Cultivated Compendium

Half of the 17 state-run insurance exchanges set up under President Barack Obama's health law are struggling financially, The Washington Post's Lena H. Sun and Niraj Chokshi report. The exchanges are facing financial distress because of "surging costs, especially for balky technology and expensive customer call centers — and tepid enrollment numbers." Federal funding for state-run exchanges has ended and exchanges now have to require their own costs of operation.

Some states are considering handing exchange functions over to the federal government but they are holding off until the U.S. Supreme Court rules by the end of June on whether the only way subsidies for health insurance can be provided to taxpayers is through coverage bought on state exchanges.

California charities must disclose the names of their major contributors, the U.S. Court of Appeals for the Ninth Circuit ruled last week. The Los Angeles Times' Maura Dolan reports that the Center for Competitive Politics lost the argument that its First Amendment right to the freedom of association is violated by the reporting requirement.

California Attorney General Kamala D. Harris ordered nonprofits to disclose donors who contributed more than $5,000 in a single year. The disclosures, however, were only to the attorney general's office, not to the public too.

The federal government is liable for some of the flooding damage from Hurricane Katrina because of failures in the hurricane protection system, the New York Times' John Schwartz reports. U.S. Court of Federal Claims Judge Susan G. Braden found that a canal built by the Army Corps of Engineers led to flooding in the New Orleans area, and that private plaintiffs and the St. Bernard Parish government can recover under the takings clause of the Fifth Amendment. The amount of the liability will be determined through mediation.

The Association of Corporate Counsel is arguing in the Pennsylvania Supreme Court that nonprofit in-house lawyers should not be allowed to blow the whistle to the state attorney general about the misuse of funds, Corporate Counsel's Sue Reisinger reports. The Supreme Court, in a case titled Redacted v. Redacted, is going to decide if in-house counsel may disclose information about wrongly diverted funds to the attorney general's office, "'“as parens patriae for the public to whom the charity and its counsel owe a fiduciary duty.”'

The ACC argues that if clients will be less candid with their lawyers if they are afraid their lawyers will turn them in to law enforcement.
 

The U.S. Court of Appeals of the Seventh Circuit has ruled that Wisconsin must criminalize video poker before it can ban an American Indian tribe from engaging in it, the Associated Press reports. As a result, the Ho-Chunk Nation can offer video poker at its Madison casino because video poker is only a civil offense when establishments that serve alcohol possess them.

Banks may be running out of time to get their money back in New York foreclosure cases because some cases could become time-barred by a six-year statute of limitations, The New York Law Journal's Andrew Keshner reports. One Long Island judge ruled that the statute of limitations starts when the entire mortgage balance was declared due in full but a bank failed to file its second mortgage complaint within six years.

Elizabeth Lynch, supervising attorney for MFY Legal Services' foreclosure project, told Keshner that it is rare that homeowners have not made some post-acceleration mortgage payments, which can start the statute of limitations clock again.

There are approximately 92,000 foreclosure cases pending in New York.

The U.S. Supreme Court ruled, 5-4, Wednesday that states can bar judicial candidates from personally asking for campaign contributions, The Associated Press' Mark Sherman and Sam Hananel report. Chief Justice John Roberts, along with the four liberal members of the court, opined that '"judges are not politicians, even when they come to the bench by way of the ballot. A state may assure its people that judges will apply the law without fear or favor — and without having personally asked anyone for money.”'

The dissenting justices would have struck down Florida's ban under the First Amendment.

Even though Roberts was in the majority on the Citizens United decision that liberated corporations and unions from campaign spending limits, the AP reports that "this case could be seen to bring out his role as the leader of the judicial branch, even if he and other appointed federal judges are not affected by the case. Roberts at several points drew a distinction between candidates for judgeships and other offices."

It is unclear who will pay the fees for the attorneys who have been negotiating settlements of Superstorm Sandy insurance cases, The New York Law Journal's Andrew Keshner reports. The Department of Homeland Security and the Federal Emergency Management Agency say that they are not statutorily authorized to pay legal fees to plaintiffs' lawyers. But insurance carriers don't want to pay the fees out of concern that they could face qui tam whistleblower suits. Eastern District Magistrate Judges Cheryl Pollak, Ramon Reyes, Jr. and Gary Brown, the trio tasked with facilitating case resolution, held a hearing this week to resolve the fee and other issues, Keshner reports. The judges said they would restart mediation if the fee and other issues can't be resolved.

The U.S. Supreme Court will hear arguments today on whether a drug used in Oklahoma's lethal-injection executions violates the constitutional ban on cruel and unusual punishment, Christian Science Monitor's Warren Richey reports. At issue is whether midazolam, the first drug used in a three-drug cocktail, is "reliably effective in preventing condemned prisoners from suffering an intolerable level of pain during the execution process." The drug is supposed to make prisoners unconscious, but there have been three botched executions in which prisoners awoke and struggled during the administration of the later drugs.

The Pennsylvania Supreme Court has reinstated the conviction of the first Catholic Church official to be convicted criminally for the sexual abuse of children for whose welfare he was responsible for but who he did not directly abuse, The Legal Intelligencer's Gina Passarella and Lizzy McLellan report.

The intermediate appellate court found that Monsignor William Lynn could not have been convicted for endangering the welfare of children he never supervised. But Justice Max Baer, writing for the majority of the Supreme Court, found that Lynn"'was a person supervising the welfare of many children because, as a high-ranking official in the Archdiocese of Philadelphia, he was specifically responsible for protecting children from sexually abusive priests,"' The Legal reports.