Winter 2005

Three of our associates have made quite a hit in the legal community...Karina B. Sterman, an associate in ECJ’s Employment and Litigation Departments, Heather L. McCloskey, an associate in ECJ’s Intellectual Property and Litigation Departments, and Richard R. Cipra, an associate in ECJ’s Real Estate Department, were all selected as “California Rising Stars” as part of Southern California Super Lawyers, Rising Stars Edition, for September 2004.

The Rising Stars of Southern California is a product of more than six months of polling, surveying and researching to identify “up and coming colleagues” who are 40 and under or have been practicing less than 10 years. In addition to being included in Los Angeles magazine’s annual listing of the top new legal talent in the Los Angeles region, this list also appears in an extensive special advertising section in the September 2004 issue of Los Angeles magazine, and in a separate publication which is distributed to all active attorneys in Los Angeles and Orange counties.

Charity Casino Events and Raffles—One Might Just Land You in Jail!

Various nonprofit charities have been hosting “casino-style” gambling events for decades. Typically, these charities either pass out chips or have their patrons purchase chips for cash consideration. These chips then allow the patrons, or donors, to play a variety of games, such as blackjack, craps and roulette. The chips are then exchanged for prizes or for tickets that are redeemable for prizes, either through a raffle or a direct exchange, e.g. 10 tickets redeemed for a specific prize. The charities typically rent a private establishment or have the charity event at a private location.

Many of us have attended these casino-style charity events, participated in the gambling activities, and whether we won prizes at the end of the evening or not, knew that the money was going to a good cause.

What is not generally known is that these casino-style gambling events, albeit for worthwhile and nonprofit causes, are illegal pursuant to California Penal Code (“CPC”) Section 337(j).

Penal Code Section 337(j)
CPC Section 337(j)(a) states that it is unlawful for any person, as owner, lessee, or employee, whether for hire or not, either solely or in conjunction with others, to do any of the following without having first procured and thereafter maintained in effect all federal, state, and local licenses required by law:

As used in this Section, “controlled game” means any poker or Pai Gow game, and any other game played with cards or tiles, or both, and approved by the California Attorney General’s Office Division of Gambling Control, and any game of chance, including any gambling device, played for currency, check, credit, or any other thing of value that is not prohibited and made unlawful by statute or local ordinance.

According to the Office of Attorney General, State of California, Department of Justice, Division of Gambling Control (the “AG Office”), “games of chance” include all games that involve chance, including the typical games found at casino-style events, such as craps, blackjack and roulette. The Charitable Services Section of the Los Angeles Police Commission and the Los Angeles City Attorney’s Office also echo the AG’s Office’s sentiments regarding what is considered a “game of chance.” All three government agencies stated that they are aware that nonprofit charities have been conducting illegal casino-style events for many years, but have chosen to not enforce CPC Section 337(j). The AG’s Office, however, has stated that it is in the process of preparing an opinion to be issued shortly regarding the illegality of charities conducting casino-style events.

Punishment
Pursuant to CPC Section 320.5(d), any person who violates, attempts to violate, or conspires to violate the Section shall be punished by imprisonment in a county jail for not more than one year, or by a fine of not more than five thousand dollars ($5,000), or by both imprisonment and fine.

Even the patron attending the event who plays casino-style games can be found guilty of a misdemeanor.

CPC Section 330 states that every person who deals or plays any game of, among other games, roulette, twentyone, cards, dice, even hokey-pokey, for money or other representative of value, which can arguably include chips that can be exchanged for prizes or redeemed for tickets that can be redeemed for a prize, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor and is punishable by a fine not less than one hundred dollars ($100) and not more than one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both fine and imprisonment.

Third-Party Liability
The landlord of the private property where the nonprofit charity conducted the controlled game would potentially be liable under Penal Code Section 337(j)(b), which states that “It is unlawful for any person to knowingly permit any controlled game to be conducted, operated, dealt, or carried on in any house or building or other premises that he or she owns or leases, in whole or in part, if that activity is undertaken by a person who is not licensed as required by state law, or by an employee of that person.”

Raffles: A Legal Alternative
Back in October 1988, the AG’s Office issued the “Attorney General’s Guide For Charities” (the “Guide”) as a comprehensive information guide for charities. At that time, a raffle held in the State of California was illegal if it contained the elements of prize, consideration and chance (See Guide, Page 34). The laws have since changed, and the organizations that qualify and conduct raffles are now governed by CPC Section 320.5.

Under CPC Section 320.5, a raffle is allowed where all of the following are true:

For purposes of CPC Section 320.5, “eligible organization” means a private, nonprofit organization that has been qualified to conduct business in California for at least one year prior to conducting a raffle and is exempt from taxation pursuant to specified sections of the Revenue and Taxation Code. With limited exceptions, the organization must register with the AG’s Office on an annual basis.

City of Los Angeles Requirements
In addition to the state requirements, the Los Angeles Municipal Code requires a nonprofit charity to complete and file a “Notice of Intention” with the Los Angeles Police Commission, Charitable Services Section, at least 15 days before the start of a special event. This notice must include, among other things: (a) the name of the person registering and desiring to solicit funds for charitable purposes; (b) whether the person registering is a natural person, partnership, corporation or association, and if a corporation, it must include various documents as specified, including articles of incorporation, bylaws and tax exemption letters; (c) the purpose of the solicitation and use of the contributions to be solicited; (d) the commencement and termination dates of the solicitation; (e) the type of solicitation activity and how it will be conducted; and (f) an estimate of the total cost of the solicitation. After an investigation, an Information Card is issued. No solicitation may be started until an Information Card has been issued. The Information Card must be displayed at the sites of special events. A report of the results of the activity showing receipts, expenditures and distribution of net proceeds also must be filed within 30 days of the termination of the fundraising campaign or within 30 days after the special event.

Conclusion: Proceed with Caution
Even though local and state law enforcement agencies have not enforced the CPC Sections banning nonprofit charities from hosting casino-style events, the time may be near when these types of activities will be prosecuted. The fact that the majority of charities conduct these types of events does not make them legal. Furthermore, charities might also be subjecting an unsuspecting landlord to potential liability in connection with the charitable gambling activities. This would truly be an unfortunate consequence of an innocent fundraising effort. Therefore, unless and until these rules are changed, the preferable way to proceed is to host a raffle where the nonprofit can sell as many tickets as it desires for whatever price it sets, so long as it abides by the requirements of CPC Section 320.5.

The Law Firm Allaince: Providing Resources to ECJ Clients Throughout the United States and Internationally

Most readers probably know that ECJ has represented clients from its offices in Beverly Hills for over 50 years now, and has represented its clients throughout the United States and the world. But did you also realize that ECJ is able to draw upon the expertise of over 2,500 lawyers in firms throughout the United States, and even internationally?

As a member and co-founder of the Law Firm Alliance, a nationwide network of mid-sized law firms, ECJ is able to tap local counsel in virtually every major market across the United States, whether it be New York or New Orleans, D.C. or Denver, Pittsburgh or Portland, Salt Lake City or Seattle, Atlanta or Oakland. The Law Firm Alliance even has affiliates in Italy and Japan that are ready to help with our clients’ international needs.

The Law Firm Alliance was founded in 2000 by a handful of midsized law firms, including ECJ, looking to establish a network of member firms for referral of legal matters and as a resource for clients to obtain and responsive legal services in most major markets in the United States. The Law Firm Alliance also provides an opportunity for member firms to share information on providing better client service, improving firm governance and marketing strategies.

Today, the Law Firm Alliance consists of 35 firms in the United States, providing local representation in 33 states, as well as in the District of Columbia. The Law Firm Alliance also has a member firm in Japan and one in Italy, with future European expansion on the horizon.

Members in the Law Firm Alliance maintain substantial business, financing and litigation practices, and are similar in terms of legal practice, attorney depth, skills and professional standards. Like ECJ, each firm also has demonstrated the highest possible commitment to attentive client service. All member firms must have achieved an “AV” rating by Martindale-Hubbell, and membership in the Law Firm Alliance is by invitation only. However, the Law Firm Alliance is not a partnership or a joint venture, and no member may charge or receive any referral fees.

So remember, we may not have offices in other states, but we can draw upon other firms to supplement our resources in assisting our clients with their needs outside of California. The members of the Law Firm Alliance and its 2,500 attorneys are out there, ready to lend a helping hand.

David P. Kassoy Memoriam

It is with great sadness that we report the death of our friend and partner, David P. Kassoy, on September 7th. David was a consummate professional, a caring and thoughtful advocate and always a trusted friend to his clients. He was an exemplary attorney, and his integrity and commitment to service built him a wonderful reputation in the legal and business community that also elevated the stature of our firm.

David is survived by his wife, Dorit, his children, Bill and Toby, his grandchildren, Ryan and Evan, and Dorit’s son, Jonathan, each of whom filled his life with pride and happiness.

He met his fate head-on, with courage and grace that each of us should emulate when our time comes. He was a truly fine man, and we were all honored to have had the privilege to call him our partner.

For those who knew David, Dorit has asked that, if you are so inclined, donations be made in David’s memory to help fund research for the cure of pancreatic cancer (1) through David’s physician, Dr. Lee Rosen, at the John Wayne Cancer Institute, 2200 Santa Monica Blvd., Santa Monica, CA 90404 (please note on your donation that it is in memory of David P. Kassoy) or (2) to the Pancreatic Cancer Activity Network, which can be accessed on the Web at www.pancan.org or by calling toll-free at 877.272.6226.

Throughout this difficult year, David assisted in the transition of his clients to his partners, who will continue to serve their needs as David did - with a high degree of skill, creativity and professionalism. If you have any questions regarding David or your legal matters, please contact his secretary, Corinne Cooley, at 310.273.6333, extension 516.

Partner Profile - Lee I. Silver

Lee Silver is a partner, the head of ECJ’s Real Estate Department and a member of the firm’s Practice Development Committee. For over thirty years, Lee’s practice has included representation of owners, developers, landlords, tenants, financial institutions and both public and private partnerships and corporations in all aspects of real estate activity, including: acquisitions and dispositions, land use, entitlements, subdivision, financing, leasing, development and construction, partnerships, limited liability companies, joint ventures, finance restructure and workouts.

Lee received his Juris Doctorate from UCLA in 1968, where he was a member of the UCLA Law Review and Order of the Coif. He received his Bachelor’s Degree in 1965 from UCLA.

Lee was recently elected Chairman of the Board of Directors of Jewish Big Brothers/Big Sisters and Camp Max Straus. Jewish Big Brothers/Big Sisters is known throughout the country for excellence in mentoring. Since its founding in 1915, Jewish Big Brothers/ Big Sisters has provided thousands of people with the opportunity to make a difference in the lives of children. In return, tens of thousands of children have thrived through their care and attention. But the real success story of the agency is told by the face of a child looking into the eyes of his or her Big Brother or Big Sister, or by the faces of the children at Camp Max Straus. Some laughing, some thoughtful, some crying, but all enriched and forever changed by the experience. Jewish Big Brothers/Big Sisters provides one-to-one mentoring, matching a caring adult mentor to any child who would benefit from this special relationship. Camp Max Straus is a full-service, residential summer camp, providing recreational and therapeutic activities on a non-sectarian basis to at-risk, underprivileged children. Camp Max Straus serves almost 1,000 children each summer.

Lee and his wife, Gail, live in Beverly Hills. They have two children: Evan, age 34, and Lauren, age 31. Lee and Gail enjoy traveling, hiking and generally just hanging out together.

ECJ Welcomes New Associate

David B. Coher received his J.D. from Georgetown University School of Law. He is an associate in the Litigation Department, where his areas of practice include general business litigation and insurance coverage issues. David previously worked at Selman Breitman in the insurance coverage department.

Legal Update is published by the law firm of Ervin, Cohen & Jessup LLP as a service to clients and friends of the Firm. Articles are intended as summaries of the law and should not be relied upon as substitutes for legal consultation. Authors will, on request, be pleased to discuss in greater detail the information contained in their articles.

Correspondence regarding information contained in this issue or address corrections should be addressed to Cynthia Kaiser, c/o Ervin, Cohen & Jessup LLP, 9401 Wilshire Boulevard, Ninth Floor, Beverly Hills, California 90212-2974 or ckaiser@ecjlaw.com.

If you would like to receive a complimentary copy of ECJ's Legal Update, please e-mail Cynthia Kaiser at ckaiser@ecjlaw.com.

Legal Update

ECJ’s California Rising Stars

Charity Casino Events and Raffles—One Might Just Land You in Jail!

The Law Firm Allaince: Providing Resources to ECJ Clients Throughout the United States and Internationally

David P. Kassoy Memoriam

Partner Profile - Lee I. Silver

ECJ Welcomes New Associate