September 4, 2015

10 iPad Apps for Use in the Office and the Courtroom

PrintThink of the first courtroom you were ever in. Was there a flip chart? An easel? A projector and slides? Or was there a sophisticated plasma TV screen and electronic system so attorneys could showcase their best evidence through their tablets? That last example may not have appeared in your first courtroom, but it certainly is becoming a common sight today.

Attorney Jason Márquez of Johnson Márquez Legal Group uses an iPad in every courtroom presentation where the judge allows it. Using apps like Adobe, Evernote, and Pocket Scan, he can create a compelling courtroom presentation to highlight favorable evidence while minimizing costs associated with photocopying and creating exhibit notebooks. Márquez believes so strongly in using iPads in his practice that he provides them to every member of his firm. He uses several apps, but suggests these ten apps as must-haves for office use and courtroom presentations:

  1. Adobe Acrobat® is multi-platform, PDF solution that allows you to work with all kinds of documents to: View, Create, Manipulate, Print, Combine files.
  2. GoodReader® is the super-robust PDF reader for iPad, iPhone and iPod touch. Sync with Dropbox, OneDrive, any FTP or SFTP server. Sync entire folders or individual files separately.
  3. DropBox® is a folder on your computer that synchronizes your files online and across computers. Any files you place within it will be available on your other computers with Dropbox, as well as the web.
  4. Evernote® is designed for note-taking and archiving. A “note” can be a piece of formatted text, a full webpage or webpage excerpt, a photograph, a voice memo, or a handwritten “ink” note. Notes can also have file attachments.
  5. Pocket Cloud® is a secure and fast way to remotely connect to your Mac or Windows desktop with your iPad, iPhone, iPod touch, or Android device no matter where you are. Access your files, pictures, and applications like Excel, Powerpoint, Photoshop, games or any other program.
  6. Tiny Scan® turns your iPhone/iPad into a portable scanner. Scans are saved to your phone as images or PDFs. Name and organize your scans into folders, or share them by: Email, Dropbox, Evernote, DropBox, Wi-Fi to your computer, Fax (using TinyFax).
  7. Dragon® Dictation is an easy-to-use voice recognition application powered by Dragon® NaturallySpeaking® that allows you to easily speak and instantly see your text or email messages. In fact, it’s up to five (5) times faster than typing on the keyboard.
  8. Prezi® is a presentation tool that can be used as an alternative to traditional slide making programs such as PowerPoint or Keynote. Instead of slides, Prezi makes use of one large canvas that allows you to pan and zoom to various parts of the canvas and emphasize the ideas presented there.
  9. Casemaker® is an alternative legal research tool to LexisNexis and Westlaw. It allows users to search and browse a variety of legal information such as statutes, regulations, and case law on the Web. Casemaker comes free with your CBA membership!
  10. JuryPad® assists with voir dire in different jurisdictions. Create custom seating charts for any courtroom. Add or modify a juror’s information including age, occupation, education, prior jury service, and much more.

Márquez will present on “The iPad Advantage” at the 2015 Colorado Legal & Technology Expo on Friday, August 21, 2015 at the Warwick Hotel in downtown Denver. Entrance to the Expo is free, and Márquez’s CLE program is only $19 for CBA members. Join us at the Warwick on Friday and learn how you can increase your productivity—and your bottom line.

2015 Colorado Legal & Technology Expo

The 2015 Colorado Legal & Technology Expo will take place on Friday, August 21, 2015 at the Warwick Hotel in Denver. Entrance to the Expo is free. Each 50-minute CLE program is $19 for CBA members and $39 for non-CBA members. Register for the event and find more information here.

5 Components of a Great Business Plan

HYS2015Have you ever wanted to start your own law firm? It can be a great way to practice in the areas you’re especially interested in while controlling your time and caseload. However, many lawyers are unsure about the business side of running a law business. Accounting, personnel issues, technology—there is a lot more to think about than simply your preferred practice area.

Our three-day institute, “Hanging Your Shingle,” can help. Learn about the ins and outs of running a law practice from successful solo and small firm attorneys. Some of the topics to be covered at this year’s institute include “Writing Your Business Plan,” “Trust Account Management and Fee Agreements,” “Marketing and Business Development,” “Technology: Your First Partner,” and more.

Qusair Mohamedbhai and Siddhartha Rathod of Rathod Mohamedbhai LLC will present “Writing Your Business Plan.” These partners know first-hand the keys to succeeding at a small practice, and appreciate the opportunity to share their experience with attorneys just beginning their own firms. Among other topics, they will discuss these five components of a great business plan:

  1. Executive Summary – explains what the firm does, establishes goals, creates a mission statement, and elucidates milestones
  2. General Company Overview – provides a glimpse into what makes your firm unique and offers detailed attorney biographies
  3. Industry Analysis – this is an important part of the business plan that examines area demand and crucial details such as price, location, experience, and competition
  4. Financial Plan – also a very important part of a great business plan, the financial plan sets expense and revenue projections and determines profit margins
  5. Marketing Strategies – marketing is key to continuing your successful business, including referrals, traditional marketing, word of mouth, and more

Listen to Mohamedbhai and Rathod speak at “Hanging Your Shingle” this week. Call us at (303) 860-0608 or click the links below to register.

CLE Program: Hanging Your Shingle

This CLE presentation will take place from Thursday, August 20, 2015 through Saturday, August 22, 2015 at the CLE offices. Click here to register for the live program and click here to register for the webcast..

Can’t make the live program? Order the homestudy here – Video OnDemand – MP3

 

New Pretrial Rules for Civil Cases—What Is Changed (Part 2 of 2)

Editor’s Note: This article originally appeared in the July 2015 issue of The Colorado Lawyer. This is the second half of the article; click here for the first half. Reprinted with permission.

DickHolmeBy Richard P. Holme

Rule 16.1—Simplified Procedure

Rule 16.1(f) and (h)—Case Management Orders and Certification of Compliance. The amendments to Rule 16.1 regarding simplified procedure are minimal, but provide another incentive to use that method of dealing with lawsuits under $100,000.[1] Sections 16.1(f) and (h) incorporate by reference some provisions from Rule 16. Because some of the incorporated provisions of Rule 16 have been renumbered, the corresponding provisions in Rule 16.1 have been renumbered to remain consistent. The significant change in Rule 16.1 is that the parties under Simplified Procedure do not have to prepare or file a proposed order or attend a case management conference unless they wish to. This exception was designed to maintain the simplified procedure with minimal paperwork for these smaller, less complicated cases.

Rule 26—General Provisions Governing
Discovery and Duty of Disclosure

The amendments to Rule 26 relating to discovery and disclosures are the most significant of all the new amendments. As described in “Part I: A New Paradigm,” these amendments are central to a nationwide effort to change the litigation culture from “discover all you want” to “discover only what you need.” They are intended to enforce the urgent need to make cases just, speedy, and inexpensive; to reopen genuine access to the judicial system for many parties that have been priced or delayed out of their ability to use or interest in using the courts to resolve disputes; and to reinvigorate confidence and trust in the courts and judges. As stated in the 2015 Comment to Rule 26, these amendments “allow discovery of what a party/lawyer needs to prove its case, but not what a party /lawyer wants to know about the subject of a case—the amendments “emphasize the application of the concept of proportionality to disclosure and discovery, with robust disclosure followed by limited discovery.” (Emphasis in original.)

These changes should persuade parties and counsel to sharpen their focus; to relinquish the idea that they must discover every conceivable fact that may have some remote relevance to their general dispute; to recognize that justice delayed is justice denied; and to acknowledge that unchecked expense is more frequently used as an unjust sword than a shield against injustice. The cultural change is not expected to be immediately popular with some trial lawyers, or clients with unlimited litigation budgets, but the change may help lawyers to become better trial lawyers when they learn they must focus their cases and use thoughtful cross-examination in place of discovery paper blizzards.

As detailed below, the amendments call for more precise early disclosures—of both the favorable and the harmful information. They redefine discoverable information to limit it to that which relates to the claims and defenses of the specific case and, more significant, require that discovery be proportional to the needs of the case at issue. At this initial disclosure stage, the information to be disclosed is that which is “then known and reasonably available to the party.” In complex cases with many possible witnesses and multitudes of documents, the limitation to those things “then known and readily available” should be reasonably applied, while recalling that this initial disclosure does not terminate the continuing requirement of disclosure. Disclosures must be supplemented under Rule 26(e) “when a party learns that the information is incomplete or incorrect,” unless complete and correct information has already been provided in discovery responses. However, nothing permits information subject to mandatory disclosure to be withheld while waiting to see whether the opposing party will request it in discovery.

Although subject to change by the court, considering proportionality, the amendments limit the numbers of expert witnesses, call for more comprehensive written expert disclosures, limit discovery of communications between counsel and their experts, and limit expert testimony to that which has been previously disclosed. The amendments reduce the normal deposition times from seven hours to six hours.

Rule 26(a)(1)—Disclosures

The Good, the Bad and the Ugly

The first visible change in this subsection is to make clear what should have been the standard for years. The opening sentence requires parties to make initial disclosures, without awaiting a discovery request, of four categories of information: identification of possible witnesses; production of certain documents; description of categories of damages, in addition to computations of economic damages; and production of potential insurance agreements. The clarification in this initial amendment is that the information is to be disclosed “whether or not supportive of the disclosing party’s claims or defenses.”

In 2000, the Federal Rules were amended to limit disclosure to information “a disclosing party may use to support its claims or defenses.”[2] Colorado declined to adopt that limitation, thus requiring disclosure of all of the information listed in Rule 26(a)(1). One of the reasons for declining to adopt the federal limitation was the belief of the Civil Rules Committee that failure to produce adverse information would only cause delay while waiting for the opposing party to request such adverse information in its initial set of interrogatories and document requests. Thus, for example, in an employment discharge case, the employer must produce not only memos, notes, and e-mails criticizing the plaintiff–employee’s behavior, but also the memos, notes, and e-mails praising the employee’s performance.

Some lawyers complain that this clarification is contrary to their ethical obligation to represent their clients. However, lawyers must also recall that they act as “an officer of the legal system,”[3] and in that light, among other things, have professional responsibilities to bring or maintain meritorious claims,[4] to expedite litigation,[5] to be candid with the tribunal,[6] to be fair to opposing parties and counsel,[7] and to be truthful in statements to others.[8] The fact that any of these obligations may impinge on a client’s interests or desires does not weaken their application to the lawyer.

Subsections 26(a)(1)(A) (identity of individuals) and (B) (documents) have both been revised to require disclosures not just of names and documents concerning “disputed facts alleged with particularity in the pleadings,” but to disclose names and documents relevant to the “claims and defenses of any party.” Therefore, in an automobile collision negligence case with a statute of limitations defense, both the plaintiff and defendant must provide names of individuals “likely to have discoverable information” about both the collision and the statute of limitations.

Subsection (A) (list of individuals) has also been amended to require more than the name, address, and “subjects of information.” Too often parties may provide a list (frequently as many names as the party can think of) with a description of the subject of their knowledge such as “these individuals may have information about the claims in this case.” This, of course, is useless and often is intentionally designed to make it difficult for the opposing party to have any real idea of who it might want to depose or interview. The revised subsection (A) now requires, in addition to the names, addresses, and phone numbers of disclosed individuals, a “brief description of the specific information” the individual in “known or believed to possess.” (Emphasis added.) The wording of this provision is not designed to require binding disclosures used to limit the scope of possible trial testimony, such as is required from testifying experts. Rather, it is designed, for example, to reveal who was responsible for deciding to discharge the plaintiff/employee; who directly participated in negotiating the key contractual provision; and who hired the allegedly negligent company truck driver. For essentially the same reasons, subsection (B) (list of documents) now requires that a listing of the subject matter of documents be provided in addition to the category of documents.

Challenging Inadequate Disclosures

An important change is found in the last sentence of the second paragraph of Rule 26(a)(1), which was imported from the experience gained from CAPP. Motions challenging the adequacy of another party’s disclosures may no longer be filed prior to the initial case management conference. There are several reasons for this limitation. First, the parties are to note concerns relating to the other party’s disclosures in the proposed order (Rule 16(b)(9)) so that these issues can be addressed at the case management conference. The process of listing the asserted shortcomings will, itself, create the need for counsel to confer about these issues and perhaps resolve some of them. The identification of asserted failures to disclose should be much shorter than a motion to compel. Further, one of the court’s significant tasks at the case management conference is to determine the appropriate level of proportionality for disclosure and discovery purposes. The court’s ruling on this issue may indicate that some of the alleged shortcomings in disclosures are not proportional to the case and need not be disclosed for that reason alone. Additionally, the court can probably resolve the issues and concerns while conducting the case management conference without any need for briefing of a motion to compel.

Rule 26(a)(2)—Disclosure of Expert Testimony

The disclosure rules for witnesses providing opinion testimony continue to provide different requirements for disclosures of two classes of persons allowed to render opinion testimony. Persons retained or specially employed to provide expert testimony are referred to in Rule 26(a)(2)(B)(I) as “retained experts.” Persons who are not specially retained or employed to give expert testimony in the case but who are expected to present testimony concerning their personal knowledge of relevant facts, along with their opinion testimony relating to those facts, are referred to in Rule 26(a)(2)(B)(II) as “other experts.”

The major differences in the amended rule are that summaries of expert testimony are no longer allowed, and experts will be allowed to testify on direct examination only about matters “disclosed in detail,” in conformity with the rule. This limitation was included in CAPP and judges enforced it rather strictly. These witnesses are not required to anticipate issues or areas of inquiry that may be brought up in cross-examination, and may testify about such areas without prior disclosure. Indeed, the knowledge that witnesses may testify only as to opinions disclosed in their reports should allow opposing parties to plan much more focused, precise, and concise cross-examinations.

Experience with summaries of expert testimony has revealed that there can be so much background that is omitted that either the opposing party is blind to what testimony to expect or, as is usually the case, needs to take an extensive deposition to try to flesh out the expert’s testimony. These more extensive depositions add significant cost to the party taking the deposition, both in the hours preparing for and the time actually spent deposing the expert. Furthermore, once a deposition is taken, many courts will not limit testimony to the summary if the subject was or could have been covered in the deposition itself. The fundamental objectives here are to require parties using retained experts to fully disclose their opinions and bases for those opinions so that the parties can more accurately evaluate the strength of their cases and to reduce or eliminate the need to take the expert’s depositions in the first place.

Rule 26(a)(2)(B)(I)—Retained Experts

The revised rule now requires full written reports of the expert’s expected testimony. There is no requirement that the expert must personally prepare the report because frequently lawyers work closely with the experts to tailor and limit the testimony to what is most necessary for the case. Determining who is responsible for selecting each word of the report is not deemed significant. What is significant is that the expert witness must sign the report and thereby accept responsibility for both what the report says and includes and what it omits.

Much of the remainder of the changes in this portion of the rule is a clarification of certain required portions of expert reports that have been in existence for years. The most critical part of the report will be the complete statement of all opinions and the basis and reasons for those opinions. The word “complete” here supports the requirement that experts be limited in their direct testimony to what is disclosed in the report. This does not require a proposed transcript of the witness’s direct examination. However, before the report is complete, lawyers should plan that direct examination in detail to make sure nothing crucial is omitted. Lawyers should not rely on the assumption that the opposing party will depose the expert and open the door for further “supplementation” of the witness’s opinions.

Other amendments clarify that the data and other information considered by the witness in forming opinions is listed but need not be included. The information considered, however, should be both that which is relied on and that which was rejected in forming the opinions. Likewise, literature to be used during the expert’s testimony needs to be identified and referenced in the report, but need not be provided. On the other hand, copies of exhibits to be used must be provided with the report, along with the expert’s qualifications, a list of publications authored by the witness within the prior ten years, and a list of deposition or trial testimony given by the expert within the preceding four years.

The amended rule now mandates more information about the compensation to be paid the retained expert. Experts have been known to testify that they are to be paid $___ per hour, but they are not sure how many hours have been spent yet, or they have only been paid a small portion of their fee because most of their billings have not been rendered or paid yet. Now, reports must include the expert’s fee agreement or schedule for the study, preparation, and testimony, and an itemization of the fees incurred, whether or not actually billed or paid. The time spent must be included in the report and must be supplemented fourteen days before trial. In short, jurors are entitled to know what the expert’s true, total compensation is, not just what may have been paid to the expert as of the day of the expert’s initial report.

Rule 26(a)(2)(B)(II)—Other Experts

These witnesses are frequently investigating police officers at accident or crime scenes; treating physicians; and employees such as business owners, accounting personnel, supervisors, mechanics, and construction personnel with specialized, relevant background and experience, as well as personal knowledge of the events in suit. Especially for those who are not employees of a party, it is often difficult to arrange for the necessary time for them to prepare extensive reports of their planned testimony. Testimony from non-specially retained or employed witnesses who will give opinions must be disclosed either by written reports signed by the witness, or by statements prepared and signed by counsel or by any unrepresented party. The allowance of statements prepared and signed by counsel recognizes that frequently, witnesses such as police officers or treating doctors cannot or will not make time available to review or sign a written disclosure statement. In either event, the witness will be limited to testifying on direct about matters disclosed in detail in the report or statement. Again, the report or statement must include all opinions to be expressed, together with the bases and reasons therefor. Thus, a statement that the treating physician “will testify about the patient’s medical records and their impact on the physician’s treatment of the patient” will not meet this test. Additionally, the report or statement must list any qualifications of the witness needed to support allowing the witness to have and express admissible opinions, and must include copies of any exhibits to be used to support the opinions.

A feature of “other [non-retained] experts” is that they are not called to testify in the case because they have been specially retained as independent experts to offer opinions. They are called as fact witnesses with personal information relating to the case, and through training or experience are qualified to offer opinions useful to the jury based on facts they observed. In short, as noted in the Supreme Court’s 2015 Comments, non-retained experts are people whose opinions are formed or reasonably derived from or based on their occupational duties with respect to the matter at issue in the case. Even though their opinions and supporting factual bases and reasons must be disclosed in detail in their report or statement, they are not required or expected to prepare and sign a full report containing the other information only required from retained experts. For example, in addition to the opinions and diagnoses reflected in the plaintiff’s medical records, a treating physician may have reached an opinion as to the cause of those injuries gained while treating the patient. Those opinions may not have been noted in the medical records but, if appropriately disclosed, may be offered at trial without the witness having first prepared a full, retained expert report.

Rule 26(a)(2)(B)—Limitations of Trial Testimony

Both of the revised subsections of Rule 26(a)(2)(B) relating to retained experts and other experts contain the same last sentence: “The witness’s direct testimony shall be limited to matters disclosed in detail in the report [or statement].” This is a new provision based in part on the experience from CAPP and on the desire to continue holding down the cost of trial preparation. One of the justifications for the perceived necessity to take expert depositions is that trial courts frequently do not limit experts to their reports at trial so that the deposition is necessary to uncover unreported opinions (or belatedly conceived opinions), which the trial judges might allow in evidence.

With the revised rule, trial courts are instructed to limit direct testimony. This does not preclude opinions for which the opposing party opens the door by cross-examining on opinions held by the witness beyond those disclosed in the report or statement. Not only does this provide a rule-based requirement that the trial courts limit testimony, but it also enforces the requirements that reports or statements in fact be complete. This limitation is also bolstered by the supplementation requirements of Rule 26(e) in those situations where depositions are taken.[9]

Rule 26(b)—Discovery Scope and Limits

Before discussing the significant change in subsection 26(b)(1), it is important not to overlook the opening phrase of section 26(b): “Unless otherwise modified by order of the court . . .”; In other words, the court is not bound to treat discovery in all cases the same. Some cases may actually have more stringent limitations placed on their discovery than the presumptive limitations in subsection 26(b)(2). Conversely, larger and complex cases may need and can be given significantly more discovery than that which is set out as the presumptive discovery limitations, as appropriate.

Rule 26(b)(1)—In General

The amended portion of Rule 26(b)(1) is taken verbatim from the new Federal Rule. It makes one fundamental change and two significant but lesser revisions to the prior Colorado Rule 26(b)(1).

Proportionality. Previously, there were four factors in Rule 26(b)(2)(F) for courts to consider when determining whether good cause existed to justify modifying the presumptive limits on discovery. The third of those factors was whether the expense of discovery outweighed its likely benefit, “taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues in the litigation, and the importance of the proposed discovery in resolving the issues.”[10] Very few reported cases ever discussed this obscurely located provision.

In 2009, the ACTL/IAALS Final Report lit the wildfire. It stated “Proportionality should be the most important principle applied to all discovery.”[11] Thereafter, proportionality of discovery became a key issue at the Duke Conference.[12] Then, the Federal Rules Advisory Committee joined in, concluding that “What is needed can be described in two words—cooperation and proportionality—and one phrase.”[13] CAPP, along with many other pilot projects, also incorporated the concept of proportionality.[14] When the Federal Rules Advisory Committee proposed its revisions to Rule 26(b)(1), it lifted the list of factors to establish good cause from Federal Rule 26(b)(2).[15] It then specifically referred to this language as involving proportionality, and placed it directly into the very definition of what is discoverable. Thus, it is not enough any longer to contend that information is discoverable simply because it is relevant to a claim or defense. Such information must also be “proportional to the needs of the case.”

In evaluating the “needs of the case,” the Advisory Committee also adjusted the order of some of the factors to be considered when determining proportionality. It switched the order of “the amount in controversy” and “the importance of the issues at stake in the action” so that the amount of money was listed after the importance of the issues. This change was made to place less emphasis on the amount of money at stake as the leading factor (even though all of the factors must be considered if significant). The Advisory Committee also moved the issue of whether the burden or expense outweighed the likely benefit of the additional discovery from being a main issue in considering good cause (as phrased in Federal Rule 26(b)(2)(C)(iii) and Colorado Rule 26(b)(2)(F)(iii)) to being simply another factor to be considered. Thus, as revised, the federal and Colorado provisions regarding the scope of discovery are virtually identical and state:

Subject to the limitations and considerations contained in subsection (b)(2) of this Rule, parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. (Emphasis added)

This new rule is patently designed to limit “full discovery” in all but the larger, more important and more complex cases. This is an important brick in the new paradigm of giving parties only what they need rather than whatever they want.

The Supreme Court’s 2015 Comments to Rule 26 emphasize the case-by-case considerations that may impact proportionality. All the listed factors should be thought about, but individual factors may carry very different weights depending on the case and claims. The amount in controversy may not be as much of a factor as the desired enforcement of fundamental civil or constitutional rights. The public interest may demand resolution of issues in the case. In employment and professional liability cases and for the amount of damages, for example, the parties’ relative access to key information may prove to justify more discovery for one party than to the other on selected issues.

Other limitations on the scope of discovery. In addition to the requirement that discovery be proportional to the needs of the case, a second change in both the Federal and Colorado Rules was to delete the authority of a court to “order discovery of any matter relevant to the subject matter involved in the action,” as allowed in the previous version of Rule 26(b)(1). This, too, strikes a blow at potentially vast discovery of material even less directly relevant to the specific claims and defenses of the lawsuit. Discovery as the fishing expedition to find out whether a party can uncover new causes of action should no longer be available.

The third change in Rule 26(b)(1) is a clarification relating to information that is not admissible at trial. The last sentence of this section still allows discovery of information that may not be admissible, but only if the information sought is “within the scope of discovery.” Thus, such inadmissible information must still be relevant to the parties’ claims and defenses, not just to the “subject matter involved in the action,” and must still be proportional to the needs of the case.

Rule 26(b)(2)—Limitations [on Discovery]

This Rule retains Colorado’s previous basic limitations on the use of the various discovery devices. It retains the ability to expand or contract the uses of those devices “for good cause shown,” but also imports the proportionality factors of subsection (b)(1).

The only change is in subsection (b)(2)(F)(iii)—the subsection describing the factors to be considered in determining “good cause,” and the subsection from which the proportionality factors were removed for relocation into subsection (b)(1). This new consideration in reworded (b)(2)(F)(iii), taken verbatim from the proposed Federal Rule amendment, is whether the proposed additional discovery is “outside the scope permitted by C.R.C.P. 26(b)(1).” However, subsection (b)(2) specifically allows exceptions to its limits on use of discovery methods for good cause. Thus, this factor in (b)(2)(F)(iii) does not mean that good cause cannot be shown in situations if discovery is sought beyond subsection (b)(1)’s scope of discovery. If the broader discovery is sought, however, the other considerations in (b)(2)(F)(i), (ii), and (iv) will need to be quite persuasive.

Rule 26(b)(4)—Trial Preparation: Experts

Depositions of Experts. The subject of expert depositions has, from the beginning of CAPP, been a hotly debated topic. Opponents of expert depositions have argued that with requirements for disclosures of full expert reports and limiting their testimony to what is disclosed in detail, depositions of experts are unnecessary, expensive, and counterproductive. They argue that the main result of deposing experts is to “educate and make them smarter” and better able to prepare for and to withstand cross-examination at trial. Proponents of expert depositions counter that depositions allow lawyers to get a feel for the quality of the expert as a person, prospective witness, and expert in the designated field. They contend that the added cost of the deposition is not great in the overall expense of expert study and preparation, and that expert depositions enhance settlement once the lawyers have seen how well the expert can withstand intense examination. Finally, as noted above, a number of lawyers claimed that depositions were necessary because they could not rely on the judges to limit the expert’s testimony to the report or summary.

Although the Civil Rules Committee ultimately recommended that depositions for retained experts should be limited to three hours, the Supreme Court decided to apply the standard of six hours to all experts, as well as to all other deponents. Because of the varying importance of expert testimony in cases, this rule specifically authorizes trial courts to expand or limit deposition time in accordance with proportionality.

Disclosures and Discovery About the Preparation of Expert Opinions and Reports. In 2010, Federal Rules 26(b)(4)(B) and (C) were added to preclude discovery of drafts of expert reports or disclosures made pursuant to Rule 26(a)(2) and to provide work-product protection to communications between a party’s attorneys and the party’s retained experts and the expert’s assistants. The discovery bar does not extend to other information gathered by the expert or to questions about alternative analyses or approaches to the issue on which the expert is testifying.[16] Discovery may extend to communications relating to the expert’s compensation for study or testimony; facts and data provided by the attorney that the expert considered in forming the opinions expressed; or assumptions that the attorney provided and the expert relied on.[17] Among other things, these rules were adopted to prevent game playing with experts, such as counsel telling them to never make notes of what they discuss, to not prepare and send drafts, and to always make revisions to the original version of the report while deleting all portions that had been changed.

After this amendment was adopted in the Federal Rules in 2010, the Colorado Civil Rules Committee was prepared to recommend a similar change. However, it decided that such a change might adversely impact the information that was to be gained from the study of how CAPP worked and, therefore, the amendment was not further considered until the study of CAPP was concluded. Although there are slight variances in language between new subsection 26(b)(4)(D) of the Colorado Rules and subsections 26(b)(4)(B) and (C) of the Federal Rules, the substance of the changes is identical.

Rule 26(c)—Protective Orders

This Rule allows courts to issue a variety of protective orders to protect against annoyance, embarrassment, oppression, or undue burden or expense. The new amendment to Colorado Rule 26(c)(2), taken verbatim from the amendment to Federal Rule 26(c)(1)(B), now also gives courts the authority to allocate the expenses of discovery among the requesting and delivering parties (or non-parties) where appropriate. This amendment does not mandate any allocation, but simply adds this tool to the court’s tool box of alternatives. Indeed, the Committee Note relating to the Federal Rule change provides that “recognizing the authority to shift the costs of discovery does not mean that cost-shifting should become a common practice,” and that “[c]ourts and parties should continue to assume that a responding party ordinarily bears the costs of responding.”[18]

Rule 26(e)—Supplementation of Disclosures,
Responses, and Expert Reports and Statements

A provision has been added to the requirement to supplement expert reports or statements where a party intends to have the expert testify on direct examination about matters disclosed for the first time during the expert’s deposition, but that are not in the expert’s report or statement. The supplementation must be a specific description of the deposition testimony to be offered and relied on. This additional supplementation is intended to allow the court to determine from the expert’s Rule 26(a)(2) report and its supplementation whether the direct testimony offered at trial has or has not been properly disclosed. These provisions are designed to avoid the court’s need to read scattered portions of the deposition before ruling on admissibility of the new testimony. It also avoids the opponent arguing surprise because it did not understand what deposition testimony was going to be offered as additional and admissible expert testimony.

When the expert report is properly supplemented with this subsequent deposition opinion testimony, Rule 26(e) instructs the trial courts that those supplemented opinions must be permitted, unless the court finds that the opposing party has been unfairly prejudiced by the failure to have made disclosure in the original expert report.

Rule 30—Depositions Upon Oral Examination

The only changes of note in Rule 30 are contained in subsection 30(d)(2). They shorten the standard deposition for all witnesses from one day of seven hours to one day of six hours (unless otherwise ordered by the court). With the usual practice now being to clock deposition times to the minute (not counting breaks for consultation or bathroom breaks), seven hours has frequently devolved into about ten hours of actual time spent at the deposition. Furthermore, many felt that six hours of solid time, leaving out boilerplate questions, was still normally sufficient to get the genuinely necessary evidence. If more is likely to be needed, the parties should determine that before the deposition and request the court’s permission for more time.

Rule 33—Interrogatories

After the Civil Rules Committee agreed on the changes to Rule 34 for the reasons described below, those changes seemed to be equally applicable to responses to interrogatories. Thus, Rule 33(b) was amended to add the requirements that objections to interrogatories specify the grounds for objection and to state whether responsive information is being withheld on the basis of the objection. Such objection also stays the need to answer those objectionable portions pending a ruling by the trial court and without filing a motion for a protective order.

Rule 34—Production of Documents

Over time, litigants have developed the habit of making a string of boilerplate objections to requests for production of documents. The objections are then incorporated verbatim, or by reference, at the beginning of the response to each document request. (To be fair, these responses are often invited by equally boilerplate definitions and instructions in the opposition’s request.) Thus, the requesting party has no real information about which of the objections are intended to apply or why they are being made. This confusion can then be aggravated by the boilerplate comment to the effect that “notwithstanding these objections, and without waiving them, [defendant] is producing the following documents.” With this response, the requesting party has no idea whether the responder is providing all the documents it has or whether it really is withholding some of them and, if so, how many are being withheld and the basis on which the responder is refusing to produce them.

Colorado Rule 34(b) and Federal Rule 34(b)(2) are being amended with virtually identical language. First, the amended rules provide that the response to each request must “state with specificity the grounds for objecting to the request.” The objections must then be specific, not generic, and relevant to the precise request to which objection is being made. Second, the amended rules require that an objection state whether any responsive materials are actually being withheld on the basis of that objection.

Separately, the rules are also being amended to allow production of materials instead of offering inspection of the materials. Essentially, this simply recognizes what has for many years been the practice in most cases, at least where the produced documents are not especially numerous or burdensome.

Finally, Colorado Rule 34(b) adds a new provision to clarify the effect of a fairly common practice. When a party objects to production of certain documents, it has been unclear whether the objecting party also must request a protective order under Rule 26(c) or whether the requesting party must file a motion to compel production. The newly amended Colorado Rule now specifies that an objection to production stays the obligation to produce these documents until the court resolves the objection and that no motion for protective order is necessary. Frequently, when the requesting party receives an objection, especially if some responsive documents are produced, the requesting party will decide that it is unnecessary to fight for more documents or the parties can reach an acceptable compromise as to what documents will be produced. Thus, it seems appropriate to await the requesting party’s determination that it really is worth the effort to obtain the withheld documents rather than requiring the objecting party to move for protection and involve the court on matters that the requesting party may no longer need.

Rule 37—Failure to Make Disclosure
or Cooperate in Discovery: Sanctions

Rule 37(a)(4)(A) and (B) have allowed courts to award reasonable expenses, including awarding attorney fees in favor of prevailing parties and against opposing parties and their attorneys, unless the court finds certain factors that ameliorate against such an award, including “other circumstances that make an award of expenses unjust.” Experience has shown that courts, which historically have been unwilling to award monetary sanctions, have used this latter escape valve to justify the lack of monetary sanctions.

The CAPP rules, however, required that courts grant sanctions “unless the court makes a specific determination that failure to disclose in a timely and complete manner was justified under the circumstances or [was] harmless.”[19] Judges handling CAPP cases found this extra pressure to impose sanctions helpful in some instances, although they still felt that encouraging compliance and emphasizing that attorneys cooperate with each other was ultimately more desirable.

After struggling with this dichotomy at some length, the subcommittee of the Civil Rules Committee, the full Committee, and ultimately the Supreme Court chose the path of encouraging courts to be more aggressive with the imposition of sanctions, but not to go as far as CAPP went. Thus, rather than making the mere determination that other circumstances made monetary sanctions unjust—a low standard for avoiding monetary sanctions—Rule 37(a)(4)(A) and (B) were amended to allow that reprieve from imposing sanctions only where it would be manifestly unjust to award monetary sanctions to the prevailing party.

Under these rules, however, courts may still decline to impose sanctions where the movant did not make a good-faith effort to obtain compliance before seeking court action or where the accused party was substantially justified for the nondisclosure, response, or objection. Indeed, those findings might trigger a sanction against the complaining party or its counsel. This counter-provision significantly increases the pressure on parties seeking these sanctions to meet, confer in person, and diligently endeavor to reach a reasonable resolution.

Conversely, Rule 37(c)(1) has authorized preclusion at trial or for summary judgment of nondisclosed information required to be disclosed by Rules 26(a) or (e), unless such failure is harmless. Because it is so easy to articulate some kind of harm, this rule has caused preclusion of evidence that failed to cause significant harm or where the harm caused by the nondisclosure would be substantially outweighed by the harm resulting from preclusion. The amended subsection 37(c)(1) prohibits preclusion as a sanction simply upon allegations of some harm. Thus, preclusion for nondisclosure may not be imposed where the failure has not and will not cause significant harm or where the preclusion is disproportionate to the alleged harm.

Rules 54 and 121 § 1-22—Costs

Although only tangentially related to the issue of amending pretrial procedures to increase access to the judicial system by advancing the concept that cases should be just, speedy, and inexpensive, the Civil Rules Committee also submitted two amendments relating to controlling costs awarded to prevailing parties. First, in Rule 54(d), as approved by the Supreme Court, awarded costs must be reasonable considering any relevant factors that may include the needs and complexity of the case and the amount in controversy. Second, Rule 121 § 1-22 is amended to allow hearings on bills of costs where the requesting party has identified the issues to be heard and where the court has concluded that a hearing would be of material benefit to the court in ruling on the bill of costs.

Conclusion

With the revisions and amendments to the foregoing Rules, Colorado has moved to address the increasingly severe problem of a litigation culture that appears to be driven by and has thrived on frequently excessive demands for information. These demands can add substantial unnecessary expense and foreclose the societal benefits of efficient judicial systems for the peaceful resolution of disputes and wrongdoing. By encouraging and expediting a new culture focused on the genuine and limited needs of clients and not their (or their lawyers’) desires—a culture trained in and dedicated to the prompt and efficient handling of disputes—it is hoped that civil litigation can indeed incorporate a new paradigm.

Richard P. Holme is senior of counsel in the Trial Group at Davis Graham & Stubbs LLP. He is a member of the Colorado Supreme Court Standing Committee on Civil Rules and was chair of its Improving Access to Justice Subcommittee, which drafted the proposed changes—(303) 892-7340, richard.holme@dgslaw.com. He has also been a member of the ACTL Joint Task Force since 2010, and was involved in the latter stages of the Joint Project of the ACTL and the IAALS. This article expresses the author’s views and does not endeavor to represent all the views of the Civil Rules Committee or the Supreme Court.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

[1] See Holme, “Back to the Future—New Rule 16.1: Simplified Procedure for Civil Cases Up to $100,000,” 33 The Colorado Lawyer 11 (May 2004), www.cobar.org/tcl/tcl_articles.cfm?articleid=3427.

[2] FRCP 26(a)(1)(A)(i) and (ii). See Advisory Committee Notes re 2000 Amendment.

[3] Colo. RPC, Preamble and Scope at [1].

[4] Colo. RPC 3.1.

[5] Colo. RPC 3.2.

[6] Colo. RPC 3.3.

[7] Colo. RPC 3.4.

[8] Colo. RPC 4.1.

[9] See discussion of Rule 26(e), infra.

[10] CRCP 26(b)(2)(F)(iii).

[11] ACTL/IAALS, supra note 24 at 7. See “Part I: A New Paradigm,” supra note 2 at 46.

[12] See Holme, supra note 3 at 46 and notes 35 to 37 and accompanying text.

[13] Advisory Comm. Memo at B2 to B3. See Holme, supra note 3 at 46.

[14] PPR 9.1. See Holme, supra note 3 at 47.

[15] FRCP 26(b)(2)(C)(iii).

[16] See Advisory Comm. Notes re: 2010 Amendments to FRCP 26(b)(4).

[17] Id.; FRCP 26(b)(4)(C)(i) to (iii).

[18] See 2014 Rules Report, supra note 26 at 26.

[19] PPR 3.7.

New Pretrial Rules for Civil Cases—What Is Changed (Part 1 of 2)

Editor’s Note: This article originally appeared in the July 2015 issue of The Colorado Lawyer. This is the first half of the article; click here for the second half. Reprinted with permission.

DickHolmeBy Richard P. Holme

Effective July 1, 2015, the Colorado Supreme Court has adopted a series of amendments to the Colorado Rules of Civil Procedure designed to significantly reduce the cost of and delays in litigation and to create a new culture for the handling of lawsuits. The amended rules will increase involvement of judges to establish early and personal judicial oversight of pretrial activities; provide for expedited discovery motions; change the breadth of required disclosures; limit discovery to what is needed, not what is wanted; limit expert discovery; clarify obligations when responding to interrogatories and requests for documents; and strengthen judges’ ability to award sanctions for noncompliance with these rules. The newly amended rules are available at www.courts.state.co.us/Courts/Supreme_Court/Rule_Changes/2015.cfm (click on Rule Change 2015(05)).

These revised pretrial rules will apply only to cases filed on or after July 1, 2015. Cases filed before then will continue to be governed by the older rules.[1] This article explains, for both judges and lawyers, the nature of and justification for the changes and how the changes endeavor to foster a new culture and paradigm for handling civil cases in a way that will be faster and less expensive, while preserving the necessary search for and application of justice.

Reasons for the Changed Rules

With the approaching termination of the Civil Action Pilot Project (CAPP) in early 2014, the Colorado Supreme Court asked its Civil Rules Committee to consider what should be done with those rules. The Civil Rules Committee appointed a subcommittee that considered and recommended a number of amendments to the rules,[2] which were discussed, modified, and approved by the entire Committee. The Supreme Court solicited written comments, held a public hearing to discuss the proposals, and adopted the recommended amendments with a few changes.

The reasons for these changes arose in conjunction with a dramatically increased nationwide recognition of the problem and the need for revised rules. The proposed rules were described in the April 2015 article in The Colorado Lawyer[3] (“Part I: A New Paradigm”). The primary influences on the changes were (1) the changes to the Federal Rules of Civil Procedure (Federal Rules) recommended by the federal Judicial Conference Committee on Rules of Practice and Procedure, which are expected to be effective December 1, 2015;[4] and (2) the June 30, 2015 expiration of CAPP for the handling of business actions applicable in five of the Denver metropolitan counties.[5] The more specific reasons and justifications for substantive changes in Colorado’s various amended rules are discussed below. The amendments contain a number of other organizational and non-substantive technical and conforming changes that are not detailed in this article.

It is significant that the Supreme Court has adopted not only the revised rules (New Rules) discussed below, but also a set of Comments that are published along with the New Rules. Thus, interpretation of the New Rules, if necessary, should begin with an analysis of any pertinent provisions of the Court’s “2015 Comments.”

Rule 1—Scope of Rules

Other than the belated removal of the reference to the “Superior Court,” gone for so long that most readers will have never heard of it,[6] the reason for amending Rule 1 was to make clear the intended breadth of its impact. Thus, securing “the just, speedy, and inexpensive determination of every action” is no longer simply a basis for “liberal construction” of the Civil Rules. As amended, Rule 1 now requires that the rules are also to be “administered and employed by the court and the parties” to achieve a just, speedy, and inexpensive determination of all cases. (Emphasis added).

The amended language in Rule 1 is taken verbatim from the change recommended for Federal Rule 1. As explained by the federal Advisory Committee on Civil Rules (Advisory Committee), a significant reason for bringing parties under the requirements of Rule 1 is to emphasize the need for the parties, and their counsel, to cooperate with each other to bring about the expeditious and effective processing of cases.[7]

No one challenges the proposition that litigation moves much more smoothly, quickly, and efficiently when parties, and especially the lawyers, cooperate with each other in handling lawsuits. Although it is difficult to legislate civility, with the broadening of Rule 1’s applicability, lawyers can expect courts to remind them regularly of the importance—and effectiveness—of cooperating among themselves.

Rule 12—Defenses and Objections

The changes to Rule 12 are largely cosmetic. Rule 12(a) is broken into several subsections to make its provisions somewhat easier to find and read. Also, a number of changes were made to amend gender-based terminology.

It is noteworthy, however, and consistent with the aim of making litigation more just, speedy, and inexpensive, that the 2015 Comment to Rule 12 also pointedly notes that, “The practice of pleading every affirmative defense listed in Rule 8(c), irrespective of a factual basis for the defense, is improper under C.R.C.P. 11(a).” The 2015 Comment notes that defenses may be pleaded only if well founded in fact and warranted by existing law or a good-faith argument for changing existing law. If an adequate basis for a defense is subsequently discovered, a defendant may then move to amend the answer to add it.

Rule 16—Case Management

The case management provisions of Rule 16(b) through (e) are largely rewritten, and the central focus of case management has been significantly changed. The primary change has been to involve the trial judge in case management personally and actively from an early stage of the case. As noted in “Part I: A New Paradigm” in describing the proposed amendments to the Federal Rules, the federal Advisory Committee said, “What is needed can be described in two words—cooperation and proportionality—and one phrase—sustained, active, hands-on judicial case management.”[8] Likewise, this judicial involvement and oversight were crucial and widely appreciated aspects of CAPP by both lawyers and judges.[9] Early, active judicial case management is also an important factor emphasized by leading judges nationwide.[10]

Early judicial involvement should include review and discussion of a number of matters, depending on the individual case. It can and should include identifying pleading and discovery issues proportional to the needs of the case, narrowing the claims and defenses, focusing and targeting discovery, establishing limits on allowable discovery, emphasizing the expectation that parties must cooperate civilly and efficiently, and setting a firm trial date.[11]

New Rule 16 provides that the initial case management conference will be held within forty-nine days of the at issue date of the case.[12] There is nothing in the Rule, however, that precludes a judge from initiating an earlier, in-person (or telephonic or video) status conference. Indeed, a number of judges use such early conferences.[13] There are several matters that can be accomplished at such an early status conference and probably within about fifteen minutes. For example, the court can impress on the parties its view of the importance that counsel cooperate and maintain civility; and in smaller cases, it can urge the parties to give serious consideration to using Simplified Procedure under Rule 16.1 as a means of avoiding the need to prepare a proposed case management order (proposed order). (One of the reasons Simplified Procedure was successful during its pilot phase, under Judges Harlan Bockman and Christopher Munch, but was not as successful later, was that the pilot judges specifically urged parties to use simplified procedure, but subsequent judges generally have not affirmatively encouraged its use.) The court can also urge parties to demonstrate genuine cooperation and to agree on appropriately proportional discovery in their proposed order so they can avoid the necessity of a subsequent initial case management conference, as provided in Rule 16(d)(3). Additionally, the court can encourage reducing unnecessary claims and defenses, as well as targeting initial discovery on a key issue or issues in the case.

To facilitate meaningful case management, the parties will need to communicate early in the case to prepare a proposed order that will provide the court the basic information it needs to meaningfully participate. The new Rule 16 also anticipates an expanded use of oral motions and the potential for more regular contact between the parties and the judge to keep the case moving efficiently.

The revisions to Rule 16 reflect several matters learned both from CAPP and from the case management experience of the members of Civil Rules Committee. Under CAPP, case management conferences were to be attended in person by lead counsel;[14] they were to be preceded by a fairly extensive report of pertinent matters; and they were then followed by a case management order from the judge.[15] Thereafter, courts were instructed by CAPP to provide “active case management,” including prompt conferences by telephone if permitted by the court.[16] Firm trial dates were to be set at the case management conference and not changed absent extraordinary circumstances.[17]

After more than two years of experience with CAPP, the Institute for the Advancement of the American Legal System (IAALS) at the University of Denver published its report of the case data and experience of lawyers and judges with CAPP based on surveys, interviews, and reviews of case filings.[18] For lawyers, “CAPP’s focus on early, active and ongoing judicial management of cases received more positive feedback than any other aspect of the project.”[19] Similarly, judges found that the initial case management conference was “the most useful tool for determining a proportionate pretrial process.”[20]

The use of the “presumed case management order” was adopted by the Colorado Supreme Court in 2002 as a means of reducing the time attorneys spend preparing individual proposed orders. Nonetheless, the intervening years have shown that it also isolated the judges from involvement in the early and frequently most expensive and time-consuming aspects of litigation. The presumed case management order also had the somewhat perverse effect of disengaging the lead trial lawyers from much thought or collaboration with opposing counsel about the genuine needs of the case. Thus, in some cases, much of the pretrial disclosure and discovery was left in the hands of junior lawyers with less experience and little or no independent responsibility and accountability to the judicial system. The prevailing culture of “leave no stone unturned regardless of the cost” remained unchanged.

Prior to the current amendments, Rule 16(b) normally meant that no case management order would be issued by the court. The Rule itself became the “presumptive” order, unless the parties filed either a stipulated or disputed case management order within forty-two days of the at-issue date. Experience suggests that having an actual court order improves compliance with the discovery terms and is easier to enforce, when needed. Without judicial awareness of pretrial activities, lawyers’ financial incentives and concerns about protection against possible future malpractice claims meant that many cases proceeded on a “give us everything” basis without independent oversight and supervision.

Although Rule 16(b) focuses on the initial case management conference, courts and parties should note that nothing in this rule prevents additional status conferences when the need becomes apparent. Indeed, in complex cases, it may be desirable to have regularly scheduled status conferences (for example, “3:30 p.m. on the last Friday of every month”) to deal with new issues that may have arisen or to determine which conference can be cancelled if no new problems have arisen that would benefit from the court’s participation and oversight.

Rule 16(a)—Purpose and Scope

First, and importantly, the Civil Rules Committee did not revise Rule 16(a). The message and meaning of that section remain significant and should create the environment for the remainder of Rule 16 (and all other pretrial matters).

(a) Purpose and Scope. The purpose of this Rule 16 is to establish a uniform, court-supervised procedure involving case management which encourages professionalism and cooperation among counsel and parties to facilitate disclosure, discovery, pretrial and trial procedures.

This purpose carries added weight and reemphasizes the expansion of Rule 1’s requirement that court and parties now also administer and employ these rules to secure the just, speedy, and inexpensive determination of every action.

Rule 16(b)—Case Management Order

This section of Rule 16 has been completely revised. The parties must now prepare and submit to the court a proposed order not later than forty-two days after the case is at issue. There is now an approved form—JDF 622—that can be downloaded and filled in to comply with this requirement. The proposed order is to be submitted in editable format so that the court can make whatever amendments to the proposed order it deems to be appropriate and desirable. It is expected that many proposed orders will have attached pages providing the information requested in the form. Also, when the parties are not in agreement on certain issues, each party must supply on the form its own version of the information sought by any particular inquiry.

Although there are a number of items of information that must be included, the judges who had experience with the use of a detailed form under CAPP[21] have concluded that the greater amount of information was necessary for them to effectively provide guidance at the case management conference. While the required information will necessitate more thought and more conferring at the outset of the case by parties and their counsel, this information should, in any event, be discussed early in the case if the goal of just, speedy, and inexpensive is to be approached. Furthermore, although some lawyers complain that preparation of this information is unnecessary “front-loading” of expense, counsel and parties will need this same information to evaluate and expedite any possible settlement or to consider the wisdom of proceeding to trial.

Each of the requirements contained in revised Rule 16(b) is described below. Readers are cautioned to read the text of the rules, because not all details of each subsection are discussed.

Rule 16(b)(1)—At-issue date. The at-issue date still triggers the timing requirements of the proposed order, initial disclosures, and discovery. The at-issue date remains the day when all parties have been served and all Rule 7 pleadings have been filed, or defaults or dismissals have been entered. The at-issue date is included in the proposed order for the court’s information.

Rule 16(b)(2)—Responsible Attorney. As in the prior Rule 16(b)(2), the responsible attorney is charged with organizing and preparing the proposed order and the steps leading to the preparation of that order. Normally, the responsible attorney will be plaintiff’s counsel, unless the plaintiff is pro se; in that case the responsible attorney may be the defendant’s counsel. The proposed order must identify the responsible attorney and provide contact information for the court’s use.

Rule 16(b)(3)—Meet and Confer. Within two weeks of the at-issue date, lead counsel and unrepresented parties are to confer about the case and the proposed order. The rule specifically calls for these conferences to be person-to-person (“in person or by telephone”) so that ordinary e-mails are insufficient to comply. Indeed, it is anticipated that preparing proposed orders may require multiple conferences and meetings. To ensure these conferences take place in a timely fashion, the rule also requires that the proposed order list the dates and identities of persons participating in those conferences. The conferences are held to discuss the basis for the claims and defenses, anticipated initial disclosures, the proposed order, and possible dates for the case management conference. The responsible attorney, who has arranged the conference, must obtain a date for the case management conference from the court. This sounds like a lot of time and effort, but if started in a timely fashion (and much can be done even before the final pleadings are filed), it should normally be easy to accomplish, because the time between the at-issue date and the case management conference can be up to seven weeks, and the proposed order does not have to be filed until one week before the case management conference.

Rule 16(b)(4)—Description of the Case. To advise the court of the nature of the case, each party must prepare a one-page (double-spaced) description of the case, including identification of the issues to be tried. Obviously, this is not intended to be a detailed factual recitation or a regurgitation of the entire complaint. It simply needs to be enough for the court to tell, for example, whether this is a single or multiple car accident, an antitrust case, or a building defect dispute. If publishers such as West Publishing can summarize a case decision in a paragraph or two, it was felt that parties to the litigation should also be able to describe the case succinctly.

Rule 16(b)(5)—Pending Motions. When there are motions under Rule 12 or otherwise that have not been resolved or ruled on when the proposed order is submitted, they are to be listed so the court will be reminded of them. Parties should be prepared to argue or discuss those motions at the case management conference, even if the time for full briefing has not expired. The court may decide them at that time, either by written order or orally from the bench.

Rule 16(b)(6)—Evaluation of Proportionality. For other than smaller, routine cases, this may be one of the more important parts of the proposed order. It will not be unusual for one of the major topics of discussion at the case management conference to be the proportionality of desired discovery, with the court deciding how much discovery is appropriate under the circumstances of the case. To the extent that the parties are seeking either more discovery than the limits set out in Rule 26(b)(2) or are seeking to limit even that discovery, this is the portion of the proposed order in which to address those issues. Parties should at least discuss the proportionality considerations listed in Rule 26(b)(1) that are relevant to the case at hand. These may include: (1) the importance of the issues at stake in the action, (2) the amount in controversy, (3) the parties’ relative access to relevant information, (4) the parties’ resources, (5) the importance of the discovery in resolving the issues, and (6) whether the burden or expense of the proposed discovery outweighs its likely benefit. Individual cases may have additional matters that a court should consider, and they should be identified in this section of the proposed order.

Rule 16(b)(7)—Initial Exploration of Prompt Settlement and Prospects for Settlement. The parties are required to discuss possible settlement, describe the prospects for settlement, and provide future dates for mediation or arbitration. Experience shows that more than 95% of the cases will not go to trial, so this requirement merely reflects that reality and seeks to have the parties start the discussions earlier rather than later. The discussion may also be helpful in organizing discovery. For example, if the defendant believes that liability is probably going to be established but that it needs to understand the plaintiff’s damages before settlement discussions are likely to be useful, the parties or court may suggest phasing discovery to focus on damages before going into all other areas. This way, settlement can be reopened before unnecessary sums are spent on less pertinent issues. Thus, in this example, proposed dates for settlement could be set for shortly after the projected date for completing discovery on damages.

Rule 16(b)(8)—Proposed Deadlines for Amendments. This provision moves the date for amending pleadings and adding parties up to two weeks from the deadline in prior Rule 16(b)(8). However, if this deadline is unnecessary or can be moved sooner to the case management conference, that fact should be addressed in this portion of the proposed order. The justification for fifteen weeks following the at-issue date is: seven weeks for the case management conference, five weeks for the first set of discovery responses, and three weeks to prepare any amendments. Of course, nothing prevents parties from taking depositions to investigate this subject following the case management conference or requesting expedited written discovery responses related to this issue. Parties should be prepared for the possibility that the court may not believe that much time is needed and may expedite this deadline to keep the case moving.

Rule 16(b)(9)—Disclosures. The parties’ initial disclosures under Rule 26(a)(1) are due twenty-eight days following the at-issue date—that is, three weeks before the case management conference deadline. The proposed order must state when those disclosures were actually made and when the documents were produced. Because parties sometimes disagree on whether the disclosures are complete, this proposed order requests that any objections to the other parties’ disclosures be addressed here. This way, there is a significant likelihood that the judge can rule on those issues at the case management conference without further delay. Indeed, Rule 26(a)(1) specifically prohibits filing motions objecting to allegedly inadequate disclosures prior to the case management conference. This is required because the adequacy of disclosures normally can be more easily addressed in person at the case management conference at the same time the court is considering issues of proportionality.

Rule 16(b)(10)—Computation and Discovery Relating to Damages. Rule 26(a)(1)(C) requires (and has for years) disclosure of categories of damages, a computation of damages, and supporting documents. That requirement is not changed in the New Rules. However, experience has shown that frequently claimants will assert that they have not been able to establish those calculations or to have gathered the supporting documents. Because this information is often crucial to resolving the case through settlement discussions, this new provision demands at least that if the disclosures have not been made, the claiming party must explain why it was unable to provide the disclosures as required and when it expects that it can produce those disclosures and documents. If the court believes the delay does not result from inability to provide the damages or that the delay is too distant, it may well shorten those time limits when it issues the case management order.

Rule 16(b)(11)—Discovery Limits and Schedule. This provision essentially incorporates the presumptive limits on discovery contained in Rule 26(b)(2), although it expressly permits parties to request more or less discovery and allows the court to either increase or decrease those limits after considering the proportionality factors in Rule 26(b)(1). Parties should expect to be asked to support any changes in discovery when they attend the case management conference. The changes in authorized discovery may not only impact numbers of deponents or allowed hours of depositions, but might also limit the number of interrogatories, requests to produce documents, or requests for admissions. Before attending the case management conference, parties should think about what specific written discovery they might want, especially interrogatories and requests for admission, because some judges and lawyers believe that such discovery is often unproductive or not proportional.

This provision also establishes that discovery may not commence until the case management order is served. This delay is incorporated to allow the court to expand or limit discovery before the parties begin under possibly erroneous assumptions as to what discovery will be allowed or limited. Likewise, the deadline for discovery is set for not later than forty-nine days before trial—a date the court can alter if appropriate.

A provision relating to discovery limits allows the court to consider limits on awardable costs. For example, a court might include in the order that it will not allow recovery of videotape charges for depositions, travel costs for out-of-state depositions of relatively unimportant witnesses, or travel costs for the depositions that could be taken telephonically. The parties can consider how badly they really need that discovery.

Rule 16(b)(12)—Subjects for Expert Testimony. This subsection asks the parties to identify subject areas for anticipated expert testimony both for retained experts and for percipient witnesses of facts who may also be asked to provide opinion testimony (such as the investigating police officer, the attending physician, or a party’s accountant). If parties on one side of a case are seeking more than one retained expert per subject, they must show the good cause for them, consistent with proportionality. (A case for negligent heart surgery may justify more experts than a case for negligent setting of a broken arm.) Sometimes, parties on one side of the case may have different perspectives and need additional experts, which this provision allows. For example, plaintiffs in medical malpractice cases may sue hospitals, nurses, and doctors, each of whom may want to have available expert testimony as to why they are not liable but other defendants might be. The same problem can be routinely expected in building defect cases.

Rule 16(b)(13)—Proposed Deadlines for Expert Disclosures. Expert disclosures are to be made within the time limits established in Rule 26(a)(2)(C), unless some different date is set in this subsection. For example, it might be expeditious for discovery to focus on liability at the outset and, therefore, to have liability experts provide their disclosures early so parties can attempt to settle or so the court could consider summary judgment on that issue before the parties undergo the entire panoply of discovery.

Rule 16(b)(14)—Oral Discovery Motions. A significant number of judges have found that requiring discovery disputes to be presented on short notice and orally is much faster, cheaper, and more efficient than using an extended written motion briefing schedule and then plowing through dozens of pages of briefs.[22] Other judges require that motions be written and fully briefed. Because of the substantial potential savings in time and expense of oral motions, it was felt desirable to bring this issue to everyone’s attention and to have the judge advise the lawyers of the judge’s practice in this respect. If the lawyers are not already aware of the court’s procedures, they should leave unmarked the choice of “(does)(does not) require discovery motions to be presented orally” in the proposed order. The judge can then mark out the inappropriate one or may insert a more extensive description of the judge’s desires concerning discovery motions.

Rule 16(b)(15)—Electronically Stored Information. The federal courts have tended to impose exhaustive and frequently onerous requirements on parties with respect to preservation, production, and handling of electronically stored information (ESI).[23] The Colorado Civil Rules Committee on the other hand has been reluctant to impose specific requirements on all Colorado cases primarily because more than 50% of the civil cases seek relief of under $100,000 and very few seek as much as $1 million. Thus, while cases will almost inevitably have some information that is in the form of ESI, a large proportion of those cases in Colorado courts will not involve unusual amounts of relevant ESI, and parties acting in good faith can normally find it easy to agree on and produce that information.

Where, however, it appears early in the case that a significant amount of the discoverable ESI will be involved, the parties must discuss, attempt to resolve, and report in the proposed order (1) issues of any search terms that should be used; (2) production, preservation, and restoration of ESI; (3) the form of production (for example, native format, with or without metadata, etc.); and, if significant, (4) an estimate of the related cost of such production. Here, as in many aspects of litigation, genuine cooperation and communication among counsel can save thousands of dollars, weeks or months of time, and substantial brain damage to all concerned. This provision does not attempt to draw a sharp line between whether and when such details are to be included, because this decision must be made on a case-by-case basis. Whatever is decided, the parties should expect to be asked about it by the judge at the case management conference.

Even if discovery of ESI is relatively simple and noncontroversial, it is important to address this topic soon after the case is at issue so the parties can understand what problems, if any, might be anticipated. Even an agreement that the parties will work together and do not need special provisions can smooth the way for better cooperation, less time, and less expense.

Rule 16(b)(16)—Trial Date and Length of Trial. The parties should discuss and report on their sense as to when they expect to complete discovery, as well as the expected length of the trial itself. In most cases, the parties should expect that the court will set a trial date during the case management conference. However, some courts decline to set trial dates until the completion of discovery or some other date further into the case preparation. This provision allows for both situations. Still, most judges expect that the case will be tried on the first trial date, so parties should not count on easy or automatic extensions of a trial date.

Rule 16(b)(17)—Other Appropriate Matters. This portion of the report is simply a catch-all for other issues unique to the particular case.

Rule 16(b)(18)—Entry of Case Management Order. Once the proposed order is prepared for filing, lead counsel are to approve and sign it before filing. After the case management conference and after reviewing and making any changes the court deems necessary or appropriate, the court shall sign the document, at which time it will become the official case management order and will bind the parties thereafter, unless modified pursuant to Rule 16(e).

Rule 16(c)—Pretrial Motions

The provisions of the prior Rule 16(c) (modified case management orders) are completely deleted because that section related to modifications of presumptive case management orders, which have been repealed. Modification of those orders is now moot. In its place, the provisions of former Rule 16(b)(9) have been moved verbatim to Rule 16(c). Thus, the need to file pretrial motions and motionsin limine thirty-five days before trial, summary judgment motions ninety-one days before trial, and challenges to the admissibility of expert testimony seventy days before trial remain intact.

Rule 16(d)—Case Management Conferences

Again, because the prior version of this section related to resolution of disputed modified case management orders, or specially requested case management conferences, this section has been completely rewritten and is now a focal point of the effort to bring early, active judicial case management to the forefront of civil litigation. The impetus for this change was from several sources. The ACTL Final Report states:

We believe that pretrial conferences should be held early and that in those conferences courts should identify pleading and discovery issues, specify when they should be addressed and resolved, describe the types of limited discovery that will be permitted and set a timetable for completion. We also believe the conferences are important for a speedy and efficient resolution of the litigation because they allow the court to set directions and guidelines early in the case.[24]

This conclusion was bolstered by the interviews with outstanding trial judges, virtually all of whom use in-person, initial case management conferences.[25]

Similarly, an amendment to Federal Rule 16(b) strikes the prior reference to scheduling conferences (the federal term for case management conferences) being held by “telephone, mail, or other means.” Although the text of the federal rule suggests that scheduling conferences are to be conducted in person, the accompanying Committee Note urges that the conference be held “in person, by telephone or by more sophisticated electronic means,” anticipating video conferences.[26] The Note adds that a “scheduling conference is more effective if the court and parties engage in direct simultaneous communication.”[27]

Colorado Rule 16(d)(1) requires that the case management conference be held no later than forty-nine days (seven weeks) after the case is at issue. There is no prohibition on the court setting an earlier conference or on the parties seeking an earlier date from the court.

Rule 16(d)(2) provides that lead counsel for the parties and any unrepresented parties are to be present at the case management conference in person, unless allowed by the court to attend by telephone or video conference, if available. That subsection calls for parties to be prepared to “discuss the proposed order, issues requiring resolution and any special circumstances of the case.” Experienced judges who have previously used in-person case management conferences suggest that there are a number of matters that can be discussed and clarified to create case preparation procedures that are in fact just, speedy, and inexpensive.[28]

Rule 16(d)(3) provides the one exception for personal case management conferences. Where all parties are represented by counsel and counsel agree, they may submit a request to the court to dispense with a case management conference. This does not, however, dispense with the need to prepare and file a proposed order. The court can grant the request if (1) there appear to be no unusual issues that might be better dealt with by the court early in the case; (2) counsel appear to be working together collegially; and (3) the proposed order appears to be consistent with the best interests of the parties and is proportional to the needs of the case. It is expected that it will be the smaller cases and those with fewer factual and legal issues for which courts will more likely dispense with the case management conferences. Counsel can clearly aid their request if they can demonstrate by a clear, concise, and limited proposed order that they are—and are likely to continue to be—working together in the spirit of obtaining a just, speedy, and inexpensive resolution.

Rule 16(e)—Amendment of Case Management Orders

All amendments to case management orders, whether for extension of deadlines or otherwise, must be supported by specific showings of good cause for the timing of the request and for its necessity. If applicable, the showing of good cause needs to address the provisions of Rule 26(b)(2)(F), describing factors for determining good cause, discussed below. Although this amended rule is essentially the same as the prior version of this rule, because the details of the new case management orders are more extensive, there may be more need to request amendments. If counsel agree to changes that do not affect the court (for example, they agree to take depositions two weeks before trial), the parties must assume that if the agreement is breached by one of the parties, the court will refuse to enforce the agreement and will look askance at counsel willing to act inconsistently with the case management order.

Richard P. Holme is senior of counsel in the Trial Group at Davis Graham & Stubbs LLP. He is a member of the Colorado Supreme Court Standing Committee on Civil Rules and was chair of its Improving Access to Justice Subcommittee, which drafted the proposed changes—(303) 892-7340, richard.holme@dgslaw.com. He has also been a member of the ACTL Joint Task Force since 2010, and was involved in the latter stages of the Joint Project of the ACTL and the IAALS. This article expresses the author’s views and does not endeavor to represent all the views of the Civil Rules Committee or the Supreme Court.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

NOTES

[1] See CRCP 1(b).

[2] The Subcommittee members included Rules Committee members: Court of Appeals Judge Michael H. Berger (Committee Chair); Richard P. Holme (Subcommittee Chair); David R. DeMuro; Judge Lisa Hamilton-Fieldman; Judge Ann B. Frick; Thomas K. Kane; Richard W. Laugesen; David C. Little; Professor Christopher B. Mueller; Teresa T. Tate; Judge John R. Webb; and Judge Christopher C. Zenisek. Outside members of the subcommittee were Judge Herbert L. Stern, III; Judge E. Eric Elliff; Gordon (Skip) W. Netzorg; and John R. Rodman.

[3] See Holme, “Proposed New Pretrial Rules for Civil Cases—Part I: A New Paradigm,” 43 The Colorado Lawyer 43 (April 2015), www.cobar.org/tcl/tcl_articles.cfm?articleid=8860.

[4] See id. at 46-47. Following publication of Part I: A New Paradigm, on April 29, 2015, the U.S. Supreme Court approved the amendments and submitted them to Congress, which could change them, but has only done so on one prior occasion. See online.iaals.du.edu/2015/05/04/supreme-court-adopts-amendments-to-the-federal-rules-of-civil-procedure.

[5] See Holme supra note 3 at 47-48 (description of CAPP).

[6] The Denver Superior Court was a civil court with a jurisdictional limit of $5,000. It was abolished in 1986.

[7] Memorandum from Judge David Campbell to Judge Jeffrey Sutton re Proposed Amendments to the Federal Rules of Civil Procedure B-2 (June 14, 2014), available from the author.

[8] Id. at B-2 to B-3.

[9] Holme, supra note 3 at 48.

[10] American College of Trial Lawyers/Institute for the Advancement of the American Legal System (ACTL/IAALS), “Working Smarter Not Harder: How Excellent Judges Manage Cases” (2014) (“Working Smarter”), iaals.du.edu/images/wygwam/documents/publications/Working_Smarter_Not_Harder.pdf.

[11] See, e.g., id. at Appendix D.

[12] Rule 16(b) and 16(d)(1).

[13] See ACTL/IAALS, supra note 10 at 7.

[14] Pilot Project Rule (PPR) 7.1.

[15] PPR 7.1 to 7.2.

[16] PPR 8.1 to 8.4.

[17] PPR 8.5.

[18] See Gerety and Cornett, “IAALS, Momentum for Change: The Impact of the Colorado Civil Access Pilot Project” (Oct. 2014) (CAPP Final Report), iaals.du.edu/images/wygwam/documents/publications/Momentum_for_Change_CAPP_Final_Report.pdf. The CAPP Final Report was preceded by a preliminary report: Gerety and Cornett, “IAALS, Preliminary Findings on the Colorado Civil Access Pilot Project” (April 2014), iaals.du.edu/images/wygwam/documents/publications/Preliminary_Findings_on_CAPP.pdf.

[19] CAPP Final Report, supra note 18 at 23.

[20] Id. at 24.

[21] PPR 7.1 to 7.2; and PPR Appendix B.

[22] See Holme, “‘No Written Discovery Motions’ Technique Reduces Delays, Costs, and Judges’ Workloads,” 42 The Colorado Lawyer 65 (March 2013), www.cobar.org/tcl/tcl_articles.cfm?articleid=7995. See also ACTL/IAALS, supra note 10 at 21-22.

[23] See, e.g., FRCP 26(f)(3)(C); Zubulake v. UBS Warburg LLC, 217 FRD 309 (S.D.N.Y. 2003); U.S. District Court for the District of Kansas, “Guidelines for Cases Involving Electronically Stored Information,” www.ksd.uscourts.gov/guidelines-for-esi.

[24] ACTL/IAALS, “Final Report on the Joint Project of the American College of Trial Lawyers Task Force on Discovery and the Institute for the Advancement of the American Legal System” 2 (rev. ed., 2009), iaals.du.edu/images/wygwam/documents/publications/ACTL-IAALS_Final_Report_rev_8-4-10.pdf.

[25] See ACTL/IAALS supra note 10 at 10-20.

[26] 2014 Rules Report at 19 (May 2014), available from the author.

[27] Id.

[28] See, e.g., 2015 Comment to CRCP 16(d). See also ACTL/IAALS, supra note 10 at 10-20 and Appendix D; Prince, “A New Model for Civil Case Management: Efficiency Through Intrinsic Engagement,” 5 Court Review 174, 189-92 (2014).

Colorado’s Lawful Activities Statute Does Not Protect Employees’ Medical Marijuana Use

Lipinsky-PrattBy Lino Lipinsky and Joel Pratt

On June 15, the Colorado Supreme Court ruled in Coats v. Dish Network, LLC, No. 13SC394, 2015 CO 44 (2015), that employers with a drug-free workplace policy have the right to take adverse action against employees who test positive for marijuana, even if the employees fully comply with the state’s medical marijuana laws, do not use marijuana at the workplace, and are not impaired on the job. This landmark decision affirms the right of employers to require that their employees comply with all federal drug laws, regardless of their states’ marijuana laws.

The plaintiff, Brandon Coats, a quadriplegic as a result of an automobile accident, failed a random drug test required by his employer, Dish Network. Mr. Coats argued that his use of medical marijuana was the only means by which he could control his leg spasms. Dish Network did not contest that Mr. Coats had no work-related problems other than the failed drug test. There was no dispute that Mr. Coats used marijuana only at home and had a valid Colorado medical marijuana card.

The court rejected the plaintiff’s argument that the Colorado lawful off-duty activities statute, Colo. Rev. Stat. § 24-34-402.5, protected his use of medical marijuana at home. That statute bars employers from taking adverse employment action against employers for “lawful” activities conducted away from work.

The Colorado Supreme Court narrowly focused on the definition of “lawful” in the statute and declined to reach any other issue. Mr. Coats’s attorney argued that the definition encompasses activities legal under state law, regardless of their status under federal law. Dish Network disagreed, arguing that the word “lawful” referred to activities legal under both state and federal law.

A unanimous court, with Justice Márquez not participating, agreed with Dish Network. The court held that the word “lawful” should be interpreted according to its generally accepted meaning, and that the Colorado legislature included no language indicating that the word should refer to state law alone. Colorado’s lawful activities statute thus only protects employees engaged in activities that are legal under both state and federal law.

Because the federal Controlled Substances Act lists marijuana as a Schedule I controlled substance and prohibits its possession, manufacture, sale, or use, medical marijuana remains illegal under federal law. Accordingly, Colorado’s lawful activities statute does not protect an employee using medical marijuana because such use is prohibited by federal law.

The trial court dismissed Mr. Coats’s claim against Dish Network. A split panel of the Colorado Court of Appeals affirmed the trial court’s decision, holding that Colorado’s lawful activities statute incorporated both state and federal law, and therefore, does not protect activity illegal under federal law. Judge Webb dissented, arguing that the reach of “lawful activities” should be determined exclusively by state law, under which marijuana use is considered lawful. The supreme court affirmed the court of appeals’ ruling.

The Coats decision reaffirms the right of employers to manage and to enforce drug-free workplaces. Employers will not have to make individualized decisions about whether a particular employee’s marijuana use is “lawful” under state law for bona fide medicinal purposes; instead, employers can institute and enforce broad drug-free workplace policies.

Further, the Coats decision avoids potential problems with the conflict between state and federal law. Colorado employers who contract with the federal government generally must comply with the federal Drug-Free Workplaces Act, which requires drug-free workplaces. Similarly, employers engaged in the transportation industry may be required to comply with the Omnibus Transportation Employee Testing Act of 1991, which mandates drug testing of certain transportation workers.

Had the court ruled in favor of Mr. Coats, employers subject to federal drug-free workplace regulations would have faced conflicting obligations. Colorado law would have demanded that employers tolerate certain employee drug use, while federal law would have demanded that employers take action against those same employees. The court avoided that problem by clarifying that Colorado law only protects employees engaged in activities that are lawful under state and federal law.

Employers also need to recognize the limits of this decision. Importantly, the court did not hold that employers have unfettered rights to fire or to discipline employees for the use of marijuana. Employers must still follow the law. Dish Network likely prevailed because it had adopted a clear and broad drug-free workplace policy, engaged in random drug testing, and applied its policies neutrally. An employer that selectively applies a policy could be vulnerable to discrimination claims.

Additionally, the Coats decision does not resolve the preemption issues surrounding Colorado’s medical and recreational marijuana amendments. A number of other pending cases, including Nebraska’s and Oklahoma’s challenge to Colorado’s marijuana laws filed in the U.S. Supreme Court, raise the preemption issue head-

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.

Joel M. Pratt is a member of McKenna Long & Aldridge’s Government Contracts Department in the Denver office. Mr. Pratt graduated, magna cum laude, from the University of Michigan Law School in 2014 where he served on the Michigan Law Review as the Executive Notes Editor and an Associate Editor. While earning his J.D., Mr. Pratt served as a judicial intern for the Honorable Alan M. Loeb, was a student attorney for the Michigan Unemployment Insurance Project and the Child Advocacy Law Clinic, and published several articles in legal academic journals across the country. Prior to joining the firm, Mr. Pratt worked as a law clerk for the Office of the Vice President and General Counsel of the University of Michigan. Mr. Pratt graduated with distinction in 2009 from the University of Colorado with a Bachelor of Arts in English Literature.  Mr. Pratt was also the winner of the University of Colorado Alumni Association Scholarship.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

The Colorado Lawyer: Abraham Lincoln—150 Years Later

Editor’s Note: This article originally appeared in the April 2015 issue of The Colorado Lawyer. Reprinted with permission.

By Charles F. Garciacharley garcia

Where justice is denied, where poverty is enforced, where
ignorance prevails, and where any one class is made to feel
that society is an organized conspiracy to oppress, rob and
degrade them, neither persons or property will be safe.

—Frederick Douglass, Emancipation Celebration
Washington, DC, 1886

April 15, 2015 marks the 150th anniversary of President Abraham Lincoln’s death. Lincoln served as U.S. President for little more than one term, and during that period, he worked to make all people of this country equal. He wrote the Emancipation Proclamation in 1862, declaring that “all persons held as slaves within any State or designated part of a state . . . shall be . . . forever free.” On April 4, 1864, the Thirteenth Amendment to the U.S. Constitution abolishing slavery passed the Senate, and on January 31, 1865, it passed the House of Representatives. It was ratified after Lincoln’s death on December 6, 1865.

Mindful of this powerful history, I began to reflect on recent events involving racial conflict occurring in the United States, including in Colorado, and to contemplate how far we have come in 150 years. We should not shy away from discussing racial conflict and related social and legal injustices simply because it is a difficult and sensitive subject for which there may be no single or immediate solution. I firmly believe that it is our duty as members of this honorable profession to reflect on the inescapable fact that people of color are over-criminalized, and constructively work toward reform. I hope this Message advances the discussion of the role we must play to ensure equality for all.

Atticus Revisted

On July 11, 1960, To Kill a Mockingbird by Harper Lee was published. Lee attended law school at the University of Alabama but chose to pursue a career in writing instead of the law. (She did receive an Honorary Special Membership to the Alabama Bar in 2008.[1])

To Kill a Mockingbird was published during a time of much racial tension in the United States. For example, in 1955, the black teenager Emmett Till was murdered in Mississippi for allegedly flirting with a white woman, and the Montgomery bus boycott of 1955 occurred after Rosa Parks was arrested for not giving up her seat on a bus to a white man. The book has been hailed by many in the civil rights movement for moving forward the dialogue on race and justice. For example, former Atlanta Mayor Andrew Young, who was the first African American since Reconstruction to represent Georgia in the U.S. Congress, stated that Lee’s book “inspired hope in the midst of chaos and confusion.”[2]

Searching for Answers

President Abraham Lincoln sought to bring racial justice to this country, and Harper Lee sought to bring social awareness to the fact that ninety-five years after the Emancipation Proclamation, equality was not a reality. Now, 150 years after Lincoln’s death and the ratification of the Thirteenth Amendment, there may be some sense of legal equality on the books, but equality across society is not a reality, and that is evident in the criminal justice system. For example, according to information as recent as November 2014:

Arrest rates are hard to come by, but African Americans are arrested at rates far exceeding their white counterparts. In many cities, the rate is 10 times higher and in some, it is as much as 26 times higher.[3]

According to the Bureau of Justice Statistics, “African American males are incarcerated at a rate 6.7 times higher, and Hispanic males 2.5 times higher, than their white non-Hispanic counterparts.”[4]

On February 22, 2015, when singer–songwriter John Legend accepted the Oscar for co-writing the song “Glory” from the film Selma, he commented, “There are more black men under correctional control today than there were under slavery in 1850.” The events highlighted by the death of a young African American man in Ferguson, Missouri have again focused national attention on the issue of race and justice in America. Similar events in Colorado have spurred protests in recent months. As citizens and as lawyers, we are striving to find answers to the questions raised by these events.

In December 2014, the Sam Cary Bar Association, in conjunction with the CBA and other bar associations, presented a program entitled “Community Forum—Waiting to Exhale: A Conversation About Race and Our Justice System.” The Forum was a panel discussion on long-ignored race-related issues brought to light by the events of Ferguson. Questions raised at the Forum focused largely on the manner in which our three branches of government should address these issues and the degree to which it is the responsibility of our justice system to rectify the unfair, unequitable imposition of punishment. Forum presenters focused on the Denver Police and Sheriff’s Departments, but the discussion also ventured into the role of our courts and legislature in addressing issues that ranged from excessive force by law enforcement to minority overrepresentation in our criminal justice system. The Forum itself provided no easy solutions to the problems raised by the community, but it continued to advance the conversation.

Legislating on Behalf of Children

The prevailing question is what lawyers can do to better address the issues pertaining to racial injustice in our society. It seems everyone has suggestions in these trying times, and one entity that is looking for answers is the Colorado Legislature, where, during the 2015 legislative session, it will be considering a bill dealing with petty tickets for juveniles. This bill began as a recommendation from the Juvenile Justice Task Force of the Colorado Criminal and Juvenile Justice Commission. The intention of the bill is to find a way to keep our children from becoming part of the criminal justice system. The belief is that once a child becomes part of the criminal justice system, it is very difficult to remove him or her from the system.

Tackling the overrepresentation of people of color in our criminal justice system begins with how we address the treatment of our children. It is a fact that our juvenile courts are overcrowded. The number of people of color adjudicated in those courts does not reflect our society as a community. We must begin our search for answers by looking at our courts and determining how our children reach the courts in the first place. This bill is a start to addressing the bigger issue of racial injustice.

The Challenge to the Justice System

We must begin to collaborate to solve the problems of over-criminalization, mass imprisonment, and minority overrepresentation in our criminal justice system. Although most people may agree on what the bigger problems are, they may differ on the causes. This should not stop us from working with our legislators, governors, mayors, judges, prosecutors, and defense attorneys to find solutions.

> A New York Times column on February 18, 2015 stated:

Usually bitter adversairies, Koch Industries and the Center for American Progress have found at least one thing they can agree on: The nation’s criminal justice system is broken. Koch Industries, the conglomerate owned by the conservative Koch brothers, and the center, a Washington-based liberal issues group are coming together to back a new organization called the Coalition for Public Safety. The coalition will have initial backing of more than $5 million, with groups also spending independently on their own criminal justice initiatives.[5]

> In her book The New Jim Crow,[6] Michelle Alexander focuses on how the enactment and enforcement of drug laws have created a society in our country where we legalize discrimination. She argues in the book that the U.S. criminal justice system functions as a contemporary system of racial control, and writes that “we have not ended racial caste in America; we have merely redesigned it.” The United States currently represents 5% of the world population but represents 25% of the world’s incarcerated population.[7] In her January 2012 appearance on the National Public Radio program Fresh Air, Alexander told host Dave Davies that “[p]eople are swept into the criminal justice system—particularly in poor communities of color—at very early ages.”[8]

> George F. Will wrote about the death of Eric Garner in New York for the Washington Post Writers Group (WPWG). On December 14, 2014, when talking about the death of Eric Garner in New York for selling illegal cigarettes, Will wrote:

Garner died at the dangerous intersection of something wise, known as “broken windows” policing, and something worse than foolish: decades of overcriminalization. The policing applies the wisdom that when signs of disorder, such as broken windows, proliferate and persist, there is a general diminution of restraint and good comportment. So because minor infractions are, cumulatively, not minor, police should not be lackadaisical about offenses such as jumping over subway turnstiles. Overcriminalization has become a national plague. And when more and more behaviors are criminalized, there are more and more occasions for police, who embody the state’s monopoly on legitimate violence, and who fully participate in humanity’s flaws, to make mistakes.[9]

> Professor Stephen L. Carter of Yale Law School has stated that [o]vercriminalization matters [because] making an offense criminal also means that the police will go armed to enforce it. However, today’s political system takes bizarre delight in creating new crimes for enforcement.[10]

> George Will states further in his WPWG article: The scandal of mass incarceration is partly produced by the frivolity of the political class, which uses the multiplication of criminal offenses as a form of moral exhibitionism.[11]

> A group known as Right on Crime,[12] a project of the Texas Public Policy Foundation and in cooperation with the Justice Fellowship, has brought together former U.S. Speaker of the House Newt Gingrich, political advocate Grover Norquist, Texas Governor Rick Perry, and others to examine the causes of mass incarceration in Texas and across the United States. A look at Right on Crime’s website, www.rightoncrime.com, will lead you to articles on attempts at criminal justice reform in such states as Ohio, Georgia, and West Virginia.

The Rule of Law—The Guiding Premise to Repairing Injustices

Racial injustice exists outside the criminal justice system, as well. Inequalities in our educational system, in the employment arena, and in housing serve as breeding grounds for racial injustice in the criminal justice system. We need to constantly work at airing and addressing the problems that exist in all areas of society. At the same time, we need to address the reasons behind the staggering rate of incarceration of people of color and the poor in our country. The answer to societal injustices does not rest in any one of the three branches of our government, but in all three.

Our legislators need to address over-criminalization, mass incarceration, and overrepresentation of people of color in the criminal justice system. Legislators around the country are now rushing to enact laws around police body cameras, excessive force laws, and grand juries for police misconduct. These are perhaps good ideas, but they may be no more than Band-Aids for a much larger wound in our society.

Our Executive Branch needs to examine the enforcement of our laws to find a way to enforce them without doing harm to society. Many of the issues are particular to the local community, and this is where change needs to begin. We need to take a new approach to law enforcement, especially as it relates to people of color. It is the job of our mayors, city councils, and county commissioners to examine our methodology of law enforcement and assure the words “Serve and Protect” have meaning.

Finally, the third branch of government, and the one we lawyers know best—the Judicial Branch—plays a vital role in questioning and responding to the many issues raised here. The acts of our legislators and of our Executive Branch will eventually be tested in our courts. The criminal justice system is unworkable if it is not vetted in our courts.

There is one thing that is paramount in effecting change in our criminal justice system, and that is adherence to the rule of law. Many believe—and rightly so—that the rich and poor are treated differently in our criminal justice system. This has to change.

The rule of law is simple: the same laws must apply to each and every one of us. It is the duty of our courts to look out into the audience of the courtroom and the cells of our jails and ask why there is such a broad discrepancy among those who are criminalized. Colorado comprises district, county, and municipal courts. The county courts handle misdemeanor criminal matters and are frequently referred to as “our people’s courts.” The municipal courts handle municipal ordinance violations. These are the cases that are the subject of George Will’s reference to the “broken windows” method of police oversight of our communities. These are the courts Michelle Alexander speaks of when she talks about sweeping people into the criminal justice system. Once they are swept in even at the municipal level, they become branded for life, thus creating hurdles to employment, housing, and other opportunities that lead to the vicious circle that keeps them in the criminal justice system.

Conclusion

As stated in The New York Times article, in writing about the Koch brothers and the center coalition:

With the huge costs to the public of an expanding 2.2 million person prison population drawing interest from the right and the conviction that the system is unfair and incarcerating too many drug and nonviolent offenders driving those on the left, the new coalition is the most recent example of ideological opposites joining together.[13]

We must continue to correct inequality in this country and we can begin by bringing equality to the justice system. Atticus Finch stated in his closing argument:

Now, gentlemen, in this country, our courts are the great levelers. In our courts, all men are created equal. I’m no idealist to believe firmly in the integrity of our courts and our jury system—that’s no ideal to me. That is a living, working reality.[14]

I am an idealist, and I firmly believe our courts are the great levelers. I also believe that we as lawyers and citizens, together with our communities, must begin the difficult work of collaboration, because the courts are not the only solution. President Lincoln stated in the Gettysburg Address that “all men are created equal.” Our Declaration of Independence also states, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights. . . .” We must reexamine what has occurred during the past 150 years and constructively work toward improving the direction we take toward a better future.


Notes

[1] “Alabama Supreme Court Awards Harper Lee Honorary Special Membership,” The Alabama Lawyer 252 (July 2008), www.alabar.org/assets/uploads/2014/08/Lawyer-July-2008_Web.pdf.

[2] See, e.g., American Masters: Harper Lee: Hey Boo (2010), www.pbs.org/wnet/americanmasters/episodes/harper-lee-hey-boo/about-the-documentary/1972.

[3] Heath, “Racial Gap in U.S. Arrest rates: ‘Staggering disparity,’”USA Today (Nov. 19, 2014), www.usatoday.com/story/news/nation/2014/11/18/ferguson-black-arrest-rates/19043207.

[4] See West, “Prison Inmates at Midyear 2009—Statistical Tables” (June 2010),www.bjs.gov/content/pub/pdf/pim09st.pdf.

[5] See Hulse, “Unlikely Cause Unites the Left and the Right: Justice Reform,” The New York Times(Feb. 18, 2015), www.nytimes.com/2015/02/19/us/politics/unlikely-cause-unites-the-left-and-the-right-justice-reform.html?_r=1.

[6] Alexander, The New Jim Crow (New Press, 2010).

[7] See NAACP, “Criminal Justice Fact Sheet,” www.naacp.org/pages/criminal-justice-fact-sheet. See also Ehrenfreund, “There’s a disturbing truth to John Legend’s Oscar statement about prisons and slavery,” The Washington Post (Feb. 23, 2015), www.washingtonpost.com/blogs/wonkblog/wp/2015/02/23/theres-a-disturbing-truth-to-john-legends-oscar-statement-about-prisons-and-slavery/?tid=sm_tw.

[8] See “Legal Scholar: Jim Crow Still Exists in American,” Fresh Air (NPR Radio, Jan. 16, 2012), www.npr.org/2012/01/16/145175694/legal-scholar-jim-crow-still-exists-in-america.

[9] Will, “Eric Garner, criminalized to death,” The Washington Post (Dec. 10, 2014), www.washingtonpost.com/opinions/george-will-eric-garner-criminalized-to-death/2014/12/10/9ac70090-7fd4-11e4-9f38-95a187e4c1f7_story.html.

[10] Carter, “Law puts us all in same danger as Eric Garner,” Bloomberg News (Dec. 14, 2014), www.commercialappeal.com/opinion/national-and-world-commentary/stephen-l-carter-law-puts-us-all-in-same-danger-as-eric-garner_29242740.

[11] Will, supra note 9.

[12] See www.rightoncrime.com. See also Denver Post Editorial Board, “Common ground on criminal justice reform,” The Denver Post (Feb. 20, 2015), www.denverpost.com/editorials/ci_27568775/common-ground-criminal-justice-reform?source=infinite. See also Hulse, supra note 5.

[13] Hulse, supra note 5.

[14] Lee, To Kill a Mockingbird (Grand Central Publishing, 1960).

Charles F. Garcia, Esq., CBA President, is a graduate of the University of Wisconsin. He worked in international tax as a CPA for Arthur Andersen & Co. and Price Waterhouse for ten years. He then went on to graduate from the University of Denver College Of Law and joined the Office of the Colorado State Public Defender, where he practiced as a criminal defense trial attorney for twenty-five years. He is an Adjunct Professor of Law at the University Of Denver Sturm College of Law and a teacher for the National Institute of Trial Advocacy. Charles retired in 2007 as the Office Head for the Denver Office of the Colorado State Public Defender. Charles was a campaign policy advisor and a co-chair to the transition team for Governor Hickenlooper and is currently Special Counsel to Governor Hickenlooper. In 2011, Charles came out of retirement to be appointed by Mayor Vidal as the Manager of Safety for the City and County of Denver.

The Colorado Lawyer: Four Things to Know About Motions to Disqualify

Editor’s Note: This article originally appeared in the April 2015 issue of The Colorado Lawyer. Reprinted with permission.

By J. Randolph Evans, Shari L. Klevens, and Lino S. LipinskyEvans-Klevens-Lipinsky


Authors’ Note
Readers’ comments and feedback on this series of “Whoops—Legal Practice Malpractice Prevention” articles are welcomed and appreciated. References in the articles to “safest courses to proceed,” “safest course,” or “best practices” are not intended to suggest that the Colorado Rules require such actions. Often, best practices and safest courses involve more than just complying with the Rules. In practice, compliance with the Rules can and should avoid a finding of discipline in response to a grievance or a finding of liability in response to a malpractice claim. However, because most claims and grievances are meritless, effective risk management in the modern law practice involves much more. Hence, best practices and safer courses of action do more; they help prevent and more quickly defeat meritless claims and grievances.


Few things are worse for an attorney than getting a new big matter, starting work on it, and then facing a motion to disqualify. At that point, the attorney is put in the awkward position of either explaining to the client why he or she should pay more money to keep the attorney, or absorbing the fees associated with defending the motion to disqualify.

Motions to disqualify are far from rare occurrences. In recent months, a number of high-profile disqualification motions have been reported.[1] Many disqualification motions are well-founded. Others are nothing more than a litigation tactic, forcing attorneys to scramble to protect valued client relationships. Significantly, the increasing mobility of lateral attorneys (with attorneys rarely spending their entire legal careers at a single law practice or firm) has raised issues that can serve as the basis of a motion to disqualify.

Disqualification motions implicate the most important duties that an attorney owes a client: the duties of confidentiality and loyalty. Under the Colorado Rules of Professional Conduct (Colorado Rules or Colo. RCP), an attorney must safeguard client confidences and secrets, subject to a few exceptions.[2] The attorney is also obligated to elevate the client’s interests above the interests of the attorney and the law firm. Disqualification motions put these obligations directly at issue.

Courts differ on how they address motions to disqualify, especially because such motions are at times simply a litigation tactic by an opposing party in search of a strategic advantage.[3] Additionally, courts are usually reluctant to interfere with a client’s choice of counsel unless the conflict is real and there are few options other than to grant disqualification.[4]

Courts also appear to distinguish between conflicts based on multiple representations and those based on successive representations.[5] After all, parties filing disqualification motions based on multiple representation conflicts are typically strangers to the attorney-client relationship.

The far more common motion to disqualify involves a former client, either of the law firm or of an individual attorney (who may have recently joined the firm). In those circumstances, courts are generally protective of confidences or secrets that the law firm or attorney may possess or to which the firm or attorney has access as a consequence of either the prior or the existing representation. According to the Colorado Supreme Court, however, a court “may not disqualify counsel on the basis of speculation or conjecture.”[6] The moving party’s burden for a motion to disqualify is satisfied only when “the motion to disqualify sets forth specific facts that ‘point to a clear danger that either prejudices counsel’s client or his adversary.’”[7]

Conflict violations are not always the focal point for resolution of a motion to disqualify. As the Colorado Supreme Court has noted, “[v]iolation of an ethical rule, in itself, is neither a necessary nor a sufficient condition for disqualification,” although there typically must be evidence of a violation or potential violation of “attorney ethical proscriptions,” such as those centered on the duties of loyalty and fairness or those intended to protect the integrity of the process.[8] Often, motions to disqualify turn on the risk that a client’s former attorney or law firm might be able to use against the client the confidences or secrets gained during the prior representation. This is because it “must be presumed” that a client shared confidences with its attorney pursuant to the attorney-client relationship.[9] Appreciating this distinction is important to successfully making or defeating a motion to disqualify.

In assessing motions to disqualify based on conflicts, Colorado courts also consider (1) a client’s preference for a particular counsel, (2) the client’s right to confidentiality in communications with his or her attorney, (3) the integrity of the judicial process, and (4) the nature of the particular conflict of interest involved.[10] Below are some important concepts that have emerged in the context of motions to disqualify.[11]

“Substantially Related” Matters

The Colorado Rules do not bar attorneys from representing current clients against former clients. Instead, Colo. RPC 1.9(a) provides that

[a] lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.

Colo. RPC 1.9 does not define a “substantially related matter,” although Comment 3 to that Rule provides some context:

Matters are “substantially related” for purposes of this Rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.

More Than “Playbook Knowledge”

Frequently, a former client accuses the attorney of having “insider information” regarding the client that does not rise to the level of a client confidence. Indeed, even if the attorney does not possess any direct information regarding the present lawsuit or transaction, the client may say that the attorney understands how the client thinks and acts. The attorney may know the client’s bottom line for settlement or how the client prefers to approach litigation. This is often referred to as “playbook knowledge”—the attorney knows the client’s paths and approaches.

As with the “substantial relationship” test, whether an attorney’s playbook knowledge is sufficient for disqualification is heavily dependent on the facts. Thus, there is no bright-line rule or test to determine whether an attorney should be disqualified because of her or his playbook knowledge. However, Comment 3 to Colo. RPC 1.9 sets a minimum baseline: “In the case of an organizational client, general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation.”

This comment makes clear that attorneys are permitted, under some circumstances, to engage in representations that are adverse to a former client. Possessing “general knowledge” about a client may not, by itself, be enough for disqualification. Typically, a former client seeking to disqualify a former attorney from representing an opposing party must identify specific, cogent information that the attorney possesses and show that the information is confidential and implicates the duty of loyalty.

Attorneys should not assume that possession of mere playbook knowledge precludes disqualification. Attorneys should be aware, however, that clients can make a successful case for disqualifying attorneys who had a greatly invested role with the organizational client or where the playbook knowledge is uniquely and particularly relevant to the new representation.

Avoiding the Motion to Disqualify

The best way to deal with motions to disqualify is to prevent them. Two important pre-motion strategies are effective. First, identify and resolve potential conflicts, including both multiple and successive representations, before undertaking a representation or hiring a lateral. Where a conflict exists, an effective written consent is the best defense to a motion to disqualify.

Second, take effective steps to mitigate, if not eliminate, risks that a former client’s confidences and secrets might be accessible to attorneys working on a matter involving the former client. Increasingly, courts nationwide have recognized and accepted timely, effective ethics screens as a positive factor for permitting an attorney to continue the representation, although sometimes a screen is not enough to avoid the ramifications of an imputed conflict.[12] Nonetheless, if the attorneys choose to employ a screen, it is important that it be erected before the involvement of the conflicted attorney in the new representation.[13]

Responding to a Motion to Disqualify

Upon receiving a motion to disqualify, the attorney should promptly notify the client. Attempting to defeat the motion without advising the client is not an acceptable solution.

In addition, if the motion is made by a former client, attorneys should consider providing notice of a potential circumstance to their legal malpractice insurer. Such motions are sometimes followed by either a grievance or a legal malpractice claim.

Finally, assess whether the firm or different counsel should defend the motion to disqualify. Independent counsel, free from the suggestion of economic self-interest, often can more effectively than the attorney press the case for allowing the client to keep its counsel of choice.

Conclusion

Attorneys understandably may feel apprehensive about the threat of a motion to disqualify, given the potential risk and loss of work. However, by understanding the underpinnings of this ethical issue, attorneys will be better prepared to anticipate, respond to, or even avoid motions to disqualify.


Notes

[1] E.g., Celgard, LLC v. LG Chem., Ltd, No. 2014-1675 (Fed.Cir. Dec. 10, 2014) (order disqualifying Jones Day), http://assets.law360news.com/0606000/606910/Celgard-LGC%20Order%20disqualifying%20Jones%20Day.pdf; Utica Mut. Ins. Co. v. Employers Ins. Co. of Wausau, No. 6:12-cv-01293-NAM-TWD (N.D.N.Y. Dec. 18, 2014) (denying motion for summary judgment on issue of whether Hunton & Williams should be disqualified in underlying arbitration), http://assets.law360news.com/0580000/580691/Memorandum%20and%20Order.pdf; Defendant and Counterclaimant Tate & Lyle Ingredients Americas LLC’s Notice of Motion and Motion to Disqualify Squire Patton Boggs (US) LLP; Memorandum of Points and Authorities in Support Thereof, Western Sugar Coop. v. Archer-Daniels-Midland Co., No. 2:11-cv-03473-CBM-MAN (Aug. 26, 2014) (motion to disqualify Squire Patton Boggs), www.law360.com/dockets/download/53fdfac81101ea655a00000b?doc_url=https%3A%2F%2Fecf.cacd.uscourts. gov%2Fdoc1%2F031119586589&label=Case+Filing.

[2] Colo. RPC 1.6.

[3] Brown v. Encompass Ins. Co. of Am., No. 14-CV-01885-RM-BNB, 2014 WL 7177378 at *2 (D.Colo. Dec. 16, 2014) (the court noted that “[m]otions to disqualify opposing counsel are viewed with suspicion”).

[4] People v. Nozolino, 298 P.3d 915, 919 (Colo. 2013) (“Disqualification of a party’s chosen attorney is an extreme remedy and is only appropriate where required to preserve the integrity and fairness of the judicial proceedings.”) (citation omitted).

[5] See, e.g., People v. Shari, 204 P.3d 453, 457 (Colo. 2009) (distinguishing between duties to current clients under Colo. RPC 1.7 and to former clients under Colo. RPC 1.9).

[6] People v. Harlan, 54 P.3d 871, 877 (Colo. 2002).

[7] Id. (quoting People ex rel. Woodard v. Dist. Ct., 704 P.2d 851, 853 (Colo. 1985)).

[8] Myers v. Porter (In re Estate of Myers), 130 P.3d 1023, 1025 (Colo. 2006).

[9] Rodriguez v. Dist. Ct., 719 P.2d 699, 704 (Colo. 1986).

[10] Shari, 204 P.3d at 460-62. See also Harlan, 54 P.3d at 877 (the Court noted that “[i]n determining whether disqualification is warranted ‘the critical question is whether the litigation can be conducted in fairness to all parties’” and explained that “[d]isqualification should not be imposed unless the claimed misconduct in some way ‘taints’ the trial or legal system”) (quoting Fed. Deposit Ins. Co. v. Isham, 782 F.Supp. 524, 528 (D.Colo. 1992)).

[11] By far the majority of successful motions to disqualify are brought on the basis of a conflict of interest with a former or concurrent client or imputation, but attorneys should also be aware that successful motions to disqualify have been brought on the following bases, among others: (1) lawyer as witness, (2) appearance of impropriety, (3) receipt of confidential data, (4) personal interest, (5) violation of the no contact rules, and (6) misconduct with a witness. See Swisher, “The Practice and Theory of Lawyer Disqualification,” 27 Geo. J. Legal Ethics 71, 77 (Winter 2014).

[12] See People ex rel. Peters v. Dist. Ct., 951 P.2d 926, 930 (Colo. 1998).

[13] See People v. Perez, 201 P.3d 1220, 1246 n.11 (Colo. 2009).

Randy Evans is an author, litigator, columnist and expert in the areas of professional liability, insurance, commercial litigation, entertainment, ethics, and lawyer’s law. He has authored and co-authored eight books, including: The Lawyer’s Handbook; Georgia Legal Malpractice Law; Climate Change And Insurance; Georgia Property and Liability Insurance Law; Appraisal In Property Damage Insurance Disputes; and California Legal Malpractice Law. He writes newspaper columns (the Atlanta Business Chronicle, the Recorder, and the Daily Report) and lectures around the world. He served as counsel to the Speakers of the 104th – 109th Congresses of the United States. He co-chairs the Georgia Judicial Nominating Commission. He serves on the Board of Governors of the State Bar of Georgia. He handles complex litigation throughout the world. He has been consistently rated as one of the Best Lawyers in America, Super Lawyer (District of Columbia and Georgia), Georgia’s Most Influential Attorneys, and Georgia’s Top Lawyers for Legal Leaders. Along with numerous other awards he has been named the “Complex Litigation Attorney of the Year in Georgia” by Corporate International Magazine, and Lawyer of the Year for Legal Malpractice Defense in Atlanta. He is AV rated by Martindale Hubble.

Shari Klevens is a partner in the Atlanta and Washington, D.C. offices of McKenna Long & Aldridge LLP. Shari represents lawyers and law firms in the defense of legal malpractice claims and advises and counsels lawyers concerning allegations of malpractice, ethical violations, and breaches of duty. In addition, Shari is the Chair of the McKenna’s Law Firm Defense and Risk Management Practice and is a frequent writer and lecturer on issues related to legal malpractice and ethics. Shari co-authored Georgia Legal Malpractice Law and California Legal Malpractice Law, which address the intricacies and nuances of Legal Malpractice law and issues that confront the new millennium lawyer. She also co-authored The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance, which is an easy-to-use desk reference offering practical solutions to real problems in the modern law practice for every attorney throughout the United States.

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.

 

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

The Colorado Lawyer: Effective Conflict Waivers

Editor’s Note: This article originally appeared in the February 2015 issue of The Colorado Lawyer. Reprinted with permission.

By J. Randolph Evans, Shari L. Klevens, and Lino S. LipinskyEvans-Klevens-Lipinsky


Authors’ Note:
The references to “safest courses to proceed,” “safest course,” or “best practices” in this series of articles in the “Whoops—Legal Malpractice Prevention” department are not intended to suggest that the Colorado Rules require such actions. Rather, these references reflect actual experience and results from defending legal malpractice claims, where attorneys are often best served if they follow the best practice rather than simply complying with the bare minimum that the Rules of Professional Conduct require.

For example, as explained in this article on “Effective Conflict Waivers,” a client’s oral consent to a conflict waiver should always be confirmed in writing for an obvious reason—to avoid factual disputes that may result from differing recollections or testimony. Hence, the best practice is to obtain a written confirmation signed by the client. This protects both the attorney and the client because it reduces the risk that the client will later disclaim having provided the consent. The Colorado Rules, however, also permit the attorney to document the client’s consent to the waiver in a writing provided to the client, although experience suggests that this is not a best practice. In any event, as stated in the article, the writing, whether obtained by or transmitted to the client, must be created within a reasonable time of obtaining the client’s oral consent to the conflict waiver. The authors welcome and comments and feedback on these articles and are happy to discuss them.


By performing fast and broad computer searches, attorneys and law firms are able to identify potential conflicts of interest. But, like the dog that catches the bus, many attorneys encountering a potential conflict invariably face the important question of “What now?”

Identifying potential conflicts of interest is only half the battle. The other half requires attorneys to seek and obtain the client’s written consent to the representation after obtaining informed consent. After all, a potential conflict of interest that has not been resolved in accordance with the applicable ethical rules is still a conflict.

Informed Consent for Purposes of Resolving Potential Conflicts

Informed consent is required to enable a client to make an educated decision regarding whether to agree or object to a representation. For a former client, it involves accepting the risk that the attorney could use confidential information against the former client on behalf of a new client. For current clients who share an attorney, it involves waiving the right to insist that the attorney protect only their interests, as opposed to protecting their collective interests with the other clients.

According to the Colorado Rules of Professional Conduct (Rules), to obtain informed consent, an attorney must provide a full disclosure that demonstrates he or she has made reasonable efforts to ensure that the client or other person has obtained information reasonably adequate to make an informed decision.[1] Comment 6 to Rule 1 explains, in relevant part:

Ordinarily, this will require communication that includes a disclosure of the facts and circumstances giving rise to the situation, any explanation reasonably necessary to inform the client or other person of the material advantages and disadvantages of the proposed course of conduct and a discussion of the client’s or other person’s options and alternatives. . . . [A] lawyer who does not personally inform the client or other person assumes the risk that the client or other person is inadequately informed and the consent is invalid.

For the disclosure to be effective, it must enable a former or existing client to fully appreciate the risks of granting consent. It is not sufficient for an attorney to simply advise a client that there is a potential conflict of interest and to ask for consent without providing an explanation and additional information.

A Simple Waiver Isn’t Enough

Similarly, it is not sufficient merely to confirm a client’s waiver of the conflict and consent to the representation. An effective disclosure requires more. The Rules require that an attorney

propose a course of conduct to [the client or other person] with adequate information and explanation about the material risks of [giving consent] and reasonably available alternatives to the proposed course of conduct.[2]

In general terms, this means that an attorney should disclose whatever information a reasonable person would expect and need before waiving an important right.

There are topics that every attorney should include when seeking a client’s consent or waiver. However, there is no template that attorneys can use as a form for full disclosure when seeking a client’s consent to a representation, because the type and content of a disclosure required for effective consent varies depending on the facts and circumstances of the specific representation. For example, the scope and content of full disclosure will often depend on the sophistication of the client, the nature of the representation, prior representations, and the length of the relationship.[3]

Written Consent

Does the client’s consent have to be in writing? Under the Rules, the answer is yes. Rules 1.7(b)(4) and 1.9(a) require that informed consent be “confirmed in writing.” Comment 20 of Rule 1.7 further requires that the writing be obtained or transmitted within a “reasonable time” after receipt of oral consent. Additionally, Comment 20 emphasizes the importance of written consent:

[T]he writing is required in order to impress upon clients the seriousness of the decision the client is being asked to make and to avoid disputes or ambiguities that might later occur in the absence of a writing.

Invariably, once problems arise, clients have different recollections about the extent of the disclosure, their understanding of the risks, and whether they consented to the representation. That is why the safest way to proceed is to require that all clients consent in writing to a multiple or successive representation.

The easiest course is to include a signature line on the full disclosure letter and have the client return an executed copy. This simple measure serves to protect both the client (by making sure the client receives full disclosure in writing) and the attorney.

Client Consultation: Next Steps

Now that you have a client in your office, what steps should you take? First, identify the proposed representation and then state what consent the attorney seeks. General waivers involve a different kind of disclosure than a limited waiver for a specific representation. Hence, tailoring the full disclosure necessarily involves clarifying exactly which type of waiver the attorney seeks.

In the multiple representation context, this means advising the client that the attorney is requesting permission to jointly represent the client along with others. In the successive representations context, this means advising a former client that the attorney is requesting permission to represent a new client in a matter involving the former client.[4]

Second, identify the risks. There should be no mincing of words when disclosing the potential risks to a client. Subtle implication and suggestion do little when an attorney is attempting later to prove that a client consented to a representation after full disclosure. To be effective, the disclosure should clearly and plainly articulate the risks so that, if necessary, a court can determine that the client understood and accepted the risks by providing consent to the representation.

In the multiple representation context, this means identifying the kinds of things that an attorney cannot and will not do because the representation involves more than one client. For example, the attorney will not explore or pursue claims by one client against another client, such as opposing parties in the same transaction, a testator and beneficiary of a will, or spouses in a dissolution of marriage proceeding. Similarly, a lawyer who prosecuted a case could not subsequently represent the accused in a civil action against the government involving the same facts.[5] In addition, information communicated by one client may be disclosed to the other clients. Other limitations on the attorney’s ability to act may also need to be disclosed, depending on the context.

The important point is to ensure that the consenting clients understand the limitations that arise from a joint representation, as opposed to the representation of a single client. In the successive representation context, this means explaining the risk that the attorney may have learned confidential information that may be used on behalf of a new client. The standard is not whether an attorney actually did learn confidential information in the prior representation that can be used against a former client. Instead, to trigger an attorney’s obligation to obtain a former client’s consent, all that is required is that the new representation be “substantially related” to the former representation.[6] The existence of confidential information is presumed.

Third, advise the clients of their right to consult with independent counsel in deciding whether to agree to the multiple or successive representation. The safest course is to encourage independent counsel on all issues arising out of the potential conflict of interest.

Importantly, an attorney seeking a client’s consent should not advise a client on whether to give consent. Instead, the attorney’s role should be limited to fully disclosing the risks without actually advising the client about whether to give consent.

Fourth, confirm what will happen if an actual conflict develops that precludes the continued representation. Clients may agree, for example, that the attorney may continue to represent one of the clients if an actual conflict develops. Alternatively, the clients may insist that, under such circumstances, an attorney withdraw from the entire representation. In either case, it is important that the clients agree before the representation begins.

Both the multiple and successive representation rules require a consultation with the attorney for the client to consent. In most cases, the consultation will be in person. Unfortunately, although it is important to answer any questions a client may have, the consultation actually does little to protect an attorney from a later allegation challenging the client’s consent to the representation.

In addition to the consultation, there must be a written component. The most important document for effective consent is a writing, typically a letter. The letter should be jointly addressed to all of the clients (for a multiple representation), or to the former client (for successive representations), and should include a discussion of all the material risks of the representation.

Conclusion

Effective conflict waivers require a writing confirming the affected clients’ informed consent. There is no checklist or formula that an attorney can use in discussing conflict waivers with a client, or in drafting a written waiver for the client’s execution. These must be tailored to the unique circumstances of each situation. The four steps above, however, provide a helpful starting point for the attorney.


Notes

[1] See, e.g., Colo. RPC 1, cmt. [6].

[2] Colo. RPC 1.0(e).

[3] See Colo. RPC 1.7, cmt. [22] for additional information on how the effectiveness of informed consent will be evaluated.

[4] See Colo. RPC 1.9, cmt. [1]. A client transitions from a current client to a former client when the attorney–client relationship is terminated, such as when the attorney or the client provides the other with a writing confirming that the relationship has concluded.

[5] See Colo. RPC 1.9, cmt. [1].

[6] See Colo. RPC 1.9(a).

Randy Evans is an author, litigator, columnist and expert in the areas of professional liability, insurance, commercial litigation, entertainment, ethics, and lawyer’s law. He has authored and co-authored eight books, including: The Lawyer’s Handbook; Georgia Legal Malpractice Law; Climate Change And Insurance; Georgia Property and Liability Insurance Law; Appraisal In Property Damage Insurance Disputes; and California Legal Malpractice Law. He writes newspaper columns (the Atlanta Business Chronicle, the Recorder, and the Daily Report) and lectures around the world. He served as counsel to the Speakers of the 104th – 109th Congresses of the United States. He co-chairs the Georgia Judicial Nominating Commission. He serves on the Board of Governors of the State Bar of Georgia. He handles complex litigation throughout the world. He has been consistently rated as one of the Best Lawyers in America, Super Lawyer (District of Columbia and Georgia), Georgia’s Most Influential Attorneys, and Georgia’s Top Lawyers for Legal Leaders. Along with numerous other awards he has been named the “Complex Litigation Attorney of the Year in Georgia” by Corporate International Magazine, and Lawyer of the Year for Legal Malpractice Defense in Atlanta. He is AV rated by Martindale Hubble.

Shari Klevens is a partner in the Atlanta and Washington, D.C. offices of McKenna Long & Aldridge LLP. Shari represents lawyers and law firms in the defense of legal malpractice claims and advises and counsels lawyers concerning allegations of malpractice, ethical violations, and breaches of duty. In addition, Shari is the Chair of the McKenna’s Law Firm Defense and Risk Management Practice and is a frequent writer and lecturer on issues related to legal malpractice and ethics. Shari co-authored Georgia Legal Malpractice Law and California Legal Malpractice Law, which address the intricacies and nuances of Legal Malpractice law and issues that confront the new millennium lawyer. She also co-authored The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance, which is an easy-to-use desk reference offering practical solutions to real problems in the modern law practice for every attorney throughout the United States.

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.

 

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Law Week: Simple Tips For A Small Firm Owner

Editor’s Note: This post originally appeared in Law Week Colorado on February 18, 2015. Reprinted with permission.

Catherine_ChanBy Catherine Chan

Small firm owners have to wear many hats, among them: business promoter, manager and senior attorney. Each of those roles requires the development and refinement of distinct skill sets.

In 2004 I began a solo practice specializing in immigration law. In 2010, I hired my first associate attorney. Since 2010, the firm has grown to include three active attorneys (including me), three paralegals and a receptionist. We strive to continue to grow our capacity to help more people.

Sometimes I’m asked by new attorneys to talk about my firm’s path and to offer tips for firm growth and development. The truth is that small firm ownership, management and development is not easy. Most small firm owners just went to law school; they lack an MBA. An MBA might help with the business side of things, but it is not required to apply some common-sense principles. Here are four top tips I’ve learned over the past ten years while developing a solo practice into a small firm.

First, everybody loves customer service. If you don’t feel a good communication with a prospective client, trust your gut. Don’t hire them. For the clients you do hire — it’s not just them hiring you — you must offer that constant winner: customer service.

Clients feel they receive good customer service when the people in your firm are happy to see them, glad they called and are eager to find a response to their important question. Customer service includes the aim of providing satisfaction to the client in their purchase of your legal services. Of course, a firm can’t guarantee results. It can, however, work passionately and competently for a client’s cause, case or position. A firm can prioritize client communication and listen to the client’s questions and concerns. At the end of the day, all our clients want to be heard. We win their loyalty and referrals by graciously and faithfully complying with that request.

Second, hire and empower the best team of professionals available in the market that you can afford. As a small firm owner, you do not have the luxury of acting only as a senior associate in your firm. You have to concern yourself with the task of raising revenue to sustain the firm and to grow it. Therefore, you need key team players that are competent, motivated and able to deliver consistent and accurate products.

The firm owner can and must do many things to support and maintain a great team. You must strive to provide a workplace that is relaxed, calm and supportive. You must provide your team with responsibility and challenges. This includes providing opportunities for their self-promotion and growth — you are well advised to encourage it and invest in that for your team members. A firm can encourage its team’s growth and knowledge through providing and promoting a generous CLE budget, including for the support staff. The firm can allow for work-from-home opportunities, mental health days and maternity and paternity time. The firm should encourage work-life balance in word and in deed. The firm should also create opportunities for advancement of team-members as individuals and as ambassadors of the firm. The betterment of your team in practically any dimension adds measurable value to your firm. Individuals are motivated to succeed and to shine and to grow. The firm always wins in turn. A good plan is to provide guidance and avenues for your team to succeed, attach recognition and reward and relax antiquated notions about productivity and value.

Third, identify your niche, study it and specialize. Firms can grow and add practice areas according to their goals and growth. It may be advisable, however, especially for small firms in the early stages of growth, to pick a niche and to specialize in that. Simply put, it’s easier to study one trade carefully than to attempt to study a few trades sporadically. Next, commit your intellect, passion and dedication to your expertise. Achievement and success are positively correlated with your commitment and devotion.

Fourth, you must passionately love and respect your firm and your practice. When you love something passionately, you are grateful for it, you are mindful of it, you pay it respect and admiration, you pay it kind and tender attention and you work to keep it and increase it in order to continue enjoying it.

If you are passionate about the law, you study it, you hold it in reverence, you strive at sharpening your skills, you accept challenge and responsibility and you positively promote your profession. Instilling passion in your work can affect the outcome of your cases and your practice — whatever your field, whomever your client, whatever the cause.

It’s easy to be overwhelmed trying to run a small firm. The world of unknowns, risks and fears looms large. But risk is inherent in business, and fear is not conducive to success. The unknown simply is waiting to be discovered. A small law firm filled with passionate professionals committed to their service and their trade stands poised to succeed in the law and in business.

Catherine Chan is the managing attorney at the Chan Law Firm, a small firm specializing in immigration law.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

The Colorado Lawyer: Conflicts Check—Just Do It

Editor’s Note: This article originally appeared in the January 2015 issue of The Colorado Lawyer. Reprinted with permission.

By J. Randolph Evans, Shari L. Klevens, and Lino S. LipinskyEvans-Klevens-Lipinsky


Authors’ Note
Readers’ comments and feedback on this series of “WhoopsLegal Practice Malpractice Prevention” articles are welcomed and appreciated. References in the articles to “safest courses to proceed,” “safest course,” or “best practices” are not intended to suggest that the Colorado Rules require such actions. Often, best practices and safest courses involve more than just complying with the Rules. In practice, compliance with the Rules can and should avoid a finding of discipline in response to a grievance or a finding of liability in response to a malpractice claim. However, because most claims and grievances are meritless, effective risk management in the modern law practice involves much more. Hence, best practices and safer courses of action do more; they help prevent and more quickly defeat meritless claims and grievances. Other than billing, there is virtually nothing that attorneys dread more than addressing potential conflicts of interest. After all, resolving conflicts issues requires and attorney to focus on why not to take on a new representation rather than how to get the business in the door. However, unidentified or unresolved conflict issues cost lawyers more—in both clients and money—than most attorrneys realize.


Legal publications are replete with articles about motions to disqualify, disciplinary cases, and legal malpractice claims based on an unidentified or unresolved conflict of interest. Even when successfully defended, conflict-based allegations cost lawyers time and money. When lawyers lose, the risks are serious. The attorney could be disqualified from representing the client, face discipline for violating the Rules of Professional Conduct, receive an unfavorable jury verdict, or be forced to pay punitive damages based on a finding of disloyalty. The Office of the Presiding Disciplinary Judge (PDJ) takes conflicts of interest violations very seriously.[1]

In addition, judges and juries may well disregard defenses to claims (such as the protections of independent professional judgment or “trial tactics”) based on a breach of the lawyer’s fundamental fiduciary duty of loyalty to the client. Unfortunately, in today’s fast-paced world, the path of least resistance when a new client walks in the door is to get started on the case without performing even a rudimentary conflicts check. When it comes to conflicts, however, haste really does make waste.

Rule 1: Identify Conflicts Before Representation

Conflicts do not get better with time and cannot simply be undone. Once a conflict-laden representation begins, one cannot simply give back the confidences and secrets and forget it ever happened. When the attorney–client relationship attaches under a cloud of a potential or actual conflict of interest, there is no going back to the way things were before. For this reason, the attorney must identify and resolve conflicts of interest before the attorney–client relationship begins. It is one of those areas where an ounce of prevention really is worth a pound (if not a ton) of cure.

Rule 2: Grant No Exceptions

With conflicts, systems aimed at 100% compliance are critical. Inevitably, it is that one representation that escaped the system that creates the most problems. Typically, the reasons for operating outside the conflicts process for one representation (the client is too important, the case is too complicated, the attorney is too rushed) are the same reasons the conflict analysis was so important for that representation. Hence, the single most important part of conflicts analysis is compliance without exception.

The challenge, then, is to address conflicts as painlessly as possible. The easier and faster the system is, the more likely it will be that every lawyer will “run conflicts” on every representation.

One last point on the “no exceptions” rule bears emphasis. Every new representation—even if it does not involve a new client—should be screened for conflicts. Conflicts screening should be done each time a new party becomes involved as a plaintiff, defendant, lender, buyer, or seller. Also note that, although computers make conflicts screening much easier, they are no substitute in the final conflicts analysis for involving lawyers in the process. Effective conflicts procedures involve both.

Spotting Actual and Potential Conflicts

Attorneys in Colorado must comply with Rules 1.7 and 1.8 of the Colorado Rules of Professional Conduct, which govern conflicts. There are two kinds of conflicts: actual conflicts and potential conflicts. The distinctions between each are worth noting.

Actual Conflicts

An actual conflict means that the conflict cannot be waived by disclosure or consent; the attorney simply cannot accept the representation. One type of actual conflict is direct adversity, which occurs when the needs of one client are directly adverse to the needs of another client. For example, a law firm cannot represent both a plaintiff and a defendant in the same lawsuit (although it has been tried). Effective conflicts systems identify direct adversity conflicts and make it impossible to open a matter when they arise.

Potential Conflicts

A potential conflict means that there is some issue that must be addressed before a lawyer can accept the representation. Typically, the issue is some form of consent or waiver from either the new client, another client, or a former client.

There are two types of potential conflicts: successive representations and multiple representations. Although they are different, the waiver is largely the same—full disclosure and consent. In both situations, the attorney must provide full disclosure to all of their clients and obtain their written consent before taking on the representation.

Successive representation. Successive representation conflict rules involve potential conflicts between a current (or prospective) client and a former client. Under the conflict rules, a lawyer cannot represent a new client in a matter substantially related to the representation of a former client without the former client’s consent after full disclosure.

Although there are many cases defining “substantially related,” the essence is whether the lawyer learned (or could have learned) confidential information from the old client that could be used in the new representation for the new client. If the answer is no—the lawyer did not and could not have learned confidences and secrets that could now be used—then the lawyer should be able to accept the new representation. If the answer is yes (and lawyers should assume the answer is yes when in doubt), then the lawyer should provide full disclosure to the former client and acquire his or her consent in writing before taking on the new representation.

Multiple representation. Multiple representation conflict rules involve potential conflicts arising out of the representation of more than one client. Many lawyers overcomplicate the analysis; it is actually pretty straightforward. If there is more than one client, then the multiple representation rules should be applied.

In most situations, the potential conflict is easy to spot—there is more than one client listed on the new matter form, so the rules have to be applied. However, sometimes the conflict is not so apparent. These situations can arise out of probate litigation (representing the executor, estate, and heirs); securities litigation (representing both the corporation and the directors/officers); domestic litigation (representing the parents and the children); and bankruptcies (representing multiple creditors).

Whenever there is more than one client, the lawyer should ask (1) Are there things I might do differently if I represented only one of the clients? and (2) Could changes down the road create adversity between the clients? If the answer to both questions is no, then there may be no conflict. Depending on the circumstances, the attorney may be able to accept the representation without further investigation. If the answer to either question is yes, then there is a potential conflict that requires a more thorough analysis. This analysis involves determining whether the lawyer can adequately represent the interests of all of the clients. If the answer to this question is no, then there is an actual conflict.

A simple way to establish whether there is an actual conflict is to determine if the clients’ interests are linked in any way. In a contested divorce proceeding, for example, no lawyer could advance one spouse’s interests without impacting the interests of the other spouse. Therefore, the representation of a wife and husband in a contested divorce proceeding is not permissible with or without consent.

Conclusion

Conflicts do not have to be complicated. They just require practice discipline and proper analysis. Before the representation begins, get the names and run the conflicts. Adopt the mantra “Just Do It!”


Note

[1] See People v. Layton, No. 13PDJ036 (PDJ Sept. 25, 2013) (suspending an attorney in part due to violation of Colo. RPC 1.8(e), which prohibits an attorney from providing financial assistance to a client involved in pending litigation).

Randy Evans is an author, litigator, columnist and expert in the areas of professional liability, insurance, commercial litigation, entertainment, ethics, and lawyer’s law. He has authored and co-authored eight books, including: The Lawyer’s Handbook; Georgia Legal Malpractice Law; Climate Change And Insurance; Georgia Property and Liability Insurance Law; Appraisal In Property Damage Insurance Disputes; and California Legal Malpractice Law. He writes newspaper columns (the Atlanta Business Chronicle, the Recorder, and the Daily Report) and lectures around the world. He served as counsel to the Speakers of the 104th – 109th Congresses of the United States. He co-chairs the Georgia Judicial Nominating Commission. He serves on the Board of Governors of the State Bar of Georgia. He handles complex litigation throughout the world. He has been consistently rated as one of the Best Lawyers in America, Super Lawyer (District of Columbia and Georgia), Georgia’s Most Influential Attorneys, and Georgia’s Top Lawyers for Legal Leaders. Along with numerous other awards he has been named the “Complex Litigation Attorney of the Year in Georgia” by Corporate International Magazine, and Lawyer of the Year for Legal Malpractice Defense in Atlanta. He is AV rated by Martindale Hubble.

Shari Klevens is a partner in the Atlanta and Washington, D.C. offices of McKenna Long & Aldridge LLP. Shari represents lawyers and law firms in the defense of legal malpractice claims and advises and counsels lawyers concerning allegations of malpractice, ethical violations, and breaches of duty. In addition, Shari is the Chair of the McKenna’s Law Firm Defense and Risk Management Practice and is a frequent writer and lecturer on issues related to legal malpractice and ethics. Shari co-authored Georgia Legal Malpractice Law and California Legal Malpractice Law, which address the intricacies and nuances of Legal Malpractice law and issues that confront the new millennium lawyer. She also co-authored The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance, which is an easy-to-use desk reference offering practical solutions to real problems in the modern law practice for every attorney throughout the United States.

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.

 

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

The Colorado Lawyer: Screen Clients First—Avoid Problems Later

Editor’s Note: This article originally appeared in the December 2014 issue of The Colorado Lawyer. Reprinted with permission.

By J. Randolph Evans, Shari L. Klevens, and Lino S. LipinskyEvans-Klevens-Lipinsky


Authors’ Note
Readers’ comments and feedback on this series of “WhoopsLegal Practice Malpractice Prevention” articles are welcomed and appreciated. References in the articles to “safest courses to proceed,” “safest course,” or “best practices” are not intended to suggest that the Colorado Rules require such actions. Often, best practices and safest courses involve more than just complying with the Rules. In practice, compliance with the Rules can and should avoid a finding of discipline in response to a grievance or a finding of liability in response to a malpractice claim. However, because most claims and grievances are meritless, effective risk management in the modern law practice involves much more. Hence, best practices and safer courses of action do more; they help prevent and more quickly defeat meritless claims and grievances. Other than billing, there is virtually nothing that attorneys dread more than addressing potential conflicts of interest. After all, resolving conflicts issues requires and attorney to focus on why not to take on a new representation rather than how to get the business in the door. However, unidentified or unresolved conflict issues cost lawyers more—in both clients and money—than most attorneys realize.


For many attorneys in today’s difficult economic world, screening clients seems like a far-fetched concept, akin to telling a starving man to watch what he eats. Many firms are just glad to have clients; screening the few they have appears to be the least of the firm’s worries.

However, according to the data, problem clients are often worse than no clients at all. Clients who pay fees, but who also bring legal malpractice claims, only hurt—not help—the attorney and can result in a large net loss for the firm. The challenge comes in screening out the problem clients during the intake process.

Screening clients has a different meaning depending on the size, type, and location of a law practice. For solo practitioners, it will mean identifying the risk factors for new clients (preferably through use of a checklist) and then balancing the risks against the potential rewards of the representation. For smaller and mid-size firms, screening involves identifying standard practices and procedures suitable for the needs and expertise of the law practice, and ensuring that all of the lawyers in the practice consistently follow those rules. For larger firms, effective screening includes systems to ensure consistent compliance with the firm’s policies.

Every representation, whether for a paying client or for a pro bono client, requires that the attorney exercise good judgment about acceptance of the new client; and because it involves judgment, there is no formula for every decision regarding whether to accept a new client. However, there are some practices and procedures attorneys can implement when creating checklists and developing systems for screening prospective new clients.

Developing a Screening Method

Some indicators for problem clients seem obvious. Others are the product of data about legal malpractice claims and the risks of the modern-day law practice. The most important part of client screening is to adopt and follow a set of standard practices and procedures, including referring to a screening checklist, that apply to every new client and matter.

1. Ask the right questions.

Common sense goes a long way in detecting and avoiding problem clients. For example, one of the most telling questions to ask a new client is: “How many attorneys have previously represented you in this matter?” If the answer to that question is “seven,” the attorney will want to think long and hard about becoming the eighth. Clients who have been unhappy enough to hire and fire seven attorneys are unlikely to be happy with the eighth. Of greater concern is that, if their case or transaction does not go well in their eyes, they just might hire a ninth to sue the eighth for malpractice.

The lawyer should ask prospective clients other common-sense questions. For example: How many times have you been a party to litigation? Potential clients who have been parties to several prior cases should raise red flags. This is especially true for potential clients who have made a career of suing other people. Eventually, these serial plaintiffs make their way to also suing their attorney.

The realities of the proposed representation are also relevant when deciding to take on a new client. In making this assessment, consider when the work must get done. This involves calculating the first deadline for the new matter. Representations often do not end well if they begin on the eve of (1) the expiration of the statute of limitations for a plaintiff’s claim; (2) a scheduled closing for completion of a transaction or deal; or (3) any other imminent deadline. Unrealistic deadlines are red flags for a new representation.

Sometimes, there are good reasons a client reaches out to an attorney to undertake a representation on the eve of a pressing deadline. However, they are sometimes the same reasons an attorney should have second thoughts about accepting the representation. It could be that an earlier attorney fired the client because the client did not pay, or there could be insurmountable problems that have left the client desperate for immediate representation. Whatever the reason, the most significant questions attorneys should ask are: (1) When is the earliest deadline? and (2) Why is the client just now reaching out? The answers to these questions are important in deciding whether to accept the representation.

Another good question to ask is whether the prospective client can afford to pay the attorney fees associated with the representation. If there is no realistic chance of getting paid and the attorney takes the case anyway, the attorney assumes the risks of liability with no opportunity for compensation. This is a lose–lose proposition. Thus, a prospective client’s ability to pay is an important pre-representation topic that attorneys should candidly address.

Other things to consider when screening prospective clients include (1) possible conflicts with other clients; (2) whether the attorney has the expertise required to effectively handle all of the client’s issues; and (3) the role the client expects the attorney to play in the context of the client’s overall situation. These determinations are of particular concern, because they relate to an attorney’s ethical obligations toward the client.

For example, the Colorado Rules of Professional Conduct (Rules or Colo. RPC) require an attorney to avoid conflicts with current and past clients or, alternatively, to take special care when entering into an engagement that could create potential conflicts.[1] The Rules also address attorney competence, requiring that an attorney has the “legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”[2] Additionally, the Rules allow an attorney to limit the scope of representation at the outset of an engagement, if reasonable.[3] Thorough screening may reveal whether limiting the scope of representation from the outset is a prudent option under the circumstances, as opposed to declining the engagement, based on the client’s stated objectives. If the attorney has captured in writing the scope of the mutually agreed representation at the beginning of the engagement, that attorney will be in a far better position should the client later challenge the attorney on this front.

Certain types of engagements may be permitted under the Rules, but not under the Standards of Professional Conduct of the U.S. District Court for the District of Colorado. Attorneys should be aware that the U.S. District Court has declined to adopt the state’s “unbundling” rule, Colo. RPC 1.2(c), which allows the provision of limited representation to pro se parties, as described in Colo. RPC 11(b) and Rule 311(b) of the County Court Rules of Civil Procedure.[4] For example, in state court matters, an attorney may provide assistance to a pro se litigant without entering an appearance. The same attorney, however, is prohibited from “ghost writing” a pro se party’s filings in federal court. The attorney should turn away a potential client who is seeking the type of behind-the-scenes assistance that the U.S. District Court does not permit.

On October 10, 2014, the U.S. District Court promulgated proposed amendments to its local rules that include an opt-out from comment 14 to Colo. RPC 1.2(d). The comment, which the Colorado Supreme Court adopted on March 24, 2014, states that a Colorado attorney may counsel clients “regarding the validity, scope, and meaning” of the medical marijuana and recreational marijuana provisions of the state constitution, and “may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions” and the laws implementing them, as long as the attorney also “advise[s] the client regarding related federal law and policy.” If the District of Colorado ultimately decides not to adopt comment 14, attorneys admitted to practice in that court would need to carefully consider whether they could accept engagements involving advice regarding the state’s marijuana laws.

In sum, thorough screening provides a double benefit to the prudent attorney. It decreases the attorney’s exposure to malpractice suits and fulfills several ethical obligations.

2. Consider what’s expected.

An attorney should inquire about the prospective client’s expectations—of both the representation and the attorney. Some clients simply expect their attorney to achieve a successful result on their behalf, without consideration as to how that end is achieved. These attorney-client relationships rarely end well. A candid conversation about what is possible, along with a description of what the attorney can and cannot do, is an important part of the screening process. If there are things the prospective client expects that the attorney is unable or unwilling to do, the attorney should decline the representation.

One other thing to watch for is a client who is “too good to be true.” Often, these are the same clients who expect an attorney to bend (or ignore) the rules. Their stories are full of contradictions, and they expect results regardless of means. Avoid the temptation of agreeing to represent them without conducting a thorough investigation; these may turn out to be problem clients, too.

3. Conduct some background research.

The Internet provides attorneys cost-effective tools for conducting fast preliminary background research on prospective clients. The research might turn up little, or it might disclose a prospective client with a history of problems that often extend to anyone and everyone around the client. Credit checks (with the consent of the prospective client) could reflect someone who either cannot or does not pay. A simple litigation search might reflect a prospective client who has sued his or her attorney before. These possible clients require a long look before an attorney would agree to the representation.

4. Create a client-screening system.

Inevitably, the client who creates the most problems is the one who escaped the screening filters. Effective systems make it next to impossible for potential problem clients to slip through the cracks. This means that a file cannot be opened or a matter billed unless the screening questions have been asked and the data collected. Hence, the certainty of the system is as important as the content of the screening itself.

NOTES

[1] See Colo. RPC 1.7 and 1.8. Comment 3 to Rule 1.7, which addresses conflicts with current clients, states, in part, “[a] conflict of interest may exist before representation is undertaken, in which event the representation must be declined, unless the lawyer obtains the informed written consent of each client . . .” under the conditions provided in the rule.

[2] See Colo. RPC 1.1.

[3] Colo. RPC 1.2, cmts. 6 and 7.

[4] See D.C.Colo.L.Atty.R. 2(b)(1).

 

Randy Evans is an author, litigator, columnist and expert in the areas of professional liability, insurance, commercial litigation, entertainment, ethics, and lawyer’s law. He has authored and co-authored eight books, including: The Lawyer’s Handbook; Georgia Legal Malpractice Law; Climate Change And Insurance; Georgia Property and Liability Insurance Law; Appraisal In Property Damage Insurance Disputes; and California Legal Malpractice Law. He writes newspaper columns (the Atlanta Business Chronicle, the Recorder, and the Daily Report) and lectures around the world. He served as counsel to the Speakers of the 104th – 109th Congresses of the United States. He co-chairs the Georgia Judicial Nominating Commission. He serves on the Board of Governors of the State Bar of Georgia. He handles complex litigation throughout the world. He has been consistently rated as one of the Best Lawyers in America, Super Lawyer (District of Columbia and Georgia), Georgia’s Most Influential Attorneys, and Georgia’s Top Lawyers for Legal Leaders. Along with numerous other awards he has been named the “Complex Litigation Attorney of the Year in Georgia” by Corporate International Magazine, and Lawyer of the Year for Legal Malpractice Defense in Atlanta. He is AV rated by Martindale Hubble.

Shari Klevens is a partner in the Atlanta and Washington, D.C. offices of McKenna Long & Aldridge LLP. Shari represents lawyers and law firms in the defense of legal malpractice claims and advises and counsels lawyers concerning allegations of malpractice, ethical violations, and breaches of duty. In addition, Shari is the Chair of the McKenna’s Law Firm Defense and Risk Management Practice and is a frequent writer and lecturer on issues related to legal malpractice and ethics. Shari co-authored Georgia Legal Malpractice Law and California Legal Malpractice Law, which address the intricacies and nuances of Legal Malpractice law and issues that confront the new millennium lawyer. She also co-authored The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance, which is an easy-to-use desk reference offering practical solutions to real problems in the modern law practice for every attorney throughout the United States.

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.

 

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Compensation During Dissolution of Law Firm LLCs

Editor’s Note: This article originally appeared in the Colorado Bar Association Business Law Section’s January 2015 newsletter. Click here for the Business Law Section webpage.

HerrickLidstoneBy Herrick K. Lidstone, Jr., Esq.

The Colorado Limited Liability Company Act was front-and-center in a January 2015 decision from the Colorado Supreme Court. The case, LaFond v. Sweeney, 2015 CO 3 (January 20, 2015) involved the dissolution of a law firm organized as a two-member LLC with no written agreement regarding the treatment of assets and liabilities on dissolution. Richard LaFond brought a contingent fee case into the law firm and performed a significant amount of work on that case before the firm dissolved. He continued his work on the matter after dissolution. His now former partner, Charlotte Sweeney, claimed an interest in the contingent fee.

Mr. LaFond brought a declaratory judgment action against Ms. Sweeney to obtain a judicial determination regarding her right to any portion of the contingent fee. The trial court entered judgment for Ms. Sweeney, finding that she would be entitled to one-half of the fees earned from the contingency case, up to a maximum of $298,589.24 potentially to be paid to Ms. Sweeney (based on the time spent by the LaFond & Sweeney law firm before dissolution and assumed billable rates).

Ms. Sweeney appealed the trial court’s decision to the Colorado Court of Appeals. Ultimately, the Colorado Supreme Court ruled that absent an agreement to the contrary, all profits derived from winding up the LLC’s business belong to the LLC to be distributed in accordance with the members’ or managers’ profit sharing agreement, and the LLC Act does not grant winding up members or managers the right to receive additional compensation for their winding up services.

Court of Appeals Decision

In its decision (2012 WL 503655, Feb. 16, 2012), the Court of Appeals recognized that it would have to decide:

[That since] there was no written agreement that specifically described how the contingent fee generated by the case should be distributed[,] we must look to other authority to decide the ultimate issue raised by this appeal: should the contingent fee be divided between LaFond and Sweeney, and, if so, how?

The Court of Appeals went on to decide that:

  1. Cases belong to clients, not to attorneys or law firms;
  2. When attorneys handle contingent fee cases to a successful resolution, they have enforceable rights to the contingent fee; and
  3. A contingent fee may constitute an asset of a dissolved law firm organized as a limited liability company.

The important conclusion by the Court of Appeals and affirmed by the Supreme Court was that when a limited liability company formed under Colorado law dissolves, the members/managers owe a duty to each other to wind up the business of the LLC, and unless otherwise agreed between the parties, no additional compensation is paid for winding up activities.

Supreme Court Decision

The statute in question is § 7-80-404(1)(a), which provides that members in a member-managed LLC and managers of a manager-managed LLC have a duty to:

Account to the limited liability company and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of winding up of the limited liability company business or derived from a use by the member or manager of property of the limited liability company, including the appropriation of an opportunity of the limited liability company.

The Supreme Court noted that, in 2006, the General Assembly added C.R.S. § 7-80-803.3 (entitled “Right to wind up business”) to Colorado’s limited liability company act, but did not include any provision allowing the person winding up the business of the LLC to be compensated for such actions, absent an agreement for such compensation. The Supreme Court also noted that the 1996 version of the Uniform Limited Liability Company Act did contemplate compensation to members who engage in winding up activities: (“A member is not entitled to remuneration for services performed for a limited liability company, except for reasonable compensation for services rendered in winding up the business of the company.” See Unif. Ltd. Liab. Co. Act § 403(d) (1996)). Colorado did not adopt this provision even though, as the Supreme Court noted, “the General Assembly’s 2006 amendments to the LLC Act incorporated some elements from the Model Act.”

The Supreme Court also noted that, in 1997, the General Assembly enacted the Colorado Uniform Partnership Act which, in C.R.S. § 7-64-401(8) “explicitly states that a partner is entitled to additional compensation for services performed in winding up the business of the partnership.” The Supreme Court went to the next logical conclusion:

If it wished, the legislature could have included language that would give members or managers the right to additional compensation for their services in winding up the LLC, but did not do so in the original LLC Act or its subsequent amendments.

Based on its analysis of the Colorado limited liability company act, the Colorado Supreme Court affirmed the Court of Appeals’ decision and concluded that:

  1. an LLC continues to exist after dissolution to wind up its business;
  2. upon dissolution, pending contingency fee cases are an LLC’s business;
  3. absent an agreement to the contrary, all profits derived from winding up the LLC’s business belong to the LLC to be distributed in accordance with the members’ or managers’ profit sharing agreement; and
  4. the LLC Act does not grant winding up members or managers the right to receive additional compensation for their services in winding up LLC business.

Members and Managers Fiduciary Duties?

In another portion of the opinion (at paragraphs 36–37), the Supreme Court addressed fiduciary duties in the LLC context in a manner that is inconsistent with the Colorado LLC Act. While acknowledging that the client has the right to choose legal counsel and to enter into and to terminate engagements with counsel, the Supreme Court said:

Under Colorado law, members and managers of an LLC cannot act to induce or persuade a client to discharge the LLC for the benefit of a particular member or manager of the LLC to the exclusion of the others; they breach their fiduciary duties to the LLC if they attempt to do so.

Unfortunately this misinterprets the Colorado LLC Act which carefully does not use the term “fiduciary duty” to define the duties of the members and managers. Furthermore the Supreme Court’s language treats the duties of members and managers as being identical, whether or not the LLC is member-managed or manager-managed. For example, the duty to “account to the limited liability company and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct or winding up of the limited liability company business” (C.R.S. § 7-80-404(1)(a)) only applies to members of a member-managed LLC, not to members of a manager-managed LLC. Members of a manager-managed LLC only owe the obligation to “discharge the member’s … duties to the limited liability company and exercise any rights consistently with the contractual obligation of good faith and fair dealing.” (C.R.S. § 7-80-404(3)) The Supreme Court’s ultimate conclusion is not dependent on the fiduciary duty analysis which may, in fact, be applicable in other forms of ownership (such as a general partnership).

In this case, the articles of organization reflect that LaFond & Sweeney was, in fact, organized as a member-managed LLC and, therefore, the members did in fact have the duties to “hold as trustee” for the benefit of the LLC. In a trust as described in C.R.S. § 15-16-302, a trustee “shall observe the standards in dealing with the trust assets that would be observed by a prudent man dealing with the property of another, and if the trustee has special skills or is named trustee on the basis of representations of special skills or expertise, he is under a duty to use those skills.” This arises to a higher duty than the “contractual obligation of good faith and fair dealing. ” The Court should have reached a similar conclusion in the context of this case without using the overly-broad language referring to fiduciary duties.

In the end, Mr. LaFond is obligated to share the contingent fee with his former law partner under the same sharing ratio as the two had shared things during the existence of their law firm, and he was not separately compensated for his efforts in finishing the case as part of his obligation to wind up the business of the LLC. Is it fair that Richard LaFond took the case to a successful conclusion after the dissolution of LaFond & Sweeney while his former partner shares on a 50-50 basis in the award? Is it fair that had the decision been under CUPA or the Uniform Limited Liability Company Act the decision would likely have been different? Whether the Colorado LLC Act should be amended to provide for “reasonable compensation for services rendered in winding up the business of the limited liability company” is an open policy question.

Herrick K. Lidstone, Jr., Esq., is a shareholder of Burns Figa & Will, P.C. in Greenwood Village, Colorado. He practices in the areas of business transactions, including partnership, limited liability company, and corporate law, corporate governance, federal and state securities compliance, mergers & acquisitions, contract law, tax law, real estate law, and natural resources law. Mr. Lidstone’s work includes the preparation of securities disclosure documents for financing transactions, as well as agreements for business transactions, limited liability companies, partnerships, lending transactions, real estate and mineral property acquisitions, mergers, and the exploration and development of mineral and oil and gas properties. He has practiced law in Denver since 1978. He writes for many publications, including the Colorado Bar Association Business Law Newsletter, where this article originally appeared.

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