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Letter from the Editor (Spring 2013)

by Bridget Daley, Editor-in-Chief

When it comes to experiences, they make you, shape you or (better yet) make you think. After three years at Duquesne Law, I have come to learn and appreciate that graduating from this Law School has taught me more than just how to think like a lawyer: I have learned how to think like a Duquesne Law graduate.

            The legal profession may not be flourishing with jobs to be had for anyone with juris doctor after his or her name. And where graduating from a small, Catholic law school may not bring with it the same name recognition as it would from a larger law school, Duquesne Law graduates come equipped with the skills and tools necessary to set themselves apart from the pack, to take a different approach and to map their own path to success. Opportunities are those that we seize and create for ourselves. More than merely staying the course, we must learn to pave the course.

            In the Spring 2013 issue, Juris shifts its focus internally to the Law School, its alumni and students who exemplify this notion. The issue begins with our cover story on the ever-inspiring Dr. John E. Murray, who has spent his life working to help improve the law. From there, the issue chronicles both the evolution of the law student and the law school—both necessary shifts in the mindsets of students and administrators to progress with the changes of the current legal landscape.

            A focus on the need for practical experience during law school has become a major change in legal education, and one that has been met with open arms and expanding course offerings at the Law School. Personally, having the chance to learn from Norma Caquatto, supervising attorney of the Community Enterprise Clinic, and Christopher Cafardi, adjunct professor of Pleading and Discovery Skills, has provided me with two of the most valuable courses at Duquesne Law.

            Finally, this issue introduces readers to some notable law students and alumni, who stand out as innovators and trailblazers. From the inspiring story of Phoebe Haddon (L’77), this year’s graduation speaker who has broken down doors and barriers to become the first African-American female dean of a top-tier law school, to the journey of Kaitlyn Kacsuta (3D), who has literally run miles to bridge her interests in sports, law and philanthropy, the Spring 2013 issue showcases an impressive collection of Duquesne Law’s finest.

            With that, I send my sincere gratitude to the Law School faculty and staff who have helped to shape and prepare me to pave my own course. I would like to thank the talented editors, writers and contributors who have worked hard to help Juris grow into the quality newsmagazine and blog it is today. And, of course, I would be nothing without my family and friends who have supported me along this challenging journey, especially my incredible husband Chris, who is always up for an adventure (like law school). So, with great honor and appreciation, I present the Spring 2013 issue of Juris.

            Now, off to make today better than yesterday.

______________________________________________________________________

Bridget J. Daley, 3D, is the Editor-in-Chief of JURIS. She is also an Associate Notes and Comments Editor of the Duquesne Law Review and a Certified Legal Intern in the Community Enterprise Law Clinic. Upon graduation and passing the bar, Bridget will join Buchanan Ingersoll & Rooney, PC as an associate attorney. She can be reached at bridgetjdaley@gmail.com.

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UPMC and "Institutions of Purely Public Charity"

by Eric Donato, Assoc. Web Editor

          Pittsburgh Mayor Luke Ravenstahl announced on March 20 that the city would challenge the University of Pittsburgh Medical Center’s status as an “institution of purely public charity,” which renders much of the $10 billion global health system’s properties tax exempt under state law.

            UPMC’s tax savings as a result of its “purely public charity” status amount to $42 million annually, according to the Pittsburgh Post-Gazette.

The city’s move is more than a policy decision concerning what UPMC’s “fair share” of the tax burden should be. The litigation raises an issue of constitutional dimensions that has troubled Pennsylvania for decades, and has raised the question: can UPMC be taxed at all?

The Pennsylvania Constitution and “Institutions of Purely Public Charity”

© insideupmc.blogspot.com

Article VIII, Section 1 of the Pennsylvania Constitution, known as the “Uniformity Clause,” typically requires that properties located within the same territorial limits be subject to the same tax burden. The Uniformity Clause makes it difficult for state, county, and local governments to tax properties at different rates, or to provide special tax exemptions for some institutions and not others.

However, Article VIII, Section 2 permits the General Assembly to exempt “institutions of purely public charity” from taxation. UPMC is currently considered an institution of purely public charity, so the properties that it uses for charitable activities are permitted to be (and are) tax-free.

            The criteria by which an organization is judged to be a purely public charity was created by the Pennsylvania Supreme Court in the 1985 case Hospital Utilization Project (HUP) v. Commonwealth. In that case, the court crafted the 5-part “HUP” test, which demands that the institution in question:

1) advance a charitable purpose,

2) donate or render gratuitously a substantial portion of its services,

3) benefit a substantial and indefinite class of persons who are legitimate subjects of charity,

4) relieve the government of some of its burden, and

5) operate entirely free from private profit motive.

            An institution must meet all five prongs of the HUP test to qualify as a purely public charity under the Pennsylvania Constitution.

            The question of whether UPMC actually meets the HUP test, however, remains an open question.

Litigation

            “It depends on how the courts decide to apply the test,” said Nicholas Cafardi, professor at Duquesne Law School and an expert on nonprofit organizations. “If they apply the test strictly, its a very difficult test to meet.”

This is particularly true with regard to the fifth prong of the test, the requirement that UPMC “operate entirely free from private profit motive.”

            UPMC’s tax exempt status has drawn heavy criticism because many of the organization’s executives receive 7-figure salaries.

            Cafardi said that while “generous executive salaries” by themselves may not be evidence of a private profit motive, “if there’s a bonus tied to performance, well, then you’re starting to look like a private business, aren’t you?”

According to IRS filings, UPMC’s CEO Jeffrey Romoff received almost $6 million in compensation for the calendar year of 2010, including bonuses tied to performance.

UPMC’s closure of its struggling Braddock facility and opening of a new facility in the wealthier Monroeville area has added fuel to claims that the organization is profit-driven, rather than charitable, in nature.

Nonetheless, UPMC is “politically powerful” Cafardi explained. “Could they convince a court that hitting them with a property tax . . . would do more harm than good? That’s not the same thing as applying the test as written. That’s just saying . . . you’re going to do this to the area, and you’re not going to do good.”

UPMC has over 55,000 employees, and is western Pennsylvania’s largest healthcare system and employer.

Cafardi suggested that the court may be swayed to “adapt legal standards” for public policy reasons, and that perhaps this was “an area where policy is a perfect reason for applying standards less than rigidly.”

A Push Toward the Bargaining Table

Cafardi said that it is possible the litigation is intended to extract an agreement from UPMC to voluntarily pay a portion of what it would otherwise owe in property taxes if the organization lost the case.

“Would this be the first time a lawsuit was filed in order to get big parties to talk to each other?” said Cafardi.

UPMC has similar PILOT (payment in lieu of taxes) agreements with Erie county and South Fayette township.

“If they can do that in Erie and they can do that in Fayette, why can’t they do that in Allegheny County?” said Cafardi.

Amending the Pennsylvania Constitution

            The General Assembly has not been content to leave the issue to the courts.

            Legislation known as Senate Bill 4, which was recently approved by the Senate and sent to the House for consideration, would amend the Pennsylvania Constitution to give the legislature the exclusive power to determine what constitutes a purely public charity.

            The state constitution may only be amended after approval by the General Assembly in two consecutive sessions and a vote by the electorate in a referendum.

            In 1997, the General Assembly attempted to wrest control over the definition of “purely public charity” from the state’s highest court by passing Act 55. The legislation provided guidance on the HUP test’s five prongs, and deliberately weakened the test to make it easier for organizations to meet the definition of a purely public charity. However, because it is the job of the judiciary (not the General Assembly) to interpret the constitution, and because the HUP test is an interpretation of the state constitution’s provision on purely public charities, a narrow majority on the high court ruled that the legislation could not weaken or otherwise redefine the test.

            Amending the Pennsylvania Constitution through Senate Bill 4 would surmount the obstacle presented by the separation of powers. Should voters approve the measure, the criteria needed to reach tax-exempt status would rest squarely with the General Assembly. The resulting definition would likely be less stringent than the current HUP test, and could potentially shield organizations like UPMC from litigtion of the sort it faces now.

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Hacking Law: Is It Time For Reform?

by Matt Andersen, Op-Ed Participant

© www.news.com.au

          We currently reside in a technologically rich era, and our personal information is constantly under attack, or available to attack, by hackers.  Luckily, the United States legislature enacted the Computer Fraud and Abuse Act (CFAA) in 1984, and it has been heavily critiqued ever since.  It goes without question that technology has significantly changed since 1984, and for that reason judges and United States citizens are calling for reform of the 29-year-old law.  Additionally, every state legislature has enacted a statute similar to the CFAA (Pennsylvania’s can be found at 18 Pa. Consol. Stat. Ann. § 7611 (West 2012)).

            The CFAA can be found at 18 U.S.C.A. § 1030 (West 2012), and it specifically states that it is illegal to “intentionally access a computer without authorization or exceed authorized access.”  In recent months, there has been public outcry over the CFAA, and, most notably, because the United States government has used the CFAA to indict a few well respected members of the hacker community. 

            Most recently, Andrew Auernheimer, commonly known in the hacker community as “Weev,” was sentenced to 41 months in prison for violating the CFAA.  Specifically, Auernheimer hacked into AT&T’s servers and obtained the email addresses of over 114,000 iPad users.  By doing this, Auernheimer was able to obtain the email addresses of New York City Mayor Michael Bloomberg, New York Times CEO Janet Robinson, ABC’s Diane Sawyer, and former White House Chief of Staff Rahm Emmanuel. 

            Auernheimer considers himself a “gray hat” in the hacking community, which means he hacks into a company’s servers, strictly to expose the flaws in their cyber security.  When a gray hat finds a flaw in a company’s cyber security, they will usually let the company know, and offer to sell them the information so they can fix it.  After a company is hacked, it will usually spend at least $100,000 to fix the breach, because companies are required to inform every customer who could be affected, and they have to pay to resolve the breach.  In fact, the largest hack in history happened to the Sony Playstation Network, which caused Sony to shut down the network for 24 days, and pay the 77 million affected users a total of $170 million. 

            However, this was not a normal “gray hat” hack for Auernheimer.  The jury did not believe Auernheimer’s argument that he was acting as a gray hat, because, upon obtaining these email addresses, he subsequently handed the data over to Gawker, which publicly posted the information on its website. 

            Just a week before Auernheimer’s sentencing, federal prosecutors indicted Reuters social media editor Matthew Keys for helping the world-renowned hacker group “Anonymous” attack the website of his former employer, the Tribune Company.  Keys is facing up to 25 years in prison, as well as fines that could reach $750,000. 

         

© theverge.com/Daniel J. Sieradski

   The biggest news story came in January when Aaron Swartz, an internet activist who advocates for absolute freedom of information, committed suicide while he was awaiting trial.  Swartz allegedly hacked into the Massachusetts Institute of Technology’s digital archive and stole millions of scholarly journals that would normally require payment to access.  Swartz was facing a potential prison sentence of more than 30 years.  Many devout fans of Swartz believe that the federal prosecutor’s threats of an extreme prison sentence are what led Swartz to commit suicide. 

            Auernheimer, Keys, and Swartz were all charged under the CFAA, and many have criticized this law for being too broad and overly vague.  Many also criticize the CFAA for imposing sentences that are entirely too harsh for merely computer crimes.  However, many critics do not realize that Keys and Swartz were indicted under completely separate provisions of the CFAA.  Swartz was indicted for violating the provision of the CFAA dealing with unauthorized access, and Keys was indicted for violating the provision dealing with damage to a computer. 

            The provision of the CFAA dealing with unauthorized access, which Auernheimer and Swartz violated, is what has received the most criticism in recent months.  It certainly seems that a law enacted in 1984 that deals with computer hacking is most likely out-of-date, and in need of some serious change.  With high profile cases in federal courts, and the attention that this issue is getting from mainstream media, an amendment to the CFAA within the next few years appears likely.

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The (Hopeful) Collapse of the NCAA Empire

by Brandon Uram, Op-Ed Participant

          It may all unravel soon for the NCAA, the billion-dollar collegiate sports enterprise, as a class-action lawsuit barrels down the road.  O’Bannon v. NCAA could finally force payments for the “student-athletes,” the ones that generate all derived revenues, which are solely enjoyed by the universities and administrators.

         Public support for the NCAA’s “student-athlete” model has been waning for years, but the camel’s back looks like it’s about to break.

         How is it justifiable that college kids, many of whom come from impoverished backgrounds, are prevented from making a single dime from their athletic endeavors? Worse yet, how are these colossal universities able to sell their players’ likeness and talents through jersey sales, memorabilia, and other licensed products?  

© NYTimes/Sara Cwynar

          All of this is cloaked under the oxymoronic, PR-department created phrase “student-athlete.”  This anachronistic model may have been feasible back when profits weren’t in the hundreds of millions of dollars, but now, everyone wants to wet their beak, and the only ones prevented from going to the well are the kids who are actually making all of this money. Take a look at what the average Division-1 athletic director makes.  After you pick your jaw from the floor, go ahead and glance at typical head coach salaries.  So while NCAA president Mark Emmert rakes in a cool $1.6 million this year, the athletes are given a $250 stipend.  Thanks so much, NCAA bureaucrats!

          Now, I’m not saying that coaches and ADs shouldn’t make six or seven figures.  After all, we’re not communists—I’m a believer in the free-market, and I think that they should rake in whatever the market will bear; but, the coaches and administrators, aren’t operating in a truly free market.  Hell, it isn’t even a competitive market—it’s an artificial monopoly.  These salaries are held up at the expense of the players.  If, after players are compensated for their talents, schools still want to pony up and pay Nick Saban $5 million-plus per year, be my guest.  If Alabama believes that that’s the fair market value and that they can still see a hefty return, then I’m all for it.  Just pay the players what they are entitled to.

      Then, there’s this ever-reliable straw man argument: “But the players are paid with their scholarships, and dammit, they should be grateful!”  Sure, the scholarship is definitely a benefit and obviously has some ascertainable value—not going to argue with that—but why are athletes the only ones on campus who are prevented from using their talents and making a buck? If, for example, School X gives a music scholarship to Y, Y can book performances if there’s a demand and make a profit. No need to stop this, says the NCAA; the concerns only arise when it’s trying to protect the games in the name of amateurism, administrator short-hand for “we’re not sharing.”

Back to the O’Bannon case.  A former UCLA star is suing to collect profits made by the NCAA and its licensed video game maker (EA Sports) for using his name and likeness, after he had graduated.  The NCAA argues that, when players sign the 20-plus pages of mandatory red-tape, releases, and waivers, it essentially owns an athlete-employee’s likeness for eternity.  If you refuse to sign all of the forms, you are barred from ever competing collegiately.  Not a whole lot of room for the players to negotiate.  I’m no Dr. John Murray, but that sounds like a contract of adhesion to me…unconscionable about sums up the NCAA’s stance on compensating its athlete-employees.

        If the players could somehow organize and boycott a major championship or tournament—perhaps this March—they could grind the NCAA to a halt.  They could force them to pony up something, anything.  But, this is extraordinarily unlikely, so, for those of us expecting justice, we’ll have to wait until it’s forced upon the NCAA. 

         Here’s to holding out hope that U.S. District Court Judge Claudia Wilken finds in favor of the ever-uncompensated “student-athletes.”

If you don’t believe that the athletes—the ones who make the NCAA a billion-dollar conglomerate—are entitled to any revenues, you’re either (1) jealous, (2) ignorant, or (3) both. There’s no wiggle-room here. Wise up.  The kids have already earned it, now let them enjoy it.

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