Tuesday, May 22, 2007

Federal Judge Grants 900K in Fees

May 22, 2007

NELVIN CEPEDA / Union-Tribune
A fight over legal fees is swirling around the Mount Soledad cross.

A federal judge said yesterday that the city of San Diego must pay more than $900,000 in legal fees to the attorney for Philip Paulson, the atheist who sued over the presence of the Mount Soledad cross on city land.

U.S. District Judge Gordon Thompson Jr. ordered that the city pay lawyer James McElroy $962,673.28 for his work on the case over the past four years.

Thompson is the same judge who ruled in 1991 that the cross on city land violated the state constitution's ban on government preference for religions – a ruling that touched off an epic legal battle that continues today.

City Attorney Michael Aguirre immediately said Thompson's ruling would be appealed.

He said the city would argue, as it did unsuccessfully in front of Thompson, that McElroy is not entitled to fees because he was not on the winning side.

McElroy had argued that he had, in fact, won – even though Thompson's 1991 order was never carried out.

....

“The federal government would not have taken the cross if not for this lawsuit,” McElroy said after yesterday's hearing. “When the federal government took that land that solved the constitutional problem in Paulson's suit – and we effectively won.”

But Aguirre said that the city will argue McElroy was not the winner – especially given his current suit seeking to overturn the land transfer. “Serious questions remain here if he prevailed at all,” Aguirre said.

Deputy City Attorney David Karlin said that McElroy is, on the one hand, claiming credit for forcing the federal government to take the land – and at the same time, trying to undo that transaction.

“He wants to have it both ways,” he said.

State law allows attorneys fees to be awarded in legal actions that “resulted in the enforcement of an important right affecting the public interest.” The state Supreme Court has ruled fees can be awarded in instances where the lawsuit was the “catalyst” behind enforcing an important right that affected the public interest.

....

He had initially sought $1.4 million in fees, based on the hours he worked plus a “multiplier” the law allows in certain cases. He bills at a rate of $400 per hour.

The two sides tried to settle the fee issue in past weeks, but could not agree. Aguirre declined to say how much the city offered, but said it was “substantial.”

Sunday, May 13, 2007

Is Medicaid Planning Eroding Common Law Property Rights?

There are two schools of thought in Medicaid planning. One holds that only the indigent or near indigent should be allowed to qualify for Medicaid assistance. Planners from this school teach that the client should plan for their old age medical needs by setting aside savings for that purpose, purchasing long term care insurance and if that is not financially possible, at least making sure than any asset transfers to children, etc. take place several years before the need for Medicaid arises.

The other school of thought holds that Medicaid should be available to anyone with the savvy to obtain it, even people with substantial assets that could afford to pay for part or all of their own care for a significant period of time. This is often called the “poor on paper” strategy. This school of thought is very attractive to people with considerable assets because it promises to allow them to retain or at least pass along much of their wealth while sticking the taxpayers with the bill for the considerable medical care expenses of their final years. In effect, it transmogrifies the needs based Medicaid program intended for the poor into a socialized medicine scheme for the middle class and wealthy.

Prof. Julia Belian of The University of Missouri Kansas City School of Law has published an article in the Creighton Law Review which asks some very probing questions about this second school of thought. It is her contention that the continued battle between congress and Medicaid planning attorneys over such Medicaid planning strategies is eroding the common law basis for basic property rights. Excerpts from Professor Belian’s article follow below:

MEDICAID, ELECTIVE SHARES, AND THE

GHOSTS OF TENURES PAST

38 Creighton L. Rev. 1111-1152 (2005)

JULIA BELIAN†

INTRODUCTION

…. Legislators and administrators have struggled for forty years to ensure that Medicaid benefits are paid only to those who meet the criteria for financial need. If an applicant is not already “financially needy” at the time of application—or financially needy enough—then Medicaid benefits will be denied until the applicant has spent down all “available resources.”3 The definition of “available resources” has expanded over the years as Medicaid administrators try to thwart applicants’ efforts to voluntarily impoverish themselves through gratuitous transfers.4 The primary method for doing so is the use of two major categories for classifying assets: those actually owned, and those not owned but subject to an enforceable claim.5 These categories then are coupled with an “applicable look-back period” to take account of assets (or claims) that the applicant transferred in the recent past.6 Disclaimer of inheritances, failure to enforce judgments, establishment of trusts by third parties, and refusal to elect the statutory spousal share all will result in the counting of assets never owned by the applicant.7 These rules were expanded several times, so much so that today, administrators may disregard certain traditional concepts of “property,” even when there is no evidence that the transfer of resources was done with the intent to qualify for Medicaid.8 ….

This assault upon our most fundamental common law ideas, even if required by contemporary circumstances, is disturbing and hard to understand, but there is more going on here than a bad job of legal analysis. Voluntary impoverishment to qualify for Medicaid benefits is a singular phenomenon in this country. The people who engage in the practice are not just the extremely wealthy, nor are they the villainous schemers that some would try to paint them to be.14 They are the exact same citizens who would never consider falsifying income tax filings, or hiding assets from their spouses, or lying in order to qualify for housing assistance, or even stealing office supplies.15 They are the exact same citizens who find such practices scandalous and immoral. And yet there seems to exist a widely accepted belief that if a person can qualify for Medicaid without first depleting everything he has saved through a lifetime of labor, then not only may he do so, he may even owe a duty to his heirs to do so.16 There seems no apparent explanation for this unusual willingness to defraud the government, especially among people who would never even consider such tactics in any other context.

This article will attempt to understand this phenomenon in light of the common law’s evolving conceptions of “property,” particularly as these are reflected in the history of the elective share and its ancestor, dower.17 The tensions between competing demands for resources that operated to flatten and then bury the feudal hierarchy of William the Conqueror seem to have resurfaced in the problem of “Medicaid planning.” Although strange to contemporary concepts of ownership and trade in a free market, these ancient ideas of “property” help us understand the current antagonism between legislative policy and popular resistance to that policy.18 Like the original image on a canvas that an artist decides to paint over, the passage of time and the pressures created by unimagined high costs of such care may have called forth something very ancient—the sense that “property” may not be a thing at all, and that “property rights” may not be natural rights that we possess as individuals in some pre-social context, but that both point instead to a complex system of mutual and reciprocal obligations that develops as the State and its citizens struggle to allocate scarce resources among them ….

The balance of the article is available for download at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=845810