The Arkansas Lawyer - Spring 2009 by Arkansas Bar Association

The Arkansas

Lawyer

A publication of the

Arkansas Bar Association

Vol. 44, No.2, Spring 2009

online at www.arkbar.com

Inside: Lawyering the Fayetteville Shale Play Environmental Regulations of the Oil & Gas Development Arkansas Limited Partnership Law

This issue is dedicated in memory of Judith Ryan Gray

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Resolution of the Past Presidents of the Arkansas Bar Association Honoring the Memory of Judith R. Gray

Whereas, the Arkansas Bar Association, a volunteer organization, dedicated to ensuring that our court system provides equal justice to all of our citizens; and Whereas, the Arkansas Bar Association is committed to helping all lawyers serve their clients diligently and professionally; and Whereas, the Arkansas Bar Association recognizes its responsibilities to help lawyers maintain their integrity and their commitment to the legal profession; and Whereas, in order for the Arkansas Bar Association to reach its goals and objectives of excellence it must recruit, hire, and develop staff who are willing and able to provide dedicated service to its members and its leadership; and Whereas, in 1967, the moon and the planets all lined up just perfectly as Judith R. Gray of Newfoundland, Canada, was hired by the Arkansas Bar Association; and

Whereas, that day set the tone for excellence for which this Bar Association is known, as for the next forty years Judith dedicated herself to ensuring: 1) that each Bar built on the successes of the past years; 2)that each Bar member was respected and valued; 3)that each Bar leader was supported and honored; and 4) that she would do everything within her power to better the legal profession and the Arkansas Bar Association; and Whereas, the Arkansas Bar Association gratefully acknowledged Judith’s dedication and extraordinary service to our profession and the Bar in 1980 and 1993; and Whereas, in 2000 the Arkansas Bar Foundation recognized Judith’s important work by inducting her as a Fellow; and Whereas, the Pulaski County Bar Association, our State’s largest local Bar, honored Judith by awarding her the Liberty Bell Award in 1988 and 2006; and Whereas, in 2007, the Arkansas Bar Association honored Judith with its C.E. Ransick Award of Excellence, in recognition of her dedicated and extraordinary service to the Legal profession, the first time the award had been presented to a non-attorney; and Whereas, Judith “retired” that year after 40 years of unselfish excellence to our profession; and Whereas, the Past Presidents of the Arkansas Bar asked that Judith join us at all Past Presidents’ dinners as an honorary Past President; and Whereas, she continued to serve our Bar, ensuring the unparalleled success of the 2007 meeting in Little Rock of the

Southern Conference of Bar Presidents; and Whereas, Judith’s actions for the Bar came from her heart; and Whereas, Judith always believed that the legal profession was the most noble of all professions; and Whereas, Judith was a special “treasure” for all of our Bar’s Past Presidents; and Whereas, her personal dedication to each Bar President and his/her family ensured the success of each Annual Meeting by: 1) inspiring each Bar President to accomplish and realize all of his/her dreams and aspirations; and 2) instilling in each Past President a sense of pride in the Bar and of his/her chosen path in life. Therefore, be it Past Presidents of Association that:

resolved the

the

Arkansas Bar

1) We recognize and applaud the accomplishments of all that Judith Gray did for our noble profession, for the Bar, for our families, and for each of us personally; and 2) That we all loved and respected Judith Gray; and 3) That we and our families appreciated her for all that she did and for all that she enabled us to do; and 4) That we mourn her death; and 5) That we hope that we each met her expectations; and 6) That we dedicate our future meetings and our future gatherings to her memory.

Signed: the Past Presidents of the Arkansas Bar Association April 3, 2009

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

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President’s Report

by Rosalind M. Mouser

Your Bar at Work Rosalind Mouser’s “President’s Report” portrays photos of recent Association Activities

Rosalind presents a Fifty-Year Member plaque to Donald H. Smith at the Jefferson County Bar Association meeting in January.

Jim Sprott, Renee Brida, Bob Estes and Donna Pettus at the Association’s Mid Year Meeting in Memphis in January.

Zane Chrisman, Elizabeth Derrico with the American Bar Association, Fred Ursury, Rick Ramsay, Rosalind and Donna Pettus at the Long Range Planning Committee meeting in February.

Renee Brida, Danna Young, Lori Burrows and Rosalind at the Arkansas Association of Women Lawyers and Arkansas Bar Association Women in the Profession Committee “Defining Balance” workshop in February.

Joe Williams, Jim Burton, Rosalind and John White at the Jonesboro Rotary Club meeting in February.

Mock Trial Runner Up team from Rogers with U.S. District Court Judge Beth Deere (front left), U.S. Circuit Judge John N. Fogleman (front center) and Rosalind (front right).

Rosalind, Don Goodner, Jim Simpson and Jean Carter at the Uniform Practice of Law Task Force meeting in March.

Rosalind, law student Steve Creekmore and Donna Pettus at the University of Arkansas Law School reception.

L. Scott Stafford, Jack A. McNulty, Lorrie Payne, and Jack Davis at a Legislative Committee meeting in March.

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

Association News President-Elect Designee Jim Julian at ABA BLI

Arkansas Bar Association Member Benefits

Arkansas Bar Center

American Bar Association (ABA) President Tommy H. Wells, Arkansas Bar Association President-Elect Designee Jim Julian and ABA President-Elect Carolyn Lammat the ABAâ&#x20AC;&#x2122;s Bar Leadership Institute (BLI) held March 1214 in Chicago. The BLI is held annually for incoming officials of local and state bars.

Arkansas VersusLaw Search Arkansas and national legal materials Developed specifically for members Searchable Weekly Case Summaries Free technical support and training Go to www.arkbar.com Click on Arkansas VersusLaw and login Select a library and begin searching

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Space available for: n Meetings n Receptions n Mediations n Arbitrations n Depositions n Visiting attorneys n To reserve call Kristen Sherm at 501.375.4606

Weekly Case Summaries Summaries of the significant Arkansas Supreme Court and Arkansas Court of Appeals cases n Available online each week n Decisions updated every Monday n Available on Arkansas VersusLaw & www.arkbar.com

For a complete listing go to www.arkbar.com & click on Member Benefits

Association News

Thank you

Oyez! Oyez! ACCOLADES The American Board of Trial Advocates Foundation presented Gordon S. Rather, Jr. of Wright, Lindsey & Jennings LLP with its highest honor - the Mark P. Robinson Lifetime Achievement Award. Cathy Underwood received the Faculty Star Award from Pulaski Technical College. Stephen B. Niswanger, managing member of Niswanger Law Firm PLC of Little Rock, has been selected by Goldline Research of Novato, California, as one of the leading attorneys of the southeastern United States for 2009. The Arkansas Judicial Council awarded Senator Jim Luker with the First Branch Award. Russell Gunter of Cross, Gunter, Witherspoon & Galchus, P.C. received the Jim Wilkins Lifetime Achievement Award from the Arkansas Society of Human Resources Management. The city of Bull Shoals renamed the city park in honor of local retired attorney Roy Danuser. APPOINTMENTS AND ELECTIONS John DiPippa, interim dean and Distinguished Professor of Law and Public Policy at the UALR William H. Bowen School of Law, has been named the eighth dean of the law school. Governor Beebe appointed Charles E. Smith of Fort Smith to the Arkansas State Banking Board. Governor Beebe appointed Todd Turner as chairman of the Arkansas Democratic Party. WORD ABOUT TOWN Kutak Rock LLP announced the relocation of its Fayetteville office to Suite 400, 234 East Millsap Road. Kutak Rock LLP also announced that two new attorneys in its Arkansas offices, Bryan G. Looney in Fayetteville and Tyler S. McClay in Little Rock, have been elected to join the firm’s partnership. In addition, eight new attorneys, Randal B. Frazier, James G. Stouffer, Jr., Glenn E. Borkowski, Melany C. Birdsong, Suzanne G. Clark, Dustin R. Darst, Alexander Justiss, and Brandon J. Massey, have joined the firm’s Little Rock and Fayetteville offices. Quattlebaum, Grooms, Tull & Burrow PLLC announced the promotion of five attorneys to membership in the firm: Michael N. Shannon, Brandon B. Cate, Joseph W. Ghormley, Karen S. Halbert, and Jeb H. Joyce. Wal Mart Stores, Inc. announced the promotion of Jeff Gearhart to executive vice president and general counsel. Hawkins, Parnell & Thackston, LLP announced the appointment of Edward M. Slaughter as Partner-in-Charge of the Dallas, TX office. Wilson & Associates announced that Aaron L. Squyres is now a partner of the firm. We encourage you to submit information for publication in OYEZ! OYEZ! To do so, please send information to: ahubbard@arkbar.com.

To our Members: The Arkansas Bar Association understands as a voluntary association it competes with other organizations for your and your firm’s resources. Membership is our lifeblood and it is important to sustain our association. We have almost 5,000 members and have programs, such as our Annual Meeting, that are the envy of bar associations nationwide. We thank you for your membership and commitment to sustaining our profession and association. It is an honor to serve each one of you.

u o y k han

Sincerely,

Brian Rosenthal, Chair Membership Development Committee

Rosalind M. Mouser, Association President Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

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Young Lawyers Section Report

by Gwendolyn L. Rucker

I Hope You Dance

One of my favorite movies as a youngster was Dirty Dancing, and I particularly enjoyed the end when Jennifer Grey and Patrick Swayze closed with “(I’ve Had) The Time of my Life.” The lyrics certainly solidify my feelings about serving as Chair this year: “Now I’ve had the time of my life…and I owe it all to you.” Corny? Maybe, but it’s true. None of it would have been possible without you giving me this amazing opportunity. In this, the final stretch of my tenure as Chair of the YLS, we’ve experienced great success. By the end of June, we will have produced and published a Young Adult Handbook, presented professionalism seminars for Bowen and U of A law students, developed and presented our own CLE programming, collaborated with the Texarkana YLS on a community service project, and helped educate citizens of our state about the vast hunger that exists here. We were not immune from tragedy, however. The sudden loss of our former and beloved Associate Director, Judith Gray, was a tremendous blow. For those of you who didn’t have the privilege of knowing Mrs. Gray, you should know there was never a greater champion for the YLS. Although she had retired several years prior to my tenure, Mrs. Gray was a consummate presence at Association events, and I am appreciative of the time, although too short, that I shared with her. She was never selfish with her support and assistance, and she’ll be truly missed. Please watch for the YLS tribute to Mrs. Gray in the next edition of our newsletter. We’ve been tempting you with hints about our Annual Meeting programming for some time now, but I can finally share some details with you. First and foremost, for the Wednesday kick-off of Annual Meeting, YLS plans to provide some Hot Springs first-responders with basic estate planning documents. If you’re interested in helping, please email me at gwendolynrucker@sbcglobal.net. Second, we’d like to thank our co-sponsor, Dover Dixon Horne,

PLLC. Thanks to their generosity, our speaker this year is Jay Foonberg, one of the nation’s most sought-after and renowned speakers. Mr. Foonberg is the author of numerous books, but he’s best known for his book, How To Start and Build a Law Practice, the number one selling book for the American Bar Association since 1977. On Friday, June 12, from 1:303:30, Mr. Foonberg will present “Nine Steps to a Successful Practice in the 21st Century - In Any Economy.” The YLS business meeting will immediately follow his presentation. Although the YLS has for a few years now met on Thursday afternoons, we’ve changed the meeting day to Friday in an effort to accommodate more of our members. We even have a new meeting room – the Venetian Dining Room. As I recall, your responses to the YLS survey indicated more members were likely to attend if we met on Friday afternoon, so we sure hope to see more of you there! Serving as Chair of the YLS allows one the opportunity to work with various factions of the Association, including the Board of Governors and House of Delegates. Having served this year, I clearly understand why the Association operates so well. It’s a true testament to the dedication and hard work of Association staff and leaders who work tirelessly behind the scenes to make things happen, and it has been a real honor and pleasure to serve under President Mouser and other bar leaders, who every day with their actions exemplify the true meaning of leadership and teamwork. I’m also grateful to the YLS and its Executive Council for their confidence in me to serve our Section. The Executive Council’s service represents true public service in the purest sense, and I would like to thank them for their dedicated work, friendship, and wise counsel. As a result of their efforts, our Section has enjoyed a year of outstanding success. It was understood that taking on this position would require additional time and sacrifice on my part, and I’d like to thank all of you who

supported me during my tenure, particularly the staff of the Arkansas Supreme Court Office of Professional Conduct (Stark Ligon, Nancie Givens, Michael Harmon, Diane Sledge, Beau Pederson, and Ashley Craig). It was with their support that I was able to take the journey. The future of the YLS is in good hands with incoming Chair Tony Juneau, who has served this Section impeccably well for many years. I look forward to serving under his leadership. If we achieved nothing else during this year, I hope we’ve displayed a true passion for service to our profession and our community. On a personal note, I’d like to thank all of you for your thoughts and prayers for me and my family. I constantly received calls and well wishes from members of the Association, who every time they saw me, asked about my brother. As an update, my brother is doing very well, and we remain optimistic he’ll receive a heart soon. The culmination of life experiences this year, both personally and professionally, have been challenging. I, nonetheless, have not lost hope. My hope for you is best stated by Lee Ann Womack: I hope you never lose your sense of wonder, you get your fill to eat but always keep that hunger, may you never take one single breath for granted, GOD forbid love ever leave you empty handed, I hope you still feel small when you stand beside the ocean, whenever one door closes, I hope one more opens, promise me that you’ll give faith a fighting chance, and when you get the choice to sit it out or dance. I hope you dance....I hope you dance. I hope you never fear those mountains in the distance, never settle for the path of least resistance. Livin’ might mean takin’ chances, but they’re worth takin’. When you come close to sellin’ out reconsider. Give the heavens above more than just a passing glance. And when you get the choice to sit it out or dance. Dance….I hope you dance. I look forward to seeing you in Hot Springs!

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

LAWYERING THE FAYETTEVILLE SHALE PLAY WELCOME TO MY WORLD by Thomas A. Daily

Arkansas’ most important business events, so far this decade, surround the production of natural gas from the Fayetteville Shale Formation, beneath parts of several counties in North Central Arkansas.1 This shale gas development (Play) is located slightly northeast of the Arkoma Basin Fairway,2 which has produced gas since early in the last century. While the Arkoma remains economically important, many of its gas reservoirs are nearly depleted. Thus, Arkoma drilling activity has somewhat slowed, even with favorable gas prices, which have, at least until recently3, more-or-less prevailed since about 2000. The Fayetteville Shale Play, on the other hand, is brand new. Its reserve potential is believed to be vast, as is its economic potential – a “super project,” in every sense of the term.4 No such seminal economic event can occur without impacting the legal community, particularly in those counties where the rigs are running. Attorneys are suddenly being asked to give advice or manage litigation in this new practice area. Unfortunately, to all but a few Arkansas lawyers, the concepts of science, business practices, common and statutory law and administrative regulation inherent to gas production come about as naturally as nano-physics.5 10

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In this article, we will take a non-disciplinary approach, because or hydraulic fracturing (“fracing”) the reservoir. oil and gas law cannot rationally be separated from the oil and gas The Fayetteville Shale is much too tight for that to work. Vertical science and business. Once that reality sinks in, we lawyers can be- wells drilled into the Shale produce next-to-nothing. Even fracing gin to understand the rules of this odd, complicated game. We will those wells does little good. No such vertical well stands a chance of also expand our vocabularies, for this is a business which has in- making a profit. However, a relatively new drilling technique, the vented its own language. To help with that part, we will font in italics horizontal well, completed with state-of-the-art fracing at multiple those words unique to the oil and gas business. stages of the horizontal portion of the well bore, can result in much Natural gas was a chemical by-product of the decomposition of better rates of production. (See Figure 1.) Without this relatively organic plant and animal material which covered the earth’s surface new and still-evolving science, the Fayetteville Shale Play simply millions of years ago. Subsequent natural processes have buried that would not be. material, trapped within rock formations, thousands of feet down. Oil and gas rights are mineral rights. Mineral rights, as we well The Fayetteville, characterized geologically as a shale, is one of those know, are property rights. Those rights are often owned by the owner rock formations, but certainly not the only one. Reservoir rocks in- of the surface of the lands above. Other times they are severed (owned clude the sandstones, limestones and cherts6 from which geoscien- by persons other than the surface owners), and sometimes they are tists have produced gas in various parts of this state. Other rocks, partially severed and partially owned by the surface owner. granite, for example, are too dense (actually the word is “impermeable” or “tight,” in industry lingo) “[A] relatively new drilling technique, the horizontal to be commercially tapped for gas. They are not well, completed with state-of-the-art fracing at multiple good reservoir rocks. Reservoir rock must possess two stages of the horizontal portion of the well bore, can properties: porosity and permeability. Porous rock contains tiny spaces, the pores, where gas can reside; result in much better rates of production.” no pores, no gas. Permeability refers to the interconnections between these pores. Without permeability, either natural or induced by the driller, gas may reside within pores within the rock, but it will not come out in commercial quantities. Tight rock, with or without porosity, lacks permeability. If you are with us so far, you know we want porous, permeable rock. Also, of course, we want the rock’s prehistoric deposition to have included lots of good rotting organic material. Finally, we want the resultant gas to have become trapped within the rock, just waiting on us to come get it. That is commonly the case when highly organic reservoir rock is layered within a subsurface sandwich, crusted by layers of other rock that are too tight to allow the gas to escape. Shales, like the Fayetteville, are unconventional gas reservoirs. They were once thought to be incapable of commercial exploitation. While often sufficiently organic and porous to contain lots of trapped gas, they also tend to be really tight. Reservoir engineers measure permeability in units called “Darcies.” Really excellent qualRegardless, just because you own some oil and gas rights, do not ity reservoir rock, found in places like Kuwait, might measure one jump to the conclusion that you “own” the gas beneath the land. Darcy, or better. The permeability of conventional Arkoma Basin Fair- What you own, instead, is the right to prospect for that gas. The gas way reservoir rocks typically measures in millidarcies – still acceptable. itself is not “owned” Our study of the Fayetteville Shale added a word to the permeability by you until you Thomas A. vocabulary: “nanodarcy.” reduce it to your Daily is a Past That describes the Fayetteville in a geologic nutshell: highly po- possession. That President of rous, full of trapped gas molecules, but tight as a tick. In this respect, is a statement of a the Arkansas the Fayetteville differs, critically, from conventional gas reservoirs. In common law prinBar Association the conventional Arkoma, where reservoirs have permeability mea- ciple, the “Rule of and a member suring in millidarcies, an optimally located vertical well will be suc- Capture.”7 of Daily & The Rule of cessful, since gas, previously trapped and under pressure, will travel Woods, PLLC along the rock’s permeability channels to the pressure relief of the ver- Capture derives, in Fort Smith tical well bore. That rock’s permeability can often be improved even by analogy, from practicing oil, gas, and mineral law. more by well completion techniques which involve applying acid to the English rule Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

“Here is the lesson. Forget what you learned from watching Beverly Hillbillies. ... Mr. Mineral Owner will not advance his cause by overplaying his hand in lease negotiations. ... He should remember this reality check: Not long ago one could have bought his whole farm, surface, minerals and all, for less, per acre, than the bonus offer on his kitchen table.” governing “ownership” of wild game.8 Since molecules of gas can migrate through porosity channels in reservoir rock, they are “owned” by no one, in their “wild” state.9 Thus, the owner of a well, legally drilled upon lands where he “owns” mineral rights, may keep all the gas molecules captured by his well, without liability to those “owners” of the land off which those molecules might have migrated in response to pressure relief afforded by the well. Neighboring owners’ sole common law remedy is to “go and do likewise” – drill their own wells and capture molecules of their own. That unregulated “free market,” common law approach is dangerously flawed. Oil and gas deposits are precious natural resources in which the state has a vital interest. Reservoirs are best developed by scientists who are primarily driven to maximize the ultimate commercial recovery of a reservoir’s molecules. Wells drilled for competitive reasons are not likely to accomplish that. Rather, leaving things to the Rule of Capture has historically led to the drilling of far too many wells than needed to efficiently produce the resource. That wastes money and can damage the very reservoir containing the target molecules. Obviously, it is not really good for the environment either. Consequently, virtually every American jurisdiction with significant oil and/or gas production has enacted statutory limitations upon the Rule of Capture.10 These statutes typically create state administrative agencies with mandates to regulate exploration and production, prevent waste of money and molecules, and insure for each owner a fair share of the reservoir’s bounty, without having to “go and do likewise.” Each owner’s fair share is termed his “correlative right” to oil 12

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and/or gas within the common reservoir. Please remember though, correlative rights are not common law rights; they are one hundred percent statutory. Arkansas’ regulatory agency is the Arkansas Oil and Gas Commission.11 We will need to understand how that agency regulates gas exploration and production from the Fayetteville Shale.12 While shale gas regulation is similar to the agency’s regulation of the Arkoma Basin, some is unique to the Shale Play. That is because of the unique “tight rock” nature of the Shale and the inherent differences of a shale drilling and production process which employs horizontal wells. Now, let us consider the mineral owner whose land is underlain by this shale-full of gas. Just visualize the typical owner. That owner is not an oil and gas professional, nor is he wealthy enough to hire a bunch of scientists and front the high cost of horizontal gas wells. Rather, he is Mr. Ordinary Arkansas Citizen, a hard-working (or retired) chicken rancher or truck driver or hair trimmer or whatever else makes him uniquely unqualified to be drilling gas wells. Still, he is the one owning the legal right to explore and produce. Luckily, help is near. Our mineral owner can make a deal with a gas production company to get wells drilled, produced and administered for their mutual benefit. The company comes to the table with scientific expertise, specialized business knowledge and, importantly, the capital and risk-taking mentality necessary to make it all happen. So, mineral owner and gas company need one another about equally and, most of the time, they will make a deal. That “deal” takes the form of an Oil and Gas Lease. Its form has become pretty stan-

dardized in Arkansas.13 The Lease transfers the mineral owner’s right to drill and produce to the gas producer, for an initial term (the primary term), and then for as long thereafter as there is commercial production from within the unit. Typically, the mineral owner is paid upfront money (“bonus”), but the real consideration is a right to a fractional portion of the proceeds of future production (“royalty”). The amounts of bonus and royalty paid, in any given deal, are dependent almost entirely upon one thing, competition. Oil and gas production is a competitive business. If Company A wants the lease, it better outbid Company B for bonus, royalty or both. If there is no Company B to worry about, Company A may be able to name its price. Fortunately for mineral owners, in most of the shale play, these days you can find Companies B, C and D. Now is the time to make something clear. The oil and gas business is just that, a business. It is undertaken only with expectation of making a profit. “Profit” means profit in the traditional sense. It is revenue, adjusted for time value, which exceeds expenses, and fairly compensates for the use of capital and the attendant risk of losing part or all of it. Expenses, which must be exceeded, are high, as is required capital investment and risk.14 Costs include, of course, the abovediscussed bonus and royalty, but also include the costs of drilling, completing, periodically recompleting and equipping the wells, the cost of transporting and marketing the produced gas, plus the direct and indirect expense of labor and other overhead associated with all of that. Any increase in any cost requires either an offsetting decrease in other costs or an appropriate increase in revenue. The only revenue is money from the sale of the gas. Gas is a publicly traded commodity. Its price fluctuates violently, influenced, somewhat, by the market fundamentals, supply and demand, but also by less predictable forces, like market psychology. Here is the lesson. Forget what you learned from watching Beverly Hillbillies. This is a tough business. The current cost of drilling and producing shale wells can only be justified by high gas prices. Every dollar spent must be returned, plus profit. Mr. Mineral Owner will not advance his cause by overplaying his hand in lease negotiations. If he Daily continued on page 41

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You should consider the investment objectives, risks, charges and expenses of the investment options carefully before investing. For a copy of the Prospectus with more complete information, including charges and expenses associated with the Program, or to speak to a Program consultant, call 1-877-945-2272, or visit www.abaretirement.com or write ABA Retirement Funds P.O. Box 5142, Boston, MA 02206-5142 - abaretirement@us.ing.com. Please read the information carefully before investing. The Program is available through the Arkansas Bar Association as a member benefit. However, this does not constitute, and is in no way a Vol. 4403/09 No. 2/Spring 2009 The Arkansas Lawyer 13 recommendation with respect to any security that is available through the Program.

An Overview of the State and Federal Environmental Regulation of the Oil and Gas Development of the Fayetteville Shale by Michelle Cauley and John Peiserich History of the Fayetteville Shale Play The Fayetteville Shale is a black, organicrich rock of Mississippian age, approximately 300 million years old, that underlies much of northern Arkansas and adjacent states. It is considered an unconventional gas reservoir. While natural gas had been produced in the central portion of the Arkoma basin from the Fayetteville Shale previously, it was not until 2004 that natural gas was commercially produced solely from the Fayetteville Shale. In August of 2004, Southwestern Energy announced that successful vertical test wells had been drilled. The productive zones of this formation (despite its name) are not physically located near Fayetteville. Instead, the Fayetteville Shale “fairway,” the area with the greatest gas production potential, lies below Arkansas hay fields and rural farm land in north-central Arkansas in Cleburne, Conway, Faulkner, Van Buren and White counties. Similar unconventional shale reservoirs, the Caney Shale in Oklahoma and the Barnett Shale in North Texas, are found in several adjacent states and even the Fayetteville Shale, while not yet productive in other locales, is found in other places beyond north-central Arkansas. The first wells to produce natural gas from the Fayetteville Shale were traditional 14

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vertical wells with low to moderate production rates. Unconventional gas reservoirs in other locations have benefited greatly from advances in drilling technology, specifically the use of horizontal drilling and hydraulic fracturing to increase production rates, and those technologies are now in use in the Fayetteville Shale. Horizontal drilling increases the amount of reservoir exposure, i.e. the amount of reservoir that gas is collected from, by drilling parallel through the shale instead of perpendicular to the shale as traditional vertical wells do. Similarly, because shale formations are described as “tight” gas formation having low natural permeability, hydraulic fracturing is used to increase permeability. Hydraulic fracturing, in the simplest terms, is the injection of fracturing fluids, 99% water with additives and proppants under high pressure to crack the shale so that the permeability is increased. Proppants are simply sand or resin coated sand that “prop” open the cracks so that the natural gas can migrate out of the shale and into the well for collection. The development of horizontal “laterals” still requires the drilling of vertical wells to just above the Fayetteville Shale, and then turning and drilling horizontally through the shale.

While these horizontal wells have been the subject of much debate by environmentalists and conservation groups throughout the country, the number of surface drilling locations is reduced and surface disturbances can be limited. The concerns expressed by conservation groups typically focus on the potential for the fracturing fluids to migrate into surrounding groundwater. There is no federal regulation of hydraulic fracturing, therefore leaving the issue exclusively to the states unless federal lands are involved. The production of natural gas in the Fayetteville Shale Play has taken Arkansas by storm. Between 2006 and 2008, over 3,000 natural gas wells were licensed for production in Arkansas. Early estimates indicated that more than 40 trillion cubic feet of gas may be found in the Fayetteville Shale. Many in our state feel the revenues from shale production will make our state recession proof. However, the recent decrease in natural gas prices has shown that everyone is subject to recession. There is no disputing the fact that this boom in natural gas production has and will continue to bring both an immediate and long-term economic benefit to our state. Despite the economic benefits, many are concerned that Arkansas is not equipped

Drill rig that is highly modernized with mechanized drill pipe loader in the process of adding additional drill pipe to the drill string (above) Photos courtesy of Perkins & Trotter, PLLC Traditional drill rig with service contractors located to the right and pallets of supplies prior to hydraulic fracturing (left) to regulate the potential environmental, health and safety concerns associated with shale drilling. Below is a description of the current regulatory environment. Regulation of the Fayetteville Shale Play Arkansas Oil and Gas Commission The first regulatory body in Arkansas for the Oil and Gas Industry was the Arkansas Oil and Gas Commission (the “AOGC”) which is tasked to “serve the public regarding oil and gas matters, to protect the correlative rights and interests of mineral owners and to regulate the oil, gas, and brine production industries to insure compliance with state and federal laws regarding protection of the environment and waters of the State.” While state control over oil and gas matters has been reserved to the AOGC, there are numerous other agencies and bodies, who by the very nature of the duties charged to them, share responsibility in regulating the Fayetteville Shale Play. In particular, AOGC Rule B-15 requires all fresh water sands to be protected by the setting and cementing of surface casing in such a manner as to prevent fresh water from being contaminated.

Arkansas Department of Environmental Quality The Arkansas Department of Environmental Quality (the “ADEQ”) is the primary environmental regulatory agency in Arkansas. ADEQ is the Environmental Protection Agency (the “EPA”) delegatee for numerous programs. Interestingly, while ADEQ is viewed as the environmental rule-making authority, it is the Arkansas Pollution Control and Ecology Commission (the “APC&EC”) that is the policy-making body for Arkansas. APC&EC, with guidance from the Governor, Legislature, the EPA and others, makes the policy that is implemented by ADEQ. ADEQ has no independent rulemaking authority absent the APC&EC. The Air Division of ADEQ is responsible

for all delegable air programs, including the Title V program for major sources of pollutants, from Region 6 of the EPA. Part of the Air Division’s responsibility includes permitting of new and existing facilities. Incorporating and in addition to U.S. EPA requirements, the Air Division also regulates air emissions and potential emissions under Regulation 18, the Arkansas Air Pollution Control Code; Regulation 19, the Arkansas Implementation Plan; Regulation 26, the Arkansas Operating Air Permit Program; and Regulation 31, Non-attainment New Source Review. Typically, Oil & Gas exploration activities do not require air permits. Air permits generally only become a factor in the transportation (i.e. compressor stations) and processing (i.e. refining) of oil and gas. For our purposes, the Solid Waste

Michelle Cauley is a member of Mitchell Williams, where she specializes in defending healthcare providers in civil litigation, and is a member of the firm’s Environmental and Toxic Tort Litigation Team. John Peiserich, a Partner with Perkins & Trotter, PLLC in Little Rock, focuses his practice on Environmental Law and Oil & Gas Law. Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

ADEQ routinely calls upon the expertise of ADH in the areas of epidemiology and toxicology. While no formal requirements exist, currently the agencies are working to develop inter-agency working groups to address Fayetteville Shale development issues.

Gas Treatment Location for treating gas prior to injecting it into the pipeline for transportation to the sales point Management Division and the Hazardous Waste Division of ADEQ can be treated together. Both divisions have branches that permit facilities that handle, process or dispose of either hazardous or solid wastes. Similarly, both divisions have enforcement branches that enforce compliance with State and Federal laws. For the oil & gas industry, exploration tends to have far fewer issues with these divisions than does transportation and processing. The Water Division of ADEQ and the regulations that it oversees probably have the largest impact on day-to-day exploration activities in the oil and gas industry in Arkansas. APC&EC Regulation 1, effective date March 16, 1993, is specific to the oil and gas industry. It is, essentially, a prohibition on the discharge of salt water or other oil field wastes onto the ground or into waters of the state. Regulation 1 shows a preference for salt water disposal through deep well injection. It allows for the surface disposal of salt water and other liquid wastes in water-tight earthen pits. Arkansas Department of Health The Arkansas Department of Health (“ADH”) is specifically responsible for the protection of drinking water and, as such, reviews and comments on some applications submitted to the AOGC and ADEQ. ADH, at times, provides technical assistance in the form of environmental epidemiology expertise to ADEQ, generally related to hazardous waste sites. Additionally, ADH is responsible for certain types of oil field wastes. 16

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Arkansas Department of Emergency Management The Arkansas Department of Emergency Management (“ADEM”) serves as the emergency notification contact for a chemical release. ADEM also receives annual Tier II and Toxic Release Inventory reports that detail a facility’s chemical usage and storage. Oil and gas related companies are among the businesses required to report chemical use and storage to ADEM. Arkansas Natural Resources Commission The Arkansas Natural Resources Commission (“ANRC”) mission is to manage and protect water and land resources for the health, safety and economic benefit of the state of Arkansas. ARNC is divided into three divisions: Conservation, Water Development and Water Management. The oil and gas industry typically interacts with the ANRC regarding dam safety and water use. ARNC issues permits for dams with height of 25 feet or more and containing 50 acre feet of storage. ARNC is tasked with essentially all water management for the state and that management includes surface water division registration, non-riparian use permits, and similar groundwater use registration. As a general rule, there is good communication and interaction between the state agencies. For example, AOGC and ADEQ co-administer the Underground Injection Control program which is a subdivision of the Safe Drinking Water Act discussed below. As noted above,

Federal and State Interaction As a general rule, the majority of the environmental regulations which the oil and gas industry is subject to are all federal in nature. These rules are generally administered by the EPA, but some or all of the programs can be delegated to Arkansas. Arkansas has routinely sought delegation of programs from EPA. The federal laws which are most relevant for the purposes of this discussion are the Clean Water Act (“CWA”) and the Safe Drinking Water Act (“SDWA”). Clean Water Act Onshore exploration and production facilities may be subject to four aspects of the CWA: national effluent limitation guidelines, stormwater regulations, wetlands regulations, and Spill Prevention Control and Countermeasure (SPCC) requirements. National effluent limitation guidelines have been issued for two subcategories of onshore (non-stripper) wells. The Onshore Subcategory guidelines prohibit the discharge of water pollutants from any source associated with production, field exploration, drilling, well completion, or well treatment (40 CFR Part 435.30). Oil and gas exploration and production facilities are exempt from CWA stormwater Phase I regulations under most conditions, but there are two exceptions: (1) if the facility has a reportable quantity spill that could be carried to waters of the United States via a storm event, or (2) if the stormwater runoff violates a water quality standard. (See 40 CFR Parts 117 and/or 302 for reportable quantities of hazardous substances or Part 110 for the reportable quantity of spilled oil.) If either of these two scenarios should happen, the facility would be required to apply for a Multi-Sector General Permit for stormwater and develop a pollution prevention plan. However, if a reportable quantity spill were to be cleaned up quickly or containment were so total that there would be no threat of a product release as a result of storm water event, there Environmental continued on page 43

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

Recent Revisions of the Arkansas Limited Partnership Law by Mary Beth Matthews Introduction

During the 2007 legislative session, the Arkansas General Assembly adopted the latest version of the Uniform Limited Partnership Act (ULPA)1, promulgated by the Uniform Commissioners in 2001.2 Effective as of September 1, 2007,3 the latest Arkansas ULPA reflects the changing role of limited partnerships in a world dominated by limited liability companies. The most informative reading regarding the new act is found in the Prefatory Note to the Uniform Act, which explains why the limited partnership statute has been completely revamped from the latest Revised Uniform Limited Partnership Act (RULPA) promulgated only sixteen years before.4 As the Note states: The new Act has been drafted for a world in which limited liability partnerships and limited liability companies can meet many of the needs formerly met by limited partnerships. This Act therefore targets two types of enterprises that seem largely beyond the scope of LLPs and LLCs: (i) sophisticated, manager-entrenched commercial deals whose participants commit for the long term, and (ii) estate planning arrangements (family limited partnerships).5 The Prefatory Note acknowledges that the Act therefore assumes that people utilizing the new statute will generally want “strong centralized management, strongly entrenched,” and “passive investors with little control over or right to exit the entity.” The new ULPA is designed to reflect those assumptions. Furthermore, the new ULPA has a fundamentally different structure. The former RULPA was drafted to piggyback onto the Uniform Partnership Act — an approach which created the potential for conflict and confusion, particularly in the case of amendment of the underlying UPA. In contrast, the new ULPA is a “stand-alone” statute — much more than a mere revision. This “de-linking” from the UPA, although adding greatly to the length and complexity of the statute, is intended to promote clarity and convenience of reference. Consider briefly a few of the most significant changes wrought by the new ULPA. 18

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Formation The formation of a limited partnership under ULPA continues to require the filing of a certificate of limited partnership, which provides notice to the world (especially creditors) of the limited liability of the limited partners. Most of the required content remains unchanged from former law. A new section of ULPA, however, states that the certificate filed with the Secretary of State must state “whether the limited partnership is a limited liability limited partnership.”6 The new statute seems intended to force its organizers to consider the possibility of LLLP status, to make the choice on the face of the certificate, and thus to notify the world of the resulting limited liability of general partners if such election is made.7 Unfortunately, the forms currently available from the Arkansas Secretary of State’s Web site do not reflect this mandate. The Secretary of State instead provides alternative forms – one for traditional limited partnerships8 and one for LLLPs.9 Although the intent seems clear, the traditional limited partnership certificate does not literally state “whether the limited partnership is” an LLLP, as required by the statute. As for LLLPs, ULPA contemplates that an LLLP will be formed in the same manner as a limited partnership, except that the certificate will simply include a statement that the limited partnership is an LLLP. The same formation section now applies to both.10 This does eliminate the need under the prior statute to file both a certificate of limited partnership and an application for registration as an LLLP.11 Again, however, the alternative form provided by the Secretary of State does not require any specific statement of election. Choosing the “Certificate of Limited Liability Partnership” form seems to clearly evidence an intent to elect LLLP status, but does not seem to meet the literal requirements of the statute.

Agent for Service of Process Despite its recent vintage, ULPA has already been amended in regard to its service of process provisions. Several uniform sections relating to service of process on an agent of a limited partnership were repealed by the adoption of the Model Registered Agents Act in the same 2007 legislative session.12 The new Registered Agents Act is designed to simplify and make consistent the requirements for registered agents among a variety of entities, and thus repeals the limited partnership-specific provisions of ULPA. Liability Another significant change made by ULPA relates to the liability of limited partners. Prior law provided that a limited partner became liable for obligations of the limited partnership by engaging in “control” of the limited partnership.13 Prior statutes and case law struggled with when that particular line was crossed. This risk for limited partners has been eliminated by the new ULPA. The statute explicitly states that a limited partner is not personally liable for limited partnership obligations “even if the limited partner participates in the management and control of the limited partnership.”14 In a world where owners of other limited liability entities are entitled to act as managing partners, officers, or managers without such risk, the restriction was seen as an “anachronism.” In regard to general partners, ULPA retains the same pattern of liability set by the former statute. That is, general partners remain liable for the obligations of the limited partnership in a traditional limited partnership.15 If the partnership elects LLLP status, however, general partners enjoy a complete shield from liability.16 Fiduciary Duties As compared to the prior RULPA, the new ULPA significantly alters the fiduciary duties imposed upon general partners. The new format is modelled on the recently revised UPA provisions,17 which have been criticized by commentators as reducing the duties too far, or not far enough.18 The new provisions are designed to encourage general partners to serve despite outside interests, and to reflect the lower standards of care permitted to management in other limited liability entities.

The new provisions are intended to be complete and exclusive, and state that the only duties owed by general partners are the duties of loyalty and care as set out in the statute.19 The duty of loyalty is limited to a duty to account for partnership benefits or opportunities, to refrain from dealing with the partnership as, or on behalf of, a party with an adverse interest, and to refrain from competition.20 A new section specifically recognizes that the general partner violates no duty “merely because the general partner’s conduct furthers the general partner’s own interests.”21 The duty of care is reduced to “refraining from engaging in grossly negligent or reck-

less conduct, intentional misconduct, or a knowing violation of law.”22 Finally, a new obligation of good faith and fair dealing is recognized.23 This obligation, however,

Mary Beth Matthews is professor of Business and Commercial Law at the University of Arkansas School of Law.

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

“[T]he new Arkansas limited partnership act includes some interesting and significant changes. These changes not only de-link the limited partnership statute from that applicable to general partnerships, but acknowledge the narrower niche occupied by limited partnerships in the current business world. The new statute is therefore designed to meet the needs of the smaller pool of investors likely to opt for the limited partnership format in the future.”

is not intended to create a new affirmative duty, but simply to piggyback onto existing obligations the parties may have (for example, those created contractually by the partnership agreement). In addition, the new ULPA specifically states what was presumably already the existing law – that no fiduciary duties are imposed upon a limited partner “solely by reason of being a limited partner.”24 However, the new obligation of good faith and fair dealing is imposed even upon limited partners – at least in regard to discharging any rights and duties apportioned to limited partners by law or by the partnership agreement.25 Exit Rights of Limited Partners One of the most important changes in the new ULPA is an alteration of the right of a limited partner to exit the entity and recover that partner’s investment. Although subject to contrary agreement of the partners (which was generally exercised), the default rule under the prior statute was that a limited partner could voluntarily withdraw from an at will limited partnership upon six months written notice,26 and that such withdrawal triggered a buyout right.27 Both of these rules have been altered. Consistent with the view that parties these days prefer an entity where passive investors have little right to exit the entity, limited partners no longer have a right to voluntarily withdraw (“dissociate”) from the limited partnership.28 The new statute recognizes that a limited partner can still wrongfully withdraw by express 20

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will29 (subject to modification by the partnership agreement). The new ULPA makes clear, however, that such a limited partner has no right to receive any distribution on account of that dissociation.30 After such wrongful withdrawal, the limited partner reverts to a mere transferee of his or her own interest,31 and all rights as a partner (such as voting rights) terminate.32 The elimination of these statutory buyout rights has a beneficial side effect which encouraged the adoption of such an approach by ULPA. The lack of a buyout right reduces the marketability of the limited partnership interest, and thus its value for estate tax purposes.33 Also, consistently with this objective of long term investment, a new ULPA default rule provides that the limited partnership has perpetual duration34 if there is no agreement otherwise.35 Miscellaneous The ULPA also includes a variety of miscellaneous changes: 1. Use of limited partner’s name – The new statute permits the name of the limited partnership to “contain the name of any partner.”36 In these days of limited liability for investors in almost every entity, creditors are unlikely to be misled by the use of a limited partner’s name in the title of the organization. 2. Entity Status – A new section of ULPA specifically recognizes that the limited part-

nership is an entity distinct from its partners, resolving any remaining issues about holding title or acting as a party in litigation.37 3. Purpose - In contrast to the prior law, which provided that a limited partnership could “carry on any business”38 that a general partnership could, ULPA states that a limited partnership may be organized “for any lawful purpose.”39 The door has thus been opened for the creation of a nonprofit limited partnership. The comments to the Uniform Act confirm that “this Act does not require a limited partnership to have a business purpose,”40 although acknowledging that the Act’s default provisions “presuppose at least a profit-making purpose.”41 Those comments therefore advise caution if “a limited partnership is organized for an essentially non-pecuniary purpose.”42 4. Annual Report - The statute institutes a new requirement that the limited partnership file an annual report with the Arkansas Secretary of State,43 similar to the reports required for corporations44 in Arkansas. This annual report is a streamlined informational document, and a sample form is available from the office of the Secretary of State.45 Although the report is not difficult to draft, the penalty for failure to file is potential administrative dissolution.46 5. Allocation of profits and losses - In the absence of agreement (failing to agree would be rare), RULPA allocated profits and losses to the partners on the basis of “the value . . . of the contributions made by each partner . . . .”47 ULPA includes a similar rule for the sharing of distributions of money or property from the partnership to the partners,48 but eliminates any default provision for the basic allocation of profits and losses. The drafters characterized such a provision as “unnecessary,” because limited partnerships “will choose to allocate profits and losses in order to comply with applicable tax, accounting and other regulatory requirements. Those requirements, rather that this Act, are the proper source of guidance for that profit and loss allocation.”49 6. Improper Distributions - ULPA includes new provisions setting ceilings on distribuMatthews continued on page 46

Is giving through a community foundation right for your clients? Seven questions for estate and financial advisors.

1. Do I have clients who care deeply about their local community? 2. Do they give to more than one charitable cause? 3. Are they interested in creating a personal or family legacy in their community? 4. Are they considering the creation of a private foundation, but concerned about cost and administrative complexity? 5. Would they like to stay personally involved in the use of their gift dollars? 6. Do they want to receive maximum tax benefit for their charitable contributions under federal law? 7. Do they place a priority on sound financial management of their contributions? If you answered yes to any of these questions, your clients will benefit from knowing more about Arkansas Community Foundation. ARCF can help your clients secure the maximum tax deduction, involve family members, focus on grantmaking and obtain visibility or anonymity, as desired. The Foundation preserves and protects individual and corporate investments and charitable intentions forever through the power of endowments. For more information on partnering with Arkansas Community Foundation, contact Melissa Stiles at 501-372-1116 or visit arcf.org. “The Foundation staff has a wealth of knowledge about what charities are doing the best work in different areas of Arkansas and are very helpful through their satellite offices in providing broad-based information on charities by location and field of interest.” – Jim Harris, Friday Eldredge & Clark, Little Rock

Union Station • 1400 West Markham, Suite 206 • Little Rock, AR 72201 501-372-1116 • 888-220-2723 • arcf.org

2009 Mock Trial Competition Parkview High Wins Statewide Mock Trial Competition

The Arkansas Bar Association extends its appreciation to members who helped make the 2009 Mock Trial Competition so successful. Among the Mock Trial volunteers were the following:

Front row l to r: Judge Beth Deere, Judge John Fogleman,Rosalind Mouser; Back row: Taura McDaniel, Virginia Diaz, Evan Wordlaw, Cameron Rodriguez, Ryan Dickerson, Max Roy, Mason Allen, Seemaab Ali, Pat Treadway

Students from Parkview Arts and Sciences Magnet High School prevailed as the winners of the Arkansas Mock Trial Competition held in Little Rock at the Pulaski County Courthouse on March 7, 2009. Eight high school teams composed of more than 50 students contended in the state finals. Parkview won the final match in a split decision over Rogers Heritage High School. The team from Parkview will compete in the national event in Atlanta, GA May 6-10, 2009 The Parkview team consisted of teacher coach Pat Treadway; attorney coach Dennis James; students Seemab Ali, Mason Allen, Virginia Diaz, Ryan Dickerson, Crystal Fuller, Cameron Rodriguez, Max Roy, Olivia White and Evan Wordlaw. Presiding over the final match was Circuit Judge John N. Fogleman, and scoring judges were U.S. Magistrate Judge Beth Deere and Association President Rosalind M. Mouser. The competition required students to role play and present a criminal case to lawyers and judges who scored them on several criteria. Many lawyers and teachers from across the state worked with the students for several months to prepare them for the Mock Trial Competition. The Arkansas Bar Association sponsors the competition and the Arkansas Bar Foundation and IOLTA Foundation assists with the funding. ď&#x201A;˘ 22

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Hon. John N. Fogleman, Circuit Judge, Second Judicial District Hon. Beth Deere, U.S. Magistrate Judge, Eastern District Rosalind M. Mouser, Arkansas Bar Association President Hon. James Marschewski, U.S. Magistrate Judge, Western District Taura McDaniel, Mock Trial Committee Chair Rando Hicks, Mock Trial Coordinator Bryan Achorn Paul Anderson Don Barnes Ali Brady Brent Capehart Michelle Cauley David Clark James Cox Alison Dennington Jodi Dennis Betty Dintelman Jeremy Emmert Harold Erwin Amy Freedman Tom Garner Buck Gibson Michele Glasgow Phillip Green Sarah Greenwood Kenneth Harper Angela Harris David Harrod Reid Harrod Sara Hartness Mark Henderson Kevin Hickey Scott Hill Pam Honeycutt Jonathan Horton Jason Hunter

Sandra Jackson Dennis James Leon Jamison Terry Jones Wayne Juneau Paul Keith Christopher Kidd Elaine Kneebone Joe Kolb Jeremy Lasiter Lynn Lisk Samuel Lisk Brooke Lockhart Coby Logan Melissa Loggains Michael Maggio Bill Mann Peggy Matson Taura McDaniel Mary McGowan James McLarty Anthony McMullen Michael Medlock Priscilla Neeley Ross Noland Anne Orsi Steve Porch Jeannette Robertson Gwendolyn Rucker Jeff Scriber Charles Sinkenbinder Charles Smith Vann Smith Brent Standridge Jason Stuart Mike Sutterfield Barbara Tarkington David Tyler Marcus Vaden Brian Vandiver Vicki Vasser Kelly Ward Susan Weaver Matthew Wells Ralph Wilson Jared Woodard

Participating Schools: Bay High School Berryville High School Bradford High School Central High School Cotter High School Hamburg High School Izard County High School Jasper High School Jonesboro High School Marshall High School Monticello High School Nettleton High School Newport High School Parkview High School Pine Bluff High School Rogers Heritage High School Russellville High School Springdale High School Tuckerman High School Valley Springs High School To volunteer for the 2010 Mock Trial Competition please e-mail Rando Hicks at rhicks@arkbar.com

House and Board Begin 2009 Planning The Association’s House of Delegates met January 24, 2009 ,at the Mid Year meeting in Memphis at the Peabody Hotel. The Board of Governors met April 17-18, 2009, at the Holiday Inn in Springdale with Steve Quattlebaum, Board of Governors Chair, presiding. The governing bodies addressed issues facing the Association in 2009, including a new Web site and database, new member benefits, and establishment of new committees. The IT Infrastructure Committee reported to the House and Board the progress of updating the Association’s Website and database. Under the leadership of Co-Chairs Pam Gibson and Sam Gibson, the committee has plans for a more member-friendly, interactive Web site by the end of the year. The Board of Governors approved two new member benefits offered by Regions Insurance – medical insurance options for members and their staff and a program to help members quickly and easily acquire a variety of bonds required in their daily practice. John Vines, Member Benefits Committee Chair, reported to the House of Delegates on the new credit card service available from Affiniscape. Lobbyist Jack McNulty presented a report to the House and Board on the Bar Legislative Package. He advised that term limits would prevent several current attorney legislators from holding office next session. The Association’s Legislation committee met weekly to review all bills introduced during the session. Mr. McNulty and PresidentElect Designee Jim Julian encouraged attorneys to be involved in the legislative process. Brian Ratcliff, President of the Arkansas Bar Foundation, reported that the Foundation created the Judith Gray Endowment Fund to benefit the Association’s future Annual Meetings. Harry Light, Annual Meeting Chair, gave the Board a preview of the events planned for the 2009 Annual Meeting. This year’s annual meeting will focus on technology and Practicing Law in the 21st Century. The Board approved the establishment of two new committees proposed by President-Elect Donna Pettus to form a Leadership Academy and

a Policy and Procedure Manual. Young Lawyer Section (YLS) Chair, Gwen Rucker, reported on the projects that the YLS will be involved in in the upcoming year, including Wills for Heroes and a Young Adult Handbook. The House of Delegates viewed the Law Related Education video “A Level Playing Field: Why the American Legal System Matters to You.” The Law Related Education Committee led by Chair Mark Hodge encourages members to present the video in their local high schools. A copy of the DVD and curriculum can be obtained by contacting Association staff. President Rosalind M. Mouser reported on the establishment of the Online Legal Research Committee, which is being tasked with monitoring the Association’s online legal research benefit. She reminded the Board of Governors about the current membership vote regarding the separation of the position of Secretary and Treasurer. The next meeting of the House of Delegates will be held during the Annual Meeting on June 13th at the Arlington Hotel in Hot Springs. 

Complete your Library with Arkansas Bar Association Practice Handbooks n Arkansas Bankruptcy Handbook AVAILABLE SOON! n Arkansas Domestic Relations Handbook n Handling Appeals in Arkansas n Revocable Trusts for the Arkansas Practitioner Order online at www.arkbar.com or call 501-375-4606

Business Valuation Forensic Accounting Economic Loss Divorce Accounting, Tracing, Appraisal Commercial Damages, Agricultural Damages Certified Public Accountant Certified Fraud Examiner Accredited Senior Appraisers Court-Appointed Expert Testimony Fair Pricing Richard L. Schwartz CPA, MCBA, ASA, ABV, CFE Dick@SchwartzandAssociatesLLC.com

Schwartz & Associates LLC 11510 Fairview Road, Suite 100 Little Rock, AR 72212-2445 501-221-9900 / 501-221-9292 fax

Steven F. Schroeder JD, MCBA, ASA Steve@SchwartzandAssociatesLLC.com

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

Arkansas Supreme Court Historical Society

Supreme Court Justice William F. Kirby By L. Scott Stafford

During the first decades of the twentieth century, Supreme Court Justice William F. Kirby was one of Arkansas’ best known political figures. Between 1906 and 1932 he was a candidate for statewide office eight times. Once as attorney general, once as governor, twice as justice of the Supreme Court, and four times as United States Senator. Kirby was born in Miller County, Arkansas, in 1867 and educated in the public schools of that county and Bowie County, Texas. In 1885 he and his father graduated from Cumberland Law School, which at that time was a part of Cumberland University in Lebanon, Tennessee. After receiving their law degrees, father and son returned to Texarkana and opened a law practice. The younger Kirby served as Miller County’s representative in the 1893 and 1897 General Assemblies, and as senator from the 21st District (Columbia, Lafayette, and Miller Counties) in the 1899 and 1901 General Assemblies. During his legislative career he supported populist legislation, in particular the creation of a commission to regulate the rates charged by railroads. He also gained a reputation as a close ally of Governor Jeff Davis. The 1903 General Assembly chose Kirby to oversee a new edition of the Arkansas statutes, which was published in 1904 as Kirby’s Digest of the Statutes of Arkansas. Kirby’s first statewide office was attorney general, to which he was elected in 1906. His principal accomplishment as chief legal officer was the successful defense of the state’s newly enacted antitrust law. See Hammond Packing Co. v. Arkansas, 212 U.S. 322 (1909), aff’g 81 Ark. 519 (1907). In 1908 Kirby sought the Democratic nomination for governor. His opponents were Conway businessman George Donaghey and John Hinemon, the former director of public education. Kirby’s chances of election were probably hurt by his close ties to Jeff Davis, 24

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and he finished second to Donaghey in the three person race. Two years later Kirby’s name recognition gained him election as associate justice on the Supreme Court. His first term on the court lasted from January 1, 1911, until November 7, 1916. During this six years on the court, Kirby authored 523 opinions, or approximately two opinions per week. The 1914 election was the first in Arkansas following ratification of the 17th amendment to the United States Constitution, which mandates the popular election of United States Senators. Kirby, who was only halfway through an eight year term on the Supreme Court, challenged incumbent United States Senator James P. Clarke for the Democratic nomination. Clarke eked out a paper-thin victory due largely, according to many observers, to last minute changes in the vote totals from Poinsett County. Clarke died on October 1, 1916, and rather than appoint his successor, the governor called for the vacant senate seat to be filled at the November 7, 1916, general election. The Democratic state central committee chose Kirby as the party’s nominee, and Kirby easily defeated the Republican candidate and took his Senate seat on November 8, 1916. Kirby arrived in the Senate during the third year of World War I, and he soon became an outspoken opponent of United States participation in the European conflict. When Germany announced the resumption of unrestricted submarine warfare and President Woodrow Wilson responded by breaking diplomatic relations, Kirby was one of only five senators to oppose a resolution supporting Wilson’s action. Kirby’s posture proved unpopular with many Arkansans, particularly after the United States entered the war against Germany. When Kirby came up for reelection in 1920, he suffered a crushing defeat by First District Congressman Thaddeus Caraway,

who had been a strong supporter of President Wilson during the war years. Kirby returned to Arkansas and resumed the practice of law, this time in Little Rock. He was elected to the Supreme Court for the second time in 1926. During this second period on the court, Kirby continued to produce roughly two opinions per week. Between January 24, 1927, and June 25, 1934, he produced some 567 opinions. In 1932 Kirby sought election to his old United States Senate seat, but he ran fifth in a crowded field of seven candidates. The winner of the race, Hattie Caraway, was the widow of Thaddeus Caraway and the first woman elected to the United States Senate. During the court’s 1934 summer recess, Kirby suffered a fatal heart attack. He died on July 26, 1934, and was buried in Texarkana. Bibliography: Richard L. Niswonger “William F. Kirby, Arkansas’s Maverick Senator,” Arkansas Historical Quarterly, Vol. 37, 252-63, Autumn 1978. “William Fosgate Kirby (1867-1934)” The Encyclopedia of Arkansas History and Culture, www.encyclopediaofarkansas.net (February 27, 2009). “Kirby, William Fosgate (1867-1934),” Biographical Directory of the United States Congress, bioguide.congress.gov (February 27, 2009). This article is provided by the Arkansas Supreme Court Historical Society, Inc. For more information on the Society contact Rod Miller, Arkansas Supreme Court Historical Society, Justice Building, Suite 1500, 625 Marshall Street, Little Rock, Arkansas 72201; Email: rod.miller@arkansas.gov; Phone: 501 682 6879.

A Special Thank You to Arkansas Bar Association Lawyer Legislators

Representative Davy Carter District 48

Representative John C. Edwards District 38

Representative Dan Greenberg District 31

Representative Steve Harrelson District 1

Senator David E. Johnson District 32

Senator â&#x20AC;&#x153;Jimâ&#x20AC;? James Luker District 17

Representative Bruce D. Maloch District 4

Representative Jim Nickels District 43

Representative Lindsley F. Smith District 92

Senator Robert F. Thompson District 11

Representative Darrin L. Williams District 36

Representative Robbie Wills District 46

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

The Arkansas Bar Association receives many calls from the public every day asking for the name of an attorney to help them. Our staff refers the caller to:

www.arkansasfindalawyer.com List up to 7 practice areas

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Potential clients can search for you by practice area and location

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u? o y are

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CLE CLE CLE CLECLE CLE CLE 2009 Spring CLE Calendar May Financial Institutions May 8, 2009 Comfort Inn & Suites Little Rock 13th Annual Environmental Law Conference May 14-16, 2009 Embassy Suites Rogers June Arkansas Bar Association Annual Meeting June 10-13, 2009 Arlington Hotel Hot Springs

CLE CLE

The Arkansas Bar Association presents:

Spring Webinar and Teleseminar Series May 13, 2009 Identity Theft: The Ethical Issues – Representing Holders of Protected Information Yan Ross 1.0 CLE Ethics Hour May 20, 2009 Exploring Durable Powers of Attorney L. Dee Davenport and Dan C. Young 1.0 CLE Hour May 28, 2009 How to Start and Build a Law Practice Jay Foonberg 1.0 CLE Hour

2009

Best of CLE June 22-26, 2009 Little Rock June 29-30, 2009 Springdale For more information contact Lynne Brown or Virginia Hardgrave 800-609-5668 or 501-375-3957 lbrown@arkbar.com or vhardgrave@arkbar.com OR check out THE CLE PAGE at www.arkbar.com

June 30, 2009 Ethical Issues in Representing Financial Advisors Yan Ross 1.0 CLE Ethics Hour June 30, 2009 Arkansas Real Estate Review Lynn Foster & Cliff McKinney 1.0 CLE Hour June 30, 2009 Representing Seniors and their Families – Ethical Issues for Attorneys and Their Clients Yan Ross 1.0 CLE Ethics Hour

Arkansas Bar Association 111th Annual Meeting Joint Meeting with the Arkansas Judicial Council

June 10-13, 2009 Arlington Hotel Hot Springs

practicing law in the 21st century Over 90 hours of CLE offered, including 19 hours of ethics

Business Track

Four Technology Tracks

• Oil & Gas Leases • Financial Privacy • Intellectual Property Issues Online

• Technology Choices in Small Firms • Record Retention and Destruction • Adobe • Practical e-discovery

Litigation/Trial Track • • • •

Wireless Courtrooms Pan Am 103 Disaster New Judges 101 Cross Examination Science and Techniques

• Gridiron 2009 • Afternoons by the Pool • Golf Tournament

Seven Tracks to Choose From

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Professional Development Professional Development Track Track • 60 Gadgets in 60 Minutes • Cleaning up the Stress Mess • Get Smart about Your Smart Phone

• Garvan Woodland Gardens • Spa Escape • Legal Runaround

2009

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PRINTED COURSE MATERIAL (Printed materials in addition to the registration fee - only available if pre-ordered) CNA Risk Management for Lawyers Program Wednesday Afternoon 1:30 Separate Registration

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$ Vol. 44 No. 1/Winter 2009 The Arkansas Lawyer

We’re proud to announce that Cauley Bowman Carney & Williams, PLLC is now

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Lawyer Community Legacy Award The Arkansas Bar Association is proud to recognize a new recipient of the Lawyer Community Legacy Award. Two awards are presented bi-annually by the Association to attorneys and judges who have performed volunteer public services out of a sense of duty, professionalism, and a genuine desire to give back to the community. Recipients were selected by the Public Information Committee after considering the nominations received by the deadline.

Shivali Sharma

Shivali Sharma has volunteered countless hours and has created several programs designed to educate the public and students about legal matters through her participation in the Texarkana Young Lawyers Association and her presidency last year, which allowed the organization to receive the Arkansas Outstanding Bar Association Award. Shivali created The Footnote, a young lawyer monthly e-newsletter sent to the Texarkana Bar Association, three years ago and she helped organize Texarkana’s first young lawyer practicum program. She organized a fundraiser for the Domestic Violence Prevention Valentine Program and a fundraiser for the Texarkana Kids Law Library; created and organized a Cancer Outreach project; participated in a literacy program with the Texarkana Baptist Orphanage; organized a local judicial dinner to raise money for the Texarkana Young Lawyers Association; judged student mock trial competitions; organized CLE presentations for young lawyers, and organized and participated in several non-legal related programs to raise money for the local Boy’s & Girl’s clubs. Shivali is a Staff Attorney to the Sixth Court of Appeals. According to her nominator, Shivali has stated that one of her missions is to dispel the public’s negative perception of lawyers. Shivali has succeeded in this mission as evidenced by her commitment to her community and legal profession.

Any person may nominate a lawyer or judge by completing the Nomination Form and turning the Form into the Arkansas Bar Association office on or before the nomination deadline. Nomination deadlines are January 31st and July 31st of each year. Nomination forms and guidelines for the award are available at www.arkbar.com or by contacting the Association.

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Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

Judicial Advisory Opinions and Disciplinary Actions The following press releases from the Judicial Advisory Opinions and Judicial Disciplinary Actions are written and provided by the Judicial Discipline and Disability Commission. Full text is available online at http://www.state.ar.us/jeac/ Advisory Opinion 2008-08 December 17, 2008 The Arkansas Judicial Ethics Advisory Committee issued an advisory opinion to Attorney Mark Leverett of Little Rock, Arkansas. Effective January 1, 2009, Attorney Leverett requested an opinion as to whether he can concurrently serve as a Pulaski County Deputy Prosecuting Attorney. The Judicial Ethics Advisory Committee addressed his concerns in the enclosed advisory opinion. JDDC Case #05112, #05123 December 17, 2008 The Arkansas Judicial Discipline & Disability Commission today announced that Formal Disciplinary Hearings will be held in cases filed against one circuit judge and one special circuit court judge. Hearings are to be held against Judge L.T. Simes, Circuit Court Judge of the First Judicial District; and Special Circuit Judge Donald Warren of the Eleventh Circuit West. Judge L.T. Simes A copy of the Formal Statement of Charges against Judge Simes is attached. Special Judge Donald Warren A copy of the formal statement of charges is attached.

Advisory Opinion 2009-02 January 15, 2009 The Arkansas Judicial Ethics Advisory Committee issued an advisory opinion to Judge L.T. Simes of Helena, Arkansas. The Judicial Ethics Advisory Committee addressed his concerns in the enclosed advisory opinion. A copy of the advisory opinion is attached. Case #07-347 January 16, 2009 The Arkansas Judicial Discipline & Disability Commission today announced that an agreed Letter of Reprimand has been issued to Arkansas Supreme Court Justice Jim Gunter. A copy of the formal reprimand against Justice Gunter and a press release from Justice Gunter is attached. Inquires may be directed to Justice Gunter’s attorney, Nicholas H. Patton (903) 792-7080. Cases: 08124, 08154, 08155, 08263, 08268 January 16, 2009 The Arkansas Judicial Discipline & Disability Commission today announced that an agreed Letter of Reprimand has been issued to Judge Edwin Keaton of the Thirteenth Judicial Circuit Court. A copy of the formal reprimand against Judge Keaton follows. 

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Lawyer Disciplinary Actions Final actions from January 1, 2009, through March 31, 2009, by the Committee on Professional Conduct. Summaries prepared by the Office of Professional Conduct. Full text documents are available on-line at http://courts.arkansas.gov and by entering the attorney’s name in the attorney locater feature under the “Attorney” link on the home page. [Note: “Model” Rules refers to the Rules of Professional Conduct as they existed in Arkansas prior to May 1, 2005. “Arkansas” Rules refers to the Rules as they exist in Arkansas from May 1, 2005.] DISBARMENT: WOODSON D. WALKER, Bar No. 76135, of Little Rock, was disbarred by Order of the Arkansas Supreme Court in Case No. 061493 delivered March 12, 2009. The Court found Walker did not challenge the special judge’s factual findings that, among other rule violations, Walker had converted client funds, failed to maintain his trust account records, and continued to practice law after his law license had been suspended in April 2003, each of which violations constituted “serious misconduct.” The primary charges arose from complaints lodged by former clients Andre Stephens and Jarvis Rodgers and from an audit of Walker’s trust account. DISBARMENT INITIATED: TIMOTHY MARK HALL, Bar No. 96043, formerly of Huntsville, Arkansas, had disbarment proceedings commenced against him on March 16, 2009, with the filing of a Petition for Disbarment in Arkansas Supreme Court Case No. 09-261, based on Committee actions in CPC 2008-070, where Kenneth Pianalto of Springdale alleged that Hall converted to his use $3,500 due to his client from a sheriff’s bond refund, and in CPC 2008-071, where Berryville District Court Judge Kent Crow alleged that Hall converted to other use $667.50 paid to Hall to pay court fees and costs for a Hall client, Ms. Holder, in the Berryville District Court. [Note: as of the submission deadline, the Office of Professional Conduct and its private process server have been unable to locate Mr. Hall, who is believed to be in the Springdale area, to serve him with the Petition for Disbarment. If anyone has information on his whereabouts, please contact OPC at 1-800-506-6631.] SURRENDER: DONALD E. WARREN, SR., Bar No. 99007, of Pine Bluff, on March 18, 2009, as case No. 09-281, filed a Petition to Surrender

Law license as a result of the agreed terms of his plea to a misdemeanor criminal charge in Jefferson County Circuit Court on March 4, 2009. His Petition was accepted by the Court by Per Curiam delivered April 2, 2009, barring him from the practice of law in Arkansas. In the plea agreement, Mr. Warren entered a guilty plea to the misdemeanor charge of “abuse of office” and the State nolle prossed two other counts. The office abused was a judicial office while Mr. Warren was sitting as a special circuit judge. JOHN DAVID WIDENER, Bar No. 85169, of Little Rock, formerly of Hot Springs and Arkadelphia, filed a Petition to Surrender License as case No. 09-179, rather than face probable disbarment proceedings based on a felony conviction. The Supreme Court accepted his surrender by Per Curiam issued March 5, 2009, and barred him from the practice of law in Arkansas. SUSPENSION: F. DAVID REES, Bar No. 79238, of Jonesboro, Arkansas, had his law license suspended for six (6) weeks [forty-two days] by Committee Findings & Order filed February 23, 2009, after a hearing, on a Judicial Complaint involving Johnny Ford in Case No. CPC 2006-156, for violations of Rules 1.2(d) and 8.4(c). Notice of Appeal on this case was filed by the Office of Professional Conduct on March 16, 2009, and Notice of Cross-Appeal was then filed by Respondent. In March 1999, Ford was injured in a two vehicle collision, where the at-fault vehicle was owned by Mr. Jones of Jonesboro and driven by his minor son. With liability not a disputed issue, Jones’s insurance carrier early offered the $100,000 policy limit to settle. Jones’s personal attorney offered Rees an additional $25,000 from Jones and implied that Jones would pay even more. In April 1999, Rees filed suit for Ford against Jones and his son. In a telephone conversation Ford taped in November 1999, Rees told Ford that Rees did not want others to know that Rees had more than $100,000 available

in the Ford settlement. Ford eventually terminated the Rees representation and retained another attorney who negotiated a $200,000 settlement in 2003, which included additional contributions totaling $75,000 from Mr. and Mrs. Jones. Rees testified at a post-settlement hearing in late 2003 that a settlement sheet he created for Ford in April 1999 showing a $100,000 settlement was only to show Ford how a settlement worked, but the evidence showed that the purpose of preparing the settlement sheet was to show Ford’s medical creditors, who had approximately $117,000 in liens, that only $100,000 was available for the settlement. The trial judge in Ford’s civil case denied Rees’s claim of a statutory attorney’s lien for his fee against the Ford settlement proceeds but left open the possibility of a fee claim based on quantum meruit. Shortly thereafter, Rees and Ford dismissed the case without Rees filing any further claim for a fee. F. DAVID REES, Bar No. 79238, of Jonesboro, Arkansas, had his law license suspended for thirty (30) days by Committee Findings & Order filed February 23, 2009, after a hearing, on a Judicial Complaint involving Teahna Mooney in Case No. 2007021, for violations of Rules 1.4(b), 1.7(a), 1.7(b), 1.8(e), 1.8(h), and 8.4(d). Notice of Appeal on this case was filed by the Office of Professional Conduct on March 16, 2009. In April 2003, Teahna Mooney was involved in a collision while she was a passenger in a commercial van owned by Sonrise Shuttle and driven by Emerson George, when the van rear-ended a tractor truck-trailer. On August 26, 2003, Mooney, who was unemployed and without assets, signed a contingency fee contract with Rees. On the same day, Rees arranged for her to receive financial assistance prohibited by Model Rule 1.8(e) [2002], in the form of an apartment in Jonesboro rented to her by Rees’s brother Robert through the brother’s business and a bank loan. She signed an apartment lease for one year with the brother for a total of $9,866.67. David Rees confirmed to his brother that he would protect his brother’s

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

Lawyer Disciplinary Actions rental lien out of Mooney’s recovery. Robert Rees submitted a final bill in October 2005 for $21,316.67 to Mooney’s then attorney Woodruff, who paid $15,000 to settle the claim. When David Rees signed Mooney as a new client, he arranged for and personally guaranteed a bank loan of $7,500 for her personal use. When the loan was renewed or refinanced in August 2004, Rees again personally guaranteed her new loan and Rees paid the accrued interest. When she obtained a recovery in November 2005, the bank loan was finally paid off in the amount of $8,327.45. In late December 2003 an incident occurred between Mooney and Rees at his law office that she characterized as unwanted sexual harassment or activity by him toward her. Rees acknowledged to one of his employees that something of an improper nature occurred involving Mooney. A Release prepared by or for Rees was signed by Mooney in the office of another Jonesboro attorney, selected by Rees, on September 20, 2004. This Release covered both the alleged sexual harassment and any legal malpractice claim Mooney might have against Rees. Mooney, without counsel in the release matter, signed this Release under duress, according to her and her handwritten notation on the Release. Mooney was given a $1,000.00 check. She was not satisfied with the deal, so stated, and did not then negotiate the $1,000. A new form of a Release, limited to only the sexual harassment allegation, was drafted providing for a total payment of $4,000.00 to Mooney. The new form did not give Rees or his law firm the blanket release from any liability for any of her possible claims for legal or professional malpractice or negligence that was in the first Release. Woodruff presented Mooney a $3,000 Rees law firm check and the new Release on November 1, 2004, Mooney signed the modified Release and received the second check. Both checks cleared the bank on November 15, 2004. Materials Woodruff supplied the Office of Professional Conduct also include an Affidavit and Release presented to Mooney on September 20, 2004, but refused by her, stating, in part, “upon my Christian word... in no way has he [Rees] engaged in sexual banner (sic), improper touching, improper behavior and neither have I.” A 2007 e-mail from Woodruff confirmed this document was drafted in the Rees office. Mooney stated she continued with Rees as her attorney after the December 2003 incident because 34

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Private Trusts Valuation of Life Insurance Policies for Life Settlement Fiduciary Compliance

www.gnfgroup.com she thought she had to have his legal skills to win her case. In late January 2004, Rees also entered into a temporary representation agreement with Emerson George, the atfault driver in Mooney’s claim, regarding an injury to George’s wife in a possible medical malpractice situation. Rees sued George on March 26, 2004 as the lead defendant in Mooney’s case, at the same time that Rees also represented George. Neither Mooney nor George were informed by Rees as to this dual representation, and neither consented to or waived Rees’s conflict. Mrs. George died on April 12, 2004. On April 26, 2004, Rees wrote the defense attorney (Wyatt) and

acknowledged the conflict situation he was then in with regard to George, and stated that Rees would need to make sure George did not come into the Rees office during the pendency of the Mooney claim. The Rees temporary agreement with George did not expire until about April 30, 2004, but it was July 20, 2004, before Rees finally wrote George informing him that Rees did not feel George had a viable medical malpractice claim in his late wife’s matter and that the Rees office would not be able to represent George. By August 2004, Rees was asking opposing counsel (Wyatt) about Rees deposing George in Mooney’s lawsuit, which was set for jury

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Lawyer Disciplinary Actions trial on November 8, 2004. On September 7, 2004, Rees wrote Wyatt and provided an Affidavit containing Rees’s version of the events surrounding his concurrent George-Mooney representations. On that date, without fully informing Mooney of Dispute Ad:Layout 1 3/17/09 4:00 PM the likely legal consequences, Rees also filed a motion and order for voluntary non-suit

with prejudice as to only defendant Emerson George in the Mooney v. Sonrise case. In the meantime, Emerson George had consulted with another attorney to represent George regarding any issues George had with Rees as a result of the apparent conflict of interest Page 1 Rees had between Mooney and George. Rees also then selected and substituted Arlon

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Woodruff for Rees as Mooney’s attorney in her lawsuit. On September 21, 2004, Sonrise filed a motion to dismiss the Mooney suit as to Sonrise, claiming that, with the Rees non-suit with prejudice order as to its driver, George, Sonrise was entitled to be dismissed from the lawsuit under Arkansas law based on the theory of respondeat superior. Judge Fogleman denied the Sonrise motion on November 1, 2004, and granted Woodruff’s motion for Mooney to set aside the Rees’s order of dismissal with prejudice as to George. As a result, George was brought back into the Mooney suit as a defendant. Judge Fogleman referred the matter of Rees’s Emerson George conflict to the Committee by letter on March 3, 2005. As a result of these actions, Mooney lost her November 2004 trial date and her case was not tried until September 2005. F. DAVID REES, Bar No. 79238, of Jonesboro, Arkansas, had his law license suspended for thirty (30) days by Committee Findings & Order filed February 23, 2009, after a hearing, on a Complaint filed by Tom Papachristou in Case No. 2007-031, for violations of Rules 1.7(a) and 1.7(b) (both Rules dealing with “conflicts”). Notice of Appeal on this case was filed by the Office of Professional Conduct on March 16, 2009. In early 2004, Tom Papachristou (“Tom”) and Kim Crockett (“Kim”), both residents of Crittenden County, Arkansas, had been long-time companions and had a minor son between them. Tom was engaged in international sales activities. Kim functioned as the long-time office manager for these businesses. In early 2004 there was an ongoing federal criminal investigation of Tom, and possibly of Kim, for activities including alleged illegal transfer of registration or serial plates on certain aircraft used in their business. Another attorney, Rubens, was representing Kim. In March 2004, the FBI sought an interview with Kim. On March 10, 2004, Kim, with her attorney, agreed to provide the FBI with information and signed a federal “Proffer Agreement,” in effect making her a cooperating witness, with some degree of immunity, in an effort to help her avoid possible prosecution in the criminal matter under investigation involving Tom. In May 2004, Tom retained Rees to represent him in the federal criminal investigation, paying Rees $125,000 and

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

Lawyer Disciplinary Actions entered into in the ongoing federal criminal investigation involving Tom. As a result of an incident with Rees at Kim’s residence in early October 2004, while Tom was away, they jointly wrote Rees terminating his services in all their legal matters. After a demand from their new attorney, Rees turned over all their files to Ford, returned the undeposited $100,000 check from Tom, and stated no further refund of fee was due to Tom. In late 2004, Rees claimed he had worked hard to “shut down” Tom’s federal criminal matter. However, Tom was charged by Information with a felony in June 2006, and was sentenced on a guilty plea in March 2007. Volpe’s 2005 deposition makes it clear that Volpe was unaware of the investigation of Tom ever being “shut down,” whether by reason of Rees’s involvement or for any other reason. In January 2005, Tom sued Rees for the repayment of $125,000 in advanced fees. Arlon Woodruff represented Rees in this suit. John Wesley Hall, Jr., a veteran Little Rock criminal defense attorney, was deposed in mid-2005 as Tom’s expert witness on criminal cases. Hall testified that Rees should not have represented Kim and Tom at the same time in the same federal criminal

giving him another check for $100,000 to hold as additional fee on the federal criminal matter, if he was actually charged. Tom made additional fee payments to the Rees Law Firm for matters other than the federal criminal matter. Thereafter Kim terminated Rubens’ services and she also became Rees’s client, as did businesses in which Tom and Kim were involved. Communications among Rees, Rubens, Assistant United States Attorney Joe Volpe, and others resulting in Rees writing Volpe and the other attorneys a letter dated June 2, 2004, stating that Rees now represented both Tom and Kim in the pending federal criminal investigation, and that Rubens was out as Kim’s attorney in the matter. Rubens wrote Rees, through another attorney, outlining the conflict of interest Rubens saw Rees had created by assuming dual representation of both Tom and Kim in the same federal criminal matter, and the risk this new dual representation posed to Kim’s probable “immunity” under her Proffer Agreement. A suit filed for Kim in June 2004, against Rubens for damages allegedly arising out of his previous representation of her, confirmed that an “immunity agreement” for Kim’s benefit had been

investigation. The Rees office file on Tom’s federal criminal matter from May-October 2004, and turned over to Ford, contained a total of fifteen (15) sheets of paper (including eight sheets which were letters generated by other attorneys). The suit was settled in May 2007 by Tom being paid $140,000. Note: The three Rees suspensions were specifically ordered to be served consecutively, for a total suspension of 102 days from February 23, 2009. REPRIMAND: DON C. COOKSEY, Bar No. 74199, of Texarkana, Texas, was reprimanded and ordered to pay $500 in restitution by Committee Findings and Order filed January 7, 2009, on a Complaint filed by Jerry Minyard in Case No. 2008-099, for violations of Rules 3.4(c), 5.5(a), and 8.4(d). Cooksey was paid $1,500 to represent Minyard in a divorce. On March 2, 2008, Cooksey’s Arkansas law license was administratively suspended for failure to pay his 2008 bar license fee by March 1. On March 12, 2008, Cooksey met with opposing counsel 6

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Lawyer Disciplinary Actions and the two agreed on a proposed decree. Cooksey signed the decree on behalf of his client and delivered the proposed decree to the court for signature. On March 13, 2008, the trial court entered the final decree of divorce. Cooksey’s Arkansas law license was reinstated on May 30, 2008, when he paid his bar license fee and penalty. DON C. COOKSEY, Bar No. 74199, of Texarkana, Texas, was reprimanded and ordered to pay $750 in restitution by Committee Findings and Order filed March 17, 2009, on a Complaint filed by Thomas Brown in Case No. 2008-100, for violations of Rules 1.1, 3.1, 3.4(c), 5.5(a), and 8.4(d). Cooksey failed to respond to the Formal Complaint and a separate reprimand sanction was entered. In 2008, Cooksey represented Brown in an effort to get a 2004 probation expunged. The prosecuting attorney informed Cooksey that he would not agree to the early release from probation as Brown had not served half of his probationary period. Brown requested a fee refund from Cooksey, who refused. Brown filed suit in Bowie County, Texas, court for the $750 and obtained a default judgment against Cooksey. Cooksey’s Arkansas law license was administratively suspended from March 2 to May 30, 2008, for failure to pay his annual license fee. ROBERT F. MOREHEAD, Bar No. 70050, of Pine Bluff, Arkansas, after a hearing on February 20, 2009, was reprimanded, ordered to pay $4,000.00 in restitution, and placed on supervised probation for

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twenty-four (24) months with certain practice oversight conditions by Committee Findings & Order filed March 2, 2009, on a Complaint filed by Bernice Marks in Case No. 2008-037, for violations of Rules 1.2(a), 1.3, 1.4(c), 1.15(a)(1), 1.15(b)(1), 5.5(a), and 8.4(d). Morehead represented Bernard Marks at trial and on appeal in 2006 of a sentence to life without parole for capital murder. Bernard’s mother gave Morehead a $4,000 check, marked as being a $900 deposit on the record and $3,100 for fees on appeal work. Morehead had no attorney trust account at the time into which he could deposit these advanced client and expense funds. Morehead later admitted that he later used the $4,000 for his personal and office matters. Morehead paid the $900 transcript deposit to the court reporter in a cashier’s check. He obtained an order extending time to file the record to the full seven months permitted by rule. The reporter delivered

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the Marks trial transcript to the circuit clerk. Morehead then obtained an Order granting Bernard indigency/pauper status for the appeal and a free, state-paid transcript. The reporter refunded Morehead the full $900 transcript deposit. The reporter was paid the full transcript cost by the State of Arkansas, pursuant to the “indigency” order. The $900 refund was neither deposited into any Morehead trust account nor refunded to the Marks. In late August 2006, Morehead tendered the Marks record but it was declined due to non-compliance with Rule 5 on his extension of time order. The record was returned to him by the Clerk’s office on November 27, 2006; he was advised to file a Motion for Rule on the Clerk; but he filed no such motion. In early 2008, Marks learned from the court that he had no appeal filed. His parents then hired and paid new counsel to attempt a belated appeal. Morehead was contacted by the Office of Professional

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Lawyer Disciplinary Actions Conduct about the Marks matter in April 2008. On April 16, 2008, Morehead filed a Motion for Rule on the Clerk. The Motion was granted, Morehead was later relieved as Marks’ counsel, and new counsel pursued the appeal which was affirmed by the Court on December 19, 2008. Morehead failed to pay his 2008 Arkansas law license fee, due by March 1, 2008, and his law license was suspended when he filed the Motion in the Marks matter in April 2008. At the hearing, Morehead asserted that medical and health problems he had encountered in 2007-2008 had at times temporarily limited his ability to handle his legal business. He stipulated that he had not had an attorney trust account from at least January 2006, until he opened a new one on February 18, 2009. Marks received his $4,000 restitution check shortly after his hearing. F. DAVID REES, Bar No. 79238, of Jonesboro, Arkansas, was reprimanded and fined $2,500.00 by Committee Findings & Order filed March 11, 2009, on a Complaint filed by Connie Dixon in Case No. 2008082, for violations of Rules 1.2(a), 1.7(b), and

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8.4(c). In October 2004, David Rees signed Connie Dixon as a new client for a Vioxx injury claim. He called her back to his office later that same day and then used coercive tactics, including intimidating her, until she had sex with him, to which she states she did not willingly consent. Rees then began using his position as her attorney to attempt to coerce Dixon into meeting him at various locations under the guise of discussing her case and to sign papers. He would then turn the conversation to personal matters. He had sex with her at least one more time. In early February 2005, for her protection, Dixon started taping their telephone conversations and the messages Rees left on her home telephone answering machine. The transcript showed Rees offered to reduce his fee percentage in her case substantially if she would accompany him and, impliedly, have sex with him at various locations, including an overnight stay at the Memphis Peabody Hotel. Rees told her of his great success as a plaintiff’s attorney; how few lawyers could handle her suit to a successful conclusion as he could; and how good her Vioxx claim was. Rees continuously told Dixon that her

Vioxx suit was about to be filed, but none ever was filed for her by Rees or his law firm. On February 21, 2005, the Rees Law Firm sent Ms. Dixon a “status” letter on her Vioxx claim and a new contract for legal representation that reduced her contingent fee from the previous 33.3% down to 25% of any recovery. She never signed this new contract. In April 2005, Dixon filed suit against Rees seeking damages for his wrongful sexual conduct with her after he became her attorney. In the September 2007 trial of Smith v. Rees, Dixon testified that her sex with Rees was not consensual. In a 2007 deposition and in the Smith v. Rees trial, Rees acknowledged having sex with Dixon while she was his client. Dixon’s case was resolved in April 2008, and dismissed with prejudice in a confidential settlement. Thereafter, Ms. Dixon filed her grievance with the Committee in June 2008. The sexual conduct alleged in this case occurred prior to the May 1, 2005, effective date of Arkansas Rule 1.8(j) which now directly prohibits an attorney from having sexual relations with a client unless a consensual sexual relationship existed between them at

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the time when the client-lawyer relationship commenced. The former Arkansas Model Rules of Professional Conduct applied in this matter. Rees accepted the ballot vote decision of the Committee, thus could be no public hearing or further proceedings. DONALD E. WARREN, SR., Bar No. 99007, of Pine Bluff, Arkansas, was reprimanded and fined $500.00 by Committee Consent Findings and Order filed January 16, 2009, on a Per Curiam Order Complaint in Case No. 2008-104, for violations of Rules 1.3 and 8.4(d). Warren failed to tender the appellate record for his client Harris. Harris filed a pro se Motion for Belated Appeal. On October 2, 2008, the Arkansas Supreme Court issued a Per Curiam Opinion treating the Motion for Belated Appeal as a Motion for Rule on the Clerk and granted it. Warren was ordered to file a petition for writ of certiorari within thirty days to call up the entire record or that portion of the record necessary for the appeal to proceed and Warren was referred to the Committee. CAUTION: MICHAEL S. HODSON, Bar No. 97208, of Fayetteville, Arkansas, was cautioned by

Committee Findings & Order filed February 27, 2009 on a Per Curiam Order Complaint, for violations of Rules 1.1, 1.3, and 8.4(d). For his failure to respond to the Committee Complaint, he was additionally cautioned and fined $250.00 in Case No. 2008-090. Hodson tendered his client’s appellate record one day late. His motion for rule on clerk was granted on September 25, 2008, and he was referred to the Committee. ROBERT H. LAMBERT, Bar No. 2004081, formerly of Fayetteville and now of Norman, Oklahoma, was cautioned, fined $250.00 and ordered to pay $2,500.00 in restitution by Committee Findings & Order filed January 13, 2009, on a Complaint filed by Wesley House in Case No. 2008-042, for violations of Rules 1.3, 1.4(a)(2), 1.4(a)(4), 1.16(d), 3.4(c), and 8.4(d). Lambert, a solo, represented House in a paternity/custody action filed in April 2007. Lambert later joined a firm. In August 2007, House learned from the firm that Lambert was no longer with the firm and that another firm attorney would be handling the matter. After House was unable to contact the new attorney, he retained another attorney to represent him. Lambert failed to act with reasonable diligence and promptness; abandoned House without any notice of his whereabouts or

Tom M. Ferstl, MAI, SRA, J.D. J.T. Ferstl, MAI, J.D. 621 E. Capitol Ave. Little Rock, AR 72201 Phone: 501-375-1439 or 501-376-1439 Fax: 501-375-8317

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intentions; failed to return House’s calls; upon his constructive termination of House as a client failed to take reasonable action to protect House’s legal interests; and failed to pay his 2008 Arkansas annual license fee from March 2 until June 11, 2008. DANA A. REECE, Bar No. 76108, of Little Rock, Arkansas, was cautioned and fined $250.00 by Committee Consent Findings and Order filed February 23, 2009, on a Per Curiam Order Complaint in Case No. 2008-106, for violation of Rule 1.3. Reece represented Doss in an appeal from a denial of a writ of habeas corpus petition after his conviction for rape. Reece filed the notice of appeal with the circuit clerk in Hot Springs (Garland County) instead of with the clerk in Hot Spring County (Malvern). Reece later tendered the appeal record to the Supreme Court Clerk with a Motion for Belated Appeal, which the Supreme Court granted. FRANK DAVID REES, Bar No. 79238, of Jonesboro, Arkansas, was cautioned and fined $1,000.00, by Committee Findings & Order filed February 23, 2009, on a Complaint filed by Kyle Brandon in Case No. 2007-113, for three violations of Rules 1.8(e), giving prohibited financial assistance to a client. Notice of appeal on this case was filed on March 16, 2009, by the Office of Professional Conduct. While representing Brandon in a personal injury case from late 2003 to early 2006, Rees’s firm made three advances or loans of funds to Brandon totaling $1,600 in 2004-2005 for his personal use and needs, even though such advances or loans to clients are prohibited by Rule 1.8(e). WILLIAM S. ROBINSON, Bar No. 76108, of North Little Rock, Arkansas, was cautioned and fined $500.00 by Committee Findings & Order filed February 6, 2009, on a Complaint Before the Committee in Case No. 2008-072, for violations of Rules 3.2, 3.4(c), 4.4, and 8.4(d). After the second dismissal of his client’s case, for failure to comply with discovery requests and Orders to Compel, Robinson failed to perfect the appeal, failed to respond to a motion to dismiss appeal, and the appeal was dismissed. Robinson admitted fault in not following up when he did not receive any notification from the Clerk’s office that the record was ready. 

Daily continued from page 12

drives the producer away, the gas just stays in the ground, doing no one any good. He needs to let competition set the price. If only one company wants his lease, the truth may be that his tract does not look that good, geologically. He should remember this reality check: Not long ago one could have bought his whole farm, surface, minerals and all, for less, per acre, than the bonus offer on his kitchen table. Meanwhile, the Oil and Gas Commission regulates the whole process, seeking to prevent an excessive number of wells from being drilled while protecting everyoneâ&#x20AC;&#x2122;s statutemade correlative rights to the reservoirâ&#x20AC;&#x2122;s gas. The commission does that by forming units. Units, in the case of the Shale Play, are 640-acre governmental section squares.15 Each mineral owner within a unit is entitled to share all unit revenues by simply paying his share of all unit costs. Of course, most mineral owners will out-source those costs and revenues (net of royalty) to gas producers, by entering into oil and gas leases. Those parties who actually do participate in unit wells are called â&#x20AC;&#x153;working interest owners.â&#x20AC;?

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Each working interest ownerâ&#x20AC;&#x2122;s share of unit costs (his â&#x20AC;&#x153;gross unit working interestâ&#x20AC;?) is calculated by dividing his net mineral acres16 by 640. Each working interest ownerâ&#x20AC;&#x2122;s net share of unit revenues (net revenue interest) is his gross working interest, less royalties paid to mineral owners and any other burdens upon production. By its very nature, this unitization is an all-or-nothing deal. There is no place for the minâ&#x20AC;&#x153;The sharing formula is based upon the â&#x20AC;&#x2DC;band eral owner who simply wants to aid.â&#x20AC;&#x2122; An ellipse is drawn, 560 feet at all points be left alone. At common law, a from the completed interval of the horizontal non-playerâ&#x20AC;&#x2122;s gas was just legally well bore. The total area of the â&#x20AC;&#x2DC;band aidâ&#x20AC;&#x2122; is then computed, as is the area which it occupies within sucked into his neighborsâ&#x20AC;&#x2122; wells. each affected unit. Those numbers, ratioed, yield When the General Assembly the sharing percentages of what is treated as a created correlative rights, it made joint venture among the units involved.â&#x20AC;? them subject to integration by 17 the Oil and Gas Commission. One of the participating working interOnce a gas producer has secured all the leases and commitments to est owners is designated â&#x20AC;&#x153;Unit Operatorâ&#x20AC;? by participate in unit operations which it can the Commissionâ&#x20AC;&#x2122;s order and is thus placed reasonably secure through voluntary agree- in charge of unit wells. The Commission ment, it calls upon the Commission to in- names the operator in its Integration Or21 tegrate the remainder. In that process, the der, and prescribes the form of the Oper22 Commission hears evidence of the prevailing ating Agreement (â&#x20AC;&#x153;JOAâ&#x20AC;?) between operator 23 bonus and royalty terms for oil and gas leases and non-operators. The Commission also obtained in the unit, as well as the geologic has mandated the precise language of the Oil risk inherent in the proposed well. It then re- and Gas Lease offered to unleased mineral 24 quires each non-consenting owner to make owners. 18 The Commission specifies, by rule, the a choice. If the non-consenting owner is a mineral number of wells which can be drilled with25 owner, his choice array includes the options in each unit, and establishes the distance to lease his interest, participate in the costs which each of those wells must be set back and revenues of the unit wells, or be carried from exterior unit boundaries, to protect ad26 â&#x20AC;&#x153;non-consent.â&#x20AC;? When an owner is â&#x20AC;&#x153;non-con- joining units from drainage. That distance sent,â&#x20AC;? his bills are paid by the participating is 560 feet, thus creating a 1,120 foot buffer owners, proportionate to their interest, who area. Since that buffer area would ultimately likewise share his revenues until those revenues recoup expenses, multiplied by a risk strand a lot of unrecovered gas molecules, factor penalty set by the Commission based the Commission has even devised a method upon the adduced evidence of geological to equitably facilitate its development. Wells risk.19 Meanwhile, pending payout,20 the are permitted to invade the buffer area if the owner does receive 1/8 of the revenue attrib- owners of the affected units agree to share the wellsâ&#x20AC;&#x2122; costs and revenues.27 utable to his interest. The sharing formula is based upon the A working interest owner who has not agreed to participate gets his choice of the â&#x20AC;&#x153;band aid.â&#x20AC;? An ellipse is drawn, 560 feet at latter two options only. By definition, an all points from the completed interval of the owner who got that way by taking leases horizontal well bore. The total area of the â&#x20AC;&#x153;band aidâ&#x20AC;? is then computed, as is the area from others does not get to execute a lease. If an uncommitted owner refuses to which it occupies within each affected unit. choose affirmatively, the choice is made for Those numbers, ratioed, yield the sharing him. The unleased mineral owner is deemed percentages of what is treated as a joint vento have accepted the lease option; the work- ture among the units involved. (See Figure 2.) With few exceptions, the Arkansas lawyer ing interest owner is carried non-consent. Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

will enter this labyrinth because he or she is called to the task by a mineral owner. Seldom will that mineral owner understand, even superficially, the business at hand. If both the mineral owner and his lawyer lack that understanding, they will be pretty ineffective. So, in the area of oil and gas, understanding some science and business is part of being a lawyer. Hopefully this short article will be of some modest help.

lars over the five years 2008-12. That study may be downloaded at FayettevilleShaleEconomicImpactStudy[1].pdf. 5. For an excellent and exhaustive treatment of the real property law concepts and theories underlying this sub-specialty, see Judge Susan Webber Wright, The Arkansas Law of Oil and Gas (pts. 1-4), 9 U. Ark. Little Rock L.J. 223 (1986-87), 9 U. Ark. Little Rock L.J. 467 (1986-87), 10 U. Ark. Little Rock L.J. 5 (1987-88). For a far less scholarly approach to the same subject, directed to the Arkansas general practitioner, see also Thomas A. Daily and W. Christopher Barrier, Well Now Ain’t That Just Fugacious!: A Basic Primer on Arkansas Oil and Gas Law, 29 U.A.L.R. Law Rev., 211 (2007) (hereinafter cited as (“Fugacious”). 6. All are types of rocks. 7. See Fugacious, supra, at 240-248. 8. Pierson v. Post, 3 Cali. R. 175 (1805). 9. The word is “fugacious,” which means “apt to flee away or flit,” Young v. Ethyl Corp., 521 F.2d 771 (8th Circ., 1975), citing the Oxford English Dictionary (1971). 10. Arkansas’ conservation statutes originated with Act No. 105 of 1939. They are codified beginning at Ark. Code Ann. § 1571-101 (Michie Repl. 1994). 11. The Commission’s rules, as well as numerous other valuable resources, are available on-line at http://www.aogc.state.ar.us. Unfortunately, that website is not particu-

Endnotes 1. Cleburne, Conway, Faulkner, Franklin, Independence, Johnson, Pope, Van Buren, White and Woodruff. 2. The Arkoma Basin is a crescent shaped area of gas production, running from near McAlester, Oklahoma, to just northeast of Russellville, Arkansas. Its wells produce from numerous reservoirs, most of which are sandstones, but also include some limestone and chert formations. 3. Ominously, the current deep economic recession has now pushed gas prices to the bottom of their recent range. 4. According to an economic impact study performed by the University of Arkansas’ Sam M. Walton College of Business Center of Business and Economic Research, the total economic impact of the Shale Play during the year 2007 was approximately 2.6 million dollars. The same study projects an economic impact of approximately 17.8 billion dol-

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larly intuitive. Thus, some future citations to materials which may be obtained there will include directions. 12. A.O.G.C. General Rule B-43. When logged on to the website, select “Rules & Regs” from the light blue band on the far left side of the page. Then navigate the resultant pdf file to B-43. 13. Dissected in detail within Fugacious, supra, at 228-238. 14. As this is being written completed well costs for horizontal Fayetteville Shale wells are running around four million dollars per well. 15. A.O.G.C. General Rule B-43(f ). 16. Meaning the acreage of his tract within the unit, multiplied by his percentage of mineral ownership within the tract. 17. Ark. Code Ann. § 15-72-303(b) (Michie Repl. 1994); A.O.G.C. General Rule B-43 (g) and (h). See also, A.O.G.C. General Rules A-2 and A-3. 18. Normally this choice must be made within fifteen days from the issuance of the Commission’s integration order. 19. 400% is normal, unless the evidence establishes extraordinary risk. 20. Payout is that point where the other 7/8 of revenue equals the amount of all drilling completion and equipment costs, multiplied by the risk factor penalty plus 100% of subsequent operating expenses. 21. A.O.G.C. General Rule B-43(g) and (h). 22. The “J” in “JOA” apparently stands for “Joint,” although “Joint” is not part of the title of the modern agreement. 23. While logged on to Commission website, select “Hearings” from the array of menu items in the yellow band at the top. Then select “JOA Documents” from the drop-down menu, select the “current” version and wait patiently while the pdf file loads. 24. Follow the instructions in the previous note. Then navigate through the JOA to its exhibit “B” (page 27 of the pdf file.) 25. The number is currently 16, per common source of supply. A.O.G.C. General Rule B-43(l). 26. A.O.G.C. General Rule B-43(i). 27. A.O.G.C. General Rule B-43(o). 

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Environmental continued from page 16

would be no permit requirement. In addition, coverage is mandatory under the Construction General Permit for earth-disturbing activities of five acres or more. An oil and gas production, drilling, or workover facility will be subject to SPCC requirements if it meets the following

specifications: the facility could reasonably be expected to discharge oil into or upon the navigable waters of the United States or adjoining shorelines, and have: (1) a total underground buried storage capacity of more than 42,000 gallons; (2) a total above ground oil storage capacity of more than 1,320 gallons; or (3) an above ground oil storage capacity of more than 660 gallons in a single container.

SPCC applicability is dependent on the tank’s maximum design storage volume and not “safe” operating or other lesser operational volumes. For purposes of the regulation, an onshore production facility may include all wells, flowlines, separation equipment, storage facilities, gathering lines, and auxiliary nontransportation-related equipment and facilities in a single geographical oil or gas field operated by a single operator. Safe Drinking Water Act The Safe Drinking Water Act was passed by the U.S. Congress in 1974. Pursuant to the act, the EPA is required to set standards for drinking water quality and oversee all states, localities, and water suppliers who implement these standards. The Federal Energy Policy Act of 2005, however, amended the Underground Injection Control (“UIC”) provisions of the Safe Drinking Water Act to exclude hydraulic fracturing from the definition of “underground injection.” Thus, regulation of hydraulic fracturing during oil and gas extraction activities has fallen to the individual states. The UIC program of the SDWA regulates injection wells used in the oil and gas production process for produced water disposal or for enhanced recovery. Wells used in the industry for produced water are classified as Class II. Minimum UIC Class II well requirements, as outlined in 40 CFR Part 144, involve specific construction, operation, and closure standards, as well as provisions for ensuring that the owner, operator and/or transferor of the well maintains financial responsibility and resources to plug and abandon the well. Included are casing and cementing requirements based on the depth to the injection zone, location of aquifers, and estimated injection pressures as well as other possible considerations. Operational standards involve regular (at least once every five years) mechanical integrity tests; monitoring of injection pressure, flow rate, and volume; monitoring of the nature of injected fluid as needed; and annual reporting of monitoring results. Finally, closure procedures must be performed in accordance with an approved plugging and abandonment plan, which includes the placement and composition of cement plugs, the amount of casing to be left in the hole, the estimated cost of plugging, and any proposed tests or measurements.

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/DZ\HU 'LVFLSOLQDU\ $FWLRQV Interaction of State and Federal agencies In addition to the interactions related to EPA delegation to ADEQ and AOGC, there are opportunities to bring both state and federal agencies to the same table pursuant to the requirements of Section 10 and 404 permits. These permits are obtained through the U.S. Department of the Army Corps of Engineers (“Corps of Engineers”) and can range from simple nationwide permits to more complex individual permits. Activities requiring Section 10 permits include structures (e.g., piers, wharfs, breakwaters, bulkheads, jetties, weirs, transmission lines) and work such as dredging or disposal of dredged material, or excavation, filling, or other modifications to the navigable waters of the United States. Activities requiring Section 404 permits are limited to discharges of dredged or fill materials into the waters of the United States and are typically thought of as “wetland” permits. As part of the Corps of Engineers permit system, ADEQ must provide a water quality certification in accordance with the requirements of the Clean Water Act Section 401(a)(1). ADEQ, in re-issuing its water quality certification for the Nationwide Permits on March 13, 2007, imposed three additional conditions on the Nationwide Permits. First, individual water quality certification requests must be submitted to ADEQ for any activity

impacting Extraordinary Resource Waters, Ecologically Sensitive Waters, and Natural and Scenic Waters as identified in Regulation 2. Second, permit applicants shall contact ADEQ for a STAA needs determination for activities that have the potential to violate water quality criteria. Third, permit applicants shall comply with the NPDES Stormwater Program requirements. Although the Corps of Engineers administers the Clean Water Act 404 permits, the EPA retains the authority to veto Corps of Engineers permits, to interpret statutory exemptions and jurisdiction, to enforce actions, and to delegate the Section 404 program to the states. As you can see, the EPA retains the underlying regulatory functions but has, for practical purposes, assigned the administrative function to the Corps of Engineers. Forward Thinking Solutions The city of Clinton, Arkansas, has been working on a process to recycle the waste water produced during the drilling process. During the hydraulic fracturing process, millions of gallons of water are used per well to break up the shale and release the natural gas. As mentioned, the ADEQ currently requires this waste water to be injected into disposal wells. The city of Clinton, however, has recently proposed utilizing an abandoned sewer plant to recycle the water.

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The sewer plant was previously dedicated to the now closed Pilgrim’s Pride poultry plant and the city is trying to save those jobs and provide revenue by selling the water back to the drilling companies. While discussions of this particular water recycling proposal are still in its infant stages, ADEQ has expressed interest in looking closer at water recycling. ADEQ is actively promoting water reuse and is working to evaluate legal restrictions on and the technologies available for the treatment of water produced during the drilling process. Conclusion As shown, there currently exists a wide range of environmental law, regulations and rules from numerous state and federal agencies related to the Oil & Gas Industry. At the present time, there is no agreement within the regulatory community as to the most effective method to regulate the industry, but the agencies are working toward an agreement. Although there have been periodic revisions to both state and federal environmental law, neither revisions nor new regulation are pending at this time. With recent administration changes in Washington, D.C., it appears that numerous environmental changes are on the horizon; how those changes will affect the oil and gas industry, while unknown, are likely to create a more regulated environment. 

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Matthews continued from page 20

tions out of the limited partnership. Similar to the Arkansas corporate restrictions,50 these rules prohibit the limited partnership from making distributions which would render the limited partnership insolvent in either a bankruptcy or balance sheet sense.51 7. Judicial Expulsion of General Partner – In regard to dissociation of a general partner, the ULPA essentially adopts verbatim the UPA provisions.52 One resulting change from the prior RULPA53 is that a general partner can now be expelled as a result of judicial determination.54 Although such a remedy was probably already within the inherent judicial power of the court, the statute clarifies its availability. 8. Conversions and mergers – ULPA includes a detailed set of new provisions permitting limited partnerships to convert to or from, or to merge with, other organizations.55 The term “organization” includes general partnerships, LLPs, limited partnerships, LLLPs, LLCs, corporations, and business trusts, “whether or not organized for profit.”56

9. Voluntary Dissolution – The former RULPA permitted voluntary dissolution upon “the written consent of all partners.”57 The new ULPA reduces that requirement of unanimity by permitting voluntary dissolution upon “the consent of all general partners and of limited partners owning a majority of the rights to receive distributions . . . ,”58 which need not be in writing. 10. Creditor’s claims at dissolution – ULPA includes new procedures permitting a limited partnership to dispose of creditor’s claims at dissolution.59 These provisions, which are similar to the corporate statutes,60 specify particular procedures to notify creditors and bar claims against the dissolved limited partnership after designated periods of time. As this discussion indicates, the new Arkansas limited partnership act includes some interesting and significant changes. These changes not only de-link the limited partnership statute from that applicable to general partnerships, but acknowledge the narrower niche occupied by limited partnerships in the current business world. The new statute is therefore designed to meet the needs of the smaller pool of investors likely

to opt for the limited partnership format in the future. Endnotes: 1. The Unif. Limited Partnership Act (2001), adopted by 2007 Ark. Acts No. 15, codified at Ark. Code Ann. § 4-47-101 et seq. (Supp. 2007). 2. Unif. Limited Partnership Act (2001), 6A U.L.A. 325 (2008). 3. Although this is the generally effective date, some RULPA provisions continue to apply to previously formed limited partnerships. See Ark. Code Ann. § 4-47-1206 (Supp. 2007). 4. Revised Unif. Limited Partnership Act (1976) With The 1985 amendments, 6B U.L.A. 1(2008), adopted by 1991 Ark. Acts No. 1175 and codified at Ark. Code Ann. § 4-43-101 et seq. (Repl. 2001). 5. ULPA(2001), Prefatory Note, 6A U.L.A. 326 (2008). 6. Ark. Code Ann. § 4-47-201(a)(4) (Supp. 2007). 7. General partners in an LLLP are not personally liable for the obligations of the LLLP. See Ark. Code Ann. § 4-47-404(c) (Supp. 2007) and discussion of liability, infra. 8. Certificate of Limited Partnership (LP-01, Rev. 03/08) available at www.sos.arkansas.gov. 9. Certificate of Limited Liability Limited

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Partnership (LLLP-02 Rev. 03/08) available at www.sos.arkansas.gov. 10. Ark. Code Ann. § 4-47-201 (Supp. 2007). 11. The “Application for the Registration of Limited Liability Limited Partnership” was required by the former RULPA, and is still available at www.arkansas.gov (Rev. 4/06). 12. Model Registered Agents Act, 2007 Ark. Acts No. 638 §§ 56-7, which repealed Ark. Code Ann. §§ 4-27-102(4) and 4-27-114 to 117. See discussion in Jenny Wilkes Robertson & Alex T. Gray, “Survey of Legislation 2007 Arkansas General Assembly,” 30 UALR Law Rev. 613 (2008). 13. Ark. Code Ann. § 4-43-303(a) (Repl. 2001). 14. Ark. Code Ann. § 4-47-303 (Supp. 2007). 15. Ark. Code Ann. § 4-47- 404(a) (Supp. 2007). 16. Ark. Code Ann. § 4-47-404(c) (Supp. 2007) states that “An obligation of a limited partnership incurred while the limited partnership is a limited liability limited partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the limited partnership. A general partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or acting as a general partner. ” 17. Ark. Code Ann. § 4-46-404 (Repl. 2001). 18. See, e.g. Allan W. Vestal, “Fundamental Contractarian Error in the Revised Uniform Partnership Act of 1992,” 73 B.U. L. Rev. 523 (1993); Lawrence E. Mitchell, “The Naked Emperor: A Corporate Lawyer Looks at RUPA’s Fiduciary Provisions,” 54 Wash & Lee L. Rev. 465 (1997); Larry E. Ribstein, “Fiduciary Duties and Limited Partnership Agreements,” 37 Suffolk Univ. L. Rev. 927 (2004). 19. Ark. Code Ann. § 4-47-408(a) (Supp. 2007). 20. Ark. Code Ann. § 4-47-408(b) (Supp. 2007). 21. Ark. Code Ann. § 4-47-408(e) (Supp. 2007). 22. Ark. Code Ann. § 4-47-408(c) (Supp. 2007). 23. Ark. Code Ann. § 4-47-408(d) (Supp. 2007). 24. Ark. Code Ann. § 4-47-305(a) (Supp. 2007). 25. Ark. Code Ann. § 4-47-305(b) (Supp. 2007). 26. Ark. Code Ann. § 4-43-603 (Repl. 2001). 27. Ark. Code Ann. § 4-43-604 (Repl. 2001) provided that upon withdrawal, a partner was entitled to “the fair value of his interest in the limited partnership as of the date of withdrawal based upon his right to share in distributions from the limited partnership” unless otherwise provided in the limited partnership agreement. 28. Ark. Code Ann. § 4-47-601(a) (Supp. 2007) flatly states that “[a] person does not have a right to dissociate as a limited partner before the termination of the limited partnership. ” 29. Ark. Code Ann. § 4-47-601(b)(1) (Supp. 2007).

30. Ark. Code Ann. § 4-47-505 (Supp. 2007) states that “[a] person does not have a right to receive a distribution on account of dissociation. ” 31. Ark. Code Ann. § 4-47-602(a)(3) (Supp. 2007). 32. Ark. Code Ann. § 4-47-602(a)(1) (Supp. 2007). 33. See discussion in Robert T. Danforth, “The Role of Federalism in Administering a National System of Taxation,” 57 Tax Law. 625, 63334 (2004); Thomas Earl Geu, “Selected Estate Planning Aspects of the Uniform Limited Partnership Act (2001),” 37 Suffolk Univ. L. Rev. 735 (2004). 34. Ark. Code Ann. § 4-47-104(c) (Supp. 2007). 35. Ark. Code Ann. § 4-47-110(a) (Supp. 2007) (provisions which are waivable by the partnership agreement). 36. Ark. Code Ann. § 4-47-108(a) (Supp. 2007). 37. Ark. Code Ann. § 4-47-104(a) (Supp. 2007). 38. Ark. Code Ann. § 4-43-106 (Repl. 2001). 39. Ark. Code Ann. § 4-47-104(b) (Supp. 2007). 40. Unif. Limited Partnership Act (2001), 6A U.L.A. 366, Comment to § 104(b). 41. Id. 42. Id. 43. Ark. Code Ann. § 4-47-210 (Supp. 2007) . 44. Ark. Code Ann. § 4-27-1622 (Repl. 2001)(annual franchise tax report) . 45. Annual Report for Limited Partnership/ Limited Liability Limited Partnership (LP-AR Rev. 08/07) available at www.sos.arkansas.gov. 46. Ark. Code Ann. § 4-47-809(a)(2) (Supp. 2007). 47. Ark. Code Ann. § 4-43-503 (Repl. 2001). 48. Ark. Code Ann. § 4-47-503 (Supp. 2007). 49. Unif. Limited Partnership Act (2001) § 503 Comment, 6A U.L.A. 444 (2008). In the absence of any agreement on the allocation of profits and losses, the result should still be allocation on the basis of contributions. An introductory table to the Uniform Act which compares the two statutes states that “in the

twitter Follow and Comment on the Annual Meeting on Twitter. Use the hash tag #arkbar in your Tweets and use your Twitter software to do a search for the #arkbar hash tag. Official communications before and during the Annual Meeting can be received by following ARAnnualMeeting on Twitter. default mode, the Act’s formulation produces the same result as RULPA formulation.” Id. at 330. 50. Ark. Code Ann. § 4-27-640(c) (Repl. 2001). 51. Ark. Code Ann. § 4-47-508(b) (Supp. 2007). 52. Ark. Code Ann. § 4-47-603 (Supp. 2007). Compare Ark. Code Ann. § 4-46-601 (Repl. 2001). 53. Compare Ark. Code Ann. § 4-43-402 (Repl. 2001). 54. Ark. Code Ann. § 4-47-603(5) (Supp. 2007). 55. Ark. Code Ann. §§ 4-47-1101 to 1113 (Supp. 2007). 56. Ark. Code Ann. § 4-47-1101(8) (Supp. 2007). 57. Ark. Code Ann. § 4-43-801(3) (Repl. 2001). 58. Ark. Code Ann. § 4-47-801(2) (Supp. 2007). 59. Ark. Code Ann. §§4-47-806 to 807 (Supp. 2007). 60. Compare Ark. Code Ann. §§ 4-27-1406 to 1407 (Repl. 2001). 

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A Special Thank You to the Gene D. Adams, Jr. Charles P. Allen H. William Allen William G. Almand Overton S. Anderson Philip S. Anderson Elizabeth Andreoli Richard L. Angel R. Keith Arman Ben F. Arnold Jess L. Askew, III Russell C. Atchley Virginia Atkinson Joyce Bradley Babin Kenneth B. Baim Charles W. Baker Kenneth E. Baker Charles A. Banks Barry D. Barber R. Kevin Barham Harry F. Barnes Marcia Barnes W. Christopher Barrier Ben T. Barry Anthony W. Bartels Sherry P. Bartley Woodson W. Bassett, III Fines F. Batchelor, Jr. David L. Beatty Paul B. Benham, III Stephen Bennett Joe Benson M. Stephen Bingham Sam N. Bird Donald E. Bishop James B. Blair C. Tad Bohannon Will Bond Barbara P. Bonds Ted Boswell William H. Bowen Ronald L. Boyer Robert B. Branch Debbie D. Branson Ellen B. Brantley William C. Bridgforth Robert R. Briggs Fred E. Briner Bill W. Bristow 48

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Thomas E. Brown Mickey Buchanan Randall S. Bueter Larry W. Burks Jim R. Burton Stephen W. Butler John Richard Byrd, Sr. Paul Byrd Andy L. Caldwell John C. Calhoun, Jr. Jerry L. Canfield Thomas M. Carpenter Douglas M. Carson Daniel R. Carter Jerry W. Cavaneau Robert M. Cearley, Jr. Earl Buddy Chadick John S. Cherry, Jr. E. B. (Chip) Chiles, IV Jonann Coniglio Chiles William M. Clark, Jr. H. Murray Claycomb John Ralph Clayton Ralph M. Cloar, Jr. Roger U. Colbert Pat Jackson Compton Barry E. Coplin Nate Coulter James O. Cox Steve R. Crane Michael A. Crockett James E. Crouch Casey L. Cullipher Niki T. Cung F. Thomas Curry James D. Cypert Thomas A. Daily Carol C. Dalby Elizabeth Danielson Paul Danielson Charles E. Davis John A. (Jack) Davis, III Steven B. Davis Robert T. Dawson Barry Deacon J. C. Deacon Jack W. Dickerson F. Hansen Dirani James F. Dowden www.arkbar.com

Ted N. Drake Robert H. Dudley Warren E. Dupwe Davis Duty Charles B. Dyer, Jr. B. Michael Easley David L. Eddy G. Thomas Eisele Don R. Elliott, Jr. Stephen Engstrom Alan D. Epley Audrey R. Evans John C. Everett Hugh A. Finkelstein Victor A. Fleming Kay West Forrest Lyle D. Foster Timothy Davis Fox Price C. Gardner David Allan Gates Charles Alan Gauldin Roy Gean, Jr. Buck C. Gibson C. C. Gibson, III Pamela B. Gibson Sam E. Gibson Martin G. Gilbert Melinda R. Gilbert Greg R. Giles Dent Gitchel Charles W. Goldner, Jr. Don Goodner Ray A. Goodwin Robert J. Govar Albert Graves, Jr. Angela B. Gray Keith L. Grayson Melanie L. Grayson Michael R. Greene John C. Gregg Ronald L. Griggs Timothy W. Grooms David F. Guthrie Michael E. Hale Barbara A. Halsey Donis B. Hamilton James A. Hamilton Frank S. Hamlin A. Vaughan Hankins

Stuart W. Hankins W. David Hardin David M. Hargis Melva Harmon David K. Harp F. Daniel Harrelson Eugene S. Harris James E. Harris Charles L. Harwell Richard F. Hatfield William D. Haught L. Kyle Heffley Brad L. Hendricks Rosanna Henry Joe Hickey Basil Hicks, Jr. Tina M. Hodne Denise R. Hoggard Cyril Hollingsworth Don Hollingsworth J. Hawley Holman Robert M. Honea Ron A. Hope Gregory M. Hopkins R. Howard Hopkins Robert E. Hornberger Karen K. Hutchins James W. Hyden Annabelle C. Imber Michael E. Irwin Donald T. Jack, Jr. Randolph C. Jackson Paul J. James Bradley D. Jesson Christopher M. Jester Glenn W. Jones, Jr. Robert L. Jones, III Robert Shepherd Jones Jim L. Julian Philip E. Kaplan Sean T. Keith William H. Kennedy, III Matthew J. Ketcham Judson C. Kidd Mike Kinard Peter G. Kumpe Stanley R. Langley Sam Laser John T. Lavey

2008-09 Sustaining Members Charles R. Ledbetter Samuel E. Ledbetter John C. Lessel Robert O. Levi Harry A. Light Alice F. Lightle Stark Ligon John G. Lile, III Courtney N. Little Coby W. Logan Chester C. Lowe, Jr. Edwin L. Lowther, Jr. James R. Marschewski William A. Martin David R. Matthews Gail Matthews Stephen A. Matthews Ronald A. May S. Hubert Mayes, Jr. Mark T. McCarty Ed W. McCorkle Michael S. McCrary Bobby McDaniel Jeffrey E. McKinley Steven McKinney James A. McLarty, III James Bruce McMath James E. McMenis Toney D. McMillan Jack A. McNulty Russ Meeks Michael Millar Andrew R. Miller Lance R. Miller Phillip J. Milligan Philip Miron Chalk S. Mitchell H. Maurice Mitchell Michael W. Mitchell T. Ark Monroe, III James M. Moody Harry Truman Moore Charles A. Morgan Christopher W. Morledge W. Frank Morledge Stephen E. Morley Kenneth R. Mourton Rosalind M. Mouser Wm. Kirby Mouser

Ralph C. Murray Timothy J. Myers E. Sheffield Nelson David Newbern George H. Niblock Dana Daniels Nixon R. Gary Nutter Debby Thetford Nye Bobby Lee Odom Edward T. Oglesby James E. Oâ&#x20AC;&#x2122;Hern, III Hugh R. Overholt Charles C. Owen Charles R. Padgham Chris L. Palmer Jerry D. Patterson Nicholas H. Patton Claibourne W. Patty, Jr. Kristen Pawlik Richard L. Peel B. Jeffery Pence Neal R. Pendergraft Edward M. Penick Mark Alan Peoples Donna C. Pettus Ellis Lamar Pettus John V. Phelps Chris Piazza George N. Plastiras Franklin A. Poff, Jr. David M. Powell Jerry D. Pruitt Donald C. Pullen John I. Purtle Joseph H. Purvis Steve Quattlebaum Richard L. Ramsay Danny M. Rasmussen Brian H. Ratcliff Gordon S. Rather, Jr. David P. Rawls J. Thomas Ray Chris R. Reed R. Jeffrey Reynerson Lewis E. Ritchey William S. Robinson Charles B. Roscopf Charles D. Roscopf Kent J. Rubens

John L. Rush J. Shepherd Russell, III Donald S. Ryan Mary M.White Schneider Don M. Schnipper John R. Scott Frank B. Sewall Deborah Sexton Dennis L. Shackleford Stephen M. Sharum J. L. (Jim) Shaver, Jr. Ronald L. Sheffield Matthew J. Shepherd W. Brad Sherman William F. Sherman Brock Showalter Robert Shults Steven T. Shults Ted C. Skokos J. Timothy Smith James E. Smith, Jr. James W. Smith Laura H. Smith Robert D. Smith, III David Solomon J. William Spivey, III James D. Sprott Thomas S. Stone John F. Stroud, Jr. William H. Sutton Marcella J. Taylor Richard D. Taylor W. H. Taylor Rex M. Terry Kent Tester Floyd M. Thomas, Jr. Robert F. Thompson Danny Thrailkill Christopher R. Thyer Cindy Thyer Win A. Trafford Robert D. Trammell N. Walls Trimble C. Bass Trumbo Fred S. Ursery James R. Van Dover Marc W. Van Pelt David B. Vandergriff A. Glenn Vasser

Vicki S. Vasser William A. Waddell, Jr. John C. Wade Wyman R. Wade, Jr. Danyelle J. Walker Eddie H. Walker, Jr. Bill H. Walmsley G. Christopher Walthall Stan L. Warrick Timothy F. Watson, Sr. Richard N. Watts Tony L. Wilcox David H. Williams Richard A. Williams Robert H. Williams W. Jackson Williams, Jr. William R. Wilson, Jr. Zachary D. Wilson Teresa M. Wineland George R. Wise, Jr. Carolyn B. Witherspoon Rufus E. Wolff Tom D. Womack Rhonda K. Wood Marsha C. Woodruff Joe D. Woodward Eric Lane Worsham Susan Webber Wright Truman E. Yancey Melanie Yelder Cary E. Young Damon Young Dennis Zolper

Your Sustaining Member dues finance a variety of projects and programs. This year, your support will sponsor several of the highlights at the Annual Meeting this June in Hot Springs.

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

In Memoriam

Darrell D. Dover Darrell D. Dover of Little Rock died March 17, 2009, at the age of 75. He earned a juris doctorate from the University of Arkansas. After graduation from law school, he joined the Little Rock law firm known then as House, Holmes, Roddy, Butler and Jewell, and except for absence for six months in late 1957 for a tour of active duty as a legal officer in the U.S. Army Signal Corps, practiced law in Little Rock with various successors to that firm until his retirement at the end of 2007. Most recently, Mr. Dover served as senior member and managing partner of Dover & Dixon (now Dover Dixon Horne PLLC) for seventeen years from 1990 through 2007. He authored Arkansas’ present Condominium Law and created the first condominium in the state of Arkansas. He was a member of the Arkansas Bar Association where he served on numerous sections and committees. He was a Sustaining Fellow of the Arkansas Bar Foundation. The Association and Foundation honored him with the C.E. Ransick Award of Excellence in 2003 for his dedication, leadership and extraordinary services to the law profession. He was a Fellow of the American College of Mortgage Attorneys and the American College of Real Estate Lawyers. He was a member of the Pulaski County and American Bar Associations. He is survived by his wife of fifty-four years, Barbara; a son, Douglas Dover; and daughter, Darrellyn Green. Paulette Lock Johnson Paulette Lock Johnson of Springdale died February 11, 2009, at the age of 57. She earned a juris doctorate from the University of Arkansas School of Law. She was a manager of Land and Legal for Sedna Energy, Inc. in Fort Smith. She is survived by her husband, Michael L. Johnson. 50

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John K. Shamburger John K. Shamburger of Fairfield Bay died March 14, 2009, at the age of 82. He earned his juris doctorate from the University of Arkansas. After practicing law several years he held the office of Assistant Attorney General for the State of Arkansas. He was sworn into office in 1953. In the mid 1950’s he became a partner in the Pope Law Firm. He opened a branch of the office of the Pope Law Firm in Fairfield Bay in the early 1990’s. He was the first Fairfield Bay City Attorney serving from 1993 until his retirement in October 2003. During his career he often provided pro bono legal representation to those in need. He was a longtime member of the Arkansas Bar Association and was honored for fifty years of practice in 2000. He served on the Government Practice and the Solo, Small Firm and Practice Management Sections. He was a fellow of the Arkansas Bar Foundation. He is survived by his wife of forty-one years, Virginia; and three children, J. Michael Shamburger, Jeffrey W. Shamburger, and Sally C. Stevens. Lt. Colonel Philip W. Ragsdale Lt. Colonel Philip W. Ragsdale (Ret. USMCR) of Little Rock died February 27, 2009, at the age of 84. Colonel Ragsdale was inducted into the Marine Corp in 1942 at the age of 18 and was a veteran of WWII and the Korean Conflict as a pilot flying all types of aircraft. He returned to Little Rock in 1954 after his active duty was complete and earned his juris doctorate from the University of Arkansas at Little Rock Law School and stayed active in the reserve until he retired in 1970 at his current rank. He was a member of the Arkansas Bar Association. He is survived by his children, Philip A. Ragsdale, Ruth Gabriel, and Robert E. Ragsdale.

Ernest LeRoy Autrey Ernest LeRoy Autrey of Texarkana died February 3, 2009, at the age of 88. He was a city attorney, a partner with Autrey & Stewart Law Firm, former deputy prosecuting attorney, labor arbitrator for the Federal Mediation and Concilliation Serve and American Arbitration Association, and a commissioner of Uniform State Laws for the State of Arkansas. He was a Sustaining Member of the Arkansas Bar Association where he served in the House of Delegates and on numerous committees and sections. He was a Fellow of the Arkansas Bar Foundation. He was a member of the Southwest Legal Foundation and Defense Research Institute, and the Texarkana and American Bar Associations. He is survived by his wife, Harriet; and two daughters, Rebecca Phillips and Mary Kardell. James Jay Glover James Jay Glover of Little Rock died January 6, 2009, at the age of 57. He earned his juris doctorate from the University of Texas at Austin. After finishing law school, he want to work at Wright, Lindsey & Jennings, LLP, where he practiced law for twenty-seven years. He was a member of the Arkansas Bar Association where he served on numerous sections. He is survived by his wife Rebecca; his sons, Matthew (Brooke) Glover and Jay Glover; and his daughter, Sarah Glover. William David Mullen William David Mullen of Walnut Ridge died January 3, 2008, at the age of 59. He earned a juris doctorate from the University of Arkansas at Little Rock Law School. He had been a practicing attorney in Walnut Ridge since taking over the law practice of his grandfather, Judge Roy Mullen, in 1976. He was a member of the Arkansas Bar Association, and was honored with the Outstanding Lawyer Citizen Award in 1986. He was honored with the Outstanding Pro Bono Attorney Award by Legal Aid of Arkansas in 2004. He was a member of the American Bar Association, and the Arkansas Trial Lawyers Association. He served as president of the Lawrence-Randolph Bar Association from 1984 to 1986 and was currently serving as the organization’s treasurer. He served as Deputy Prosecuting Attorney of Lawrence County in 1979 and as city attorney for Ravenden in 1981, Lynn in 1990, and Strawberry in 1992. He is survived by two daughters, Laura Gwen Mullen and Mary Lynn Mullen.

Arkansas Bar Foundation Memorials and Honoraria The Arkansas Bar Foundation acknowledges with grateful appreciation the receipt of the following memorial, honorarium and scholarship contributions received during the period January 1, 2009, through March 31, 2009: In Memory of Judge William R. Butler B. Jeffery Pence In Memory of Darrell D. Dover Charles Frierson, III Philip E. Kaplan Fred S. Ursery In Memory of E. Charles Eichenbaum Designated to the E. Charles Eichenbaum Scholarship Fund Peggy E. and L.R. Jalenak, Jr. Family In Memory of James J. Glover B. Jeffery Pence Ed Tyler Nathan Tyler In Memory of Judith Ryan Gray Designated to the Judith Ryan Gray Annual Meeting Endowment Fund Joyce Bradley Babin W. Christopher Barrier Joyce Bobbitt Branch, Thompson & Warmath, P.A. Elaine Carpenter Mr. and Mrs. H. Murray Claycomb Betty Formby Hamilton, Colbert & Scurlock, LLP Virginia and Bubba Hardgrave Hyden, Miron & Foster, PLLC Anna Hubbard Louis B. Jones, Jr. Ruthe and Phil Kaplan Janet K. Moore Ann and Hoyte Pyle Hayden and Gordon Rather Frances M. Ross John L. Rush Elaine and Isaac Scott Barbara Tarkington

In Memory of Mary Anne Roscopf H. Murray Claycomb Marjem and John Gill Judith Ryan Gray Judge James G. Mixon Ann Dixon Pyle Fred S. Ursery Judge Robert and Nancy Vittitow Judge William R. Wilson, Jr. In Memory of Kent J. Rubens Judge Robin L. Mays Judge James G. Mixon John and Cristina Speer In Memory of John K. Shamburger Edward T. Oglesby In Memory of Ron Tullos B. Jeffery Pence Honorarium, Scholarship and Other Contributions In Honor of the Arkansas Bar Foundation Regions Insurance, Inc.

To permanently memorialize our dear friend Judith Gray The Arkansas Bar Foundation has established the Judith Ryan Gray Annual Meeting Endowment Fund Income from the endowment will be used each year to offset the cost of a major speaker in her name at the Arkansas Bar Association Annual Meeting in June Please make memorial contributions for Judith payable to the Arkansas Bar Foundation designated on the memo line to the Judith Gray endowment fund

In Memory of Ralph C. Murray Fred S. Ursery

Please mail to: Arkansas Bar Foundation 2224 Cottonale Lane â&#x20AC;˘ Little Rock, Arkansas 72202

In Memory of Philip W. Ragsdale B. Jeffery Pence

A framed photo portrait of Judith will also be displayed on the first floor of the Arkansas Bar Center.

Vol. 44 No. 2/Spring 2009 The Arkansas Lawyer

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MAGISTRATE JUDGE POSITION U.S. DISTRICT COURT WESTERN DISTRICT OF ARKANSAS The Judicial Conference of the United States has authorized an additional full-time magistrate judge position for the Western District of Arkansas. The position will be located at Fayetteville. The duties of the position are demanding and wide-ranging, and will include: (1) conduct of most preliminary proceedings in criminal cases; (2) trial and disposition of misdemeanor cases; (3) conduct of various pretrial matters and evidentiary proceedings on delegation from a district judge; (4) conduct of settlement conferences; and (5) trial and disposition of civil cases upon consent of the litigants. The basic authority of a United States magistrate judge is specified in 28 U.S.C. 636. A merit selection panel composed of attorneys and other members of the community will review all applicants and recommend to the district judges in confidence the five persons it considers best qualified. The selectee will be subject to an FBI full-field investigation and an IRS tax check. The current salary of the position is $160,080. The term of office is eight years. Application forms and other detailed information on the magistrate judge position may be obtained from the court’s public website: www.arwd.uscourts.gov. Applications must be received by June 1, 2009. Applications should be mailed or delivered to the following address: Christopher R. Johnson Christopher R. Johnson Clerk of Court Clerk of Court United States District Court United States District Court P.O. Box 1547 Isaac C. Parker Federal Bldg. Fort Smith, Arkansas 72902 Room 1038, 30 S. 6th Street (U.S Mail) Fort Smith, Arkansas 72901 (FedEx or UPS) 7KH $UNDQVDV

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