Lawyer Donna Hall appears before court

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Prominent Maori lawyer Donna Hall has denied a conflict of interest over a central North Island land deal in which she allegedly acted for three of the trusts involved in the sale.

The Law Society's standards committee alleges Ms Hall acted for the vendor, purchaser and lender during the 2007 deal, without the consent of each party to represent the others.

The committee opened its case against Ms Hall before the Lawyers and Conveyancers Disciplinary Tribunal in Wellington today.

The tribunal is able to impose much harsher sanctions than the committee can, including being struck off the roll, suspension, or fines of up to $30,000.

The hearing follows a complaint from a shareholder of the Tauhara Middle 15 Trust, which in 2007 bought the Tauhara North block near Taupo from Landcorp for $5 million jointly with another trust.

The complainant alleged a conflict because Ms Hall acted for both Tauhara and the Hikuwai Hapu Lands Trust, which facilitated the transaction.

She also acted for Tauhara Middle 4A2A Trust, which provided an unsecured loan to Tauhara Middle 15 to help fund its $1m contribution to the deal.

Law Society standards committee lawyer Gary Turkington told the tribunal today that Ms Hall failed to advise each party of the areas of conflict or potential conflict, and to advise the purchaser and lender that each should take independent advice.

Ms Hall was in a conflicted position during the on-selling of the land because she was also acting for the purchasing trust, he said.

In authorising the sale, the Maori Land Court gave its approval for the execution of a mortgage, but signalled it was not approving the purchase until five questions had been answered.

Mr Turkington said Ms Hall by-passed the questions and had put Hikuwai's trustees first.

Ms Hall's lawyer, Helen Cull, said there was no conflict because her client was not acting on the land deal itself.

Rather, she was acting on behalf of the Tauhara Middle 15 in its Maori Land Court proceedings, and to help remove a trustee who was opposed to the bank loan to secure the deal.

Ms Cull said the trust had approached Ms Hall to act on its behalf in the land deal, but she declined and instructed a barrister to act for the trust.

It was the barrister's duty to inform the trustees of a potential conflict, and any conflict arose from the trusts sharing trustees, she said.

Three people involved in the deal were trustees on all three trusts, while a further three were trustees on the two Tauhara trusts.

Ms Cull said there was evidence the trusts had shared mutual interests in purchasing the land, which had significant development potential for Maori, and the trusts shared beneficiaries.

"It is only a professional conflict if there are two distinctive interests that are conflicting and we don't accept that,'' she said.

Tribunal member Susan Hughes QC questioned whether the trustees were aware that Ms Hall stood to lose $300,000 in legal fees from the Hikuwai trust if the deal did not got through.

Ms Cull said she would need to take instructions from her client on that matter, and would get back to the tribunal tomorrow.

The hearing is expected to last three days.

- APNZ

By Hana Garrett-Walker and Matthew Backhouse | Email Hana

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Supreme Court rejects damage claim in HIV privacy case

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The Supreme Court limits "actual damages" under the Privacy ActA California man sued when the government publicly revealed his HIV statusThe 5-3 ruling pitted the court's conservative majority against the liberal minorityJustice Elena Kagan, the former solicitor general, did not participate

Washington (CNN) -- A divided Supreme Court ruled Wednesday against a California pilot who sued after the federal government publicly revealed his HIV status.

In a 5-3 ruling, the high court decided Stanmore Cooper's claims of mental and emotional distress are not covered under the Privacy Act.

"The Privacy Act does not unequivocally authorize damages for mental or emotional distress and therefore does not waive the government's sovereign immunity for such harms," Justice Samuel Alito wrote for the conservative majority.

Three liberal justices dissented, while a fourth, former Solicitor General Elena Kagan, did not participate.

In a statement Wednesday, Cooper said it was "discouraging that a majority of the court sided with the government."

Cooper became a licensed recreational pilot in 1964, but two decades later, the San Francisco man was diagnosed with HIV. As his condition worsened, he let his private pilot's certificate and his airman medical certificate lapse.

In 1996, Cooper applied for long-term disability with the Social Security Administration.

"I was in bad shape, I didn't have long to live," he said last year. But his health improved thanks to a cocktail of anti-retroviral therapy. He went back to work and wanted to fly again.

"I found out they were issuing medicals (exemptions) and I reapplied" to the Federal Aviation Administration "without revealing my HIV status," he said. "Big mistake."

He received his new pilot's certificate but, unknown to him, a joint local-federal initiative called Operation Safe Pilot was launched in 2002. Using a spreadsheet, the agencies shared and compared the names and personal data of about 45,000 pilots in Northern California, looking for potentially medically unfit individuals who were also receiving federal benefits.

Cooper was among four dozen or so pilots tagged as a "person of interest." When confronted by government agents, he admitted to a misdemeanor charge of filing a false report.

He was sentenced to probation and fined, and his pilot's certificate was revoked. The retired business executive's name was listed in a federal press release and later, through his prosecution, Cooper's medical history suddenly was a matter of public record.

"I had been able to control those (with) whom I shared my information about my HIV status, limited to some co-workers, family, and close friends," he said "And suddenly that was out of my control."

Cooper, who was eventually allowed to fly again, sued.

"I chose not to reveal my HIV infection and that was a very bad thing," he said. "I took responsibility for it and I paid the price. I was punished. And I think now it's the government's turn to own up to breaking the law and take responsibility for what they did."

A federal judge found both the FAA and the Social Security Administration violated the Privacy Act with the information-sharing investigation, but said under the law, only "actual damages" could be collected by plaintiffs seeking redress.

Since Cooper made no claims for economic harm, such as lost wages or medical expenses, he was out of luck. The judge found "emotional injury" alone did not qualify and dismissed the lawsuit.

A federal appeals court reversed that decision, ruling for Cooper. The FAA then asked the high court to intervene.

During an hour of oral arguments last year, the justices stayed away from the specific claims of emotional harm made by Cooper, focusing instead on what the law says about qualifying for damages.

"The argument you have made -- and I certainly understand it, that this is the Privacy Act and so it's precisely these types of damages that you would be concerned about -- really cuts both ways," Chief Justice John Roberts said to Cooper's lawyer.

"What you are saying is this (law) covers a really big chunk of damages, because this is what the whole act was about," Roberts said. "And it seems to me that argument suggests that there is some weight to the government's point: That if you are going to get that, you really do need clearer" language in the law that would immunize the government to some extent, from a flood of hard-to-disprove lawsuits.

The ambiguity has divided lower courts for years, and privacy experts said the ease with which the government can collect and share information in the digital age makes the issue of personal privacy liability ripe for review.

Justice Ruth Bader Ginsburg repeatedly hammered away at the government lawyer arguing for the FAA. She said the federal damages provision in question is similar to state tort claims that include both emotional and financial harm.

"The person who is subject to this, to this embarrassment, this humiliation, doesn't have out-of-pocket costs, but is terribly distressed, nervous, anxious, and all the rest," Ginsburg said. "The act that the Congress is reaching, the impact is of that nature. I mean, pecuniary (monetary) damages ordinarily attend conduct that embarrasses, humiliates you, causes mental distress."

Eric Feigin of the Justice Department said the Privacy Act's language may be interpreted as allowing damages for such things as "humiliation, embarrassment and mental anguish," but said because the phrase "actual" damages remains vague, the government should get the benefit of the doubt, tipping the case in its favor.

"Simply because a plaintiff may have suffered an adverse effect" from the privacy violation, argued Feigin, "doesn't mean that the plaintiff suffered actual damages."

Raymond Cardozo, Cooper's lawyer, pointed out during the hearing that his client's information was made public and his name and HIV status are still posted on a federal government database. He also made a larger argument, that his client's dilemma is one that may affect all Americans.

"Congress passed this act to restore the citizens' faith in their government, and it made a solemn promise to the American citizens that in cases of intentional and willful violation, the United States shall be liable for actual damages," Cardozo said. "Today, the government is proposing that "actual damages" be read in a way that renders this act virtually irrelevant. That makes a mockery of that solemn promise."

Cooper attended the public session at the court and expressed optimism afterward he would prevail.

"They've betrayed my trust and I can't get that back," Cooper said at the time. "There was nothing to lose here. I had to do it. It was the right thing to do."

The case is Cooper v. FAA (10-1024).

CNN's Tom Cohen and Kate Bolduan contribute to this report.

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Stolen Valor Act at Supreme Court: Is lying about being a hero a right?

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When Xavier Alvarez stood up and introduced himself at a local water district meeting in July 2007, he had no idea he was about to commit a federal crime.

“I’m a retired Marine of 25 years,” he told the other board members in Pomona, Calif. “I retired in the year 2001. Back in 1987, I was awarded the Congressional Medal of Honor. I got wounded many times by the same guy. I’m still around.”

In most social situations, such statements might elicit interested nods, admiring smiles, and perhaps heart-felt thanks for his brave service to the nation.

But it turns out Mr. Alvarez never served a day in the US military, had never been wounded, and – most important – was never awarded the Medal of Honor.

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After his false claim was exposed, the Federal Bureau of Investigation showed up. Alvarez was soon indicted for allegedly violating the Stolen Valor Act of 2005, a law that makes it a federal crime to falsely claim to have been awarded a military medal.

His lawyer attacked the indictment as a violation of the First Amendment, arguing that Americans have a free-speech right to make false and outrageous claims about themselves without facing criminal prosecution from a government truth squad.

A federal judge upheld the indictment, but a US appeals court panel reversed.

On Wednesday, Alvarez’s case arrives at the US Supreme Court, where the justices are being asked to decide whether the Stolen Valor Act is an unconstitutional regulation of free speech or an acceptable effort by the government to punish an alleged liar.

The high court has never directly addressed the issue of lying about military awards, and it is not clear how the justices may decide it.

The Supreme Court has recognized a number of categories of speech that are unworthy of full First Amendment protection. They include obscenity, libel and defamation, incitement to imminent harm, and fraud. In each of those areas the underlying speech causes a concrete injury.

Critics of the Stolen Valor Act say it requires no underlying injury. Any false statement claiming receipt of a medal may be punished. These critics suggest the best remedy for such false statements is not criminal punishment but more speech, particularly truthful speech to expose the lie.

The Obama administration is urging the court to uphold the restriction as a valid regulation of a discrete kind of false speech that lacks significant constitutional value.

Alvarez counters that the court has never before declared that such false statements are unworthy of constitutional protection. His lawyer says the government’s position marks a radical departure from free speech principles that could lead to sanctions against those who exaggerate, use hyperbole, or engage in satire.

“For good or bad, right or wrong, everyone lies. Xavier Alvarez is no exception. He told a bunch of whoppers,” wrote Alvarez’s lawyer, Deputy Federal Public Defender Jonathan Libby, in his brief to the court.

“Exaggerated anecdotes, barroom braggadocio, and cocktail party puffery have always been thought to be beyond the realm of government reach and to pass without fear of criminal punishment,” Mr. Libby said.

The US Solicitor General’s Office disagrees, arguing that the Stolen Valor Act is aimed at achieving an important government objective and that it is narrowly focused to achieve that objective.

“The government employs military honors to convey a message to the public that the recipient has been endorsed by the government as part of a select group,” Solicitor General Donald Verrilli wrote in his brief to the court. “The aggregate effect of false claims undermines that purpose … by diluting the medals’ message of prestige and honor.”

The law seeks to punish only those who knowingly make a false claim of having been awarded a medal, Mr. Verrilli said. A person is unlikely to make such a claim out of confusion or by mistake, he said.

“Content-based restrictions on false factual statements are consistent with the First Amendment if they are supported by a strong government interest and provide adequate ‘breathing space’ for fully protected speech,” Verrilli’s brief said.

Alvarez’s lawyer, Mr. Libby, openly admits his client is a liar. But he says Alvarez was pilloried in his community as an “idiot” and a “jerk” after his false statements were exposed.

Libby says Americans lie all the time in social situations and that if his client loses his case, the government may soon be investigating the veracity of a broader range of facetious statements.

“Xavier Alvarez lied. He lied when he claimed to have played professional hockey for the Detroit Red Wings. He lied when he claimed to be married to a Mexican starlet whose appearance in public caused paparazzi to swoon. He lied when he claimed to be an engineer. He lied when he claimed to have rescued the American ambassador during the Iranian hostage crisis, and when he said that he was shot going back to grab the American flag,” Libby said in his brief.

What’s the harm, Libby asked in his brief. There is no evidence that anyone relied on Alvarez’s false claims about hockey or military heroics.

“The government’s interest in protecting the reputation of military medals is legitimate, but not compelling,” Libby said. “False claimants cannot tarnish the reputation of medal winners.”

“The government seeks to create a new test – completely unmoored from this court’s precedents,” Libby said.

“Falsehoods are valuable for innumerable reasons: in refining truth, in expressing personal autonomy, and in greasing the wheels of social interaction,” Libby said. “More than that, there is a realm of harmless prattle and puffery generally considered beyond government control.”

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In Stolen Valor Act Case, Supreme Court Debates When Lies Can Be Crimes

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WASHINGTON -- The Supreme Court on Wednesday morning appeared divided over whether to strike down a federal law that makes it a crime for a person to lie about receiving military honors.

In 2007, Xavier Alvarez, an elected member of a Los Angeles-area water board, introduced himself at a public meeting as a retired Marine. "Back in 1987, I was awarded the Congressional Medal of Honor," he added for the record. Both statements were lies -- and the latter he would find out, when the FBI came looking for him, had recently been made a federal crime.

The Stolen Valor Act, passed by Congress in 2006, states that "whoever falsely represents himself or herself, verbally or in writing, to have been awarded any decoration or medal authorized by Congress for the Armed Forces of the United States ... shall be fined under this title, imprisoned not more than six months, or both." Alvarez would become the first person convicted under the act.

He appealed his conviction on the ground that the Stolen Valor Act violates the First Amendment protections for free speech. The U.S. Court of Appeals for the 9th Circuit in 2010 agreed, reversing the lower court and striking down the act. Since the Supreme Court consented to hear United States v. Alvarez this past fall, another appeals court has upheld the act, creating a split among the circuits.

Solicitor General Donald Verrilli, arguing on behalf of the Obama administration, told the justices on Wednesday that the 9th Circuit's fears of a society where any knowing falsehood could be criminalized were unfounded. The Stolen Valor Act prohibits only a "carefully limited and narrowly drawn category of calculated factual falsehoods" regarding military honors, Verrilli said at the start of his presentation.

Justice Sonia Sotomayor then wondered about a hypothetical Vietnam War protester who holds up a sign that reads, "I won a Purple Heart -- for killing babies." If the protester knew his statement to be false, Sotomayor asked, "Is that person, if he's not a veteran having received the medal, is he liable under this act?"

If a reasonable observer would see the sign as "political theater," Verrilli answered, then "it's not within the scope of the statute, and it wouldn't be subject to liability."

But, Verrilli continued, "this Court has said in numerous contexts, numerous contexts, that the calculated factual falsehood has no First Amendment value for its own sake."

"It has said it often, but always in context where it is well understood that speech can injure," responded Justice Anthony Kennedy, pointing to defamation and fraud actions. "I think it's a sweeping proposition to say that there's no value to falsity," he went on. "Falsity is a way in which we contrast what is false and what is true."

But Alvarez's lies and others implicated under the Stolen Valor Act do cause injury, Justice Antonin Scalia said. "[T]here's harm to those courageous men and women who receive the decorations," said Scalia. "Their service is demeaned when everybody says, 'I served in the armed forces.'"

Sotomayor disagreed. "[Y]ou can't really believe that a war veteran thinks less of the medal that he or she receives because someone's claiming fraudulently that they got one," she said. "They don't think less of the medal. We're reacting to the fact that we're offended by the thought that someone's claiming an honor they didn't receive."

"So outside of the emotional reaction, where's the harm?" she asked. "And I'm not minimizing it. I, too, take offense when people make these kinds of claims, but I take offense when someone I'm dating makes a claim that's not true."

Throughout Verrilli's presentation, Scalia seemed to be the lone unambiguous supporter of the Stolen Valor Act, going so far as to declare flatly, "I believe that there is no First Amendment value in falsehood." The justice's clear intent to uphold the act comes in some contrast to his votes in recent years to strike down, on First Amendment grounds, a federal ban on dogfighting videos, a California ban on the sale of violent video games and a jury verdict against funeral picketers. Scalia's son Matthew served with the U.S. Army in Iraq.

But whatever lead Alvarez had at the end of the solicitor general's argument disappeared when his lawyer, Jonathan Libby, took to the lectern. Chief Justice John Roberts, who had earlier pushed Verrilli on whether Congress could criminalize lying about obtaining a high school diploma, jumped all over Libby, a deputy federal public defender in California.

"What is the First Amendment value in a lie, pure lie?" asked Roberts.

The question, which came less than a minute into Libby's argument, seemed to knock him off balance. "Just a pure lie? There can be a number of values," he answered. "There is the value of personal autonomy."

"The value of what?" said Roberts.

"Personal autonomy," Libby repeated.

"What does that mean?" pressed the chief.

"Well, that we get to, we get to exaggerate and create ... ," Libby tried to answer.

"No, not exaggerate, lie," Roberts corrected him.

Libby offered up Samuel Clemens' use of the pen name Mark Twain as one such "persona" that is really just a lie about one's personal story and identity.

"Well, but that was for literary purposes," retorted Roberts.

Justice Samuel Alito was similarly incredulous, asking, "Do you really think that there is First Amendment value in a bald-faced lie about a purely factual statement that a person makes about himself because that person would like to create a particular persona?"

"Yes, Your Honor, so long as it doesn't cause imminent harm to another person or imminent harm to a government function," Libby said.

Some minutes later, Kennedy, who had seemed very much on Libby's side in the first half of the argument, appeared to fall off the bandwagon. "[I]t's a matter of common sense that it seems to me that [lying about receiving a military honor] demeans the medal," he said.

But it was Justice Elena Kagan who may have delivered the knockout blow to Libby, even if most of her questions leaned toward his case. "What truthful speech will this statute chill?" she asked.

"Your Honor, it's not that it may necessarily chill any truthful speech," Libby said. "We certainly concede that one typically knows whether or not one has won a medal or not."

"So, boy, I mean, that's a big concession, Mr. Libby," Kagan replied.

On rebuttal, the solicitor general made the most of that concession, but not before Kagan gave him a hard time, too. She asked if the government can criminalize deliberate falsehoods about extramarital affairs if the law is drawn narrowly and specifically enough. "The government has a strong interest in the sanctity of the family, the stability of the family, so we're going to prevent everybody from telling lies about their extramarital affairs," she hypothesized.

"That's a hard case," Verrilli admitted, before facing an additional flurry of questions from Sotomayor and Justice Stephen Breyer suggesting their belief that upholding the Stolen Valor Act would lead to laws that chilled speech clearly protected by the First Amendment.

To dispel that concern, Verrilli said, they need look no further than Libby's admission just moments earlier. The defendant's own lawyer, the solicitor general said, "conceded that this statute chills nothing."

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