a desire for balance wi thinthe library collection among themajor topics or categories ofbooks according to guidelinespublished and generally followedby the library profession; the academic, social. and economiccharacteristics of the student population being served; and requests by students and others.
In Island Trees, the Courtquoted with approval the observations of a district court with respect to the nature and purposesof a school library:
"[A] student can literally explore the unknown, and discover areas of interest andthought not covered by the prescribed curriculum ... Th[e]student learns that a library is aplace to test or expand uponideas presented to him, in or outof the classroom." Right to ReadDefense Committee v, SchoolCommittee, 454 F. Supp. 703, 715(Mass. 1978).The court then noted that the
board's discretion in carrying outthe inculcative function, at leastas to the removal of books fromthe library, is not unfettered. Thedissent suggested that the plurality's holding required school libraries to act as conduits for thedistribution of or access to published materials; the majority didnot choose to refute that charge.Practically speaking, there is agood reason to allow greater lati-
tude of materials in the library: because of the often watered-downnature of many textbooks, it isonly in the library that studentswill have access to materials thatwill benefi t them in preparing forcollege admission tests, in writing essays for college applications, and in acquiring the enrichment of background that will beessential to their success in a college environment and in increasingly sophisticated and diversework environments.
The situation with respect topatron complaints about specificmaterials is somewhat different.The school board has, of course,the ultimate responsibility for thecontent of courses taught. the materials used, and the library materials made available as a complement to the required courses andmaterials. On occasion, a complaint might be received aboutsuch materials and the boardmust respond in appropriateways.
First and foremost, the boardshould establish clearly definedand regularly followed procedures for such complaints. Theabsence of such procedures or theboard's departure from themweakens any decision that may ultimately be made, because itsuggests that there may havebeen less than a full and fair exploration of the educational valueof the challenged materials.
At a minimum, the board shouldrequire the complainant to specifically identify the materials andthe parts alleged to be offensive;the harmful results which the complainant fears would follow use ofthe materials; the age group ofstudents for which the complainant thinks the materials appropriate; the extent of the complainant's familiarity with thematerials and with reviewers' andcritics' opinions of the materials;the action requested; and the identification of materials whichmight be substituted for the allegedly offensive materials.
There should then be a procedure for review of the materials bya committee which includes educators (teachers, administrators.and librarians) and parents. Finally, the board, if called on tomake the ultimate decision,
July 1985/Arkansas Lawyerll19
should determine whether theeducational value of the materials outweighs the perceivedthreat to community values. In Island Trees. the Court specificallytreated the removal of librarybooks. and articulated a standardtied to the board's motivation forthe removal decision. 457 US. at871. To its decision-making process, the board should also add ameasure of sensitivity to the academic freedom of the faculty.
The issues of alleged obscenityor indecency are most likely toarise in the context of literaturecourses and library holdings. InIsland Trees. the Court held thatthe board could not remove a bookfrom the school library if itthereby intended to deny studentaccess to ideas with which theboard disagreed, and if the intentwas a substantial factor (one inthe absence of which the decisionwould have been different). TheCourt carefully limited its opinionto the removal of library books.and did not treat ei ther curriculardecisions or library book acquisitions.
The board has ari obligation tothe students who depend on it fortheir education to not unduly narrow the scope of that education.Our society and world are changing so rapidly, and the diversity ofour nation is such that the boarddoes students a distinct disservice when they elect to removematerials for which there is anysubstantial educational purpose.A particular danger is that aboard might tend to be too parochial in its viewpoint. on thetheory that it is bowing to community notions of decency; thestudents are the losers, because agreat many of them will be required to function in a societymuch larger than that of theirhometown, and to restrict theireducational opportunities andtheir acquaintance with newideas is to put them at a disadvantage when competingeither in colleges and universitiesor in the employment marketplace.
None of this is intended to interfere with the right and obligationof parents to educate theirchildren and to determine whattheir children will read, at least in
1201Arkansas Lawyernuly 1985
the realm of optional reading materials. Parents can and should, ifthey feel the necessity to do so, instruct their children not to read anunassigned book. More importantly, these suggested rules and procedures do not in any way interfere with the abilities of parents todiscuss and explain their viewswith respect to a particular workor idea, or to make available tothe child the benefits of other instruction, either through a church,the reading of alternative works,or through the literature of anynumber of groups or organizations.
If the board is to truly enhanceand support traditional Americanvalues, it must not tread on theconcept under!ying the first andmost important of the Bill ofRights: maximum personal freedom is attainable only in an environment where there is a free exchange of ideas, and where thebest ideas acquire that status because they are constantly challenged by new ideas and survivethat challenge. The schoolroomand school library, of all places.should be free marketplaces ofideas; otherwise, they become inconsistent with the fundamentalright of freedom of speech and. bytheir example. encourage intolerance and even limitation of thisbasic and precious right.
SchoolBoardReviewTo WhatExtent?
By G. Ross Smith
Since the adoption of the FirstAmendment to the Constitution ofthe United States and subsequentcourt decisions extending itsreach to state action. the case lawwhich has developed to establishthe scope and substantive content
of the rights enumerated in theAmendment has been overwhelming, if not always clearly articulated. One reason for the volumeand frequency of litigation is thatthe rights protected are notabsolute and cannot be stated orapplied with mathematical precision. Rights such as freedom ofspeech must often be applied incontexts which require a balancing of free speech interests withother legitimate and competingconcerns.
In June, 1982, the United StatesSupreme Court was called upon tobalance the long-establishedprinciple favoring deference tolocal school officials on matters ofpublic educational policy andadministration with the allegedspeech rights of public schoolstudents. In Board of Education.Island Trees Union Free SchoolDistrict v. Pica.' the Court addressed (in eight separate opinions) the constitutionality of actions of local school boards andtheir individual members in appiying their personal moral. social and political values to makecontent-based decisions regarding selection and removal ofschool library books and curriculum design. Five junior andsenior high school students liledsuit under 42 U.S.C. §1983 alleging that such actions violatedtheir constitutional rights of free
Editor's Note:G. Ross Smith, with the G. Ross
Smith, P.A.. law firm of LittleRock, received a B.S.B.A. Degreefrom the University of Houston in1966. He was associate editor ofHouston Law Review from 1964 to1966. He was counsel for the Defendants in the United States Supreme Court cases of Wood v.Strickland and the Board of Education v, McCluskey, In Wood v.Strickland. the Court was for thefirst time confronted with the issueof the liability of individual members of boards of education forcivil rights deprivations. Smith isa member of the National SchoolBoards' Association and the National Council of School Attorneys. He authors a monthlycolumn in the Arkansas SchoolBoards' Association newsletter.
speech. While there was admittedly no abridgment of actualspeech. the students argued thattheir challenge should properlybe construed as within the protection of speech rights. The DistrictCourt granted summary judgmentfor the school officials. noting that:
"the board acted not on religious principles but on its conservative educational philosophy. and on its belief that thenine books removed from theschool library and curriculumwere irrelevant, vulgar. immoral. and in bad taste. making them educationally unsuitable for the district's junior andsenior high school students."102 S.Ct. at 2804.
The Court of Appeals reversedand remanded for trial and theSupreme Court granted certiorari.
Prior to Island Trees. the Supreme Court had not addressedthe exact issues involved. It hadhowever decided other cases requiring resolution of first Amendment controversies in the publicschool context. One of the mostnotable was Epperson v.Arkansas.' where the Court expressly acknowledged that localschool boards have broad discretion in the management of schoolaffairs and that the federal judiciary should not "intervene in theresolution of conflicts which arisein the daily operation of schoolsystems" unless "basic constitutional values" (emphasisadded) are "directly and sharplyimplicated" in those conflicts. '
Although Epperson involved theEstablishment of Religion Clauseof the First Amendment, the citedlanguage is the acknowledgedtest to determine the propriety offederal intrusion in public schoolmatters where constitutional violations are alleged.
Also prior to the SupremeCourt's decision in Island Trees. aconflict on the library book removal issue had developed in theCourts of Appeal for the Secondand Sixth Circuits. In President'sCounciL District 25 v. CommunitySchool Board No. 25.' the SecondCircuit sustained school board action on library book removalprimarily predicating its holdingon the Epperson rationale and aconcomitanl finding that the
issues asserted by the plaintiffswere not of constitutional magnitude and did not involve the deprivation of federally protectedrights which would warrant federal intrusion. To the contrary. inMinarcini v_ Strongville CitySchool District.' the Court of Appeals for the Sixth Circuit concluded, by reasoning which somehave characterized as specious.that public school students possessed a First Amendment "rightto know." The cases cited in support of that assertion pertained tothe rights of adult citizens in nonschool contexts and althougharguably involved the right to receive information. did not addresssituations where the defendantshad a right or duty, as do schoolboards, to prescribe and regulatethe substantive content of an educational program.
The Court's ultimate "resolution" of the Island Trees controversy is perhaps one of the mostperplexing series of opinions in recent years. No clear majorityemerged. Justice Brennan wrotethe plurality opinion. joined byJustice Marshall. Justice Stevensand, in part. by Justice Blackmun.Justice White concurred solely inthe judgment. Separate dissentswere advanced by Chief JusticeBurger. Justice Powell. JusticeO'Connor and Justice Rehnquist.Justices Powell. Rehnquist andO'Connor joined the Chief Justiceand Justice Rehnquist was joinedby the Chief Justice and JusticePowell.
The legal issues on which theJustices diverged included notonly the basic issue whether theright of free speech afforded anyprotection to students protestinglibrary book removal but also avariety of tangential issues whicharose once the threshold issuewas decided by the plurality infavor of the students' position.Once the decision was made thatfreedom of speech was in fact implicated in library book removal.the Court was faced with issuessuch as: (I) the substantive content of the legal test to be appliedin determining the propriety of removal; (2) the proper allocation ofthe burden of proof; (3) explicationof specific criteria which wouldunquestionably permit removal if
adequately substantiated; (4) consideration of distinctions in decisions to remove library books fromthe shelves vis a vis decisions notto acquire books for indusion inthe library inventory and decisions not to include materials incurriculum resource materials: (5)assuming vulgarity or obscenityto be an appropriate reason for removal of books. must such obscenity or vulgarity be pervasiveor would "random" vulgarity in abook suffice for removal; (6) the extent to which the adequacy ofinternal school board review procedures should affect the judicialreview process; and (7) the extentto which any legal test whichmight be articulated would effectively erode the discretion ofschool board members and permitor require the substitution of a federal judge's notion of appropriatelibrary materials by invalidatingdecisions based on the values oflocally elected school officials.
As noted, the plurality opinionauthored by Justice Brennan heldthat library book removal did indeed implicate rights of freespeech and, in appropriate cases,warrant fecleral court intervention. Justice Brennan stated thatfederal review and possible intervention was necessary to protectthe students' "right to receive information." a right which he foundto be implied in the right of freespeech. He referred to what he perceived to be the unique role of apublic school library and suggested that a student's right to receive ideas was "0 necessarypredicate to the recipient's meaningful exercise of his own rights ofspeech, press. and political freedom.'" In a holding which cameclosest to securing a consensus(eight justices), Justice Brennandid concede that local schoolboards have a legitimate role inestablishing an educational program so as to impart traditionalcommunity values and to promoterespect for authority and traditional values "be they social.moral or political."7 However, if itcan be established that the decisive factor in library book removalwas "0 narrow partisan or political" motivation or an intent tosuppress ideas. it was impermissible. Justice Brennan did specify
luly 1985/Arkansas Lawyer/121
that criteria such as pervasive vulgarity. educational suitability.inappropriateness for an agegroup. space limitations and obsolescence would be acceptable.hut that is presumably qualifiedby the language on impermissiblemotivation. Justice Brennan expressly stated that his views related only to library book removaland not to initial acquisition orcurriculum content decisions. Healso decided that the internal review procedures in the IslandTrees case were suspect and thata trial was necessary to exploreissues pertaining to the motivation of the boord members. Thecase was thus remanded.
The dissenting Justices {and tosome extent Justice Blackmun}were aghast at what they perceived to be fatal flaws in theplurality's reasoning. Foremost intheir concern was JusticeBrennan's announcement of a public school student's "right to receive information" which wastermed "previously unheard of"and "wholly unsupported by ourprevious decisions. "8 The dis·senters also professed theirinability to fathom how a schoolboard could eltectively inculcatetraditional community values(whether moral. social or political) in light of the largely subjective and restrictive test prescribedby the plurality. Moreover. if. asadmitted by the plurality. a boardmay transmit its notions of appropriate values without federal review in the curriculum and inbook acquisition decisions. whatpossible rational basis couldthere be for severely restrictingtheir discretion in library book removals. The dissenters alsocogently noted that. not only wasspeech per se not involved. butthat any alleged denial of accessto information did not rise to thestandards of Epperson as a material and substantial encroachment of a basic constitutionalright since (I) no such right hadbeen previously recognized; (2)the removed books were available from other sources and (3) noeffort was made to suppress or inhibit classroom discussions of theideas discussed in such books.
It is unfortunate that this newlysanctioned basis for further fed-
1221Arkansas Lawyer/luly 1985
eral encroachment into the altairsof local school districts emanatesfrom such a bizarre combinationof opinions as is found in IslandTrees. The divergence of viewsmanifested in the eight opinionsmay be the most persuasive evidence that the plurality opinion issimply wrong. from both legaland policy considerations. Almosteveryone would concede that public students generally benefitfrom exposure to a wide spectrumof varying ideas. However. tosuggest that exposure to librarymaterials is a matter of federalconstitutional dimensions is simply to arrogate unto the federaljudiciary additional authority tofurther erode local control of public school operation when otherdirect and indirect means of obtaining access to a divergence ofeducational materials are readilyavailable. Chief Justice Burger observed in Island Trees:
"We can all agree that as a matter of educational policystudents should have wide access to information and ideas.But the people elect schoolboards. who in turn selectadministrators. who select theteachers. and these are the individuals best able to determinethe substance of that policy.The plurality fails to recognizethe fact that local control of education involves democracy in amicrocosm. In most publicschools in the United States theparents have a large voice inrunning the school. Throughparticipation in the election ofschool board members. the parents influence. if not control.the direction of their children'seducation. A school board isnot a giant bureaucracy far removed from accountability forits actions; it is truly 'of thepeople and by the people.' Aschool board reflects its constituency in a very real senseand thus could not long exercise unchecked discretion inits choice to acquire or removebooks. If the parents disagreewith the educational decisionsof the school board. they cantake steps to remove the boardmembers from oltice. Finally.even if parents and studentscannot convince the school
board that book removal is inappropriate. they have alternative sources to the same end.Books may be acquired frombook stores. public libraries. orother alternative sources unconnected with the unique environment of the local publicschools."In civil rights cases from other
contexts. the federal judiciary hasstressed that defendants. to theextent possible. must make decisions (particularly in the employment discrimination area) utilizing objective. as opposed tosubjective. criteria. Yet. the Island Trees Court has articulatedalmost totally subjective criteriato be employed by a federal judgereviewing library book removaldecisions. The ominous prospectseems to be that the inventory ofpublic school libraries will be determined more by litigious teenage students and federal judgesthan publicly elected school officials.
Although the question posedhere for debate is whether localschool boards should be requiredto review educational materials toensure the installation of traditional social. moral and politicalvalues. Island Trees suggests thatthe real inquiry. at least in thecase of library book removal. isthe extent to which they can do so.The plurality seems to insulatecurriculum and book acquisitiondecisions from federal judicial review. at least for now. The dissenters' position that none of thethree categories of decisions meetthe parameters of Epperson ispreferable. 0FOOTNOTES
• 102 S.Ct. 2799 (1982)., 303 U.S. 97 (1968)., Id at 104.• 457 F.2d 289 (2d Cir. 1972). cert.
denied. 409 U.S. 998 (1972)., 541 F.2d 577 (6th Cir. 1976). See
also Right to Read Defense Committee of Chelsea v. School Committee of the City of Chelsea. 454F.Supp. 703 (D. Mass. 1978) andSalvail v. Nashua Board of Education. 469 F.Supp. 1269 (D.N.H.1979).
• 102 S.C!. at 2808., 102 S.C!. at 2806.• 102 S.C!. at 2830.
The Grand GulfCases
A summary of decisions, issues and arguments on
state v. federal jurisdiction in utility regulation
Middle South Utilities, Inc.(Middle South), is the parent tolour wholly-owned utility companies: Arkansas Power & Light(AP&L), Louisiana Power & Light(LP&L), Mississippi Power & Light(MP&L), and New Orleans PublicService, Inc. (NapS!) (collectivelyreferred to as the operating companies). In the early 1970's, MiddleSouth planned the Grand Gull nuclear project as a two-unit generating plant to be located near PortGibson, Mississippi. to produce1250 megawatts of power per unitand to serve and be individuallyfinanced by Mississippi Power &Light. Middle South determinedsubsequently that MP&L did notalone possess financial strengthsufficient to finance constructionof the project and in February 1974organized Middle South Energy,Inc. (MSE), as a wholly-ownedgeneration subsidiary to take overthe interest of MP&L and facilitatefinancing and construction.
The existing financing framework for Grand Gull (to date involving a sum exceeding some
$3.4 billion) has been developedthrough a complicated series offinancing agreements amongMiddle South, the operating companies, Middle South Energy, Inc.and third party lenders - a consortium of domestic and foreignbanks. The first such agreement,known as the Availability Agreement, was executed by MiddleSouth Energy, Inc.. and theoperating companies in June 1974. Underits terms, the four operating companies agreed to take and pay forpower from the Grand Gull unitaccording to their respectiveneeds based upon a formula setout in another document known asthe 1973 System Agreement.' In effect, under the Availability Agreement. the operating companiesagreed to jointly reimburseMiddle South Energy, Inc. forthe cost of construction of GrandGull by paying depreciation over27.4 years, plus amounts equal toMSE's operating expenses and interest on debt, whether or not it received necessary government authorizations to perform its dutiesunder the agreement or actually
performed its duties and obligations under the agreement.
Beginning in 1974, MSE executed a number of bank loanagreements and indentures to obtain construction financing, in theCOllrse agreeing to enforce itsrights as to the operating companies arising from the Availability Agreement and to neitherterminate nor modify the agreement without the consent of thelenders, MSE also agreed to assign to its lenders its rights underthe Availability Agreement to receive payments from the operating companies as security for the
Editor's Note:
Dana Daniels Nixon of LittleRock, was senior and chief Administrative Law judge from 1980-84 atthe Arkansas Public Service Commission. She attended RandolphMacon Women's College and theUniversity of Arkansas at Fayetteville School of Law, where shewas a member of the ArkansasLaw Review staff. Nixon plans toreturn to law practice in the fall.
By Dana Daniels Nixon
July 1985/Arkansas Lawyerll23
loan agreements. Between June1977 and October 1984, AP&L andthe other operating companiesjoined in 12 agreements related tothe assignments in which theyagreed to make payments pursuant to the Availability Agreement directly to the banks in theevent MSE defaulted in its payments to the lenders, and to makethe payments due even if regulatory approval for the plant wasnever secured and even if theplant never produced any power.The operating companies alsoagreed to make the payments dueMSE under the AvaHability Agreement even though a regulatoryagency might prohibit the operating companies from making them,in the form of unsecured "advances," or loans from the companies to MSE, which would become "subordinated indebtednesses" of MSE to them. In effect,then. the operating companiesagreed to make "loans" to MSE ifthe making of "payments" were tobe prohibited. The rights of the operating companies to collect thedebts owned them by MSE would,under the terms of the assignments of the Availability Agreement. be inferior to ("subordinated") MSE's' pre-existingdebts to the banks - which wouldbe paid to the banks with the proceeds of the "advances" made toMSE by the operating companies.
AP&L built its plants in Arkansas and, by 1980, had a greater portion of coal and nuclearbaseload generating capacity inrelation to its customers' needsthan the other operating companies. In recognition of this, theoperating companies agreed in aJuly 1980 Memorandum of Understanding to reallocate their obligations to take power from and topay for Grand Gulf. In this agreement, formalized a year laterin a Reallocation Agreementapproved by the federal Securities and Exchange Commission("SEC")', AP&L relinquished allof its interest in Grand Gulf.The other operating companiesagreed that AP&L should be allocated none of the energy capability of the project and agreed theywould indemnify or "hold harmless" AP&L for any obligationsthat might ever be imposed on itdue to the 1974 Availability Agreement and assignments of MSE's1241Arkansas Lawyer/Ju1y 1985
rights thereunder. The other threecompanies further agreed to execute an agreement to be filed withthe Federal Energy RegulatoryCommission ("FERC") establishing the terms, rates, and conditions for the sale of Grand Gullpower in conformity with the Reallocation Agreement.
As noted, however, the Availability Agreement could not bemodified by MSE to comply withthe Reallocation Agreement's zeroallocation of capability to AP&Lwithout the permission of thoselenders financing construction ofthe project. The lenders refused torelease AP&L from its obligationsaltogether but did agree to a fixedallocation of 17.1% of the total financing cost of the project asAP&L's obligation. In November1981, with the consent of the lenders, an amendment to the Availability Agreement was executedwherein AP&L expressly assumedthe obligation to pay for thatshare of the costs.
Each of these documents was,in accordance with the PublicUtility Holding Company Act of1935, IS U.S.C. §79 et seq.. filedwith the SEC for approval. The1973 and 1982 System Agreementswere filed for approval only withthe FERC.
On June 10, 1982, the operatingcompanies and MSE entered intoa formal agreement known as theUnit Power Sales Agreementwhich was filed as a wholesalerate in Middle South Energy, Inc.'(hereinafter cited as the GrandGulf case). This agreement detailed terms for the sale and purchase of Grand Gulf power pursuant to the fixed allocations inthe Reallocation Agreement and,therefore, granted no entitlementto capacity and imposed no costobligations on AP&L. The agreement was filed with FERC for approval on June 18, 1982. MSE justified its allocation plan on thegrounds that each operating subsidiary should have adequatebaseload generation and a diversified fuel mix, and that AP&L'sgeneration currently met suchneeds. On February 3, 1984, FERCAdministrative Law Judge ErnstLiebman rejected the provision ofthe Unit Power Sales Agreementthat AP&L had no obligation topurchase power and held thatAP&L should receive 36% of the
power from Unit 1 of Grand Gulfand bear 36% of its cost. (The fateof Unit 2 was not decided.)
On April 30, 1982, Middle SouthServices, Inc.. the service subsidiary of Middle South, filed the1982 System Agreement for approval in Middle South Services,Inc,' (hereinafter cited as the System Agreement case). Thisdocument was meant to replacethe 1973 System Agreement as thegoverning agreement for wholesale buying and selling transactions among all the publicutility subsidiaries of MiddleSou th except those from GrandGulf, which was covered by theUnit Power Sales Agreement.'
In early 1983, testimony and exhibits were filed in the SystemAgreement case by the FERCStaff, the Louisiana PSC, and theCity of New Orleans. Each proposed major changes in the assignment of production costsamong the Middle South operating companies to effectivelyequalize such costs among thecompanies and shift substantialportions of the costs from the otheroperating companies to AP&L.One major consequence of equalizing production costs on theMiddle South system would be totransfer the benefits associatedwith two-thirds of AP&L's low-costcoal and nuclear plants to the operating companies in Louisianaand Mississippi, while shiftingonto AP&L one-third of the cost impacts of the more expensiveGrand Gulf and Waterford nuclear plants. Quite obviously, thenet result of such equalizationwould be a dramatic escalation inAP&L's costs of electricity.
On February 2, 1984, the day before the initial decision in theGrand Gulf case, Middle SouthServices, Inc. filed a "Notice ofSeparate Positions" of the operating companies and advised theFERC that they would take different positions on the MiddleSouth System's production costallocation issue.' Subsequently,Louisiana Power & Light, Mississippi Power & Light and NewOrleans Public Service, Inc.,called for use of allocation methods designed to bring aboutequalization of production costsamong the operating companieswhile AP&L adhered to the position advanced by MSS at
previous evidentiary hearings in1983; which reflected a zero allocation of Grand Gulf to AP&L pursuant to the Reallocation Agreement.
In March 1984, following the decision by Judge Liebman to impose 36% of the Grand Gulf costson AP&L, the Arkansas PSC began actions on its own. First. itinstituted two investigatory proceedings into the facts and circumstances underlying the contractual relationships involvingGrand Gulf among AP&L, its affiliates, and Middle South.' It thenissued an Order to Appear andShow Cause in August 1984 inwhich it directed AP&L to showcause why certain agreementswhich purported to obligate it inconnection with the Grand Gulfproject should not be held void abinitio as a matter of law.' TheOrder referenced a number of documents involved in the GrandGulf financing scheme but indicated that the only documentssubject to being declared voidwere the agreements actually executed by AP&L. It did not addresseither the System Agreement orthe Unit Power Sales Agreement.
A hearing date was set and documents and testimony filed withthe Arkansas PSC. Before thehearing took place, MSE filed suiton August 31, 1984, for declaratoryjudgment and injunctive relief inMiddle South Energy, Inc. andArkansas Power & Light Co. v.Arkansas Public Service Comm'net aJ.' Seven days after a briefcourt hearing on the matter, District Judge Henry Woods permanently enjoined the PSC from conducting further proceedingspursuant to the Show CauseOrder on the ground of federalpreemption. The PSC's Motion toAmend the District Court's Orderwas denied, and the matter wasappealed." Oral arguments wereheld on April 8, 1985, and a decision is pending in that case.
DECISIONS, STATUS Of CASE,ISSUES, AND RATIONALES
(BRIEfLY)The underlying issue in these
cases is the proper division ofjurisdiction and power between astate and the federal governmentin the regulation of public utilities. There are, of course, numer·ous other issues involved in eachcase, factual and legal. and pro-
cedural and substantive, not sum·marized due to space constraints.
In the Grand Gulf case, JudgeLiebman issued his initial decision on february 3, 1984. He foundthat generation capacity ownedby operating companies in theMiddle South system, includingGrand Gulf. is planned and can·structed to meet the needs of theentire system rather than the indiovidual needs of the separate operating companies; that the currentlevel of baseload capacity foreach operating company is due tosystem planning; and that MSE'sjustifications for the proposedGrand Gulf sales were inadequate. He concluded that MSE'sproposed allocation of Grand Gulfpower and costs unduly discriminates against Louisiana andMississippi retail ratepayers andmust be modified; that the Louisiana PSC proposal to allocateGrand Gulf power and energy tothe operating companies basedupon equalization of costs fromthe nuclear units on the MiddleSouth system is just and reasonable; and that the fERC has thepower to force AP&L to purchasepower from MSE despite the factthat AP&L has no contractual rightor duty under the Unit PowerSales Agreement to purchasesuch power.
In the System Agreement case,Administrative Law Judge Headissued his Initial Decision onfebruary 4, 1985. His decision contains several findings of fact andconclusions of law which are diametrically opposed to those madeby Judge Liebman in the GrandGulf case: he rejected the pro·posals for equalizing productioncosts among the operating companies on the Middle South sys·tem and concluded that suchproposals were unjust. unreasonable, and unduly discriminatory.He found that any cost equalization scheme would be foreign tothe traditional operation of theMiddle South pool and that theevidence clearly showed that theindividual operating companiesof the system have operated anddo operate independen tly of theirparent so that generation additions, with the exception of GrandGulf. have been made to satisfyindividual company needs andhave not been planned or built assystem plants.
Since he found Grand Gulf hadbeen built as a system plant,Judge Head ordered that AP&Lshould purchase a portion of itspower and bear a part of its cost.He based its share upon the ratioof its annual demand for energy(kilowatt hours) to the annualdemand of the system as awhole" and ordered that this formula be integrated into the 1982System Agreement.
Both the System Agreementcase and the Grand Gulf case arenow on appeal to the full fERC.Both cases involve as majorissues the general power of thefERC to order involuntary equal·ization of production costs againstone member of an affiliated powerpool and, more specifically, thepower of the fERC under the federal Power Act, 16 U.S.C. §824 etseq.. to require that a separateelectric utility purchase powerfrom another utility, albeit anaffiliated one, where the purchas.ing utility has no contractual rightor obligation to purchase powerfrom the selling utility and wherethe selling utility is contractuallyrequired to sell all of its power output to other affiliated utilities. Underlying the arguments of the Arkansas parties l2 in both cases isthe question of the extent to whichthe federal agency may properlyintrude on the regulatory authority of the state.
The Arkansas parties arguethat there are few situations beyond the one involved in thesecases in which Congressional intent not to preempt state authoritycould be more pronounced. Theynote that the federal Power Actwas designed to Ii 11 the gap in regulation of the electric industry leftby Public Utilities Comm'n. V.
Attleboro Steam & Electric Co. "which denied the states the rightto regulate the price of electric energy across state lines. The primary purpose of the Act was togive a federal agency power to soregulate. 14 The Act was "conceived entirely as a supplementto, and not a substitute for stateregulation. "I:' In referring to whatis now the Act. the House notedthat probably "no bill in recentyears has so recognized the responsibilities of state regulatory
•. "16commlsslOns ...While the Arkansas parties rec
ognize the interstate nature of
July 1985/Arkansas Lawyer/125
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Sierra doctrine. developed inUnited Gas Pipeline Co. v. MobileGas Service Corp.~ and FPC v.Sierra-Pacific Power Co.." thepawer o( the FERC under the Federal Power Act to abrogate jurisdictional contracts is severelycircumscribed: the FERC maychange the contractual terms impacting rates only if the FERClinds. under §206(a) o( the Act"that the rate adversely affects thepublic interest to the point that thefinancial ability o( the utility tocontinue service is impaired. orwhen the rate is unduly discriminatory to or places an excessiveburden on other jurisdictional(wholesale) consumers. The FPA.according to the Arkansas parties. is premised on voluntarily devised contractual relations amongits jurisdictional utilities and contern plates abrogation of these contracts by the FERC only in circumstances of unequivocal publicnecessity. Further. they arguethat the FERC may not force AP&Lto purchase capacity that it hasnot agreed to purchase and notethat the Eighth Circuit has heldthat title need not pass in order toconstitute a prohibited sale pursuant to §202 o( the Federal PowerAct. 16 USC §824(a). in Otter TailPower Co. v. F.P.C.". Nor. theyassert. does the Commission precedent support a "forced purchase"in a similar situation.:zI
The cost equalization parties inboth the Grand Gulf and System
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ambit of [its] statutory authority."" In their opinion. to lawfully equalize production costsamong operating companieswould require equalizing theircosts of service. an accomplishment only achieved by allocationo( ownership of generation plant.directly or indirectly. Such allocation is beyond the pawer o( FERCto make. since it has no jurisdiction over generation facilities.either indirectly or directly.'"
Further. the Arkansas partiesargue that Judge Liebman has exceeded the jurisdiction o( theFERC by considering the retailratepayers o( the jurisdictionalconsumers. the opera1ing companies. While they agree that theFederal Power Act has as itsprimary purpose the protection o(consumers. they assert that thebeneficiaries of such protectionare these jurisdictional consumers (the operating companiesin this case) rather than the ultimate retail consumers. 21 Only inextreme cases, such as a pricesqueeze. may the Commissionconsider the impact of its determinations on retail rates. Z!
The Arkansas parties go on toargue that. even if it has jurisdiction generally to do so. the FERCcannot allocate any power from orcost responsibility (or Grand Gulfto AP&L because it has no contractual vehicle through which it maydo so." The Arkansas partiescontend that under the Mobile-
sales in general among theMiddle South operating companies. and. specifically. sales ofthe energy from Grand Gulf. theycontend that the mere complexityof the transactions and the interstate nature of the transactions donot. in and of themselves. renderevery aspect of their regulationsubject only to (ederal authority.The Arkansas PSC. however. admitted that Congress could. if it sodesired. render the agreementscompletely subject to (ederal authority. As the Supreme Courtstated in Connecticut Light &Power Co. v. FPC:":
It has never been questionedthat technologically generation. transmission, distribution. and consumption [of electric energy] are so (used andinterdependent that the wholeenterprise is within the reach ofthe commerce power of Congress. neither on the basis thatit is. or that it affects interstatecommerce if at any point itcrosses a state line. Such abroad and undivided base (orjurisdiction of the Power Commission [the predecessor of theFERCI would be quite unobjectionable and perhapshighly salutary if the UnitedStates were a unitary government and the only conflictinginterests to be considered werethose of the regulated componies.The Arkansas position is. sim
ply. that Congress has not chosento give the FERC such a broodjurisdiction to date. The mostbasic arguments o( the Arkansasparties are that the FERC lacksauthority to equalize costs because it would be an impermissible allocation o( generationplant andlor an impermissible setting o( retail rates by FERC. Theycontend that the FERC is clearlyprohibited from allocating generation plant under Section 201(b) o(the Federal Power Act' :
The Commission shall ... nothave jurisdiction. except asspecifically provided ... over(acilities used (or the generation of electric energy ...
While they note thot the FERCmay make "pragmatic adjustments" in agreements before it torelieve unduly discriminatory orunreasonable impact, they assertthat it may do so only "within the
126 Arkonsos Lawyer July 1985
Agreement cases contend thatFERC may (and should) modifyeither of the agreements to equalize production costs on the system. In doing so, they use threemain rationales for supportingsuch a decision.
First. they contend that theissue is not whether or not costsshould be equalized or redistributed but how the massive newcosts, some $6 billion, associatedwith the Grand Gull units andWaterford 3 (a Louisiana nuclearplant scheduled to begin commercial operation in mid 1985), shouldbe distributed.
Second, they contend that thereis no issue as to the jurisdiction ofthe FERC to adopt cost equalization. because jurisdiction is clearly existent due to the pervasive interstate nature of the operations ofthe system, the subjection of theSystem Agreement to the FERC forapproval, and precedent both atthe FERC and in the courts."
Third, they assert that the issueis not whether the Middle Southsystem should be treated differently than other power pools inthe country by forcing cost equalization upon some memberswhich have not voluntarilyagreed to acceptance of equalcosts. Rather, they argue, theMiddle South system operates asa monolith and the individual corporate identities of the separateoperating companies have, formany years, been ignored for purposes of system generation planning, so the matter is one of distinguishing the Middle Southsystem from voluntary and unaffiliated (in the holding companysense) companies for cost allocation purposes.
These parties view cost equalization, if not supported by precedent. as a response to the "realworld" economic and structuralcharacteristics of the MiddleSouth system which operates overa four state area and has, in itsnew nuclear units. ventured intoconstruction of units with giganticphysical and generational size aswell as gigantic costs. Their rationale is that active and effectiveregulation by the federal agencyis mandatory to protect the systems' (retail) ratepayers sincestate commissions cannot be expected to fairly deal with
consumers in other states. Theyalso suggest that FERC shouldmove into cost equalization tospread risks assumed by companies constructing such gigan ticplants.
In response to the arguments ofthe Arkansas parties that costequalization would either requirean impermissible forced sale ofthe generation plant or, failingthat. require a state commissionto set retail rates based on average system costs rather than theactual operating costs of the individual utilities (which would violate all traditional concepts andlegal standards of traditional ratemaking), the proponents of costequalization assert that their planwould do neither. It would merelyreallocate costs and is permissible under Municipalities ofGroton v, FERC" and CentralIowa Power Coop, v. FERC."They also rely on Georgia PowerCo. v. FERC." where the FPC refused to equalize costs among theSouthern Company subsidiariesbecause the system agreementdid not provide for it. and Connecticut Light & Power Co. v.FERC." wherein the FERC didorder cost equalization becausethe Northeast Utilities systemagreement did so provide.
The cost equalization partiesalso use these cases in which voluntary cost equalization has beenapproved by FERC as support fortheir argument that FERC has thepower to modify the System Agreement to force cost equalization,arguing that FERC has, at leastimplicitly, found cost equalizationto be just and non-discriminatorysince it could not have approvedan agreement that resulted in unjust or unlawfully discriminatoryrates.
Finally, in Middle South Energyv. Arkansas PSC. supra, the substantive question is one of theproper regulatory roles of theFERC, the SEC, and the ArkansasPSC with respect to a number offinancial documents executed byAP&L in support of the Grand Gullproject since 1974. The PSC arguesthat the District Court erred infinding that the FERC has exclusive jurisdiction over theagreemen ts which were subject tothe Order to Appear and ShowCause.~ It also contends that theDistrict Court abused its discre-
tion by granting injunctive reliefthat was overbroad; that the District Court lacked subject matterjurisdiction because the appellees failed to exhaust theiradministrative remedies and thematter was not ripe for adjudication; and that the District Courtshould have abstained from judgment pending the outcome of thePSC proceeding.
The PSC and supparting intervenors argue that there is concurrent jurisdiction between itand the SEC to regulate securitiesand other evidences of indebtedness issued by public utilitieswhich are subsidiaries of publicutility holding companies, sincethis jurisdiction is recognized explicitly in the Public Utility Holding Company Act of 1935. 15U.S.C. §79g. The PSC also assertsthat whenever a state regulatesthe securities of electric utilities,the FERC is ousted in jurisdictionover such securities by expressprovision of the Federal Power Actat §§824c(f) and 825q.
MSE and AP&L argue that thelower court properly found thatstate jurisdiction over the subjectfinancial agreements was preempted by the Act under Narragansett Electric Company v.Burke." that state regulation ofthe Grand Gulf agreements wouldbe an unreasonable interferencewith interstate commerce in violation of the Commerce Clause,~and that the PSC's proceedings inthe Show Cause docket were ripefor injunctive relief by the DistrictCourt. 31
However, nowhere in his Memorandum Opinion did JudgeWoods address the securities and"evidence of indebtedness" arguments raised by the PSC in itsShow Cause Order and briefs tothe Eighth Circuit. It is anticipated that the Eighth Circuit will, if itreaches the merits of the preemption issue, address the relativeroles of the FERC, SEC, and Arkansas PSC in regulating securities of subsidiaries of publicutility holding companies. TheCourt, of course, may decide to abstain from deciding the substantive issues presented and remandthe case to the PSC for further proceedings and a final order in theShow Cause docket. A decisionfrom the Eighth Circuit in thiscase is expected this summer. 0
July 1985/Arkansos Lawyerl127
FOOTNOTES
I The System Agreement. signed in 1973and laler amended. covers the buyingand selling of power at wholesaleamong the four operating companies; itwas succeeded by the 1982 SystemAgreement which is the subject of one ofthe coses discussed in this article.
t Middle South Energy. Inc.. et 01..S.E.C .. Holding Company Act ReleaseNo. 22280 (November 18. 1981).
, FERC Dockel No. 82-616·000.• FERC Dockel No. 82·483-000.~ MSS acted as the representative agent
of the four operating companies for thisfiling. In October 1982. LP&L. MP&L. theStote of Mississippi. and the Mississippi Legal Services Coalition jointlymoved for consolidation of this casewith the Grand Gulf case: the motionwas denied in November 1982.
6 Traditionally. each operating MiddleSouth company has buill its own generating plants and assumed financial responsibility for its own productioncosts. approved by the state commissions.
• In Re An Investigation into the Operations of Arkansas Power &: Light Co..APSC Dockel No. 84·04·011; In Re An Investigation into the Operations ofArkansas Power 8t Light Co.. APSCDockel No. 84-041-011.
I In Re an Order for Arkansas Power &:Light Co. to Appear and Show Causewhich Certain Agreements Should NotBe Held Void Ab Initio. APSC Docket No.84·l90-U. The order referenced Ark. Stat.Ann. §73-2SS, which provides that a public utility may not issue "stock, bonds.notes or other evidences of indebtedness" without authorization from theArkansas PSC and stated that the obligations assumed by AP&L for GrandGulf costs "may constitute evidence ofindebtedness" under the Arkansasstatutes. All of the documents includedin the Order. including the AvailabilityAgreement and its amendments andassignments executed by AP&L. hadbeen filed with and approved by theSEC.
• Dockel No. LR·C-84·778 (E.D.PJk.). AP&Lintervened in support of MSE. and theAttorney General of Arkansas andRatepayers Fight Back. a consumers'group. intervened as defendentintervenors.Arkansas Public Service Comm·n. et al.v. Middle South Energy. Inc. andArkansas Power &: light Co.. DocketNos. 84-2409. 2410. ond 2480.Judge Head admitted that an argumentcould be made that he lacks jurisdictionto require sales or purchases of GrandGulf power because the UPSA is the subject of the Grand Gulf case in Footnote 1.
n For purposes of this article. referencewill be to the arguments of the partiesas those made by "the Arkansas porties" or "the cost equalization parties";the geographical division betweengroups is not exactly reflected in the division of legal and philosophical arguments but is for the most part. and thereferences serve the purpose of brevityin this article due 10 the number of par·ties in the various cases: for example, inthe System Agreement case. the partiesare: MSS; the four MSU operating companies; Arkansas PSC; jointly. theCities of Benton. North Little Rock, Osceola. and Prescoll. Arkansas. andFarmers' Electric Cooperative Corporation; jointly, the cities 01 Conway andWest Memphis. Arkansas; the Louisiana PSC; the City 01 New Orleans; the
128/Arkansas Lawyernuly 1985
City of Lafayette, Louisiana; the Mississippi PSC; Mississippi Representatives Wayne Dowdy and WebbFranklin; the Missouri PSC; the MissouriOffice of Public Counsel; AMAX; International Paper Co.; Occidental Chemical Corp.; Georgia-Pacific Coo; Mississippi Industries; Mississippi LegalServices Coalition; the Municipal Energy Agency of Mississippi; ArkansasIndustries <Reynolds Metals Co.. Rice·land Foods. Associated Industries ofArkansas. and Weyerhaeuser Co.);Union Carbide Corp.; Louisiana Representative W. J. Tauzin; the AttorneysGeneral of the states of Arkansas. Mississippi, and Louisiana; CongressionalDelegations of the states of Arkansas.Missouri. and Louisiana; and. the Stallof the FERC.
" 273 U.S. 83 (1927).16 See H. Rep. No. 621. 74th Congo 1st Sess.
17 (1935).I~ Hearings on H.R. 5423 before House
Comm. on Interstate and foreign Com..74th Congo 1st sesS. 1638 (935).
" H.R. Rep. No. 1318, 74th Congo 1st Sess. 7(1935).
" 324 U.S. 515 (1954)." 16 U.S.C. 884(bl." Ohio Power CO. V. fERC. 668 f.2d 880
(6th Cir. 1982). quoting FPC NationalGo. Pipeline Co. 315 U.S. 575 (1942).
'Xl In Re Pacific Gas and Electric Co.. 45F.P.C. 1153. aUd sub nom.. Northern California Power Agency v. FPC. Sl4 F.2d184 (D.C. Cir. 1971). cerl denied. 423 U.S.863 (1975); See. Richmond Power &: LightCo. v. FERC. 574 F.2d 610 (D.C. Cir. 19781.
21 See. Pennsylvania Weier Power &: CO. V.
FPC. 343 U.S. 414. 418 (19521; Flo. Power &Lighl Co. v. FERC. 617 F.2d 809. 816 (D.C.Cir. 1980); Towns of Alexandria. Minne.olo v. FPC. 555 F.2d 1020. 1028 (19771.
Z1 FPC. V. Conway Corp.. 426 U.S. 271(1976).
ZJ In the Grand Gulf case, AP&L is a signatory only for the purpose of consentingto the terms of the contract; it has norights or obligations under the UnitPower Sales Agreement to take powerfrom or pay for Grand Gulf. In the System Agreement case, the allocation 01power and cost of Grand Gulf is not provided for since it is covered by theUPSA. and the owner of the plant.Middle South Energy. Inc .. is a party toneither the SA itself nor the case.
24 350 U.S. 332 (956); See. Permian BasinArea Rate Cases, 390 U.S. 747 (968).
~ 350 U.S. 348 (1956).'lIl 16 U.S.C.§824e. which provides: When·
ever the Commission shall, after a hearing.... find that any rate ... demanded... for any ._. sale subject to the jurisdiction of the Commission ... is unjust.unreasonable. unduly discriminatory orpreferential. the Commission shall determine the just and reasonable rateand shall fix the same by order ... _"
n 473 F.2d 1253 (81h Cir. 19731.:II Southern Co. Services. Inc.. 20 FERC
61(19821.2! See. e.g.. Nantahala Power 8t Light Co.
v. FERC. 727 F.2d 1342 (41h Cir. 19841;Ohio Power Co. v. fERC, 668 f.2d 880(61h Cir. 1982).
~ 587 F.2d 1296 (D.C. Cir. 1978)." 606 F.2d 1156 (D.C. Cir. 1979); ludge Heed
also voiced this opinion in his decisionat page 97.
:l2 S2 F.P.C. 1343 (974). This case is alsoheavily relied upon by the Arkansas par·ties.
~ 324 U.S. 515 (19451.
J6 In his order enjoining the Arkansas PSCfrom further review or regulation of thefinancial agreements entered into byAP&L beginning in 1974. federal District
Judge Henry Woods found that the Avai1~
able Agreement and related financialagreements are so "inextricably bound"to the wholesale sale of power in interstate commerce that they are subject tothe exclusive jurisdiction of the FERC.Judgment and Memorandum Opinion inDockel No. LR-C-84-778. (Sept. 14. 1984)at 7-8.
:r. 119 R.I. 559. 381 A.2d 1358. cert. denied.435 U.S. 972 (1978).
:l6 United States Constitution. Art. 1. §8. cl.3.
71 Public Utilities Comm·n. of California v.United States. 355 U.S. 534 (958).
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New 1985-86 Officers
Newly elected President Don M.Schnipper, of Hot Springs, (seefront cover) assumed his positionon Saturday, june 8, at the close ofthe Arkansas Bar Association'sAnnual Meeting at the ArlingtonHotel. Hot Springs.
Richard F. Hatfield, of Searcy,was elected president-elect. andAnnabelle Davis Clinton, of LittleRock, was named to a fourth termas secretary-treasurer. Richard L.Ramsay was elected 1985-86 chairof the Young Lawyers' Section andMartin G. Gilbert was electedpresident of the Arkansas BarFoundation. Both are from PineBluff.
A partner in the Wood, Smith &Schnipper law firm, Schnipper isan alumnus of the University ofArkansas at Fayetteville School ofLaw and is a former national president of the U of A Alumni Association.
He is a member and formerchair of the State Board of Law Examiners. former chair of theArkansas Institute for ContinuingLegal Education and was twiceappoin ted in 1976 as specialassociate justice of the ArkansasSupreme Court.
Schnipper is a 1980 recipient ofthe Association's Golden GavelAward for exceptional service tothe Association. He is a formerchair of its Young Lawyers' Section and Executive Council. a former member of the House of Delegates and a former member andchair of the Association's LegalEducation Committee. Schnipperis a Little Rock native.
Hatfield, a partner in the Hatfield, Hodges, Marshall and Jordan law firm, is chairman of theArkansas Supreme Court Committee on Legal Specialization.
He was appointed a special justice to the Arkansas SupremeCourt in 1983 and was named anOutstanding Alumnus of the U ofA at Fayetteville School of Law.
A Texarkana native, Hatfield received the Association's GoldenGavel Award in 1976.
Richard F. Hatfield
Richard L. RamsayClinton is a graduate of Smith
College in Massachusetts and theUALR School of Law where shewas comments editor for theArkansas Law Review. She alsoattended the Institute for Paralegal Training in Philadelphiaand the University of Houston,Bates College of Law, where shewas a candidate for the HoustonLaw Review.
A former circuit judge for theFifth Division Circuit Court, Pulaski and Perry Counties, Clintonis with the Wright. Lindsey &jennings law firm and is a HeberSprings native.
Ramsay was elected YLS chairon Thursday, june 6, in HotSprings. He is a partner in the
Annabelle D. Clinton
Martin G. GilbertRamsay, Cox, Lile, Bridgforth, Gilbert. Harrelson and Starling lawfirm and an alumnus of the U of Aat Fayetteville School of Law. Heis a member of The American TrialLawyers of America and the Boardof Directors of United CerebralPalsy of Central Arkansas.
Gilbert, also a partner in theRamsay Cox Law Firm, waselected Foundation president onWednesday. june 5. He is analumnus of the U of A at Fayetteville School of Law, a former president of the jefferson County BarAssocialion and a former chair ofthe Association's Banking LawCommittee, and serves on theAlCLE Board of Directors. 0
July 19851Arkansas Lawyerll29
IN
MEMORIAM
James D. Storey
James D. Storey, aged 61. ofLittle Rock, died Saturday,February 23, 1985.
Storey was a member of theWright, Lindsey and Jenningsfirm in Little Rock for 32 years. In1984 he was inducted as a Fellowin the American College of TrialLawyers. Storey was a formerpresident of the Pulaski CountyBar Association (1978-79).
Born in Flint. Mich., Storey wasan Army veteran of World War IIand the Korean War. He servedas the Army's youngest officer atage 18.
In 1949, Storey graduated fromthe University of Arkansas Schoolof Law at Fayetteville. He was recently honored by the school as anoutstanding alumnus.
A member of the Arkansas BarAssociation for 28 years, Storeywas a former chair of its membership, public information, civil procedures, and professional utilization committees. He had served onthe Association's Executive Council and had chaired annual Association meetings.
130IArkansas Lawyer/July 1985
Storey was a member of the Pulaski County Bar Association, theArkansas Defense Attorneys'Association, the American Judicature Society and the InternationalAssociation of Insurance Counsel.
For eight years Storey was amember of the Arkansas Chapterof the Multiple Sclerosis Societyand was its chairman in 1971-72.He was a member and formerchairman of the Little Rock TrafficSafety Commission and was amember of the Governor's Advisory Board for Trailic Safety from1970-75.
He was also a member of thePleasant Valley Country Club andthe Club's Legal Advisory Board.He was a member of the HeightsOptimist Club and served the clubthree times as president.
Storey was an elder in the Westover Hills Presbyterian Church for25 year~.
Survivors are his wife. NormaIvy Storey of Little Rock; a son, J.Michael Storey of Little Rock; twodaughters, Kathryn Mainard ofCarrollton, Tex., and PennyStorey of Minneapolis, Minn.; hismother, Cora Crockett Storey ofParagould; a brother, RobertStorey of Paragould; a sister,Joanne Alexander of Madisonville, Ky.; and three grandchildren.
John Herman Spears
John Herman Spears, aged 84,01 West Memphis, died Monday,April 8, 1985.
Spears was a portner in the lawfirm of Spears, Sloan and Johnsonand was a former West Memphiscity attorney.
The West Memphis EveningTimes described Spears as a "selfmade man." A practicing Crittenden County attorney for 50 years,Spears never "set foot" in a law
school but. instead, learned hisprofession via correspondenceschool. He was one of threeamong 32 men to poss the barexam in 1934.
Spears, the son of an Imboden,Ark., farmer, quit elementaryschool in the sixth grade to helpsupport a large family. He enteredhigh school at age 22 after working for little more than a year without pay at the Imboden railroaddepot to become a telegraph operator. He passed the telegrapher'stest in 1923 and enrolled in highschool while assigned to the nightshift at Marion.
He later passed the Universityof Arkansas' entrance exam but,due to money problems, returnedto his Marion railroad job. He thenaccepted a telegrapher's job in theMemphis Frisco yards and attended Memphis State Universityfor three years. He took a job inGrandin, Mo., as the Depressionhit in the early 1930's and completed a law course by mail whilethere. It took him IS months.
Spears took a railroad job inTurrell in 1934 and practiced lawon the side until 1940.
From '1940 to 1944 he was deputyprosecuting attorney and in 1945he moved to West Memphis to fillthe city attorney's position. Heserved as city attorney until 1951.
A 3D-year member of the Arkansas Bar Association, Spearswas honored at the 1984 AnnualMeeting of the Arkansas Bar Association for his outstanding contribution to the legal profession andthe community and lor serving theprofession with dignity and honor.
He was a trustee of the Crittenden Memorial Hospital. the attorney for the Bank of West Memphis, and a member of the WestMemphis Chamber of Commerce.He was a former trustee of theBaptist Memorial Hospital inMemphis and of the Southern Baptist College in Walnut Ridge.
•
Spears was a former West Memphis alderman.
He was a member and trustee ofthe First Baptist Church and a former Sunday School teacher.
Survivors are his wife, WillieSue Robertson "Bill" Spears andthree brothers, Ernest Spears ofRichland, Wash., and Richardand ada Spears, both of Imboden.
Joseph Leo Tresp
Joseph Leo Tresp, aged 62, ofNorth Little Rock, died Wednesday, February 14, 1985.
Tresp was retired as a former regional counsel from the SmallBusiness Administration, wherehe had worked for 30 years.
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A native of Dallas, Tex., Trespwas a World War II Navy veteran,a past president of the DiocesanSchool Board and a 4th-degreeKnight of Columbus.
Tresp was also a member of theNational Association of RetiredFederal Employees and the German-American Club.
He was a member of the Arkansas Bar Association and St. Patrick's Catholic Church.
Survivors are his wife, EmmaFrancis Harbrecht Tresp of NorthLittle Rock; a son, Leo JosephTresp of Okinawa; eight daughters, Sister Rose Marie Tresp ofSpringfield, Mo., Nancy MarilynTresp of Bangui. Central AfricanRepublic, Mary Margaret Marineau of St. Louis, Mo., VirginiaSusan McAnally of CopperasCove, Tex., Teresa Ann Tresp ofSacramento, Cal., Patricia KarenTresp of Houston, Tex., and GeriLynn King and Lisa Yvonne Trespof North Little Rock; a brother,Bruce Tresp of Dallas, Tex.; foursisters, Margaret Burns of Dallas,Elizabeth Davis of Woodinville,Wash., Leontine Benton of Albuquerque, N.M., and Nancy Ladowski of Syracuse, N.Y.; and sixgrandchildren. D
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July 1985/Arkansas Lowyerll31
The Tax Reform Act of 1984By William T. Marshall
Changes inDivorce Taxation
The Tax Reform Act of 1984 (TRA)passed by Congress on June 22,1984, and signed into law by President Reagan on July 18, 1984 haschanged the rules relating to divorce taxation. The TRA is the firstmajor reform in federal divorcetax law in over forty years. Thisarticle briefly discusses how theTRA modifies the alimony rules,the dependency exemption rules,the allocation of the medical expense deduction rules, and theproperty transfer rules, includingthe repeal of Davis. The authorpresented a more in-depth outlineand presen tation of the new taxlaw as it relates to Divorce Taxation at the Arkansas Bar Association's annual meeting in June atHot Springs. A copy of this outlineis available to Association members upon request.
NEW ALIMONY RULES
In 1942, Congress attempted tocreate a uniform federal conceptof alimony. The actual application of the alimony rules, however, soon became dependentupon state law (i.e. state courts determined whether the payments
Editor's Note:
William T. Marshall is a certified public accountant andattorney. He obtained his Bachelor of Science, Master of BusinessAdministration and juris Doctordegrees all with honors from theUniversity of Arkansas. Prior topracticing with the Hatfield,Hodges, Marshall & jordan lawfirm in Little Rock, he was a taxpartner at House, Wallace, Nelson& jewell, P.A.
1321AJ-kansas Lawyer/July 1985
were for "a legal obligation forsupport" - alimony; or whetherthe payments were for "interestsin mari tal property" - propertysettlement).
Now, for the second time, Congress has attempted to develop afederal concept of alimony. The1984 attempt should prove muchmore successful because the taxconsequences will be largely determined by how the parties characterize the payments, ratherthan how state law would classifythe payments.
To qualify as alimony or separate maintenance payments, thepayments must satisfy five requirements;' (I) they must be incash; (2) be received under a divorce or separation instrument; (3)if the payments are made pursuant to a decree of divorce or separate maintenance. the spousescannot be members of the samehousehold when the payment ismade; (4) the divorce or separationinstrument must state that thepayor has no liability to makepayments past the payee's death;and (5) if payments in any calendar year are to exceed $10,000,then payments must be called forat least six consecutive calendaryears, beginning with the firstyear in which a payment whichotherwise satisfies the requirements of alimony is paid. inorder for any of the payments to betreated as alimony.2
In addition, alimony or separate maintenance payments madein any of the first five calendaryears of payments may not bemore than $10,000 larger than thealimony or separate maintenancepayments made in any succeeding year of the first six years of
payments. To the extent the eaTlier payment does exceed a lateryear's payment plus $10,000, thedifference is recouped as incometo the payor and is allowed as adeduction for the payee on their respective returns for the later year.This recapture front loading ruleis cumulative in effect in that anydecreased payment in a later yearis measured against the amountpaid in each of the preceedingyears as reduced by the amount ofexcess recouped in any intervening year.:!
There are three circumstancesin which these recomputationrules do not take effect, eventhough a prior year's payment exceeds a later year's payment bymore than $10,000; (I) if eitherspouse dies or the payee spouseremarries and the alimony or separate maintenance paymentscease for that reason, there isno recomputation for that year orany later year; (2) payments madeunder a suppart order or similartemporary court decree are notconsidered alimony or separatemaintenance payments for thispurpose (i.e.. the recomputationrules do not start until paymentsare made under a decree of divorce or separation or a writtenseparation agreement); and (3)payments are not counted to theextent the payor's liability is topay a fixed portion of the incomefrom a business or property orfrom compensation.
As under prior law, paymentswhich are fixed as child supportare not alimony or separate maintenance payments. However, theTRA makes a significant changefrom the way prior law was interpreted. Under the TRA, to the extent any payments are reduceddue to a contingency relating to achild, such as attaining a certainage, marrying, dying or leavingschool, the amount of the reduction in the payment would bedeemed child suppart. Paymentswhich terminate at a time that canbe clearly associated with a childrelated contingency would havethe same effect. such as paymentswhich terminate in the samemonth as a child's 18th birthday.'
The TRA will continue the existing rule that payments are firstallocated to child support. Thus,there can be no alimony until all
Smu 1886
WILSON ARKANSAS
MEDICAL EXPENSES AND READOF-HOUSEHOLD STATUS
The TRA allows either parent todeduct the medical expenses paidby that parent for the child, regardless of which parent is entitled to the dependency exemption for the child.'
The TRA redefines head-ofhousehold status to include anyhousehold which otherwise meetsthe definition for more than onehall instead of an entire taxableyear. Therefore, a custodial parent will now be able to qualify ashead of household in more situations. For example, the custodialparent can file as head of household in the following situations: (I)when spouses are still married atyear-end but lived apart for thelast six months of the year and (2)although the noncustodial parentis entitled to claim the dependency agreement under an agreemenL 10
PROPERTY TRANSFERSProbably the driving force be
hind the persistent and ultimatelysuccessful ellorts by the tax bar tochange the property division ruleswas the almost universal dissatisfaction with the results ofapplying Davis". In Davis, thetransferor was required to recognize as ain the dillerence be-
•
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Rather than handling the matter on a year-by-year basis, however, the temporary regulationsindicate that the parties can, andin most cases they probablyshould, decide the dependency exemption issue for all future yearsin the divorce or separation agreement. If the exemption is releasedfor more than one year, the original release must be attached tothe noncustodial spouse's returnand a copy of such release mustbe attached to his or her return forall succeeding taxable years forwhich he/she claims the dependency exemption.'
These TRA amendments applyto taxable years beginning afterDecember 31. 1984. Since dependency exemptions are determinedon a calendar year basis, the newlaw will apply to support payments beginning January I, 1985,and to tax returns filed for yearsbeginning in 1985. If a decree oragreement was executed prior to1985 and provides that the noncustodial parent may claim the dependency exemption then suchprovision will continue to controlprovided the noncustodial parentprovides at least $600 support tothe child in such year claimed.
child support payments in arrearshave been satisfied.'
If all of the foregoing requirements are met, thenpayments will be treated as alimony or separate maintenancewhich are deductible by the payorspouse and includable by thepayee spouse as taxable income.Tbe parties can, however, designate that the payments are notto be taxable to the payee and arenot deductible by the payor. Acourt may also make this designation in a decree or order.
The option to make the payments not alimony could be exercised by including in an agreement the words, "Such paymentsare not includable in gross income under I.R.C. Section 71 andnot deductible under I.R.C. Section 215." Without these words, allpayments otherwise qualifiedwill be treated as alimony.
The TRA alimony rules apply toall divorce or separation instruments executed after 1984. Instruments executed before 1985and thereafter modified will besubject to the new alimony rules ifsuch modification expressly provides that the instrument is to besubject to the 1984 Act. If a decreeof divorce or separate maintenance executed after December31, 1984, incorporates or adoptswithout change the terms of thealimony or separate maintenancepoyments under a divorce or separation instrument executed before 1985, such decree will betreated as executed before 1985.
DEPENDENCY EXEMPTIONSAs in the case of property set
tlements and alimony, thespouses can determine by agreement who will be allowed the dependency exemption for theirchildren.
Under the general rule, the parent with custody of the child formore than one-hall of the calendar year will be allowed the dependency exemption. This is trueeven though the noncustodialspouse provides most or all of thechild's support.'
The TRA provides that on a yearby-year basis the custodial parentcan surrender the dependency exemption to the other parent by executing a written declaration tothat ellect.' The form of thewritten declaration will be pre-
July 1985IArkansas Lawyer/l33
We do more than print the lawwe put it into perspective...
od 01 such potential liability . Suchrecords must be preserved andkept accessible by the transferee. 17
CONCLUSIONThe domestic relations provi
sions in the Tax Relorm Act of 1984more clearly described the parameters by which parties can determine, by agreement, the tax consequences of transactions pursuant to divorce. Therefore, a taxadvisor should be consulted toassist in the settlement process aswell as the preparation 01 the settlement documentation. 0
FOOTNOTES
I Internal Revenue Code (I.R.C,) §7l(b)(1)., l.R.C. §7I(fXl).'l.R.C. §7I(fX2).• l.R.C. §7I(cX2)., l.R.C. §7I(cX3).'l.R.C. §152(eXI)., l.R.C. §IS2(eX2).• Temp. R"\!. §1.l52·4T., l.R.C. §213<b).w l.R.C. §44A(lXIS)." U.S. v. Davis. 370 U.S. 651 (1962).12 Supplemental Report of the Committee
on Ways and Means, U.S. House of Rep·resentatives on H.R. 4170 at 1491.
"l.R.C. §1041."l.R.C. §104I(c)."Temp. Reg. §l.104-IT(bl." l.R.C. §104I(b).17 Temp. Reg. §1.l04-IT(e).
u.S. Supreme Court Reports. L EdusesFederal Procedural Forms. L EdFederal Procedure, L EdBankruptcy Service. L Ed
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the transler ("carryover basis")and the transferee is treated ashaving held the property as longas the transferor did ("tracking" 01holding period)." This nonrecognition applies even if theparties are dealing with eachother at arms-length in a nondivorce or separation situation.Therelore, the subsequent tax consequences of the translereeshould be taken into consideration when negotiating the purchase price.
The temporary regulations impose notice and recordkeeping requirements with respect to transactions under I.R.C. §1041. Atransferor 01 property under Section 1041 must, at the time 01 thetransler, supply the transfereewith records sufficient to determine the adjusted basis and holding period of the property as of thedate of the transfer. In addition, inthe case 01 a transfer 01 propertywhich carries with it a potential liability lor investment tax credit recapture, the transferor must. atthe time of the transfer, supply thetransferee with records sufficientto determine the amount and peri-
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tween the fair market value andthe basis of property he transferred to his spouse at divorce insatisfaction of her inchoate marital rights. The transferee, in turn,took the property with a basisstepped up to its value as 01 thedate of the transfer.
According to the supplementalreport of the new act by the Committee on Ways and Means, thegovernment wanted the changefor two reasons: First. the currentrules governing translers 01 property between spouses or formerspouses incident to divorce havenot worked well and have led tomuch controversy and litigation.Second. in divorce cases, the government often gets whipsawed. 12
The transleror will not report anygain on the transfer. while the recipient spouse, when he or shesells, is entitled under the Davisrule to compute his or her gain orloss by reference to a basis equalto the lair market value of theproperty at the time received.
The TRA added new I.R.C. §1041which provides that no gain orloss will be recognized on transfers 01 property to a spouse. Transfers to a former spouse are alsonontaxable, if the transfer is incident to a divorce." New I.R.C.§104l(c} provides that the transferis incident to divorce if such transfer: (l) occurs within one year afterthe date on which the marriageceases, or (2) is related to the cessation of the marriage. This provision could cover any transfer required by the divorce instruments'even if made many years alter thedivorce. It To prevent divorcingspouses from choosing certaintransfers on which they want taxable treatment. the IRS has takenan expansive view of which translers are related to the cessation ofthe marriage. The Temporary Regulations provided that a transferof property is treated as related tothe cessation 01 the marriage ifthe transfer is pursuant to a divorce or separation instrument.and the transfer occurs not morethan 6 years alter the date onwhich the marriage ceases. l~
For measuring the taxable gainor loss of the transleree on thesale of the property alter the transler, the transferee's basis in theproperty is deemed to be the transleror's basis in the property before
134IArkansas Lawyerlluly 1985
EXECUTIVE DIRECTOR1S REPORT
Long Range Planning Conference to be Held
By William A. Martin
New Members
We added 67 new lawyer members to the Arkansas Bar Association in April. Last January yourHouse of Delegates amended theAssociation's By-Laws to providefree memberships to newly admitted lawyers without the necessity of making an application forthe balance of the bar year inwhich admitted (until the following July).
We welcome these new members and hope they will be activein the work of the Association andwill pay dues when the first billcomes. We would like for those ofyou who have been members toencourage these new attorneys inyour community to volunteer forcommittee work - either YoungLawyers' Section committees orAssociation committees. Theyhave a lot to contribute and willgrow in the profession if they getinvolved.
- For everyone - please tell usahout your interests in committeework. The Association's presidentand Young Lawyers' chair cannotread your mind and they do notwant to leave out anyone whowants to be involved. If you didnot return a preference sheet, youcan still tell us of your interestsand there is still room for addedmembers on many committees.
For the Admission Ceremonythis spring, we tried somethingnew - a reception in the lobby ofthe justice Building, handouts ofinformation and absolutely nospeeches. We had many of ourleaders there with name tags sothe new lawyers could easily identify and meet with them and thejudges on an informal basis. Thischange seemed well received anda welcome contrast to trying to get
the new lawyers to walk over tothe old Supreme Court Room inthe Capitol. listen to numerouspitches about almost every bargroup imaginable, then rejointheir families and come to theArkansas Law Center for a reception. We plan to continue our newformat and hope more practicingattorneys will come to the reception.
IOLTA
The Arkansas IOLTA Foundation, Inc., the non-profit corporation authorized by the ArkansasSupreme Court to handle intereston lawyers' trust accounts, hashad its organizational meeting.Associate justice David Newbernwas elected the first president ofthe corporation. The work ofachieving recognition of tax exempt status and working out banking arrangements is underway.When these jobs are completed,Norwood Phillips, chair of theIOLTA Education and RecruitmentSubcommittee, will start contacting lawyers to put their nominaland short term trust funds whichare too small to draw interest forindividual clients into IOLTA accounts where they will, as justiceP. A. Hollingsworth noted: "... bea very significant source of in·come for the benefit of public interest programs related to the legalprofession." (Re: Ark. Bar Assn.Pet. for IOLTA Program, 283 Ark.252, 675 S. W. 2d 355 (984) ).
Long Range Planning
David M. "Mac" Glover has accepted President Don Schnipper'sinvitation to chair the Association's Long Range Planning Conference next spring. Associationleaders will gather Thursdaythrough Saturday, May 1-3, 1986,at the Sheraton Hotel on LakeHamilton, Hot Springs, to look at
where we are as an Associationand where ·we should be going inthe next few years. We skippedhaving a conference this year partly because of the emphasis onour legislative work and partly because interest in long range planning seemed to be lagging lastyear after a series of conferenceseach year.
Preparation is a key to a successful conference and we wouldlike to have volunteers who wouldlike to be involved and we wouldalso like your suggestions aboutissues which should be considered. Please let Mac, Don or mehear from you.
Dues
Arkansas ranks 38th in theamount of annual dues out of 55state bors and bar associations,according to a survey conductedby the Florida Bar Association. Incoming up with this figure, theSupreme Court license fee andsimilar charges were added to thedues of voluntary associationssuch as ours to enable a comparison to states with unified bars.Our $125 total for lawyers in practice more than ten years is farbelow the top of $310 for Alaska,$300 for Delaware, $275 for Connecticut and $273 for Hawaii. Tenothers have dues of $200 or more.At the low end of the scale areAlabama, Georgia, Louisianaand Oklahoma - all states inwhich every attorney is compelledto belong to be licensed - withyearly dues of $100.
The 55 figure - instead of 50 is accounted for by including theDistrict of Columbia and by Virginia, North Carolina, West Virginia and the District of Columbiahaving two associations - a mandatory one which handles discipline, admission and similar mat·ters and a voluntary one. 0
July 1985JArkansas Lawyerl135
YOUNG LAWYERS' UPDATE
Ramsey Elected YLS Chair
Association of Behavior Trial Consultants
Trial ConsultationMelissa A. McMath, M.S., L.A.C.
Worthen Bank Bldg.Little Rock, Ark. 72201
501-374-1169
By Martha M. Miller, Chair
On Monday April 8, 1985, 67 newlawyers were admitted to the Barof Arkansas. In their honor theYoung Lawyers' Section, in cooperation with Arkansas SupremeCourt Clerk Dona Williams, entertained these new lawyers andtheir families at a reception inthe foyer of the Justice Buildingimmediately following their induction. Several special guestsalso attended: Arkansas SupremeCourt Chief Justice Jack Holt, andAssociate Justices George RoseSmith, Darrell Hickman, RobertDudley, John Purtle, David Newbern, and Steele Hays; ArkansasCourt of Appeals Judges DonaldCorbin and Melvin Mayfield;Attorney General Steve Clark;Fayetteville Law SchQol AssistantDean Jim Miller; Arkansas BarAssociation President William R.Wilson, Jr.; ABA President ElectDon Schnipper; and ABAlYLSChair Elect Richard L. Ramsay.Congressman Beryl Anthony alsowas present to watch his spouseSheila Foster Anthony receive herlicense. At the suggestion ofChairman Edward Boyce of Newport, the program format waschanged deleting all speechesfrom the YLS portion of the ceremony and making the eventmuch more enjoyable.
Criminal Defense HandbookThe final draft of the Criminal
Defense Handbook will be goingto the printer sometime duringJune, and will be available at theABA Fall Legal Institute September 19 and 20, 1985. The FallLegal program will be devoted topreviewing portions of the Handbook and is shaping up to be oneof the finest seminars YLS hasbeen associated with. RacehorseHayes has agreed to be the keynote speaker for this event, andCo-Chairman Sam Perroni deserves yet another pat on the back
t36/Arkansos Lawyernuly 1985
for his continuing fine efforts inboth editing the Handbook andserving as Program chairman ofthe Fall Legal Institute. Mark yourcalendars now; you won't want tomiss this one.
Chair-Elect Richard L. Ramsayattended the American Bar Association Young Lawyers DivisionAffiliate Outreach Project BarLeadership Institute in St, Petersburg, Florida this post May. Rickacceded to the office of chair ofYoung Lawyers' Section duringthe Annual Meeting in HotSprings in June.
Other YLS officers and members of the Executive Councilwere elected on June 6 during theAnnual Meeting in Hot Springs.Thomas Ray of Little Rock was theonly candidate who filed a nominating petition for the office ofchair elect,
Since this is my last edition ofthe YLS Update, I want to thankeveryone who helped make thisyear a successful one for theYoung Lawyers' Section. AlthoughI can't possibly name each ofthese individuals due to space
Jury SelectionWitness PreparationVerbal-Nonverbal Analysis
limitations, I do want to recognizethe officers and Executive CounciL and each of the committeechairs for their time and efforts.Several "old" lawyers have alsocontributed to our efforts and deserve special mention: ABA President Bill Wilson; John Stroud,chairman of the Bar FoundationSpecial Projects Committee; andother members of the Bar Foundation who made many of our programs possible due to their generous funding.
And, finally, two non-lawyersmust be mentioned. Ruth Williams of the ABA staff has devoteda great deal of time and attentionto two new major YLS projects, theMock Trial competition and theAETN video series "Ways of theLaw." The other non-lawyer isABA Assistant Executive DirectorJudith Gray. Those of you whohave ever worked with Judithknow that her contributions aretruly invaluable. She has been involved in every facet of the YLSprogram and we owe her a veryspecial "Thanks!".
o
Case PresentationVoir Dire Analysis
Post Trial Jury Review
ARKANSASBARFOUNDATIONBy Robert L. Jones, III
ASSETSREPAIR AND
CURRENT ASSETS OPERATING TRUST REPLACEMENT TOTALChecking Account 5 6.067.t3 5 1.463.80 5 5 7,530.93Savings Account lO.t68.26 64. t73. t3 10.470. to 84,811.49Certificate of Deposit ·0- 25,000.00 20,000.00 45,000.00Interest Receivable 2,371.50 14.084.90 1,432.62 17,889.02
TOTAL CURRENT ASSETS $ 18,606.89 5104,721.83 $31.902.72 $ 155,231.44INVESTMENTS $ 56.494.17 561.551.88 50,000.00 668,046.05INVESTMENT MANAGEMENT
ACCOUNT (RANSICK) 5 14,134.36 14,134.36PROPERTY 8< EQUIPMENTLond, Bldg. 8< Equip. $1.594,715.92 51,594,715.92Less: Accum. Depree. 1398,934.551 1398,934.55)NET PROPERTY 8<
EQUIPMENT 51,195,881.37 51.195,881.37OTHER ASSETSUtility Deposit $ 10.00 $ 10.00TOTAL ASSETS $1.285,126.79 5666,273.71 581.902.72 52,033,303.22
LIABILITIES AND MEMBERS' EQUITYCURRENT LIABILITIESNotes Payable 5 6,728.11 5 6,728.11ABA Escrow Account 579,785.11 79,785.11ABA Accrued Interest
Payable 1.432.62 1,432.62Siale Income Tax ·0- -0·TOTAL CURRENT
LIABILITIES 5 6,728.11 5 -0. 581,217.73 5 87,945.84LONG TERM LIABILITIESNoles Payable less
current Maturities $ 692,995.24 5 692,995.24Deferred Compensation 14,134.36 14,134.36TOTAL LONG TERMLIABILITIES 5 707,129.60 $ 707,129.60DEFERRED INCOMEDeferred. Lease Income $ 86.300.00 5 86,300.00TOTAL LIABILITIES 5 800,157.71 5 ·0· 581,217.73 5 881,375.44MEMBERS' EQUITYUnrestricted Surplus-
Appropriated S 379.78 S 53,989.44 S 5 54,369.22Unappropriated 481.536.97 401.647.67 684.99 883,869.63
Current Year ExcessRevenues over Expenses 3,052.33 46,405.63 49.457.96Restricted Surplus 164,230.97 164,230.97
TOTAL MEM8ERS' EQUITY $ 484,969.08 5666,273.71 $ 684.99 51,151,927.78TOTAL LIABILITIES8< MEMBERS' EQUITY $1,285,126.79 5666,273.71 581.902.72 52,033,303.22
The Foundation banquet held inconjunction with the Mid-WinterBar Association meeting in January 1985 in Little Rock was againa success. Scholarship and research grant recipients were honored. The dinner was open toFoundation members and theirguests. Chief Justice Jack Holtspoke on the need for higher andbetter quality of justice. Over 175persons attended.
Membership in the Foundationhas continued to grow. During thelast nine months 24 attorneys be-
came Fellows. The Foundationnow has 355 living Fellows.
In the July 1983 issue of theArkansas Lawyer, then Chairman, Randy Ishmael, printed theFoundation's linancial status. Ibelieve it is good practice to periodically furnish the Associationmembership with this information. Printed below you will lindthe balance sheet of the ArkansasBar Foundation as of March 31,1985.
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IN-HOUSE NEWSLaw Schools. AICLE and House of Delegates
UNIVERSITYOFARKANSASSCHOOL OFLAW ATFAYETIEVILLE
By J. W. Looney
Alumni Day ActivitiesAlumni Day, 1985,
was highlighted by aluncheon which featured a tribute to thetrial judges of Arkansasincluding the FederalDistrict Court judgesand Circuit and Chancery judges. WilliamWilson, Jr. and Winslow Drummond honoredthe judges. A secondfeature of the programwas a tribute to Dr.Robert A. Leflar uponthe forthcoming releaseof his latest book "OneLife and the Law: ASixty-Year Review."Judge J. Smith Henleyreviewed the careerand contributions of Dr.Leflar. Jack Gordon, a1969 graduate of thelaw school presented abronze bust of Dr. Leflarto the law school andDr. Leflar then spokein celebration of the60th Anniversary of theSchool of Law.
Also a featured partof the program was theannouncement by theWomens Law Caucusof the first Gayle PettusPontz award to be givenannually to an out-
1381Arkonsas Lawyer/July 1985
standing female lawyer. The award was presented to Mrs. Pontz,as the first femalegraduate of the lawschool and in recognition of her distinguished career.
The Student Bar Association announced theselection of ProfessorRichard Atkinson forthe "Professor of theYear" award. ProfessorAtkinson teaches property, decedents estatesand real estate transactions.
Faculty ActivitiesCharles Carnes has
an article in the most recent issue of the Journalof Agricultural Taxationand Law, entitled"Worker CompensationTexas Extends Coverage to AgriculturalWorkers."
Linda Malone has afeatured article in Agricultural Law Update.the newsletter of theAmerican AgriculturalLaw Association entitled "The Future ofTransferable Development Rights in the Supreme Court."
Jake Looney's article"Modification of Arkansas Water Law: Issues and Alternatives"appeared in theArkansas Law Review.
John Watkins article"Open Meetings Underthe Arkansas Freedomof Information Act" alsoappeared in the Arkansas Law Review.
Rodney Smolla has anarticle in ConstitutionalCommentary entitled"The Supreme Court
and the Temple ofDoom: A Short Story."
Chris Kelley has anarticle in the ArkansasLaw Review, entitled"The Southern Pulpcutter and the ShortStick: The MississippiUniform Pulpwood Scaling and Practices Act."
Dr. Robert Leflarspoke at an ArkansasUnion Program Symposium on "Our JudgeMade Law."
Wylie Davis delivered an Oxford Lecture,"The Emergence of'Good Faith' and 'BadFaith' as Major LegalNorms."
Linda Malone moderated a panel on"International Perspectives on Food, Development and Peace"at the Third Annual Fulbright Institute Symposium.
Dean Jake Looneyconducted a workshopat Lake Louise, Alberta,Canada on "EstatePlanning for AlbertaFarmers and Ranchers:" spoke in Orlando,Florida on "The Effect ofMember Bankruptcy onCooperatives" to theFlorida Council of Cooperatives and on thesame topic at the University of FloridaSchool of Law.
Dean Looney alsoserved as educationalleader for a legal studytour of the U.S.S.H. Agroup of lawyers andtheir spouses, fromArkansas, Oklahoma,Louisiana and Kansastoured four cities in theU.S.S.H. and met with
Soviet lawyers, judgesand government officials to study Sovietlaw. Arkansas lawyersin the study group included Truman Yancyof Fayetteville; Bill andMarion Penix of Jonesboro; Greg Smith of FortSmith; John HarrisJones of Pine Bluff andMaurice Cathey of Paragould.
Moot Court TeamWinners Selected
Chief Justice JackHolt, Jr., and AssociateJustices Steele Haysand David Newbernserved as judges of thefinal rounds of competition for selection of theUniversity of ArkansasMoot Court Team. Thenational team membersselected were Mike Rosenthal. Leanne Johnson, Stephen Garnerand the alternate. KenTreece. Best brief scoreaward was to Mike Rosenthal and Outstanding Team Award wasgiven to the team ofMike Rosenthal andLewis Steenken.
UNIVERSITYOFARKANSASAT LITTLEROCKSCHOOL OFLAW
By John M. Sheffey
ALTHEIMER LECTUREProfessor Victor J.
Stone of the Universityof Illinois College ofLaw delivered theSpring Altheimer Lecture on Friday. March 8.The title of his addresswas "Approaching TwoHundred: Is The Judicial Check In Balonce?". ProfessorStone. who is a Constitutional Law andCivil Procedure Scholar. argued forcefullyand persuasively thatstrict construction of theConstitution by theUnited Stales SupremeCourt would be inappropriate. His thesis wasthat the Constitutioncan remain a living document which adapts tomodern issues only ifthe Supreme Court is allowed some flexibilityin its interpretations.
While on the LawSchool campus. Protessor Stone also spoketo the law studen tsabout his recent experience in arguing a casebefore the SupremeCourt of the UnitedStates.
In addi tion to hislegal scholarship interests. Professor Stonehas been very active inthe Association of American University Professors, serving tha1 organization in numerouscapacities on the university. state andnational levels. Heserved as presiden t ofthe national organization from 1982-1984.
ALUMNI ASSOCIATIONMEETING
The UALR Law SchoolAssociation continuedto hold its monthly luncheon meetings in LittleRock. In February Carolyn Long. anchor person for KARK TV NewsCenter 4. spoke on herinvolvement in the libelsuit of KARK vs. Simon.She also shared her re-
actions to and thoughtsabout libel suits againstbroadcast journalists.
The April meetingheard Sheffield Nelson.an alumnus of the LawSchool and formerchairman and chief executive officer ofARKLA. discuss deregulation. Nelson is opposed to deregulationin general. fearing thatit will result in both a reduction in services andan increase in prices.
FACULTY NEWSProfessor Glenn E.
Pasvogel. Jr. led apanel discussion of"Bankruptcy and Banks- Current Trends." atthe Banking Law Seminar sponsored by theArkansas Institute forContinuing Legal Education and the Arkansas Bar Association.Professor Pasvogel presented a series of questions focusing on eUTrent issues in Bankruptcy Law that affectbanks. and then moderated the discussionamong several expertsin the area.
Professor Fred Peelparticipated in a paneldiscussion on EconomicDevelopment in Arkansas. The panel. whichwas sponsored by PhiKappa Phi, includedrepresentatives of otherdepartments at UALH,as well as Tom MacRaeof the Winthrop Rockefeller Foundation.
The UALR International Trade Center presented an exportingseminar on February22. Professor Arthur G.Murphey was one of thespeakers. and he addressed the subjects ofagency. oral contractsfor the sale of goods. formation of contractsunder American and foreign law and the ViennaTreaty of 1980. and conflicting terms in contracts.
Professor Philip D.Oliver has been appointed Visiting Professor at the University ofFlorida College of Lawfor the Fall. 1985 semester. He will teach inboth the J.D. and LL.M.Tax Programs.
Donaghey Distin-guished Professor ofLaw Robert R. Wrightchaired a joint ABAAALS Inspection of theUniversity of AlabamaLaw School in March.
Professor Richard A.Burke. a native ofArkansas who recentlyjoined the faculty fromthe University of SouthDakota School of Law.which he served as bothdean and professor.spoke to the HelenaRotary Club on "Increasing Litigation andthe Supreme Court ofthe United States." Healso addressed theJonesboro Rotary Clubwhere his topic was,"Business and Professional Ethics." Professor Burke. an outspokenadvocate of greater attention to legal ethics.also spoke on professional ethics issues onKARN radio.
An article entitled."The Unconstitutionality of State InsuranceTakeover Statutes: AnUnfortunate But NotNecessarily Final Resuit." by AssociateDean and Professor ofLaw John M. Sheffey.was published in Volume 69 of the MinnesotaLaw Review.
Professor James R.Cromwell will edit the1985 update to theArkansas Legal Services Support CenterPoverty Law PracticeManual. He will alsoauthor the 1985 updatefor the UnemploymentCompensation Chapter. Professor Cromwellcontinues to be activeon a subcommittee of
the Arkansas Bar Association Civil Procedures Committee concerned with the proposed aboli tion of localcourt rules.
Librarians Ruth Brunson. Dana Davis, Pauline Ghidotti and MikeHankins attended theSouthwestern Chapterof Law Libraries annualmeeting in Fayettevilleon March 28-30.
Professor Susan Webber Wright spoke at theTwenty Fourth AnnualArkansas Natural Resources Law Institute.Her topic was "Fiduciary Duties Arising FromOwnership of Oil andGas Interests."
ATLA PROGRAMAT UALR
UALR School of Lawwas host to a NationalCollege of AdvocacyBasic Course in TrialAdvocacy on March 2429. The course wassponsored by the Association of Trial Lawyersof America. Over 100practicing trial lawyersparticipated. This wasthe largest number ofstudents ever to attenda National Collegecourse. The large enrollment was due in nosmall part to the organizational efforts ofWalter Niblock of Fayetteville. The facultywas composed of outstanding trial lawyersfrom all parts of the nation, as well as severalof Arkansas most respected trial lawyers.UALR law professorsPaula Casey and DentGitchel also served onthe faculty. The courseconsisted of six days ofintensive lectures. demonstrations. workshopsand one-an-one videocritiques of student performance. There wasgeneral agreement thatthe program was a resounding success.
luly 1985 Arkansas Lawyer/139
Suite 400, Continental Building100 Main St., Little Rock, Ark.
1-501-375-1439
TOM M. FERSTl, MAl, SREA
C. Lessel. of Little Rock,focused on the following topics: real estatetransactions; divorce;time value of moneyconcepts; tax shelters;income shifting/splitting, and complianceand record keeping.Ray Keenan, director ofthe Internal RevenueService Center for theSoutheast Region inMemphis, spoke on thetransition of IRS jurisdiction over Arkansasfrom Southwest toSoutheast regions. Thisprogram was enthusiastically received by 100registrants.Irving Younger Returns
AICLE and the Arkansas Trial LawyersAssociation are jointlysponsoring a one dayseminar featuring Professor Irving Younger on Friday, September 6 at the UALRConference Center.
Professor Younger'stopics will include hearsay in the morning andcredibility and crossexamination in theafternoon.
Don't miss this rareopportuni ty to attend a"live" one day sessionwith Professor Younger. []
licers of local laborunions and state andfederal employees. Anumber of people attended from SouthernMissouri. Western Tennessee, Mississippi.Louisiana, Texas andOklahoma.
Topics included refusal of unsafe work;sex discrimination;duty of fair representation; arbitration; wagedetermination and comporable worth; plantclosures and the duty tobargain; public sectorbargaining; "hot issues under the National Labor RelationsAct; employment atwill; current trends incollective bargainingand the Fair LaborStandard Act.
Judge Richard Arnoldmade a presentation onthe update of relevantlabor in em ploymen t relations decisions in theEighth Circuit.Tax Awareness Institute
The 7th annual TaxAwareness Institute.jointly sponsored by theAssociation's TaxationSection was held at theUALR Conference Center in Little Rock onApril 26. This year's program, chaired by John
Member:Arkansas Bar AssociationArkansas Realtors Assn.
Society of Real Estate AppraisersAmer. Institute of Real Estate Appraisers
Court Testimony ...Real Estate Counseling ... Feaslbility StudiesCommercial and Residential Real Estate Appraisals
programs will continueto increase as more andmore Arkansas lawyersrealize this unique opportunity to attend lirstclass CLE programming with a minimumexpense in time andtravel.
Other t.v. satelliteprograms were on buying and using computers in law offices,May 8; evaluating apersonal injury case- the brain damagedchild, May 14; UCCstrategies under Articles Two and Nine,May 15; and Cable Communications Policy Actof 1984, June II.
Labor Law InstituteThe Labor Law Insti
tute, jointly sponsoredwith the Association'sLabor Law Section, Region 26 of the NationalLabor Relations Board,UALR Labor EducationProgram and the American Arbitration Association, was held April 1920 at DeGray Lodge,Arkadelphia. The ISOregistrants representedattorneys specializingin various areas oflabor law and employment discrimination,personnel managers,business agents and of-
By Claibourne W. Patty, Jr.
1985 Banking LawSeminar
This year's biennialBanking Law Seminar,co-sponsored with theAssociation's BankingLaw Committee washeld March 22-23 at theSheraton Inn, HotSprings. The program,chaired by Mark Lester,tackled usury, one ofthe oldest problems forArkansas lawyers, andthe Organized CrimeControf Act (RICO), andbankruptcy, one of thefastest growing problems.
A panel composed ofMartin Gilbert. BakerCurrus, Chris Barrierand Steve Watson discussed usury problems;Professor Glenn Pasvogel. Jill Jackoway,bankruptcy judges Robert Fussell and JamesMixon, David Po;"'elland W. E. Ayers discussed bankruptcyproblems, and JerryJones and John Lisle discussed RfCO issues.
The program was attended by 73 persons,two thirds of whomwere lawyers, with theremaining one thirdbankers.TV Satellite Programs
Two t.v. satellite programs on computer lawand real estate planning for aged and incapacitated clients,and another on governmental liability underanti-trust laws, werepresented simultaneously at Little Rockand Fayetteville onFebruary 26, March 26and March 20. Approximately 40 people totalhave attended theseprograms. It is anticipated that attendanceat these t.v. satellite
~.I.C=;.~.~.
N~WS
140/Arkansas Lawyer/July 1985
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