Vermont Legislature SmartTranscripts:

[Sen. Nader Hashim (Chair)]: You're alive. Alright. We are back in senate fiduciary January 22. We have the defense general here with us to talk about s one eighty three.

[Marshall Pahl (Vermont Defender General)]: And this is the I'm at the later. This is the contractor front. This is the bill that's near and near to my heart, to be honest. I was here when the bill was when contractor fraud was originally created. And I don't mean that. I'm just saying there's this little flashback that one of the things that we've dealt. Senator Sears said, you know, you don't have to make a bill out of everything that happened in in the last, you know, year since we were here in the legislature. This is one of a number of bills that were created out of bad situations that arose regarding his mother during the time between, like, the last section to the last section. Ones like, you know, telecommunication, fraud. Yeah. All of those things. And this this was one of them. And there was an original bill that that was passed, a contract in fraud bill. And it basically and and I argued at the time that what it did is a criminalized negligence in the creation of know, when when a contractor came in, and didn't finish the job or did a terrible job, like, was not qualified to do the job, that kind of thing. And at that time, I'm like, you know, there are some things that are civil, and there are some things that are criminal. And, typically, criminal things are those types of conduct. And, I might be the last public school student that read Latin, but, are. Right? That they are people recognize them as criminal in and of themselves. So, you know, killing somebody or raping somebody or punching somebody in the face or stealing their stuff. And then there are other things that the that are what we call malum prohibitive, which are legal wrongs that don't involve, like, moral culpability, where people suffered losses, not as a result of the intent of the person who caused the harm, but that there was but there was a loss. And I, at the time, argued that these negligence cases where contractors don't know what they're doing. And I don't know. I mean, I think probably all of us had at some point find somebody who didn't know what they were doing. And, like, well, you know, sometimes, like, I get bored. I'm stupid for for hiring that person. You know, he was referred to me by my cousin or whatever. I didn't check to see if they, you know, did they do any other work? You know, you know, that kind of thing. Was it any good? But, typically, the model and say type things where we recognize the activity as being criminal in and of itself. Those have criminal severe criminal penalties as they should. And the malum, predivitum are usually civil wrongs, so there might be fines, or licensure issues or that kind of thing that get attached to it. And but they don't there's not typically a possibility of jail time or or that sort of thing. Well, as as time went by, prosecutors are finding it difficult to prove, you know, negligent negligent criminal, you know, the the negligence portion beyond a reasonable doubt. Because this is where we're mixing at the times concepts of negligence that are typically you have to prove negligence in a civil case by a preponderance of the evidence, much lower standard than beyond the reasonable doubt. So they were having difficulty proving it, and the AG's office at the time was the one that was handling, I I don't know if it was the criminal division or even it might have been, like, the consumer protection division or in consultation with the two, like, maybe a reference, then they'd send it over to criminal. But they're having trouble proving it because this is where you're mixing civil negligence standards with criminal standards. And it's very hard in general to prove, negligence beyond a reasonable doubt as opposed to just having a bad result, kind of thing. Or that there are you know, negligence type crimes have the same types of defenses, like proficiencies, demeaning causes, you know, that something else occurred that caused this other thing to be a problem. Well so at that time, this very shortly after this, probably in a couple of years, the statute was amended to include basically what is a strict liability provision about where if the, like, the work stops that's a portion that got knocked out here, you know, in the proposed bill where there's a failure for this is on page three of seven. Failed to perform contract agreement, then the owner requests performance pain or refund. And the person fails to refund, fails to comply with a plan that fits within a definite period of time. Contractors were going crazy at that because one of the things that typically happens, back when I was a real lawyer, used to represent some of the bigger contractors in the part of the state that I'm from. And then they would always have, like, subs, you know, on their jobs. But a subcontractor, for purposes of this, who's trying to do this kind of work, might have two or three jobs going at the same time. They're working with a with a credit line. And then one of the jobs that they're on, the person fails to pay them. So now their cash flow is interrupted, and they can't meet their credit line situation. So they can't pay their pay their employees. And you get somebody else who unfortunately gets stuck with the fact that the cash flow has been interrupted. And so when the owner requested performance of payment or refund and then the person failed to do it and or was unable to come up with a plan to refund, that became a criminal activity under the current statute. So what it effectively did is created a strict liability crime for something that was totally outside of the ability of the contractor to remedy it. And one of the things that I suggested at the time is it's one thing in the criminal law. First of it's an odd thing in the criminal law to criminalize some sort of negatives. We do it with motor vehicles, operation motor vehicles somewhat regularly. But that's a little bit different kind of thing where really what we're criminalizing is a breach of a contract here. That leaves a negative breach of a contract, something kind of beyond your control. And I had suggested at the time, why don't you make that portion intentional? So if somebody in you know, comes in, takes your money, paints two boards, and runs away. Well, that's happened to me a few times, to be honest, not to the you know? And I should know that it. But, intent, is something, you know, an intentional depriving of somebody of their money is already a crime under false pretenses. You get all kinds of there's other financial crimes that are out there that are not negligent oriented, but it causes the intent. And what senator Sears wanted to do was kinda protect the people who apparently, like me, can't protect myself all the time when somebody decides to be part of the job or none of the job and take your money. And he was looking at protecting, you know, over folks and and people who, love lesser me. As I understand the intent of doing it, it's it's just hard when it is a a criminal activity. It's it's a mixing of concepts. You know what I mean? So the what I had suggested at the time is that it become an intentional crime. Yes.

[Sen. Robert Norris (Vice Chair)]: Are you leading to saying that this bill now is what you wanted originally? Yes.

[Marshall Pahl (Vermont Defender General)]: That's what I was Great. Gonna tell you. But it wouldn't have been as exciting if I just came and said, I support the bill. Thank you. I'm glad. And because I'll I'll tell you honestly, from a defense perspective and a public defense perspective, I don't care about this problem. This makes no impact whatsoever on, like, the public defense system. It's not like we got a thousand of these cases. The only thing I will say is we get we get very few of them, but when we get them, other lawyers don't know what to do with them because they're, like, arguing, you know, about civil contracts and stuff in the in a criminal contract in a criminal context. And so it's difficult. It's not that they can't, you know, figure it out at some point. It'd probably be better if I were doing them because I've done, like, on a civil side before. But we you know, I think that this makes sense keeping the concepts of, I would say, bound prohibitive, consistent with what they're what the criminal law was supposed to be about philosophically. Now it doesn't mean that the legislature can do whatever it wants regarding criminalizing what it wants to criminalize as long as it doesn't violate the constitution. So, you know, it is what it is right now. I just thought it was, even at the time kind of unfair that a contractor who, you know, through no fault of their own, had no ability to repay because of interruption in either revocation on the credit line or another job that failed to pay them, or or that sort of thing. You know, contractors don't have the same requirements of lawyers that, like, they hold hold the piece across every job is funding the next job is funding the next job is funding the next job. And, you know, we just stay at the front for materials and the like. So that that's all I I really wanted to say about it is that the to me, from a the way the business works with product factors, it makes sense. We had I thought it was harsh to create a strict liability crime where the defendants at times, I'm not saying always, but at times, no ability to remedy if there was a breach either on their part or because of something that happened with their cash flow or credit line, that sort of thing. And, you know, so that's really all I gotta say about it. And I understand, you know, from a consumer protection standpoint, why, you know, you wanna address this activity, but it is the criminal law the best way to best way to do it. Because then that that will also, you know, prevent people from, you know, the contractors and getting back into business. I mean, there's collateral consequences of getting multiple convictions or having, you know, multiple victims as a result of, you know, this inability to repay if they get get stuck in a situation. Know? I mean, obviously, it's up to you. It's not earth shattering for the system, but it's one of those things that, is kind of the homogeneity of criminal law, as it exists now.

[Sen. Nader Hashim (Chair)]: Thank you. Any any questions?

[Sen. Philip Baruth (Member)]: I appreciate your testimony. Also, I also took Latin High School. Question to you Public school? Yes, and we got the high school. Nice. And as far as I know, Latin was taught at an annual up until just a couple year until just this year, actually, is the first year they stopped teaching Latin. Anyways, the constitutional concern that's been raised, because my understanding is this is sort of a reboot of the '20 what did you say, 2015? Does the is the constitutional issue addressed here? Like, do we is there a constitutional issue as this is drafted in your opinion?

[Marshall Pahl (Vermont Defender General)]: I haven't seen a constitutional Okay.

[Sen. Philip Baruth (Member)]: Perfect. I just wanted

[Sen. Nader Hashim (Chair)]: to make sure that the way this language was, we were threading the needle in a way that

[Marshall Pahl (Vermont Defender General)]: Yeah. I mean, it's it's changing the, basically, the intent that that's offered. And so, yeah, I I didn't see it as a constitutional issue. Just a

[Sen. Philip Baruth (Member)]: a policy. Yeah. I just

[Sen. Nader Hashim (Chair)]: know multiple people have brought

[Sen. Philip Baruth (Member)]: up this constitutional issue, so I just wanted to make sure from

[Marshall Pahl (Vermont Defender General)]: your perspective. What people said to god. What do they think the constitutional issue is?

[Sen. Philip Baruth (Member)]: That well, so my understanding is the constitutional issue, and, again, I don't know if it's entirely in this language or if it's in larger language, was that there's a forced labor aspect. There

[Marshall Pahl (Vermont Defender General)]: had that I'm familiar with the case. Okay. One judge at the trial level thought that there was a forced laboring issue with the statute.

[Sen. Philip Baruth (Member)]: So with the existing statute. So this actually addresses that. Right. Okay. And

[Marshall Pahl (Vermont Defender General)]: I thought that was bizarre. That was, like, a really bizarre interpretation. So I can't say that it my analysis of it that is that the existing statute is unconstitutional. I don't know if I agree with that. It's not late for other reasons, but we literally had, like, one judge who came up

[Sen. Nader Hashim (Chair)]: with

[Marshall Pahl (Vermont Defender General)]: this opinion. And not all of other judges are not following a line. The supreme court hasn't ruled on it. And but, you know, everybody's in especially judging their kind of opinion. Sanborn.

[Sen. Robert Norris (Vice Chair)]: Yeah. So I think it was they they reported thirteen thirty nine most of our certitude and soft pull forward. Yeah. And right now, we were told this morning that there is an appeal in Orange County going in on that. Okay. I'll wait. It says slated for March 4, I believe they said.

[Marshall Pahl (Vermont Defender General)]: Okay. We'll wait and see what happens with the big downs. I'll ask if if I don't know if we're doing it. I'm guessing that it's probably some private counsel only because I'll I'll see if we're done. I don't think we are.

[Sen. Nader Hashim (Chair)]: I didn't realize you had a follow-up.

[Sen. Philip Baruth (Member)]: Yeah. My my follow-up, now that I have a better understanding that the current law is the questionable constitutional issue. So in your view, this isn't proof that on current law.

[Marshall Pahl (Vermont Defender General)]: Well, it's consistent with what I believe it should be if you're gonna have a, contract to fraud statute. That's just my opinion. But I also, as I said before they and even started, as I said in seventy years, you know, there's a whole bunch of other stuff people could be charged with even if you don't have a contractor for that law. But he wanted us on specific. So that's okay. So it's it's not it's not, like, necessary that somebody's doing something like, say this whole thing's on a leg. You can think of three things that they can be charged with without this being on books at all. So thank you. Wasn't that worth waiting for? Thanks, Brad. No problem.

[Sen. Nader Hashim (Chair)]: We we can we can take a break until, like, 10:25, if we can be a near start at ten point five because we have retired Justice Ann's story, Chief Justice Ann's story coming in. So we can get him out there in The United States.