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19 Litig. News 1 (1993-1994)

handle is hein.journals/lignws19 and id is 1 raw text is: OCTOBER 1993 VOLUME 19, NUMBER I LITIGATION NEWS ABA Urges Legislation to Restrict Banking Agencies from Obtaining Asset Preservation Orders Against Lawyers R e ABA House of Delegates re- cently approved and adopted resolutions calling for several amendments to the Federal Deposit Insurance Act to modify and limit the authority of federal bank- ing agencies to obtain asset preservation orders and issue cease-and-desist orders. The resolutions, which were adopted in August at the ABA Annual Meeting in New York, are based on the final re- port and recommendations of the ABA Working Group on Lawyers' Represcn- tation of Regulated Clients. The House also directed the ABA to oppose the fed- eral agencies' interpretations and uses of Coverage of 1993 ABA Annual Meeting Pages 1, 8-11 Special hisert: Section Committees Offer Opportunities for All to Join by Ralph A. Taylor, Jr., Associate Editor the rules of professional conduct. The House of Delegates' action is embodied in nine resolutions, all co- sponsored by the Section of Litigation and recommended by the Working Group. A key resolution calls for amendment to the Act to require federal banking agen- cies to seek priorjudicial approval for the imposition of any asset freeze order directed to institution-affiliated parties -a term that, under certain circum- stances, includes attorneys. The House also directed the ABA to ask Congress to clarify that the agencies arc precluded from using their cease-and-desist powers Supreme Court Rejects Due Process Challenge to Punitive Damages Award by Christine S. Sherry, Associate Editor Sl n a closely watched case, the the Due Process Clause. Stevens foun d' Supreme Court has declined to delineate that the award in this case-a common a bright-line due process standard for law slander of title action in West Vir- assessing punitive damage awards. ginia state court-was not so excessive In TXO Production Corp. v. Alliance as to offcnd due process in light of the Resources Corp., U.S. Supreme Ct. 92- amount of money at stake, the bad faith 479, 61 U.S.L.W. 4766 (June 25, 1993), and wealth of TXO, and the fact that the the Court rejected substantive and pro- scheme employed was a part of a pattern cedural due process challenges to a $10 of fraud, trickery, and deceit. In so do- million punitive damage award, which ing, Stevens found that although the was some 526 times the amount of con- parties' desire to fornulat a test was pensatory damages awarded. 'lie plurali- understandable, neither respondents pro- ty opinion held that the Court need not posed rational basis standard nor TXO's and indeed.., cannot, draw a mathe- proposed heightened scrutiny standard matical bright line between the constitu- was applicable. The Court also rejected tionally acceptable and constitutionally various procedural due process attacks. unacceptable that would fit every case:' In a separate opinion, Justice Anthony In his plurality opinion, Justice John Kennedy disagreed that the focus of sub- Paul Stevens, speaking for Chief Justice stantive due process analysis should be William Rehnquist and Justice Harry on a reasonableness standard, but rather Blackmun, concluded that the reasonable- should be on ensuring that the award does ness of a punitive damages award should not reflect juror bias, passion, or preju- be considered in determining whether it dice. Justice Kennedy concluded that the violates the substantive component of (continued on page 6-Damages) to secure the payment of money damages claims that otherwise ordinarily arc available only through prosecution of damages suits. In urging adoption of these resolu- tions, the Working Group's report to the House of Delegates notes that the federal agencies, especially the Office of Thrift Supervision, have not hesitated to use their cease-and-desist powers against a (continued on page 10-Preervation) Need for Lawyers to Represent Children Grows by Christine E. Sherry Associate Editor Mave you ever represented a child? Would you take a case on behalf of a child who was subjected to parental abuse, who had been denied special education bene- fits, or who needed access to health care? The Section of Litigation, through its Task Force on Children, is now urg- ing its members to do just that. At the ABA Annual Meeting in New York, a Presidential Showcase program entitled Who Will Remember the Children? Meeting Children's Legal Needs: A Call to Service brought together a blue rib- bun panel of Section lawyers who under- scored the desperate need for providing pro bono legal services to children. A. Leon Higginbotham, Jr., Philadel- phia, a senior judge of the Third Circuit Court of Appeals, emphasized the need for providing children with legal repre- sentation. Higginbotham recently chaired an ABA Presidential Working Group on the Unmet Legal Needs of Children. The Working Group published a report, America's Children at Risk:' which de- tails the obstacles facing American (continued on page iI-Chidren)

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