Gideon Alert: North Carolina attorneys leave appointed counsel panels in droves

BY David Carroll on Tuesday, May 10, 2011 at 11:05 AM

On May 4, 2011, the House side of North Carolina’s General Assembly passed a budget bill (HB 200) that cuts annual funding for the statewide Indigent Defense Services (IDS) by roughly $11 million, or more than 9% of their previous year’s budget.  The threatened cut is especially drastic because, based on projected need for the remainder of this fiscal year, IDS expects to be nearly $12.8 million short.  In the past, the legislature would make a one-time appropriation to IDS to make up for any end-of-the-year shortfall, but the current legislative leadership has made it clear that such practices will not continue. This means the legislature is expecting IDS to pay for this year’s deficit out of next year’s reduced budget.  IDS would have to operate for all of the 2011-2012 fiscal year with only 80% of the budget it had in 2010-2011, and this at a time when IDS caseloads are increasing.  (Click here for more information on IDS and how North Carolina prosecutors pushed for these cuts).  Most locals expect the budget bill to pass the Senate, with sufficient votes in the Assembly to override any gubernatorial veto.  

Currently, North Carolina pays assigned counsel attorneys $75 per hour, out of which assigned counsel cover their overhead expenses and receive the rest for their compensation.  A special provision in The Report on the Continuation, Expansion, and Capital Budgets (informally known as the “Money Report” or “Appropriations Summary”) that accompanies HB 200 directs IDS to “use its statutory authorization to set reimbursement rates based on projected utilization to minimize potential shortfalls in the fund, including setting differential rates for District and Superior Court work and setting fixed costs for high-volume, standard case types.”  In plain language, this means that IDS must lower the assigned counsel hourly rate to bring total IDS costs within the budget the legislature intends to provide.  IDS staff estimate that it will have to reduce assigned counsel rates to $50 per hour to come within the projected budget.  

If assigned counsel attorneys actually pocketed $50 per hour, this might be a significant amount of money, but they do not.  Assigned counsel attorneys must first pay all of the overhead expenses of operating a law office out of this hourly rate, and they receive as income only the amount that is left over.  These overhead expenses would have to be incurred by the state if services were delivered through staffed public defender offices.  Overhead includes, but is not limited to: office rent and utilities (lights, phone, fax, internet, water, etc.); office infrastructure (computers, photocopiers, desks, etc.); office supplies; legal research tools (Westlaw/Lexis-Nexis, law library, etc.); administrative and legal support (salaries, payroll taxes and benefits of secretarial and paralegal staff); malpractice insurance; state licenses and bar dues; and continuing legal education.  The North Carolina Bar Association reports that the hourly overhead cost today of operating a one- to four-person law firm in North Carolina averages more than $58 – in other words, $8 more per hour than IDS believes it will be able to pay.  By comparison, the federal government pays $90 per hour for appointed defense counsel.

When the budget passed the House, many of the state’s assigned counsel attorneys began removing their names from the list of attorneys willing to be appointed to represent the indigent.  The Winston-Salem Journal reports that more than half the assigned counsel attorneys in Forsythe County have left the assigned counsel system.  The Times-News reports that 39 of 70 assigned counsel attorneys in Alamance County have resigned.  The entire panel in Bladen County has declined to take cases, as have several experienced attorneys in New Hanover County, according to WECT-News6.  WFAE reports that all Rutherford County attorneys have also removed themselves from being appointed.

With so many criminal defense attorneys leaving the system, judges are contemplating appointing any member of the bar – real estate lawyers, patent attorneys, those who practice bankruptcy law and insurance defense and domestic relations law -- to represent people who cannot afford an attorney.  Though IDS Rule 1.5(d)(2) provides that “[n]o attorney shall be appointed as counsel for a person in a non-capital criminal or non-criminal case in a court of any district unless the attorney has consented to placement of his or her name on the list of attorneys subject to appointment or, if the attorney has not agreed to do so, has otherwise consented to be appointed,” there does seem to be some legal basis for judges to appoint lawyers outside of the authorized panels.  IDS Rule 1.5(d)(1) authorizes judges to appoint a lawyer who is not “on the certified plan or list or who is not next in sequence on the list” if the judge deems it to be in the “furtherance of justice.”  Case law also suggests that the courts have inherent authority to operate in the furtherance of justice, but that this “is a tool to be utilized only where other means to rectify the threat to the judicial branch are unavailable or ineffectual.” [See: In the Matter of the Alamance County Court Facilities, 329 N.C. 84, 99, 405 S.E.2d 125, 133 (1991)].

Authority or not, such a move would directly violate national standards for indigent defense systems.  Principle 6 of the American Bar Association (ABA) Ten Principles of a Public Defense Delivery System requires that the ability, training, and experience of defense counsel match the complexity of the case to which they are appointed.  Just as you would not go to a dermatologist for a heart operation even though heart and skin specialists are both doctors, it is wrong to expect that everyone with a bar card has the ability to provide adequate criminal defense representation.  Representing a juvenile in a delinquency proceeding or defending a person charged with capital murder are very different than preparing a will or real estate conveyance instrument or defending an insurance malpractice claim, for example.  

Along with the budget cut to IDS, the General Assembly is proposing to simultaneously increase the number of staffed public defender offices in the state.  Both the House and the Senate have bills that would transfer IDS from a predominantly assigned counsel system to a predominantly statewide public defender system.  

When IDS was first established in 2000, the enabling legislation (§ 7A 498.7) identified those counties that already had public defender offices and established a complex method for any other county to change to a public defender office.  Statutorily, IDS must give notice to and consult with the affected district bar and presiding Superior and District Court judges.  Then the IDS Commission must recommend that the General Assembly pass a law to establish a public defender office in the county or region.  Only if the legislation passes can a new public defender office be established in any county that did not have one in 2000.  Otherwise, a county will continue to have an assigned counsel system, where judges have significant control over whether and which attorneys receive appointments and the pay that goes with them.  The likelihood of such an act passing is small, since in many areas of the state judges do not wish to give up the power of appointment.  Assigned counsel systems in states where the judges are elected are always open to the criticism, rightly or wrongly, that judges make assignments to local attorneys with the expectation that those attorneys will contribute to the judges’ re-election campaigns.

Both the House and Senate proposals would eliminate the need for further legislation to create public defender offices and also eliminate the role of the local bar and judges.  The proposals would create a total of 30 public defender offices providing representation in all 100 of North Carolina’s counties, increasing from the existing 16 public defender offices that currently provide representation in 26 counties.  Only the implementation dates differ between the Senate and House proposals. Senate Bill 596 anticipates a switch effective January 1, 2012, while House Bill 200, Section 15.16.(d) has an implementation date of July 1, 2012.  

On May 20, 2011 the IDS Commission will meet to discuss next steps.  It is anticipated that the Commission will either set new rates or set a floor to new rates so that assigned counsel attorneys will know the minimum hourly rate they will be paid for their work.  As for the additional public defender offices, local advocates are suggesting that the General Assembly either allow IDS to conduct a study before enacting the public defender office increase or simply delay the effective dates of the legislation to allow IDS more time for orderly expansion.

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