THE NORTH CAROLINA STATE BAR

JOURNALSPRING

2011

IN THIS ISSUE

Metadata 101: Beware Geeks Bearing Gifts page 10Did Atticus Finch Commit Malpractice? page 12

Veterans’ Benefits Act page 16

8 SPRING 2011

The Vanity PressB Y L . T H O M A S L U N S F O R D I I

S T A T E B A R O U T L O O K

I was honored recently at a surprise partyby the State Bar’s officers and some of mycolleagues in regard to the 30th anniversaryof my employment with the agency. It was avery nice affair and I was highly gratified. Inaddition to an inordinate amount of praise inreference to my service, I received a gift ofincalculable worth—a beautifully handcraft-ed, leather-bound book, evocatively entitledDisbarment Enclosed, which includes all ofthe essays I have written for publication inthe State Bar Journal since 1997. Knowingthat I would inevitably hocka gold watch or other com-memorative object havingactual market value, myfriends wisely chose to giveme something that only Icould love, and for whichthere apparently exists nomarket at all. It was truly aninspired choice, commis-sioned by sympathetic peo-ple who well understandtwo essential things aboutme. I love rare books and Ilove the sight of my own voice. Quite happi-ly, I now possess the world’s rarest book, byone of my favorite authors.

It really is a great privilege, writing anessay each quarter that is read or ignored, orread and ignored, by 24,000 people who arelegally literate and literally legal. It’s also agreat challenge trying to explicate the mostmundane aspects of professional regulationin ways that are, it is hoped, surprising andattractive. I know I don’t always succeed inexplaining or amusing. But, my intentionsare good. Frankly, it’s difficult finding yourauthentic voice as an organ of governmentalpublicity. The role is fairly and appropriatelyrestricted. I am in print mainly to interpretwhat the State Bar has done, is doing, orintends to do. It is not my place to criticizeestablished policy or even to note my dis-agreement. I do have ample opportunity toinfluence official decisions as they are being

formulated by providing information andadvice, but I don’t have a vote and I certainlydon’t have the right to discredit or second-guess. I keep faith with you, my imaginedreaders, by trying to tell the truth aboutwhat we do thoughtfully and credibly. Inthat connection, I am proud to say that,unlike Mark Twain, I am subject only toself-censorship.

Now, as it happens, most, if not all, statebars have a journal of some sort. I happen tohave a complimentary subscription to most

of them. They are, with afew notable exceptions, arather sorry lot, in compar-ison to which our ownmagazine sparkles withimagination and panache.This comparative judg-ment bespeaks faint praise,I know, but I also thinkthat our publication standspretty tall in an absolutesense, particularly whenyou consider its fairly limit-ed mission and its depend-

ence upon amateur journalists like me forcontent. Although most bar journals havesimilar tables of contents and offer some ofthe same regular features, like the “President’sMessage,” very few offer commentary fromthe executive director. Those that do tend topurvey information in a generic, no-non-sense kind of way. I can’t think of anyone elsein my position who routinely leavens thefacts with buffoonery, deadpan, and absurd-ity. Maybe that’s a good thing.

Of course, the most interesting questionin regard to my articles, and everything elsethat appears in the Journal, is whether any-one is actually paying attention. We knowthe circulation of the publication becauseevery active member is compelled to “sub-scribe,” but we haven’t a clue as to how manyof you are in fact reading the magazine, inwhole or in part. And we don’t really knowwhat you think of it. It would be good to

have this information because we are rapidlyapproaching the day when there will be areadily available low-cost digital alternativeto the palpable thing you are presently read-ing. In truth, the technology already exists,but we continue to suppose that the StateBar Journal, in its current form and with itsrecurrent content, has sufficient value to youand the agency to justify the amount we arespending to produce and distribute it eachyear—about $150,000 in 2011, exclusive ofsalaries and overhead.

Maybe we’re wrong about that. Maybethe magazine, like so many other quaintdescendants of the Gutenberg Bible, has out-lived its usefulness and become cost ineffec-tive and irrelevant. We have been told repeat-edly by demographers and social scientiststhat young people, including young lawyers,tend to get the information they need ondemand from digital devices, and simplydon’t read paperwritings much anymore. Ifthat’s so, maybe we ought to go green insteadof black and white, forsaking the coffee tablefor the laptop, and substituting the “link” forthe dog-eared page. It’s worth noting in thisregard that the State Bar has already convert-ed the venerable Lawyer’s Handbook to cyber-copy. By offering that publication onlineinstead of in print, we are saving about$50,000 a year. That’s definitely a goodthing.

But what about the magazine? Isn’t itsomehow different? It’s one thing for a refer-ence book, like the Handbook, to reside onthe internet. Its content changes glaciallyand its primary virtue is being availablewhen needed. Because it is meant to be con-sulted rather than consumed, a cybershelf isjust as fine a resting place as a bookcase, andmuch more handy than a lobby or bath-room. But the magazine is a different thingentirely. It serves many other purposes. Firstand foremost, it dishes information andopinion—authoritatively and graphically,though somewhat belatedly. As the StateBar’s journal of record, it is itself a recording.

It has residual archival value as a thing worthsaving that can actually be saved. Unlike themillions of ephemeral electronic impulsesthat from moment to moment fleetinglyrepresent thought and action in cyberspace,the Journal is extant and material. True, itcan be thrown away by the recipient but,once delivered, it can’t be deleted or over-written by the publisher or anybody else. Ithas existential heft.

The Journal in its present form also hassignificance as a tangible representation ofthe State Bar and the idea of professional self-regulation. It is for most lawyers the “face” ofthe organized Bar. With its many distinctiveand familiar elements, the magazine arrivespredictably each quarter in the mail, bring-ing to mind the singular nature of our callingand our confederation in a way that duesnotices, CLE forms, and email “blasts” justcan’t. It is something that represents us andunites us. That being the case, it has valuethat can’t be measured merely in terms oftimeliness, convenience, or utility. Like thenew building that will soon rise in down-town Raleigh to house the State Bar’s opera-tions, and its soul, the Journal is an enduringsymbol of our profession. It has a presencethat cannot be entirely contained on or con-veyed by the internet.

Perhaps more to the point is the fancifulnotion to which many of us cling that peo-ple, and by that I mean to include lawyers,are more likely to read a magazine in handthan online. This theory, of course, runscounter to the wisdom referenced above con-cerning young lawyers, and I freely confessthat I’ve got no evidence to support thealleged preference for paper. But it doesmake sense to me—and I used to be a“young lawyer.” There’s just something aboutflipping open a fresh copy of a fine profes-sional journal that suggests the enchantingpossibility of edification—and the delightfullikelihood of surprise. Who knows uponwhat life-changing tidbit one’s glance mayrandomly fall? Perhaps one of Bruno’s TopTips for Tip Top Trust Accounting, or aninteresting IOLTA statistic, or one of thoseirreverent columns attributed to the execu-tive director. This is the sort of arcana towardwhich no one would intentionally navigateon a website, and yet it is endlessly charmingwhen encountered by chance while “leafing”through the Journal.

If I were still a mediocre trial lawyer, Iwould rest my case at this point, confident

that you, the imagined readers of this essay,are convinced that we should print theJournal in perpetuity. But like the cross-examiner who foolishly asks the one fatefulquestion to which he doesn’t know theanswer, I feel compelled to inquire further ofyou. Do you regularly read all or any part ofthe Journal? Do you occasionally read all orany part of the Journal? When you read theJournal, what regular features do you peruse?Is there any aspect of the Journal that youparticularly enjoy or dislike? What do think

of the Journal’s overall quality? How could itbe improved? What do you think about thefeatured articles? Would you like more infor-mation about who got stung by theDisciplinary Hearing Commission, or howto cope with depression, or what my child-hood was really like? And, perhaps more tothe point of this article, please let us know ifyou would you prefer to “receive” the Journalonline.

C O N T I N U E D O N P A G E 3 4

THE NORTH CAROLINA STATE BAR JOURNAL 9

10 SPRING 2011

For those attorneys of the tech nerd per-suasion, this change (to call it an “evolution”would imply a qualitative improvement, atwhich, doubtless, many attorneys would takeumbrage) is cause to rejoice. It gives hope tous nerds; hope that at long last, our col-leagues at the bar may cease to roll their eyesand writhe in agony during our painstaking-ly (some might say, painfully) detailed disser-tations on the relative merits of Windows 7versus Windows XP. (This author has, sadly,not yet found this to be the case.)

For the rest of the bar—those of you whoinexplicably prefer time with loved ones and

sunshine to blogs and the soft blue glow of acomputer monitor—the increased role oftechnology in legal practice has often beencause for shrugged shoulders, deep sighs, anda collective murmur of, “great...what newthing do I need to worry about now?” Wehave learned to be wary of geeks bearinggifts—for every time-saving and practice-enhancing app we giddily load on our iPads,a new danger or frustration lurks around thenext technological bend.

Over the past few years, perhaps no suchtechnological danger has been less under-stood yet more commonly present in law

practice than that posed by metadata. Eventhe name itself is impenetrable, conjuring anunholy blend of metaphysics and data thatprobably makes you want to put down thisarticle and turn on Dancing with the Stars.More frustrating still, a plea to our modernoracle—the internet—fails to provide anyuseful insight as to the nature of metadata.Merriam Webster helpfully defines it as “datathat provides information about other data.”

Well, that clears that up. Any questions?What many of us do know, however, is

that metadata is important enough that theNorth Carolina State Bar has issued a formal

Metadata 101: Beware GeeksBearing Gifts

B Y E R I K M A Z Z O N E

There was a time when a

lawyer who was unin-

terested in technology

could happily and suc-

cessfully run her practice without knowing her AOL from her elbow.

(Readers under the age of 30: kindly consult Wikipedia on what AOL is.)

Much like AOL’s internet hey-day, those halcyon days of technology-free

law practice are behind us. For good or ill, the practice of law has dragged

itself from the primordial sea and now walks on land, breathing air and pecking out emails on an iPhone.

Greg Hargreaves/images.com

THE NORTH CAROLINA STATE BAR JOURNAL 11

ethics opinion (2009 FEO 1) on the topic.So, with the renewed clarity of purpose thatonly an existential threat to our law licensescan provide, let us tackle this topic of meta-data and provide some measure of relief toour collectively furrowed brow.

Metadata: What Is It?When one creates a digital document, the

software used to create the document willoften keep a log about the creation and edit-ing of that document. Metadata, as the ethicsopinion states, is embedded information indigital documents that can contain informa-tion about the document’s history, such asthe date and time the document was created,“redlined” changes, and comments includedin the document during editing. In otherwords, long after a document has been fin-ished, metadata about the process of creatingand editing the document is left behind likefingerprints at a crime scene.

Unlike actual fingerprints (at least if thecurrent crop of crime scene investigation tel-evision shows is to be believed) metadata iseasy for an untrained, tech-novice to uncov-er. Searching Google for “how to find meta-data in a Word document” will yield over 3million results, including step-by-stepinstructions that any technophobe could eas-ily follow. There is nothing objectively goodor bad about metadata—it’s just data. You’velikely never wiped down a room for your fin-gerprints before (and this being the magazineof the State Bar, if, for some reason you rou-tinely wipe down your prints, please keepthat revelation to yourself ) so too worryingabout metadata in most facets of your life isunnecessary. The one facet of your life whereyou do, however, need to worry about meta-data—where indeed you are duty-bound toworry about it—is in your practice.

Metadata: Why Do You Need to Care?If you have never, in the course of your

professional practice, created, edited, read,received, or sent a digital document, you maynow skip to the next article in this magazine.

Still there?As an attorney, you need to care about

metadata because it is a client confidentialitytime bomb hidden in the middle of yourpractice. As attorneys, we are prohibitedfrom revealing confidential client informa-tion without the informed consent of theclient by RPC 1.6(a). You know this. I knowyou know this. I further know that you

would never knowingly reveal client confi-dences purposefully. The very real possibilityremains, though, that if in the course of yourpractice you have ever shared digital docu-ment with an opposing counsel, you mayhave unknowingly and inadvertentlyrevealed confidential client information inthe form of metadata.

Since you probably have your law licensehanging on your office wall right now (as Ido), I probably don’t need to elaborate fur-ther on why you need to care about metada-ta. But to err on the side of caution I offer asyllogism that would make my old Jesuitlogic professor reconsider my grade:

We have an ethical duty to maintain clientconfidences. Metadata may contain client confidences. Sending metadata which contains clientconfidences to an opposing counsel or partyis a violation of our ethical duty.

Metadata: What Do You Do About It?You now know what metadata is and why

you, as an attorney, need to care about it. Allthat remains is to know what to do about it.

For the answer to that question and more,please send me a check or money order for$19.95 to… just kidding. None of the fore-going matters much if you don’t know whatto do when you close this magazine and goback to your office.

If you have not yet read 2009 FEO 1 onmetadata, reading that opinion is your firststep. Go on; it’s on the State Bar website. I’llwait.

Read it now? Great. You now know that there are two primary

questions surrounding your ethical dutyrelating to metadata: 1) what is your duty toprevent disclosing confidential client infor-mation in metadata; and, 2) if you receivedigital information from opposing counsel,what may you do with any confidentialclient information contained therein?

Duty When Sending DigitalInformation

Your duty when sending digital informa-tion is to “take reasonable precautions to pre-vent the disclosure of confidential informa-tion, including information in metadata, tounintended recipients.” (2009 FEO 1) Theopinion goes on to state, “a lawyer must takesteps to minimize the risks that confidentialinformation may be disclosed in a communi-cation.” (2009 FEO 1 quoting RPC 215)

What steps and precautions would be con-sidered reasonable will depend on the cir-cumstances. So as not to leave you adriftwondering what you can do to satisfy thisreasonable precaution standard, let me sharewith you the way I advise the members of theNorth Carolina Bar Association in the courseof my work.

The obvious precaution to take is toremove the metadata from a digital documentbefore sending it. There are several ways to dothis, ranging from the free and clunky to theexpensive and elegant. The best way to do thisin my opinion (which, it should be noted,along with $1.75 will buy you a cup of coffeeand should under no circumstances be con-fused with a State Bar Ethics Committee GetOut of Jail Free card) is to purchase a stand-alone metadata removal product (oftenreferred to as a “metadata scrubber”). It’s notunlike redacting confidential informationfrom a document.

If you work at a law firm with an IT depart-ment, chances are you already have a metadatascrubber product in place. If, however, you areone of the many lawyers in North Carolinawho works at a firm without an IT departmentI would suggest looking at Payne’s MetadataAssistant ($89 at www.payneconsulting. com).Payne’s Metadata Assistant removes metadatafrom Microsoft Word, Excel, and PowerPoint.It integrates nicely with Microsoft Outlook (aswell as GroupWise and Lotus Notes) and popsup helpful reminders just before you send anemail with a digital document attached.

If the purchase of a stand-alone product isnot in your budget, the word processing pro-grams Microsoft Word and CorelWordPerfect each contain metadata removaltools or settings, as well. For WordPerfectusers, using the included metadata removaltools is likely to be your best option—Payne’sMetadata Assistant does not work forWordPerfect. For Microsoft Word users,though, for $80 you can purchase a productwhose sole function is to remove metadata—it may not be a Get Out of Jail Free card, butit certainly ought to help demonstrate thatyou took reasonable precautions to preventthe disclosure of confidential information.

For the sake of completeness, I’ll brieflyaddress some other possible solutions. Oneless elegant and less green but neverthelesseffective solution: printing out documentsand scanning them back in as PDF files.

C O N T I N U E D O N P A G E 1 5

12 SPRING 2011

The book strongly implies that Mr.Robinson was innocent, that the primaryprosecution witnesses lied throughout thetrial, and that it was only Mr. Finch's valiantefforts and relationship with the communitywhich caused the jury to hesitate at all beforethe unfair conviction. What if, however,Atticus in fact made a terrible mistake dur-ing trial which eliminated any small chancehis client had of acquittal, any chance ofavoiding death?

Although I'm a fairly voracious reader forpleasure, I'd never gotten around to readingTo Kill a Mockingbird. However, one recent

weekend, desperately in need of a breakfrom contract review and liability analysis, Igrabbed it from the coffee table where mywife had deposited it a few days earlier. I'dnever read a review or summary of the book(nor have I yet), but was still vaguely awarethat it featured a lawyer named Atticus, arape or murder, and a racial controversy.This makes it even more unlikely that Iended up reading the book, as I tend toavoid stories about lawyers, who in booksand movies are almost always far too perfect-ly successful, far too naive, or far too evil tobe realistic.

I grew up in an environment very dis-similar to Maycomb; nobody would con-fuse south Florida with south Alabama.Now that I've moved to North Carolina,however, explorations of southern cultureseem more appropriate. Plus at least half ofthose running for judgeships and otherpositions within the justice system hereseem to claim To Kill a Mockingbird as theirfavorite book. Thus I came to read it, inthree different sittings within 36 hours. Ienjoyed it, but I was at first puzzled, andthen dismayed at the way the trial went,and not just due to the unjust outcome. I'vetried many cases, including sex crimes, vio-lent felonies, and wrongful death cases, andI just couldn't fathom what happened—orrather didn't happen. What went wrong,Atticus?

Toward the end of the trial, the father of

Did Atticus Finch CommitMalpractice?

B Y J A S O N A . M C G R A T H

On November 21,

1935, Tom Robinson

raped 19-year-old

Mayella Violet Ewell.

So said the Maycomb County, Alabama jury, as written

by Harper Lee in the classic novel To Kill a

Mockingbird. Despite an admirable defense by court-

appointed attorney Atticus Finch, Tom Robinson was convicted and sentenced to death by

a jury which was most definitely not made up of his peers.

Getty Images

the alleged victim, a disreputable white mannamed Bob Ewell, takes the stand afterbeing called by the prosecution. Hedescribed what he witnessed the night ofNovember 21, 1935 as he returned homefrom the woods. "[J]ust as I got to the fenceI heard Mayella screamin' like a stuck hoginside the house—." Mr. Ewell went on topoint to the defendant, Tom Robinson, whowas seated next to his attorney, AtticusFinch, and to exclaim, "I run up to th' win-dow and I seen...I seen that black niggeryonder ruttin' on my Mayella!" The lan-guage used and the events described causeda disturbance in the packed courtroom.

Minutes later, Mr. Ewell's testimonycontinued with a question by the prosecu-tor. "Mr. Ewell, did you see the defendanthaving sexual intercourse with your daugh-ter?" The witness answered with certainty,"Yes I did," and then stated that he had aclear view of the room as his daughter wasbeing raped by the defendant. Finally, theangry father confirmed, "I sawed who hewas, all right."

Upon cross-examination, Atticus Finchestablished several points, the key being thatMr. Ewell was left-handed. This was poten-tially relevant, as other evidence showed orimplied that Mr. Ewell was a mean and per-haps abusive drunk, and that his daughter'sinjuries were largely on her right side—andthus arguably inflicted by a left-handedattacker.

The next witness to be called was thealleged victim herself, Mayella Violet Ewell.Other than being a member of the unpopu-lar Ewell family, there was no indication inthe book that Mayella herself was particular-ly disliked. Rather, she was presented as ayoung woman born into an unfortunate sit-uation; into a family with no means, nomotivation, and no role models.

Mayella agreed that she'd peripherallyknown the defendant for years, as they wereneighbors. She testified that on November21, Tom Robinson had been walking by herhome when she asked him to assist her inchopping an old piece of furniture up to beused as firewood. Instead of helping her asasked, however, he attacked and raped her."[A]n 'fore I knew it he was on me....He gotme round the neck, cussin' me an' sayin'dirt—I fought'n'hollered, but he had meround the neck. He hit me agin an' agin—."

"Then what happened?" the young Ms.Ewell was asked. She replied, "I don't

remember too good, but the next thing Iknow Papa was in the room a'standin' overme hollerin' who done it, who done it?Then I sorta fainted an' the next thing Iknew Mr. Tate was pullin' me up offa thefloor and leadin' me to the water bucket."(Mr. Tate was the sheriff.)

Tom Robinson later testified, denied thathe had committed any type of crime orimproper action, and reluctantly explainedthat it was he who had fended off Mayella'ssudden advances. Atticus Finch demonstrat-ed to the jury that Mr. Robinson had a par-ticular physical impairment of his left armand hand, which made it less likely that hecould have carried out the attack asdescribed. During closing arguments, Mr.Finch emphasized to the jury that the evi-dence of guilt was unreliable, and imploredthe jurors not to assume guilt merelybecause of the color of the defendant's skin.He also commented, "Her father saw it, andthe defendant has testified as to his remarks.What did her father do? We don't know, butthere is circumstantial evidence to indicatethat Mayella Ewell was beaten savagely bysomeone who led almost exclusively with hisleft." Despite Mr. Finch's efforts, TomRobinson was found guilty after perhaps sixhours of jury deliberations.

At first, I expected Atticus to pounce onit during cross-examination of Mayella, forthat would be what most lawyers would do.However, some lawyers (this writer beingone of them) prefer not to emphasize such"gotcha!" testimony during cross, but rathersave it for closing argument. (Why bring itup during cross, which only gives the oppo-sition the opportunity to try to completelycorrect the problem or at least minimize thedamage with additional evidence?) Thus, Ithought "Ahhh, the wise Atticus Finch willkeep this nugget in his pocket, polishingand savoring it until the moment isabsolutely right, until the jury is hanging onhis every word, his every motion. Ofcourse!” Although it was one o'clock a.m.when I read this part of the book, I foldedpage 206 in order to mark it, the way I'dhave asked a court reporter to mark a pieceof testimony during a real trial. I then readthrough closing arguments before going tosleep, a sleep literally troubled by whatturned out to be missing from Atticus' clos-ing argument.

The next morning, I explained my think-ing to my wife. She looked at me, trying to

determine if I was actually being clever (fora change) or if I mistakenly thought I wasbeing clever. Eventually she nodded inagreement, and her face took an expressionof slightly puzzled thoughtfulness as shesubconsciously continued to nod her headever so slightly up and down.

Perhaps some of you reading this knewwhere I was going before you read morethan a sentence of two of this commentary.Others may have picked up on it a few hun-dred words ago, while some of you, appre-ciated readers, are still waiting to hear what,to me, seems a blatant and damning errorby the esteemed Atticus Finch. Well, let'sget to it.

Bob Ewell testified very clearly that hesaw Tom Robinson attacking and raping hisdaughter. Further, he then watched as Mr.Robinson, his long-time neighbor, exitedthe Ewell house and ran off. We have Mr.Ewell's own words that he "sawed who itwas" and we know that he pointed to thedefendant when he exclaimed, from thewitness stand, "I seen that black nigger yon-der ruttin' on my Mayella!" That's a per-fectly straight forward and positive, firstperson, eyewitness identification, offensivelanguage notwithstanding.

However, what did Mayella Ewell testifyregarding her father and his words andactions at the time of the alleged crime? Shemade a general statement that she didn't"remember too good" what happenedimmediately after the rape, but then testi-fied with specificity as to what she didremember. "[B]ut the next thing I knowPapa was in the room a'standin' over mehollerin' who done it, who done it?" (empha-sis added)

That question mark means everythinghere. The father, who testified so emphati-cally that he was an eyewitness to the defen-dant's rape of his daughter, was reportedlyyelling and asking that very daughter whohad raped her. This could have been, shouldhave been, the moment, or at least shouldhave led to the moment of the trial. The"gotcha" moment, the "now we all knowyou're a liar” moment, the "not even you,ever-suspect jurors, can now mess this up"moment. Yet somehow, it was not. AtticusFinch missed the key bit of testimony andits significance. The otherwise competent,even inspiring, country lawyer let his client

C O N T I N U E D O N P A G E 1 7

THE NORTH CAROLINA STATE BAR JOURNAL 13

14 SPRING 2011

Questions after a Decade on the Bench

B Y M A R T I N B . ( M A R T Y ) M C G E E

In this article, I move beyond my narrowjudicial responsibilities of finding facts andapplying the law to discuss some practicalconcerns I now see with private warrant casesand with the procedure for setting bonds indomestic matters. I then explore creating aforum to identify and address other issues. Inoffering these opinions, I am mindful that it

is the General Assembly’s responsibility tomake law. I hope, however, that this writingmay offer a useful perspective of a judge inthe trenches.

Should Private Warrants BeEliminated?

Our state has a curious procedure that

allows any citizen to charge another with amisdemeanor criminal offense. N.C.G.S.Sections 15A-303 and 15A-304. There is noneed to call the police, because all one has todo is swear to the magistrate that the futuredefendant violated the law and that personwill be charged with what is commonlycalled a “private warrant.” This procedureneeds to be reconsidered because innocentpeople are often charged and guilty peopleare unlikely to be convicted.

While some private warrants allege minoroffenses, others are of a more seriousnature—domestic violence, threats involvingfirearms, and assaults. With no investigation,it is often impossible for a judge to determinebeyond a reasonable doubt what—if any-

Ihave just completed a decade on

the district court bench. During

that time, the yearly caseload in

my district has steadily grown

from 35,000 to over 50,000 cases for our four judges. The vari-

ety, volume, and pace of these matters have taught me much

about our judicial system and human nature. The time has

allowed me to consider our legal system from a different per-

spective from my previous views as a law student and as an attorney in private practice. Now

seems an appropriate time to reflect on this experience, and I hope to do so in a manner that

may be helpful in improving our justice system.

©iStockphoto.com

thing—happened. Our citizens deserve agovernment that investigates allegations ofcrime to both thwart frivolous charges and toadequately prosecute meritorious cases.

North Carolina should consider eliminat-ing private warrants and provide law enforce-ment with the necessary resources to investi-gate and charge—or not charge—underthese circumstances. Perhaps the law shouldpermit a citizen to petition the district attor-ney to bring charges if law enforcementdeclines to act. While eliminating privatewarrants would increase the burden on lawenforcement, simply allowing folks to filecharges without an independent law enforce-ment investigation is even more burdensometo the justice system and the public.

Should Magistrates Set Bonds inDomestic Violence Cases?

Historically, magistrates set bonds in allcases except murder. About 15 years ago, theGeneral Assembly established a new generalrule requiring that district court judges setbonds in domestic violence cases. N.C.G.S.Section 15A-534.1. The rule provides thatonce a defendant is arrested in a domesticviolence case, he or she is supposed to bebrought before a district court judge for con-sideration of bond. If court is not in session,then the defendant will likely be heldovernight and brought before a judge thenext morning when court resumes. If there isnot a session of court within 48 hours afterthe defendant’s arrest (during the weekend,for example), then a magistrate sets the bondafter the 48 hour period expires. State v.Thompson, 349 N.C. 483 (1998).

No doubt the change in the law is sup-posed to provide an added measure of pro-tection to victims of domestic violence basedupon the assumption that district courtjudges are better at setting bonds than mag-istrates. Observing this rule in practice, how-ever, raises two concerns: (1) a magistrate isstructurally better positioned than a districtcourt judge to get accurate information to seta bond and (2) when court is not in session,everyone in a domestic relationship is injeopardy of spending an extended period oftime—up to 48 hours—in jail based upon afalse charge.

First, a magistrate is in a better position toget accurate information because a magis-trate speaks to the victim or the law enforce-ment officer when the case is charged. Also,the same magistrate is often on duty and

speaks to the defendant when he or she isarrested. Instead of the magistrate setting thebond with information from both sides ofthe case, under current law the case is nowlikely added onto a crowded docket eitherthat day or the next day that court is in ses-sion. In ten years of setting bonds in thesecases, I can only remember a handful oftimes when either the law enforcement offi-cer or the alleged victim in one of these casesappeared in the courtroom when I set thebond. Instead of having information fromboth sides of the case, all the district courtjudge has to rely on in setting the bond is thewritten charge, the defendant’s version ofevents, the defendant’s record, and perhaps,some notes or recommendation from themagistrate. It seems to me that divorcing theresponsibility for setting the bond from bestinformation is a poor practice.

Second, since this rule also applies inprivate warrant cases, too often the actualvictim of domestic violence is charged bythe perpetrator, and must wait overnight orlonger until his or her bond is set. If a falsecharge is brought Friday after court hasconcluded, then the innocent defendant(the actual victim) will likely spend 48hours in jail before his or her bond is set.Thus, the law, in these instances, has terri-ble consequences for those it was intendedto help.

Should North Carolina Establish aLegal Retreat?

Science, for example, has been advancedby leading scientists gathering for informalretreats to discuss problems and ideas in theirfields. A similar small gathering of legal com-munity leaders—judges, lawyer-legislators,prosecutors, private practitioners, magis-trates, and legal educators—would likelyproduce improvements in our law and judi-cial system. How our various statutes fittogether, problem areas in the law such as thetwo I have mentioned above, funding for thejudiciary, judicial selection, and other topicscould be explored with collective input fromleaders with broad perspectives to help theparticipants move beyond preconceivednotions. It would provide a forum to notonly identify and discuss problems, but itwould also develop relationships necessary tocollaboratively address them.

As most readers know, the UNC Schoolof Government does an outstanding job pro-viding formal training to governmental

employees and informally answering theirquestions on an as needed basis. The schoolcould plan an excellent continuing legal edu-cation retreat that would benefit all NorthCarolinians. I would welcome the opportu-nity to volunteer to help in any capacity. n

Martin B. (Marty) McGee has served as adistrict court judge in Cabarrus County sinceOctober 6, 2000. He resides in Concord withhis wife, Debin, and their two daughters.

THE NORTH CAROLINA STATE BAR JOURNAL 15

Metadata 101 (cont.)

Proponents of this approach often choose itbased on cost, though given the cost of paperand printer ink, I’m not convinced it is moreeconomical. Printing a word processing doc-ument into a PDF document will removemuch of the metadata as well. If it were mylicense at stake though, I’d purchase a stand-alone metadata scrubber and some piece ofmind.

Duty When Receiving DigitalInformation

2009 FEO 1 is clear and straightforwardon this point: a lawyer may not search formetadata (often referred to as “mining” formetadata—a description which belies therelative ease with which it can be done). If alawyer unintentionally views another party’sconfidential information within the meta-data of a given document, she must notifythe sender and may not use the informationwithout consent of the other lawyer orparty.

ConclusionNot nearly as thorny and difficult to grasp

and deal with as its name would imply, meta-data is a fact of life in the modern law office.You now know what it is, why you need tocare about it, and what to do about it.Purchase a metadata scrubber or otherwiseput into place a procedure to deal with meta-data in your practice. Then unfurrow yourbrow, and go back to enjoying time withyour loved ones and sunshine. And, ofcourse, your iPhone. n

Erik Mazzone is the director of the Centerfor Practice Management at the NorthCarolina Bar Association.

16 SPRING 2011

The VBA also amended theServicemember Civil Relief Act (50 USCode Appendix, section 501 et. seq.), theprincipal statute protecting active duty serv-ice members and their families and also thefocus of this article. The most important ofthese latest SCRA amendments established aprivate right of action against those who vio-late the SCRA. Other changes authorized theUS Attorney General to commence civilactions to vindicate SCRA rights, and clari-fied service member rights to terminate cellphone contracts as well as residential andmotor vehicle leases.

Those with only a passing familiarity withthe SCRA may be aware that it precludes cer-tain default judgments against service mem-bers, allows service members to reopen somedefault judgments, and prescribes circum-stances under which a service member may

delay civil proceedings. However, the SCRAalso provides other rights and protections. Forexample: it limits interest rates on most pre-service obligations to six percent (section527); prohibits landlords from evicting serv-ice members except through court order (sec-tion 531); except by court order, prohibitsbusinesses from repossessing personal or realproperty secured by a contract executed priorto military service (section 532); prohibitsnon-judicial foreclosure on realty secured by apre-service mortgage (section 533); authoriz-es service members to terminate residential ormotor vehicle leases in certain circumstances(section 535); authorizes service members toterminate cell phone contracts without penal-ty in certain circumstances (section 535a);and provides that neither the service membernor the member’s spouse either lose noracquire a domicile for personal or income tax

purposes solely due to compliance with mili-tary orders to move to a military duty station(section 571).

Needless to say, parties with adverse inter-ests have not always been especially scrupu-lous in safeguarding such service memberrights. Creditors repossess vehicles and bankspursue non-judicial foreclosures in violationof the SCRA. Lenders are hardly eager toreduce interest rates to six percent, and land-lords withhold security deposits and sendadverse information to credit reporting agen-cies when a service member validly terminatesa residential lease. So, how is the servicemember to protect himself and/or pursueafter-the-fact relief?

M I C H A E L S . A R C H E R

n October 13, 2010, President Obama

signed into law the Veterans’ Benefit Act

of 2010 (HR 3219), providing impor-

tant tools for the enforcement and vindi-

cation of service member rights and a potentially lucrative opportunity for members of the bar.

The Act extended, increased, and generally strengthened certain benefits provided to veterans,

particularly, but not exclusively, to disabled veterans.

©iStockphoto.com

The service member may visit a militarylegal assistance attorney, who can educate theadverse party and may even provide a copy ofthe relevant portion of the law. If that doesn’twork—and often it does not—the militarylegal assistance attorney can get the USDepartment of Justice (DoJ) involved.Generally, a call from the DoJ, which has full-time attorneys dedicated to SCRA enforce-ment, will stop the wrongful action, particu-larly since a knowing violation of many por-tions of the SCRA may constitute not only acivil wrong, but also a criminal offense.

But what if the service member isunaware of the obnoxious, unlawful actionuntil it is too late? What if the repo mansteals a sailor’s car while the sailor is at sea?What happens if the creditor plaintiff pur-sues an illegal foreclosure before the soldierever gets to any military legal assistance offi-cer, or the marine has any idea that he mayhave protection under the SCRA? That’swhere the new law comes in.

This latest SCRA amendment makes itclear that the DoJ can pursue a civil case onbehalf of the aggrieved service member. Evenprior to the amendment, the DoJ pursuedsuch cases, but defendants argued, occasion-ally with some success, that because suchaction was not explicitly authorized, the DoJwas powerless to pursue any civil remedy.According to this view, that lance corporalpatrolling Helmund Province in Afghanistanhad to fend for himself. No more.

Section 597of the SCRA now specificallyprovides that the DoJ can pursue a civilaction against any person who engages in apattern or practice of SCRA violations orengages in a violation that “raises an issue ofsignificant public importance.” The courtmay grant equitable or declaratory relief,and all other appropriate relief, includingmonetary damages. In addition, the courtmay assess a fine of up to $55,000 for thefirst offense and $110,000 for subsequentoffenses.

But what can the service member do onhis own? After all, the DoJ cannot be expect-ed to intervene in every case. Further, theservice member may want to control the liti-gation himself.

On this point, section 597a, concerning aprivate right of action, is short, sweet, and tothe point. It now authorizes “any person”aggrieved by a violation of the SCRA to pur-sue a civil action to obtain equitable ordeclaratory relief, and to “recover all other

appropriate relief, including money dam-ages.” The statute provides that the court“may” award costs and attorneys’ fees to theaggrieved person if that party prevails in thelitigation.

Prior to this amendment, lawsuits againstSCRA violators had gone forward, sometimesresulting in large damage awards. However,the statute now specifically authorizes a widearray of relief, including attorney fees to theprevailing plaintiff. Furthermore, prior to theamendment, defendants would argue thatbecause the statute failed to specify a privateright of action, none existed. According tothis view, once the bad actor violated thestatute, there was nothing the service membercould do about it. The majority position hadalways been that an implied private right ofaction existed, particularly in light of the pur-poses of the statute as well as the oft-cited USSupreme Court admonishment that, “TheAct should be read with an eye friendly tothose who dropped their affairs to answertheir country’s call.” Le Maistre v. Leffers 333U.S. 1,6 (1948).

In large measure, section 597a grew out ofHurley v. Deutsche Bank, a case arising in theFederal District Court for the WesternDistrict of Michigan. In this case, contrary tothe old adage, bad facts have made for goodlaw. Sergeant James Hurley, an army reservistwith an existing mortgage, was mobilized foractive duty. He fell behind on the mortgagewhen he quit his second job. The lender fore-closed on the soldier’s house pursuant to non-judicial foreclosure, evicted his family whileSgt. Hurley was deployed to Iraq, and sold thehouse to a bona fide purchaser. The plaintiffalso provided an affidavit to the court inaccu-rately averring that Hurley was not in thearmed forces, without making any inquirywhatsoever as to the truth of the statement.Despite the fact that the plaintiff ’s actions vio-lated at least two provisions of the SCRA, theplaintiff was granted summary judgment, thecourt agreeing that the SCRA did not author-ize a private right of action (W.D. Mich. Sept.30, 2008). Unless Sgt. Hurley could findsome state remedy, he was simply out of luck.On reconsideration, the judge determinedthat the SCRA implied a right of action,reversing his earlier ruling (W.D. Mich. Mar.13, 2009). Enshrining this right into the textof the SCRA should go a long way towardpersuading attorneys to take such meritoriouscases. The new law should also diminish thelikelihood that future service members will

return from combat only to find their familiesillegally evicted, their houses illegally takenout from under them, and the courts unwill-ing to do anything about it. n

Major Archer is a retired Marine Corpsjudge advocate and currently serves as the headof legal assistance for Marine Corps InstallationsEast.

To view the full text of the Veterans' BenefitsAct of 2010, go to govtrack.us/congress/bill.xpd?bill=h111-3219.

THE NORTH CAROLINA STATE BAR JOURNAL 17

Atticus Finch (cont.)

down and, we may even feel, let us down. The Finch's neighbor, Miss Maudie,

reflected that it was impressive that Atticushad at least given the all-white, biased juryreason to pause on its way to unfairly con-victing the defendant. "And I thought tomyself, well, we're making a step - it's just ababy step, but it's a step." Well said, butunder further consideration, we may be leftto wonder if that baby step could have orshould have been a leap.

I still can't decide if I like Atticus Finchmore now than I would had he been better,had he pulled off the miracle. At least he was-n't perfect, as we surely are not. I dare say weare no better than Mr. Finch was, and weshould remain thankful for him, stunningerror and all. n

Jason A. McGrath is the owner of McGrathLaw, PLLC, and practices statewide in bothNorth Carolina and Florida. He spent fiveyears as a criminal prosecutor, followed by eightyears as a litigator in a private firm in which hewas a partner. Mr. McGrath now focuses onproviding foreclosure prevention and mortgageloan modification services to individuals, aswell as business law and contract services tosmall and medium-sized businesses.

Fire Investigator available to conductorigin and cause, and other fire investi-gation services. Retired police fire inves-tigator, certified, licensed, and insured.Visit my website at www.pyropi.com.Contact me at 919-625-8556 orscott.hume@nc.rr.com.

18 SPRING 2011

Incongruously, even though HUD hasdesignated the North Carolina Fair HousingAct (NCFHA) as “substantially equivalent” tothe federal act, there is an assumption that thestate act requires a plaintiff to exhaust admin-istrative remedies before pursuing an action incourt under the NC statute. Congress did notrequire administrative exhaustion for theFFHA, as it did in some other administrativecontexts, because it imposes a substantial bur-den on victims of discrimination and therebyhampers the goal of both acts: to end residen-tial segregation.

The burden is exacerbated in NorthCarolina because the North Carolina HumanRelations Commission (NCHRC) lacks theresources to investigate and resolve claims in a

timely manner as required by statute. Delayedadjudication denies prompt relief for merito-rious complaints and keeps even innocentdefendants in limbo. Delay increases costs toplaintiffs and defendants and may discouragecomplaints. Low-income plaintiffs are espe-cially affected by the time and expenseinvolved in delayed administrative proceed-ings. In addition, exhaustion limits plaintiffs’choice of forums, which undermines theirability to obtain effective redress for discrimi-nation. Exhaustion also contributes to low set-tlement amounts because of plaintiffs’ inabili-ty to sustain lengthy proceedings. The largenumber of administrative complaints, whencompared to paltry settlement amounts, sug-gests that administrative remedies are inade-

quate to address pervasive discrimination.4

Imposing an exhaustion requirement inthe NCFHA not only denies justice to victimsof discrimination, but is legally untenablebecause such a requirement: 1) diverges sub-stantially from the federal requirement of sub-stantial equivalence, 2) lacks a foundation incase law or the NCFHA’s own statutoryterms, and 3) is inconsistent with the persua-sive interpretation of parallel statutes in similarjurisdictions.

Current NC LawThe NCFHA is largely modeled after the

FFHA. As the NC Court of Appeals noted inNorth Carolina Human Relations Council exrel. Leach v. Weaver Realty Co., the “[l]egisla-

The Exhaustion Requirement asa Barrier to Fair Housing Claims

B Y M A R K D O R O S I N A N D P E T E R G I L B E R T

The Federal Fair Housing Act (FFHA)1 allows

victims of housing discrimination to choose

between filing an administrative complaint

with the US Department of Housing and

Urban Development (HUD), filing a lawsuit with no administrative complaint, or to simul-

taneously proceed in the administrative forum until “the beginning of the trial of a civil

action”2 and to proceed in court until an “administrative law judge has commenced a hearing

on the record” in the administrative proceeding.3 Steve Dininno/images.com

ture modeled the key provisions of the StateFair Housing Act after provisions of theFederal Fair Housing Act.”5 The court ofappeals acknowledged that “the body of fed-eral cases interpreting the Federal FairHousing Act is useful,” but then rejected thefederal case law recognizing disparate impactdiscrimination in fair housing claims.6 Thecourt found that disparate impact analysis was“contrary to the ordinary meaning of theterms in the North Carolina State FairHousing Act,” even though those termsmatched the language of the federal law.7

Following the ruling and subsequent inquiriesby HUD, the legislature amended the stateact to allow claims based upon disparateimpact.8 After these amendments, “the Actsare now virtually identical.”9

While largely mirroring the FFHA, theNCFHA omits language in the Federal Actthat a party has an express right to directly“commence a civil action in an appropriateUnited States district court or state court.”10

However, nowhere does the state law prohibita party from immediately filing such a civilaction: “[a]ny person who claims to have beeninjured by an unlawful discriminatory hous-ing practice or who reasonably believes that hewill be irrevocably injured by an unlawful dis-criminatory housing practice may file a com-plaint with the North Carolina HumanRelations Commission.”11 This permissivelanguage implies that an administrative com-plaint is not the exclusive remedy. TheNCFHA refers to various situations where acivil action may be pursued, but all within thecontext of the administrative enforcementscheme.12 The NCFHA does not address aplaintiff proceeding directly in court andbypassing the administrative option entirely;the enforcement provisions neither forbid norregulate such judicial proceedings to remedyhousing discrimination under NCFHA.

“It is a familiar canon of statutory con-struction that when a legislature borrows fromthe statutes of another legislative body, theprovisions of that legislation should be con-strued as they were in the other jurisdiction atthe time of their adoption.”13 Although feder-al decisions interpreting a statute even withverbatim terms are not binding on statecourts, where, as in fair housing, “NorthCarolina decisions are few by comparison andthe state and federal systems are closely inter-related,” increased regard for federal decisionsis appropriate.14 Deference to federal interpre-tation is particularly suitable when the state

statute and its judicial interpretations must be“substantially equivalent” to the federalscheme. The FFHA and cases interpreting itdo not require exhaustion; “Congress intend-ed to provide all victims of Title VIII viola-tions two alternative mechanisms by which toseek redress: immediate suit in federal court,or a simple, inexpensive, informal conciliationprocedure, to be followed by litigation shouldconciliation efforts fail.”15 The NC statutewas modeled after the federal law; therefore,the NCFHA should be construed to notrequire administrative exhaustion.

There are very few cases interpreting theNCFHA, and none address the question ofadministrative exhaustion, even when thatissue was argued to the court. In Bergman RealEstate Rentals v. North Carolina Fair HousingCenter, a fair housing organization filed anadministrative complaint.16 The defendantssought an injunction in superior court basedon lack of standing.17 The organizationargued the court lacked jurisdiction becausethe administrative process had not beenexhausted: “The Durham Fair HousingOrdinance, state Fair Housing Act, and theAdministrative Procedures Act (APA) man-

date that such complaints be resolved in anadministrative setting before any court inter-vention is permitted.”18 Although the issue ofexhaustion under the NCFHA was expresslyraised, the NC Court of Appeals did not con-sider the issue, finding only that exhaustionwas not required under the APA in that partic-ular situation.19 The lack of any NorthCarolina ruling requiring exhaustion, evenwhen squarely before the court, suggests look-ing to other jurisdictions, and especially at theFFHA upon which the NCFHA is modeled,which does not require exhaustion.

Milsap v. Cornerstone ResidentialManagement, Inc.

In Milsap, a class of prospective tenantsand the Housing Opportunities Project forExcellence, Inc., (HOPE), sued a housingdeveloper, alleging that its policy limiting thenumber of occupants per bedroom discrimi-nated on the basis of familial status.20

Plaintiffs’ action was brought under both theFFHA and the analogous Florida FHA.21

Relying upon Florida precedent in Belletete v.Halford,22 the federal district court held, “theonly law published on the issue holds that

THE NORTH CAROLINA STATE BAR JOURNAL 19

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20 SPRING 2011

Florida’s Fair Housing Act claims are barredunless administrative remedies are exhausted,”and dismissed the complaint.23

Following the dismissal, the FloridaAttorney General intervened in the case “forthe limited purpose of arguing that the[Florida FHA] does not require exhaustion ofadministrative remedies.”24 The attorney gen-eral’s argument focused on three points: 1) theFlorida act was modeled after the federalstatute and ought to be interpreted with guid-ance from federal law; 2) the Belletete opinionimproperly relied upon federal employmentlaw, which requires exhaustion, and, 3) thatthe Florida Supreme Court was likely to over-rule the exhaustion requirement.25

Additionally, the attorney general warned thatan exhaustion requirement “would clearlydiminish, if not entirely eliminate, the ‘sub-stantial equivalency’ of the Florida law to itsfederal counterpart,” and undermine the pur-pose of both acts by barring “victims of hous-ing discrimination from raising theirclaims.”26

Persuaded by the attorney general’s brief,the Milsap court reversed itself, finding thatthe Florida Supreme Court would likely over-rule Belletete, and holding that the FloridaFHA contained no requirement for adminis-trative exhaustion.27 The opinion focused onthe fact that Belletete improperly relied on stateand federal employment law, which requiresexhaustion, rather than federal case law andlegislative intent for the FFHA, both of whichspecifically reject an exhaustion require-ment.28 The court also quoted the language ofthe Florida FHA that an aggrieved party “mayfile a complaint with the commission,” “lan-guage [which] is permissive and not mandato-ry.”29 “The clear import of the above-refer-enced statutory language indicates a com-plainant may file a complaint and exhaustadministrative remedies or, alternatively, com-mence a civil action.”30

North Carolina ought to pay specialattention to Milsap not merely because of itscogent reasoning and the lack of any control-ling North Carolina cases, but primarilybecause of the great similarity between thefair housing statutory frameworks in Floridaand North Carolina. Both are expressly mod-eled after the FFHA, and both contain almostexactly the same language that persuaded theMilsap court that there was no exhaustionrequirement in Florida.31 Even where thestate acts differ from the federal statute, theydiffer in the same respects: both statutes spec-

ify that even after the administrative proceed-ings have begun, a party may proceed incourt if no resolution is reached within agiven time period,32 and both also lack anyanalogous language to the federal provisionwhich specifically allows a civil action with-out exhaustion.33

Although the Milsap court did not addressthe attorney general’s warning about substan-tial equivalency certification, it nonethelessfound no exhaustion requirement in a statuto-ry scheme virtually identical to NorthCarolina’s. The case is even more compellingbecause in Florida, unlike North Carolina, anappellate court had previously ruled thatexhaustion was required. Nevertheless, thecourt recognized the error of that ruling andfound that an exhaustion requirement was asubstantial deviation from the statutory lan-guage and persuasive federal law.

Administrative Remedies areInsufficient to Meet the Goals of theFair Housing Act

Reading an exhaustion requirement intothe statute, although legally questionable,would not be as objectionable if the adminis-trative process adequately deterred discrimina-tion. In the recent draft, Analysis ofImpediments to Fair Housing Choice, all four ofthe primary impediments identified by theState of North Carolina relate directly to theexhaustion requirement: 1) insufficient systemcapacity, 2) discrimination in the rental mar-kets, 3) constraints in the lending markets,and 4) “[p]ossible barriers in land-use poli-cies.”34 Insufficient system capacity createslong delays in the administrative process,increasing costs and delaying resolution, andtherefore deters complaints but not discrimi-nation. Rental and loan discrimination arespecifically targeted by the NCFHA, butadministrative exhaustion limits the impact ofthe law by increasing complainant costs anddecreasing settlement amounts. As to thefourth impediment, the NCFHA could beused to challenge discriminatory zoning andland use practices, but complainants in NorthCarolina have avoided it due to the exhaustionrequirement.35 Greater opportunity to bringcases in state court without an exhaustionrequirement would not completely removethese impediments, but the increased poten-tial for litigation would help deter and remedydiscrimination.

State fair housing claims are regularlybrought through the NCHRC, but the puta-

tive exhaustion requirement limits strategicoptions, reduces settlement amounts, andincreases the cost of proceedings. While com-plainants may pursue claims under the FFHA,federal litigation generally consumes moretime and resources than state litigationbecause courts are fewer and more sparselylocated, with crowded dockets and a smallerbar. State judges are also more likely to befamiliar with the context of segregation andfair housing in their communities, as recog-nized in the federal statute by its preference forlocal resolution where protections are substan-tially equivalent.36

Unfortunately, after the time and cost ofan administrative proceeding, complainantsare unlikely to bring a suit in state court. Outof hundreds of complaints to the NCHRC inrecent years, only two plaintiffs have proceed-ed in court following the administrative pro-ceedings.37 An increased choice of forumswould broaden the options available to advo-cates and help resolve legitimate claims of dis-crimination.

The persistence of housing discriminationin North Carolina also suggests that recoveryamounts awarded in conciliation and admin-istrative hearings have been inadequate todeter discrimination. An analysis of data fromthe NCHRC shows that of 55 cases withreported non-zero settlement amounts, theaverage recovery was $3,232.26; the average ofthose cases conciliated through the adminis-trative process, 48 of the 55, was only$2,546.85.38 These low amounts, even incases where the agency found cause to believediscrimination had occurred, are an inade-quate deterrent to housing discrimination.

Cases that proceed to an administrativehearing fare slightly better. A review of fairhousing cases litigated through the NC Officeof Administrative Hearings from 2001 to2009 reveals only four published cases.36

Discrimination was found in two of thosecases, both default judgments related to racediscrimination.40 One resulted in damages of$30,910, the other $9,400, both substantiallylarger than the average results achievedthrough conciliation. Although the awards inthese administrative hearings are higher, thefact that only a tiny fraction of cases proceedto this stage highlights the inadequacy of thisexclusive forum.

Unfettered access to state courts wouldprovide greater deterrence through increaseddamages for discrimination. In administra-tive resolutions, the potential for an immedi-

THE NORTH CAROLINA STATE BAR JOURNAL 21

ate court proceeding, with the associatedattorney costs and uncertainty, wouldencourage respondents to settle for higheramounts.41 In civil court, the amount ofdamages and penalties awarded for housingdiscrimination usually exceeds that of admin-istrative proceedings.42

One final advantage of greater access tostate courts would be the development of abody of case law interpreting the NCFHA.The North Carolina Court of Appeals hasonly heard three cases since 1986 interpretingthe act; none have been heard by the NCSupreme Court.43 Of the three cases, one wasdismissed for lack of standing and another wassubsequently overruled by amendment to theact.44 This dearth of judicial analysis increasesuncertainty in the act’s interpretation, whichin turn discourages complaints and furtherhampers the purpose of the act.

Substantial EquivalencyHUD must certify that state agencies and

statutes are “substantially equivalent” to theFFHA and its enforcement structure in orderfor the state to receive funding and be referredclaims. Substantial equivalency depends bothon the adequacy of the law, which focuses onthe text of the statute, and on the adequacy ofperformance, which examines how the statuteis enforced. The adequacy of the law prongmandates inter alia that the state law “notplace excessive burdens on the aggrieved per-son that might discourage the filing of com-plaints,” including increased costs,45 and thatthe law affords both administrative and judi-cial enforcement.46

Adequacy of performance depends largelyon the timeliness of the state agency’s process-ing of charges, requiring commencement ofprocessing within 30 days of receipt, determi-nation of reasonable cause within 100 days,and administrative resolution within oneyear.47 Performance reviews also consider thestandards used, attempts at settlement, thenumber of complaints filed, and the adequacyof the relief granted to prevent continued dis-crimination.48

Understaffing, combined with the need fortravel and detailed investigation, prevents theNCHRC from determining cause in themajority of complaints within the 90 daysrequired by the NCFHA, which increases thedelay and cost to plaintiffs and frustrates thepurpose of the act.49 Of the 70 cases with anascertainable cause determination date, 99%took more than the NCFHA’s 90 days, and

96% took more than the 100 days allowed bythe FFHA.50 On average it took 341 days forthe NCHRC to investigate and determinewhether cause existed. The longest case tookover two years.51 While both state and federallaw allow the agency to exceed the time limitsin exceptional cases if they provide a writtenexplanation of the delay to the parties, it isinconceivable that legislators contemplatedthat 96-99% of cases would exceed this time-frame.52 Even if these delays could be justi-fied, they highlight the inadequacy of theadministrative remedy as the exclusive optionto address housing discrimination.Administrative exhaustion ought not to berequired if for no other reason than to relievethe burden on the overwhelmed NCHRC.

Administrative resolution also frequentlytakes longer than the statutorily permittedyear. Of 124 cases analyzed, 38 (31%) tookmore than a year to resolve.53 On average thecases took almost a year to resolve, but thelongest took almost seven years.54 Althoughno evidence suggests that the NCHRC fails toprovide written notice explaining the delays,the fact that a large percentage of the com-plaints are not handled within the period setby statute violates the intent of the FFHA, dis-courages victims of discrimination from seek-ing administrative redress, and constitutes an“excessive burden” on complainants.Permitting aggrieved parties to file directly instate court would provide individuals a moreexpeditious vehicle for their claims, as well asrelieve pressure on NCHRC.

An exhaustion requirement contradicts thesubstantial equivalency provisions regardingthe adequacy of the law and the adequacy ofperformance. If the state law requires exhaus-tion, it fails the adequacy of the law prongbecause it discourages complaints and doesnot afford equivalent judicial enforcement.The consistent failure of the NCHRC tocomport to the federal time frames constitutesinadequate performance. An exhaustionrequirement undermines the intent and effica-cy of the NCFHA, compounds delays inresolving complaints, discourages claim fil-ings, and exacerbates the resource and person-nel pressure on NCHRC. Administrativeexhaustion therefore jeopardizes NC’s sub-stantial equivalency certification.

ConclusionThe upcoming state report on impedi-

ments to fair housing highlights the persist-ence of residential segregation and discrimina-

tion. While the NCHRC labors diligentlyagainst the tide of complaints, its capacity isinsufficient. Removing the perceived adminis-trative exhaustion requirement is not apanacea, but would expedite resolution of fairhousing claims, increase the damages awardedin fair housing cases, and further the deterrenteffect of the act. Fair housing advocates wouldgain a key tool in their work—access to statecourts. Most importantly, federal fundingthrough HUD for fair housing would be safe-guarded by bringing North Carolina intocompliance with federal regulations. n

Mark Dorosin is the senior managing attor-ney at the UNC Center for Civil Rights, wherePeter Gilbert is the community developmentattorney fellow. Special thanks are also due to

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Charles E. Daye, Henry Brandis professor of lawand deputy director of the Center for Civil Rightsat the UNC School of Law, former communitydevelopment attorney fellow Sarah Krishnaraj,and Nam Douglass.

Endnotes 1. Fair Housing Act, 42 U.S.C. § 3601 (2006).

2. Id. at §3612(f).

3. Id. at §3613(a)(3).

4. See infra text accompanying notes 38-43.

5. 79 N.C. App. 710, 714, 340 S.E.2d 766, 768 (1986).

6. Id. at 714-15, 340 S.E.2d at 768-69.

7. Id.

8. B. Bailey Liipfert III, Comment, The BroadenedDimensions and More Powerful Bite of the State FairHousing Act, 12 CAMPBELL L. REV. 268, 281-82(1989-90).

9. Id. at 268.

10. Fair Housing Act, 42 U.S.C. § 3613(a)(1)(A) (2006).

11. State Fair Housing Act, N.C. GEN. STAT. § 41A-7(a) (2007) (emphasis added).

12. Id.

13. Hyde v. Abbott Lab., Inc., 123 N.C. App. 572, 578,473 S.E.2d 680, 684 (1996) (considering federal casesas persuasive authority where the state anti-trust statutewas modeled after federal law). See also Edmisten v. J. C.Penney Co., 292 N.C. 311, 314-16, 233 S.E.2d 895,898 (1977) (citing federal cases to interpret NCstatutes modeled after the Federal Trade CommissionAct).

14. Stone v. Lynch, 68 NC App. 441, 443-44, 315 S.E.2d350, 352-53 (1984) (declining to apply federal incometax law where a North Carolina decision applied direct-ly).

15. Gladstone v. Village of Bellwood, 441 US 91, 104(1979); see e.g., Mitchell v. Cellone, 389 F.3d 86, 90 (3rdCir. 2004).

16. 153 N.C. App. 176, 177, 568 S.E.2d 883, 884(2002).

17. Id.

18. Br. Def.-Appellant at 8, 17, Bergman, 153 NC App.176, 568 S.E.2d 883 (2002) (emphasis added).

19. Bergman, 153 N.C. App. at 179, 568 S.E.2d at 887.

20. Compl., Milsap v. Cornerstone Residential Mgmt., No.05-60033-CIV, 2005 WL 452058 (S.D. Fla. Feb. 1,2010). See also Keenya J. Robertson, President,Housing Opportunities Project for Excellence, Inc.,Testimony before the National Commission on FairHousing & Equal Opportunity (Oct. 17, 2008), avail-able at: www.prrac.org/projects/fair_housing_commis-sion/atlanta/robertson.pdf.

21. Complaint at 10, Milsap, No. 05-60033-CIV, 2005,WL 452058.

22. 886 So.2d 308 (Fla. Dist. Ct. App. 2004).

23. Order at 5, Milsap, No. 05-60033-CIV, 2008 WL1994840 (May 5, 2008) (citing Belletete and citing Rossv. Jim Adams Ford, Inc., 871 So.2d 312 (Fla. Dist. Ct.App. 2004)).

24. Intervener’s Mot. Recons. at1-2, Milsap, 2009 WL5548496 (Nov. 30, 2009).

25. Id. at 3-7.

26. Id. at 8-10.

27. Order and Op. at *4, Milsap, 2010 WL 427436 (Feb.

1, 2010).

28. Id. at *1-2.

29. Id. at *3.

30. Id.

31. Compare State Fair Housing Act, N.C. Gen. Stat. §41A-7(a) (2007) (“Any person who claims to have beeninjured by an unlawful discriminatory housing practiceor who reasonably believes that he will be irrevocablyinjured by an unlawful discriminatory housing practicemay file a complaint with the North Carolina HumanRelations Commission.” (emphasis added)), with FairHousing Act, Fla. Stat. § 760.34(1) (“Any person whoclaims to have been injured by a discriminatory hous-ing practice or who believes that he or she will beinjured by a discriminatory housing practice that isabout to occur may file a complaint with the commis-sion.” (emphasis added)).

32. N.C. Gen. Stat. § 41A-7(h) (130 days after filing, theNCHRC, “shall issue to the complainant a right-to-sueletter which will enable him to bring a civil action insuperior court”); Fla. Stat. § 760.34(4) (180 days afterthe complaint is filed, “the person aggrieved may com-mence a civil action in any appropriate court”).

33. See Fair Housing Act, 42 U.S.C. § 3612 (2006). Seegenerally N.C. Gen. Stat. § 41A; Fla. Stat. §§ 760.20-37. But see Fla. Stat. §§ 760.35(d) (section contemplat-ing civil actions initiated by the commission specifies,“This subsection does not prevent any other legal oradministrative action provided by law.”).

34. 2010 North Carolina Analysis of Impediments to FairHousing Choice Draft Report for Internal Review at 3(September 17, 2010), www.nchfa.com/forms/Forms/2011-2015AI.pdf.

35. See, e.g., Complaint, Habitat for Humanity of the NCSandhills, Inc. v. Unsworth, 2009-CVS-00858 (MooreCounty Super. Ct. May 1, 2009) (A fair housing casebrought by the UNC Center for Civil Rights challeng-ing, inter alia, exclusionary zoning by the town ofPinebluff, NC. The case was brought under the FFHAin state court, removed to federal court, remanded tostate court, and ultimately settled.).

36. 42 U.S.C. § 3610(f).

37. Telephone Interview by Nam Douglass with RichardBoulden, chief counsel for NCHRC (June 23, 2009).One plaintiff proceeded in federal court; the other instate court after an administrative finding of “no cause.”The property in question purchased for about$250,000. Id.

38. Data is based upon a review of 363 cases filedbetween January 22, 2002, and April 17, 2009. TheCenter for Civil Rights requested data from theNCHRC on fair housing complaints in June 2009,and again in September and October 2010. TheCenter was provided with four overlapping data sets, a“Summary of Fair Housing Intake Data for HumanRelations Commission November 2004–October 3,2008,” “FHAP Voucher Detail Reports” coveringcases closed between June 16, 2008, and June 16,2009, a “Case Closed Inventory” filed with HUD bythe NCHRC covering January 1, 2007, throughSeptember 30, 2010, and a “Complaint Log” coveringcomplaints filed between December 5, 2007, andOctober 25, 2010. This data was amalgamated, and362 cases had enough information about their dispo-sition to analyze. A small number of cases had incon-sistent information between the various reports andwere excluded.

These cases do not represent all complaints filed in thistime period but were all of the information received

from NCHRC. According to the draft report onimpediments to fair housing, “more than 800 com-plaints were filed in North Carolina from 2004through 2009.” 2010 North Carolina Analysis ofImpediments to Fair Housing Choice Draft Report at3. Complaints filed in North Carolina would not nec-essarily be included in NCHRC’s data if they werefiled with municipal agencies or resolved by HUD.

39. Decisions, North Carolina Office of AdministrativeHearings, www.oah.state.nc.us/hearings/decisions/(listing OAH cases related to the HRC between 2001and 2009). Of seven cases listed as having had admin-istrative hearings, four had published decisions. Twoof these, one brought by the NCHRC and the otherby the Orange County Human RelationsCommission, resulted in findings of no discrimina-tion. Id. NC Human Relations Comm’n ex rel. Teele v.Wedco Enter., 00 HRC 1449 (NC Office Admin.Hearings Dec. 20, 2001); Orange County HumanRelations Comm’n ex rel. Wolpin v. Cornerstone RealtyIncome Trust, 03 HRC 1116 (N.C. Office Admin.Hearings Mar. 24, 2004).

40. Guffey v. Heavener, 99 HRC 1383 (NC OfficeAdmin. Hearings Aug. 6, 2001); NC Human RelationsComm’n ex rel. Johnson v. Gore, 08 HRC 1166 (NCOffice Admin. Hearings Mar. 16, 2009).

41. Liipfert at 288 (“results [in an administrative proceed-ing] may be more predictable” than in civil trial, and“[f]or respondents, the risk of facing a jury can be acostly risk”).

42. Id. (citing J. Kushner, Fair Housing Discrimination inReal Estate, Community Development, andRevitalization, app.9-1 (1983 and Supp. 1988)).

43. A Westlaw search for “Fair Housing Act” in the “nc-cs” or “All North Carolina State Cases” database revealsthree cases, Lee Ray Bergman Real Estate Rentals v. NorthCarolina Fair Housing Center, supra n. 17, NC HumanRelations Council ex rel. Leach v. Weaver Realty Co., supran. 6, and Town of Newton Grove v. Sutton, 111 NCApp. 376, 432 S.E.2d 441 (1993).

44. Supra n. 9, n. 12.

45. 24 C.F.R. § 115.204(a)(3).

46. 24 C.F.R. § 115.204(b). 42 U.S.C. § 3612(a).

47. 24 C.F.R. § 115.206(e).

48. Id.

49. N.C. Gen. Stat. § 41A-7(e) (While the federal regu-lations allow 100 days, the NCFHA requires the short-er 90-day time period.).

50. Of the case data provided by the NCHRC, see supran. 39, eight cases gave a date of cause determination,one of which was excluded because the data was incon-sistent with other information provided. Sixty-six addi-tional cases resulted in a finding of “no-cause” so thecause determination date would be the same as thecase-closed date. Of these 66, three cases were excludeddue to discrepancies in the case-closed date.

51. Id.

52. 24 C.F.R. § 115.206(e). N.C. Gen. Stat. § 41A-7(e).

53. Of the data provided by the NCHRC, 135 cases haddates for both the filing of the complaint and theadministrative resolution. Of these, five cases had sig-nificant discrepancies between data sets provided, andso were excluded from the sample. Six additional caseswere excluded from the study because they were appar-ently filed and closed on the same day. 124 casesremained and were analyzed. See supra n. 39.

54. Id.

24 SPRING 2011

Roy Parker had loved his wife for as longas he could remember. Even now, after morethan 20 years of marriage, he still felt a stir-ring in his chest as he watched her sleep.Cora made a neat, slender mound in theirfour-poster bed, a ripple beneath the snowywhite bedspread. Roy matched his breaths tothe hypnotic rhythm of the bedcovers risingand falling as he sat in a straight chairpropped against the bedroom wall—a sen-tinel on his nightly watch.

Roy had loved Cora even when they werekids and she wouldn’t give him the time ofday. A silent, coffee-colored boy in patchedclothes, Roy had hardly been able to carve outany time for school with all of the work thathad to be done on the 40 acres that his daddysharecropped. When he did get to attendCarter G. Woodson Elementary, he had beenawed by the ginger-skinned Cora Avery whostood out in the schoolyard like a fairyprincess with her two fat braids, her neatlypressed dresses, and her full lunch pail.During the Depression, when most everyfamily in Pine Point had too many childrenand too little food, Cora, an only child, was anoddity. She never wore hand-me-downs likeeveryone else. She had a tall, strong daddy, apretty momma, and a bedroom where she gotto sleep all by herself. Most of all, Cora radiat-ed such joy from her hazel eyes.

When her daddy went missing, and laterwhen everyone accepted that white folks hadkilled Samson Avery, Cora changed. Just lit-tle changes at first. Her hair was no longerneatly combed. The part down the middlewas crooked as if her momma had been toobusy to tend to her and Cora had tried to fixher own plaits. Her legs grew too long for herskirts, but no one let out the hems. It wasCora’s eyes, though, that nearly broke Roy’sheart. They lost that saucy sparkle; theylooked dull and dejected as if she’d opened abrightly wrapped Christmas present and

found it full of sand.Roy made it his mission to get Cora to

smile. He snatched apples from the barrel atthe general store to give her at lunchtime,paying no mind to the rumblings of his ownbelly that his momma’s cold biscuits and adollop of sorghum syrup never assuaged. Hebrought her satin ribbons, bouquets of pinkbush roses, and once, a white lace handker-chief.

When they were no longer children, Royknew he wasn’t the sort of man that Corawould give her heart to easily. Cora belongedwith somebody like Roosevelt Turner, some-body with good hair and easy laughter.Roosevelt was stylish, and he had all the samemoves as the dancers in the colored minstrelshows that came to the fairgrounds once ayear. He was like quicksilver with his compli-ments and jokes, and girls hung onRoosevelt’s every word. Roy knew his Corawouldn’t marry the smooth talking roller,though. He knew it even when he camehome one weekend and saw her dancingcheek to cheek with Roosevelt in Walter Lee’scafé. Roosevelt Turner was restless and unre-liable. Cora wasn’t going to marry a manwho might leave her.

Meanwhile, Roy worked out a plan of hisown. Being a funeral director was one of thefew respectable jobs where a colored mancould earn a good living, so he apprenticedhimself to his uncle, an embalmer inLaGrange. Roy studied hard and passed thestate board examination. He became asdependable and as sturdy as a Georgiapine—saving money and writing to Coraevery week. After Roosevelt Turner rode offon a train headed for Detroit, leaving Corawith kisses and empty promises, Roy camehome and married her. He opened his ownfuneral parlor in Pine Point, and Cora hadworked right beside him until the babiesstarted coming.

Roy Jr. and Beverly were born not quite14 months apart; then five years later, Anna.And just when they thought they were done,Henry. Cora called him her change of lifebaby.

Junior and Beverly, they were just liketheir momma—fearless and stubborn with arod of steel for a backbone. And Henry wasRoy’s big brother Sammy all over again—good-natured and cheerful. Henry couldcoax the meanness out of Satan with a smileand a wink.

But Anna, sweet Anna—doe-soft browneyes, timid, and tenderhearted.

Roy started as a car drove past the house.In an instant, he was up from his chair,reaching for the loaded shotgun beside him.He pressed his body against the bedroomwall while he watched the headlights on thecar cast crazy shadows in the front yard. Thecar drove past and disappeared down PopeSchool Road. Roy let out the breath that hedidn’t realize he had been holding.

It had been the same every night sincethat brick had been thrown through the win-dow. They had registered Anna in the whitehigh school that morning, and all hell hadbroken loose by the afternoon: death threatsover the phone; carloads of rednecks drivingpast the house, cursing and jeering. TheReverend Hairston and Lawyer Jessup from

The Stone BullB Y M I R I A M D E L A N E Y H E A R D

The Results Are In!

This year the PublicationsCommittee of the State Bar sponsoredits Seventh Annual Fiction WritingCompetition. Eight submissions werereceived and judged by a panel of sixcommittee members. The submissionthat earned third prize is published inthis edition of the Journal.

F I C T I O N W R I T I N G C O M P E T I T I O N - T H I R D P R I Z E

THE NORTH CAROLINA STATE BAR JOURNAL 25

the NAACP had told them that they couldexpect some retaliation. They had promisedthat the Parker family would be protected,told them that they could count on the sup-port of the attorney general and the fullresources of the Justice Department.

Only the attorney general and the JusticeDepartment had not been on Pope SchoolRoad when that brick came through theirliving room window. There had been no pro-tection when Roy and his oldest son foundthe dynamite under the front porch, thedynamite that had somehow slipped out ofthe duct tape that was still wrapped aroundthe brick, the dynamite that had landed, bythe grace of God, under their porch and notin their home. When Junior, young fool thathe was, had picked up the makeshift bomband hurled it into the empty field next to thehouse like he was a quarterback trying to geta third down conversion, there had been amighty explosion. The blast had fallen a treeand burned the surrounding brush, but ithad not maimed or incinerated Roy’s family.

Tomorrow he was supposed to walk hisbaby girl into that high school and hand her

over to those murdering bastards. Roy had protested Anna’s attending that

school with everything he had. When repre-sentatives from the NAACP, the SCLC, andthe SNCC all came to his house to tell himthat it was imperative to force Pine Point toabide by that Supreme Court decision, Roysaid his Anna was not going to that school.When Cora, still breathing fire and brim-stone over her father’s murder, insisted that itwas high time to send a message to whites inPalmetto County that they couldn’t kill aNegro with no more thought than theywould give to shooting a dog just ‘cause hewanted honest pay for honest work; whenshe vowed that nobody was going to tellSamson Avery’s grandchildren where theycould eat, piss, and sleep, Roy had held firm.His Anna was not going to that school.

It was Anna herself who had been hisundoing, when she’d grasped his hand andsaid softly, “Somebody’s got to be first,Daddy.”

Somebody’s got to be first.Roy had read a section of an encyclopedia

once that talked about folks who lived thou-

sands of years ago on the other side of theworld. Once a year, they held a ceremonyand sacrificed one of the village’s children toa god made of stone. He could still remem-ber the picture. The stone god with a facelike a bull and a lap made of fire. A man onhis knees, his arms outstretched, about totoss a live baby into that fire—all so theirwarriors could defeat an enemy in battle, orso that a drought would end and the villagecould have a good harvest.

Roy wondered if the man held his ownchild or someone else’s.

He peered through the window up anddown the quiet street. Roy propped his gunagainst the wall and sat back in his chair towatch his wife sleep. n

Miriam Delaney Heard was a member ofthe charter class of Elon University School ofLaw and since her admission to the bar, she hasworked for the Greensboro office of thestatewide nonprofit law firm, Legal Aid ofNorth Carolina, Inc., where she focuses onMedicaid, Social Security, and other state andfederal administrative law issues.

26 SPRING 2011

I’ve made mistakes of law and mistakes ofjudgment, each one, I hope, making mestronger and better as a person and as alawyer.

I have gained deeper understandings and aricher appreciation of our adversarial process,where the opposing counsel is my colleague,not my enemy, where successes belong to themen and women who have entrusted to metheir interests and their livelihoods, but wherefailure is personally felt.

Over 25 years I have advised governmentsin their deliberations of what is useful andwhat is good, and I have represented busi-nesses as they have created jobs and expandedtax bases. I have represented men and womenwho, because of someone else’s negligence,have lost a member of their family, a part oftheir body, or their ability to earn a living.And I have, on a few occasions, had the priv-ilege of standing between a citizen accused ofa crime and a powerful government thatclumsily holds the levers of the fragilemachinery of justice. Over 25 years I havelearned that justice is more of an ideal than aresult, and that, in spite of our continuousefforts to improve our laws and legal systems,

they remain inherently unequal and imper-fect because we, as humans, are imperfect.

As a profession, we are often maligned onMonday by the same person who needs usdesperately on Tuesday, while the methodicaland tedious and time-consuming effortsrequired to build and present our cases incourts of law are often portrayed in abbrevi-ated simplicity and undeserved glory inmovies and on TV.

But our role in a civil society is never sokeenly underappreciated or misunderstoodas when, in celebration of Memorial Day orthe 4th of July, citizens of admirable inten-tion forward mass emails that credit thetotality of our freedoms to victories and sac-rifices on foreign battlefields, messages thatignore the ongoing battles in our own citiesand neighborhoods over the centuries eitherto protect American citizens from society’smembers who are sometimes fearful of oth-ers’ freedoms while guarding their own, orto protect citizens from a government thathas taken active steps to take their freedomsaway.

I’m proud that it was lawyers with brief-cases, not soldiers with guns, who fought for

Rosa Parks’ right to sit at the front of the buswhen the duly adopted ordinances ofMontgomery denied her that freedom. I’mproud that the rights of Jehovah’s Witnessesto practice their religion according to theirown determinations, and the right of youngIowa student John Tinker to protest a contro-versial war, and Myra Bradwell’s right, as awoman, to become an attorney in Illinoiswere all defended by members of my profes-sion.

I’m proud that guarantees of due processand the rights to own property free from gov-ernment confiscation are protected in thecourts of our country every day and every-where, often without fanfare and sometimeswithout compensation, by lawyers. For weprove to ourselves again and again that whenit comes to the basic rights and freedomsguaranteed by one of the greatest documentsever written, we—not foreign govern-ments—can be our own worst enemy.

On September 19, 1985, I stood in acourtroom before the Honorable Edwin S.Preston and took an oath to “be faithful andbear true allegiance” to our state and federallaws and constitutional powers and to “trulyand honestly demean myself” as an attorney.And as I sit here today, reflecting on my first25 years as a member of the Bar of the greatstate of North Carolina, I hope my recordreflects that I have lived up to my oath. AndI hope that my next quarter century gives meevery opportunity to do the same. n

Tom Terrell, an attorney with Smith MooreLeatherwood, practices land use in NC. He hasbecome an active commentator on land use mat-ters through his blog, where this article was orig-inally posted on September 19, 2010. To readthis and other posts, visit https://nclegalland-scapes.wordpress.com.

Twenty-Five Years... andCelebrating

B Y T O M T E R R E L L

Icelebrate my 25th anniversary today, silently. And humbly.

Twenty-five years of membership in the one profession that is

needed for an ordered society to thrive under the deliberate

laws of its duly-elected citizens. In 25 years I have learned

much, taught much, laughed much, and had moments of tears.

34 SPRING 2011

In July 2009, North Carolina enacted theNorth Carolina Secure and Fair EnforcementMortgage Licensing Act (NC S.A.F.E.), N.C.Gen. Stat. § 53-244.010 et seq. NC S.A.F.E.provides, with limited exceptions, that

no person may engage in the mortgagebusiness or act as a mortgage loan origina-tor with respect to any dwelling located inthis state without first obtaining and main-taining a license under this Article. It shallbe unlawful for any person, other than anexempt person, to act as a mortgage loanoriginator without a mortgage loan origina-tor license, which authorizes an individualwho is employed by a licensee holding alicense as provided in subsection (b) of thissection to conduct the business of a mort-gage loan originator.

N.C. Gen. Stat. § 53-244.040(a). The North Carolina Office of the

Commissioner of Banks (OCOB), amongother responsibilities, regulates non-exemptpersons and entities engaged in the mortgagebusiness in the State. According to OCOB,they have very little leeway under NC S.A.F.E.to allow individuals to make loans secured bydeeds of trust on residential real property.While there is an exemption for lawyers underNC S.A.F.E., the exemption only applies to“[a]n attorney licensed pursuant to Chapter 84of the General Statutes who negotiates theterms of a residential mortgage loan on behalfof a client in the course of and incident to theattorney’s representation of the client, so longas the attorney does not hold himself out asengaged in the mortgage business and is notcompensated by a mortgage lender, a mortgagebroker, or other mortgage loan originatorwhen negotiating the terms of a residentialmortgage loan.” N.C. Gen. Stat. § 53-244.040(d)(4)(emphasis added).

This raises the inquiry of “What happens

when an attorney takes a promissory note forunpaid legal fees and secures it with a deed oftrust from the client?” In 1995, the ethics com-mittee issued RPC 186, which rules that “alawyer who represents a client in a pendingdomestic action may take a promissory notesecured by a deed of trust as payment for thelawyer’s fee even though the deed of trust is onreal property that is or may be the subject ofthe domestic action.” RPC 186 does not dis-tinguish between residential or non-residentialreal estate nor does it address any OCOBlicensure issues.

According to the OCOB, to the extent alawyer intends to secure the fee payments by anote and deed on “residential real estate,” asthat term is defined in § 53-244.030(31), thelawyer would need to be licensed under NCS.A.F.E. OCOB opines that if the lawyer isnot negotiating the terms of a residentialmortgage loan on behalf of a client, butinstead on his own behalf, he would not beexempt under § 53-244.040(d)(4), and wouldbe “engaging in the mortgage business” as thatterm is defined in § 53-244.030(11)(a)–(c).On the other hand, and to the limited extentthat the payments are secured by commercialor non-residential real estate, licensure is notrequired. According to OCOB, any lawyerwho took a mortgage on a client’s home afterthe effective date of NC S.A.F.E. is in viola-tion of the act and could be subject to prose-cution by the Attorney General’s office. Whilethe practice of securing fees with securityinterests may primarily be associated withfamily law practitioners, presumably, any pro-hibition under NC S.A.F.E. would applyregardless of practice area.

Compliance with the law is implicit in theRules of Professional Conduct. To the extentthat RPC 186 conflicts with NC S.A.F.E., theethics opinion is trumped by the law. A foot-

note to that effect has been added to theonline version of the ethics opinion. In addi-tion, given the concern that there is a conflictbetween RPC 186 and NC S.A.F.E., theEthics Committee will consider the fate of theethics opinion at the next quarterly meeting inApril.

OCOB is considering other inquiries per-taining to this prohibition, including how itmay relate to lawyers securing obligations onbehalf of clients in equitable distributionactions. Stay tuned. n

Suzanne Lever is assistant ethics counsel forthe North Carolina State Bar.

L E G A L E T H I C S

OCOB Opines that Lawyers May Not SecureLegal Fees with Deeds of Trust on Clients’Residential PropertyB Y S U Z A N N E L E V E R

Outlook (cont.)

We could, probably should, and perhapswill, ultimately seek the answers to theseinteresting questions by means of a properscientific survey, no doubt conducted online.In the meantime though, it would be nice toget some informal and unscientific feedbackfrom you, the putative readers of this col-umn. Not only will your answers be carefullyconsidered, but it would be very encourag-ing to the author and the publisher to knowthat someone out there is paying attention.What have you got to lose? Take a momentand respond. Don’t bother with snail mailor try to be ironic. Just send me an email attlunsford@ncbar.gov and tell me what youthink. Who knows, if your opinions areinsightful and respectful, you may qualify foran autographed copy of DisbarmentEnclosed. n

L. Thomas Lunsford II is the executivedirector of the North Carolina State Bar.