October 4, 2015

Dignity to All Persons: CBA-CLE to Host LGBT Law Institute

LGBTOn June 26, 2015, the United States Supreme Court decided in the landmark case Obergefell v. Hodges that the fundamental right to marry is guaranteed to same-sex couples by both the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. In reaching this conclusion, the majority relied on four principles and traditions that demonstrate marriage is a fundamental right under the Constitution, and applies with equal force to same-sex couples.

The first premise is that the right to personal choice regarding marriage is inherent in the concept of individual autonomy. The second principle in the Court’s jurisprudence is that the right to marry is fundamental because it supports a two-person union unlike any other in its importance to the committed individuals. The third basis for protecting the right to marry is that it safeguards children and families and thus draws meaning from related rights of childrearing, procreation and education. Finally, the U.S. Supreme Court’s cases and our Nation’s traditions make clear that marriage is a keystone of the Nation’s social order. Writing for the majority, Justice Kennedy stated:

The right to marry is fundamental as a matter of history and tradition, but rights come not from ancient sources alone. They rise, too, from a better informed understanding of how constitutional imperatives define a liberty that remains urgent in our own era. Many who deem same-sex marriage to be wrong reach that conclusion based on decent and honorable religious or philosophical premises, and neither they nor their beliefs are disparaged here. But when that sincere, personal opposition becomes enacted law and public policy, the necessary consequence is to put the imprimatur of the State itself on an exclusion that soon demeans or stigmatizes those whose own liberty is then denied. Under the Constitution, same-sex couples seek in marriage the same legal treatment as opposite-sex couples, and it disparages their choices and diminishes their personhood to deny them this right.

What is the case law, legislation and culture surrounding the Lesbian/Gay/Bisexual/Transgender journey to this holding? Attend the Colorado Bar Association CLE’s Lesbian/Gay/Bisexual/Transgender Law Institute on September 24-25, 2015, and hear not only from Colorado Supreme Court Justice Monica Marquez, but also from Colorado Senator Pat Steadman on the LGBT legal history and landscape in our State and our Nation. Learn about changes in government programs after the Windsor case, and about LGBT issues in both the employment law and immigration contexts. Also find out about how to reach out to the LGBT community and the logistics of navigating through such legal issues as changing one’s name and Social Security if you are a transgender person.

The Institute will showcase many points of view. On August 13, 2015, the Colorado Court of Appeals affirmed a finding from May 2014 from the Colorado Civil Rights Commission that the Masterpiece Cakeshop’s policy of turning away a same-sex couple’s request for a cake violates Colorado’s Anti-Discrimination Act. The speaker at the Institute will address the topic from the perspective of Masterpiece Cakeshop owner Jack Phillips, who refused to bake a wedding cake for a same-sex couple because of his religious beliefs. Learned legal scholars will also discuss the salient points from both the majority and dissenting opinions in the Obergefell case. Religious freedoms in connection with LGBT issues will also be discussed.

There are many more topics to be found when you register here. We’ll see you in the front row on September 24-25.

CLE Program: Lesbian/Gay/Bisexual/Transgender Law Institute

This CLE presentation will take place Thursday, September 24, and Friday, September 25, 2015 at the CLE offices. Click here to register for the live program or click here to register for the webcast.

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

Tenth Circuit: First Amendment Does Not Require Government Employer to Tolerate Disloyalty

The Tenth Circuit Court of Appeals issued its opinion in Rock v. Levinski on Monday, June 29, 2015.

Joyce Rock was the principal of Career Prep High School in New Mexico, an alternative high school for kids who are parents, have been suspended from another school, or do not feel comfortable at other schools. In May 2013, Phil Kasper, the District’s Director of Administration and Rock’s immediate supervisor, informed Rock that the district was planning to close Career Prep at the end of the school year. Two days later, Kasper and Don Levinski, the superintendent, held a meeting with the staff to explain the closing, at which meeting several staff members raised questions and concerns. Later that day, a meeting for parents, students, and staff was held in the school cafeteria. Rock was present at the meeting, and although the parties dispute when she first spoke, at some point Rock stood up, introduced herself as principal, expressed support for her students, and expressed concern that many of her students would not succeed at the larger high school they would be placed in after Career Prep closed. The next day, the Board of Education announced that Career Prep would remain open. A few days later, Kasper gave Rock a “growth plan” indicating Rock had performed unsatisfactorily in working with supervisors, administrators, staff, parents, and students. Kasper explained the negative evaluation was based on Rock’s failure to support the superintendent and speak with him privately about her concerns. Kasper also suggested Rock’s lack of confidence in her students’ ability to perform at another school “deeply disappointed” the superintendent. Levinski disagreed with Kasper’s decision to put Rock on a growth plan and terminated her employment. She was placed on administrative leave through the end of her contract. Levinski testified that the primary reason for Rock’s termination was the parent meeting, where he felt she behaved in an unprofessional manner. Shortly after her contract expired, Rock was named Principal of the Year by the New Mexico Association of Secondary School Principals.

Rock brought a First Amendment § 1983 retaliation claim against Levinski and the district, alleging defendants unconstitutionally retaliated against her for speaking in opposition to the closing of Career Prep at the parent meeting. The district court granted summary judgment to defendants on three grounds: (1) Rock’s speech was not protected because it was made pursuant to her official duties; (2) even if Rock did not speak in her official capacity, the district’s interest in efficient public service outweighed Rock’s interest in free speech; and (3) Levinski was entitled to qualified immunity because he did not violate a clearly established First Amendment right. The Tenth Circuit affirmed on the second ground.

The Tenth Circuit applied the Garcetti/Pickering test to evaluate Rock’s claim that she suffered retaliation for exercising her right to speak. The Tenth Circuit evaluated the third prong of the test, whether the government had adequate justification for treating the employee differently than any member of the public, and found adequate justification. The Tenth Circuit noted that Rock’s high-ranking position within the district restricted her right to speak freely in opposition to her employer’s policies. The Tenth Circuit found it well established that the First Amendment does not require a government employer to tolerate disloyalty from the upper echelons of administration.

The Tenth Circuit affirmed the grant of summary judgment to defendants.

Comment Period Open for Proposed Changes to 10th Circuit Local Rules

On August 14, 2015, the Tenth Circuit Court of Appeals announced that changes to its local rules will take effect January 1, 2016. From August 14, 2015 to October 22, 2015, all interested parties are encouraged to review the changes and make comments to the clerk of the court. The changes are outlined in a memorandum explaining the proposals, and are excerpted here:

10th Cir. R. 8.3(A) (addressing applications for stay made to a single judge) This proposed change removes the language at the end of the current rule which states applications for stay made to single judges are disfavored “except in an emergency.” Given technical advancements, all emergency motions can be processed centrally.

10th Cir. R. 9.1(C) (regarding application of the Rule 46.3(B) motion requirement to bail appeals) This proposed change modifies the rule to make clear that the new motion practice announced in R. 46.3(B) does not apply to bail appeals.

10th Cir. R. 17.3 (regarding filing an appendix in agency cases) This proposed change modifies the rule to make clear that when an agency record is filed, the parties need not submit a separate appendix.

10th Cir. R. 25.6 (addressing CM technical failures) This new rule addresses procedures in the event of a CM/ECF system failure.

10th Cir. R. 27.1 (location of the “confer and consent” provision of the local rule on motions) The court’s “confer and consent” rule has been moved to the beginning of local rule 27 for greater visibility. In addition, the rule now makes clear that CJA counsel need not confer on motions filed to withdraw or for continued appointment.

10th Cir. R. 30.1(D)(6) (addressing motions to seal documents) This local rule addresses the submission of sealed materials. The proposed change to the rule requires parties submitting materials under seal (except for presentence reports, which are exempt) to file a motion to do so. The proposed change is made in accord with circuit case law emphasizing the presumption in favor of providing access to judicial records. See Eugene S. v. Horizon Blue Cross Blue Shield of New Jersey, 663 F.3d 1124, 1135-1136 (10th Cir. 2011).

10th Cir. R. 31.5 (addressing the number of hard copies required for briefs) This modification adds a specific clause regarding the court’s already existing requirement that 7 hard copies of briefs must be received in the clerk’s office within 2 business days of the electronic filing.

10th Cir. R. 33.2 (removal of the requirement to have a private settlement discussion) This modification deletes this local rule.

10th Cir. R. 46.3(B) and R. 46.4(B)(1) (incorporating the new motion requirement from the amended CJA Plan adopted effective July 8, 2015) This proposal includes a section memorializing the new motion requirement created by virtue of the court’s amendment of the circuit Criminal Justice Act Plan in July 2015. In addition, please note the language added to Rule 46.4(B)(1), which makes clear the new requirement is not a substitute for filing a motion to withdraw, as appropriate, in Anders cases. In addition, the court’s decision in United States v. Cervantes, ___F.3d___, 2015 WL 4636640 (10th Cir. May 22, 2015) has been incorporated into the rule. Finally, Addendum I of the rules, which is a copy of the CJA Plan, has been updated.

Addendum IV (removal of the Rules for Judicial Misconduct and Judicial Disability Proceedings) Because they are now available on the court’s website, the Rules on Judicial Misconduct have been deleted as an attachment to the Rules.

The Federal Rules of Appellate Procedure will not be updated January 1, 2016. A redline of the Tenth Circuit Local Rules including the proposed changes is available here.

Colorado Court of Appeals: Default Judgment Must Be Set Aside When Defendants Not Served

The Colorado Court of Appeals issued its opinion in Burton v. Colorado Access on Thursday, August 13, 2015.

Employee Retirement Income Security Act of 1974—Process Service.

Burton was formerly employed by a company known as Colorado Access. Colorado Access sponsored the Colorado Access Long Term Disability Plan (plan), which was issued and administered by Unum Life Insurance Company of America (Unum). Burton sought benefits from Unum under the plan, and Unum paid her benefits for approximately two years before terminating them. Burton filed a complaint against the plan, claiming entitlement to additional benefits under the Employee Retirement Income Security Act of 1974 (ERISA). Instead of serving the complaint on the plan, she served the complaint on the Secretary of the U.S. Department of Labor. Burton sought a default judgment against the plan, which the district court entered but later set aside. The district court also entered summary judgment in favor of the plan.

On appeal, Burton argued that the trial court erred in finding that she did not properly serve the plan administrator when she served the Secretary of Labor. A party intending to sue a plan must serve the plan administrator where it is designated as the agent for service of process. It is only where the summary plan description designates neither the plan administrator nor some other person as the agent for service of process that service on the Secretary of Labor is allowed. Given that Colorado Access was the plan administrator, and the plan designated Colorado Access as its agent for service of process, Burton could not properly serve process on the plan by serving the Secretary of Labor under § 1132(d)(1) of ERISA. Therefore, the district court did not err in determining that Burton failed to properly serve the plan.

Burton also argued that the district court erred in entering summary judgment in favor of the plan. The only proper defendants in an ERISA claim to recover plan benefits are those entities that make eligibility or payment decisions or are obligated to pay benefits. In this case, Unum (the insurer) made all decisions regarding eligibility for and payment of benefits, and made all such decisions with respect to Burton. Further, only Unum was obligated to pay any benefits owed to Burton under the plan. Therefore, the plan was not a proper defendant as to Burton’s ERISA benefits claim, and the trial court properly entered summary judgment in the plan’s favor.

Summary and full case available here, courtesy of The Colorado Lawyer.

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


Tenth Circuit: Waiver of 11th Amendment Immunity Applies to All Divisions of State Department of Labor

The Tenth Circuit Court of Appeals issued its opinion in Arbogast v. State of Kansas Department of Labor on Friday, June 19, 2015.

Kathleen Arbogast worked for the Kansas Department of Labor (KDOL) in the Workers’ Compensation Division and suffers from asthma. She complained that her co-workers’ perfumes were triggering asthma attacks, so the Division moved her to an office in the basement in September 2010, but she continued to have asthma attacks when co-workers would visit her office. In August 2011, Ms. Arbogast was terminated by her supervisor, Karin Brownlee. Ms. Arbogast filed suit in January 2013, asserting claims of discrimination and retaliation in violation of the Rehabilitation Act, and named as defendants KDOL and Brownlee in her individual capacity. KDOL sought to dismiss the Rehabilitation Act claims, arguing KDOL lacks the capacity to sue or be sued and Kansas has not waived its judicial immunity under the Eleventh Amendment. The district court denied KDOL’s motion to dismiss and KDOL brought an interlocutory appeal.

The Tenth Circuit first examined its appellate jurisdiction to consider KDOL’s claim that it lacked capacity to be sued. KDOL argued that under state law, as a mere agency of the state, it lacked capacity to sue or be sued, and the collateral order doctrine conferred immediate jurisdiction on the Tenth Circuit to hear the issue. However, at oral argument, KDOL’s counsel conceded that the collateral order doctrine may not permit interlocutory review of the capacity argument. The Tenth Circuit agreed with the concession. Citing three requirements to invoke jurisdiction under the collateral order doctrine, i.e., (1) the district court’s order conclusively resolved the disputed issue, (2) the order resolved an issue separate from the merits of the case, and (3) the order is effectively unreviewable on order from final judgment, the Tenth Circuit found KDOL’s argument failed at the first prong because the district court did not conclusively determine KDOL’s capacity to sue or be sued. The Tenth Circuit dismissed the issue on appeal.

Next, the Tenth Circuit evaluated whether KDOL waived Eleventh Amendment immunity by accepting funds for the Unemployment Insurance Division housed within the Department of Labor. KDOL contended that because Ms. Arbogast worked for the Workers’ Compensation Division, not the Unemployment Insurance Division, there was no waiver of immunity. Looking at the Rehabilitation Act, the Tenth Circuit found the plain language included in the waiver of immunity “all the operations of . . . a department . . . of a State.” Since the Workers’ Compensation Division and Unemployment Insurance Division were both housed in the Kansas Department of Labor, the acceptance of funds for the Unemployment Insurance Division constituted a waiver of Eleventh Amendment immunity for the entire Department of Labor. Kansas argued that extending the waiver of immunity to the Workers’ Compensation Division when it received no federal funds would violate the Spending Clause of the U.S. Constitution. The Tenth Circuit found the first Dole factor was satisfied because allowing those who suffer discrimination to bring private causes of action is “reasonably calculated” to achieve Congress’s goal of combating discrimination. KDOL also argued it did not have notice of its waiver, but the Tenth Circuit disagreed, finding the plain language of the Rehabilitation Act provided sufficient notice that the waiver extended to all the operations of the department. KDOL also argued that the waiver of immunity is unrelated to the federal interest justifying expenditure of the funds, but the Tenth Circuit again disagreed, finding that Congress’s intent to eliminate discrimination based on disability was reasonably related to its distribution of federal funds.

The Tenth Circuit dismissed due to lack of jurisdiction KDOL’s argument that it lacked capacity to be sued. The Tenth Circuit affirmed the district court’s finding of a waiver of Eleventh Amendment immunity.

Tenth Circuit: State Does Not Waive Sovereign Immunity Under ADA by Accepting Federal Funds

The Tenth Circuit Court of Appeals issued its opinion in Levy v. Kansas Department of Social and Rehabilitation Services on Tuesday, June 16, 2015.

Paul Levy was a rehabilitation counselor for the Kansas Department of Social and Rehabilitation Services (SRS). In December 2008, he agreed to serve as a counselor for a blind co-worker, Tina Bruce, who was concerned she was not being properly accommodated. He ordered an assessment from a contractor, Brenda Umholtz, who had done extensive work for both Levy and Bruce at SRS. Umholtz’s report stated that Bruce was not receiving adequate accommodations and could not compete on a level playing field with her co-workers. In February 2009, Levy’s supervisor, Michael Donnelly, sent Levy a letter proposing Levy’s termination due to a violation of SRS’s conflict of interest policy based on Umholtz’s report. The letter provided Levy an opportunity to appear in person and respond to the allegations on February 24, 2009. Levy reported in his interrogatories that he met with Donnelly prior to receiving the termination letter, and in that meeting he told Donnelly that other counselors in the division had served as counselors for co-workers without being punished. He also stated that he informed his supervisor about Bruce’s case in January 2009 and transferred the case to his supervisor immediately when asked to do so. Levy tendered his resignation on February 25, 2009, noting that it became clear to him in the February 24 meeting that Donnelly intended to terminate him regardless of the outcome of the meeting.

Umholtz filed suit against SRS on February 11, 2011. Levy joined the suit on March 2, 2011, and Bruce joined shortly after. In the Second Amended Complaint, Levy alleged SRS retaliated against him in violation of the ADA and requested reinstatement, compensatory damages, attorney fees, and other litigation expenses. Plaintiffs subsequently amended their complaint to include Rehabilitation Act claims for Bruce and Levy, and SRS agreed not to oppose the amendment in exchange for plaintiffs’ agreement that SRS had not waived sovereign immunity. SRS filed for summary judgment on all Levy’s claims on March 23, 2012, arguing Levy’s ADA claim was barred by the Eleventh Amendment and his Rehabilitation Act claim was barred by Kansas’ two-year statute of limitations for personal injury claims. Levy countered that SRS waived its Eleventh Amendment sovereign immunity claim by accepting federal funds and the Rehabilitation Act claims were more appropriately characterized as statutorily created rights subject to Kansas’ three-year statute of limitations. The district court granted summary judgment to SRS on the ADA claim based on sovereign immunity and on the Rehabilitation Act claims due to the expiration of the statute of limitations. Levy appealed.

The Tenth Circuit found Levy’s arguments that the state waived sovereign immunity by accepting federal funds cogent, but ultimately disagreed. Levy contended the waiver provisions of the Rehabilitation Act similarly apply to the ADA because the two acts are closely linked. The Tenth Circuit agreed that the two acts were closely linked, but instead found it appropriate to apply a stringent test to determine whether the state waived its sovereign immunity. The Tenth Circuit decided that, since “Congress does not hide elephants in mouseholes,” the waiver of sovereign immunity under the ADA must be explicitly stated and not “hidden in another statute and only applied to the ADA by implication.” Particularly because the ADA was passed after the Rehabilitation Act’s waiver provisions, the Tenth Circuit found merit in its determination.

Turning next to the statute of limitations issue, the Tenth Circuit agreed that Kansas’ two-year statute of limitations for personal injury actions applied to the analogous Rehabilitation Act claims. Levy argued that the case on which the district court relied was confusing because it made several references to a Kansas statute detailing when a three-year statute of limitations applies, and argued Kansas case law supported the determination that Rehabilitation Act claims should be subject to the three-year statute of limitations because they involved statutorily created rights. The Tenth Circuit found that although the case incorrectly cited the wrong statute twice, the holding of the case was clear that the personal injury analogy should apply to Rehabilitation Act claims. The Tenth Circuit found Levy’s second argument more persuasive, since Kansas courts expressly characterized employment discrimination claims as statutorily based and subject to the three-year statute of limitations. However, the Tenth Circuit was not bound by the Kansas Supreme Court decisions, and chose to uphold its own precedent in finding Rehabilitation Act claims analogous to personal injury claims. The Tenth Circuit determined Levy’s Rehabilitation Act claims were time-barred.

The judgment of the district court was affirmed.

Colorado Court of Appeals: Day-to-Day Oversight of Personnel Exempted from Disclosure Under Open Meetings Law

The Colorado Court of Appeals issued its opinion in Arkansas Valley Publishing Co. v. Lake County Board of County Commissioners on Thursday, July 16, 2015.

Executive Session—Colorado Open Meetings Law—Personnel Discussions.

On February 19, 2013, the Lake County Board of County Commissioners (Board) convened an executive session to discuss a disciplinary matter involving the director of the Lake County Building and Land Use Department. An employee in the department had accused the director of criminal conduct. Plaintiff sought an order from the trial court for the Board to disclose the audio recording of its executive session after the Board had denied its request. The trial court granted the order.

On appeal, the Board contended that the district court erred by ordering the executive session recordings to be disclosed. The executive session was a meeting subject to the Colorado Open Meetings Law (OML). However, meetings involving the “day-to-day oversight of property or supervision of employees by county commissioners” are exempt from the notice requirement. Because the executive session here falls within this exception, the Board was not required to provide full and timely notice before convening the executive session to discuss the director’s employment status and record of that meeting was not subject to disclosure under the OML. Accordingly, the district court erred by granting plaintiff’s request for the Board to disclose the records of the executive session. The order was reversed and the case was remanded with directions for the district court to address plaintiff’s alternative grounds for disclosure under the Colorado Open Records Act.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Verification Requirement for EEOC Charge Non-Jurisdictional

The Tenth Circuit Court of Appeals issued its opinion in Gad v. Kansas State University on Wednesday, May 27, 2015.

Sabreen Gad was hired by KSU in 2010 as a part-time assistant professor of geology. She subsequently requested to be promoted to a full-time professorship or promote her to membership on the graduate faculty, and when she did not receive either promotion, she filed an unverified charge with the EEOC alleging religious, sex, and national origin discrimination. The EEOC investigator mailed her a Form 5, which has a box in which to sign under penalty of perjury, satisfying the verification requirement, and also a letter instructing her to verify the charge within 30 days or the EEOC would be authorized to dismiss the charge. The investigator also mailed a letter to KSU that Gad had filed an “unperfected” charge of discrimination, and advising that no action was required by KSU. Later, the investigator spoke to Gad again and advised her that further investigation would be unlikely to result in a violation and the EEOC would issue her a dismissal and right-to-sue notice. The notice was mailed to Gad and copied to KSU after the conversation.

Gad sued KSU in federal court. KSU’s answer stated that Gad had failed to exhaust her administrative remedies but did not mention the unverified charge. KSU then moved for summary judgment, arguing the court lacked jurisdiction because Gad had failed to exhaust administrative remedies by not verifying her EEOC charge. The district court agreed, finding exhaustion of administrative remedies is a jurisdictional prerequisite to suit. Gad appealed.

The Tenth Circuit first discussed whether Title VII’s verification requirement was a prerequisite to its subject matter jurisdiction. Although Title VII specifically confers jurisdiction as a general matter, it also requires claimants to submit a “charge” to the EEOC, which must be in writing and must be signed and verified. The Tenth Circuit noted that it is not clear whether the verification requirement is a jurisdictional prerequisite to a Title VII suit. The Tenth Circuit analyzed Supreme Court cases and its own precedent and concluded (1) the language discussing Title VII jurisdiction was not located in the same statute as the verification requirement, tending to show the verification requirement was non-jurisdictional; (2) courts should be careful in interpreting procedural rules to deprive non-lawyers of rights in proceedings they initiate; (3) verification protects employers from the burden of responding to frivolous claims or claims of which they had no notice; and (4) failure to verify will not necessarily render a document fatally defective.

Applying the four principles to the verification requirement, the Tenth Circuit determined it was non-jurisdictional, but noted “[h]olding verification non-jurisdictional does not imply any diminution in the need for plaintiffs to comply with this Title VII requirement.” The Circuit held that an employer may still achieve dismissal based on a verification defect, and found that verification is a condition precedent to suit. The verification requirement is integrated into a statutory section delineating steps a plaintiff must satisfy before receiving leave to sue. Although Gad argued only the EEOC waived the requirement, not KSU, the Circuit held the requirement cannot be waived unilaterally, but non-compliance may be excused in some cases.

The Tenth Circuit reversed the district court’s grant of summary judgment and remanded for further proceedings.

Tenth Circuit: Refusal to Pay Arbitration Fees Justified District Court’s Removal of Stay

The Tenth Circuit Court of Appeals issued its opinion in Pre-Paid Legal Services, Inc. v. Cahill on Tuesday, May 26, 2015.

Todd Cahill was a former sales associate for Pre-Paid Legal Services, Inc., who agreed not to solicit or recruit other Pre-Paid sales associates during his employment or for two years after termination. Cahill left Pre-Paid to join another marketing company, and Pre-Paid contended he misused trade secret information and solicited other Pre-Paid employees for work at his new company. Pre-Paid brought suit in Oklahoma state court, and Cahill removed the action to the U.S. District Court for the Eastern District of Oklahoma, claiming diversity jurisdiction. Cahill then moved to stay the proceedings pending arbitration, which motion was granted. Pre-Paid initiated arbitration proceedings before the American Arbitration Association (AAA). Pre-Paid paid its share of arbitration fees but Cahill did not. Cahill received repeated warnings from the Director of ADR Services at the AAA that arbitration would be suspended and terminated if he failed to pay, but neither paid his fees nor requested other relief. Eventually, the Director terminated arbitration. Pre-Paid petitioned the district court to remove the stay, and the district court granted the motion.

Cahill appealed the lifting of the stay, arguing the Tenth Circuit had jurisdiction under 9 U.S.C. § 16(a)(1)(A). Pre-Paid moved to dismiss the appeal for lack of jurisdiction, and, if the Tenth Circuit found it had jurisdiction, urged the court to affirm the lifting of the stay.

The Tenth Circuit first analyzed its jurisdiction. Although it generally does not have jurisdiction to review non-final orders, the Federal Arbitration Act provides an exception for orders that refuse to stay proceedings pending arbitration. The Circuit found that the order lifting the stay was essentially an order “refusing a stay,” since the district court declined to continue enforcing the stay after arbitration proceedings were terminated. The Tenth Circuit declined to draw a distinction between a district court refusing to apply a stay and a court refusing to continue a stay once arbitration failed. The Circuit likewise found that Cahill’s request to continue the stay was initiated under § 3 of the FAA.

Turning to the merits of the appeal, the Tenth Circuit found the district court properly lifted the stay. The Circuit found that arbitration had “been had in accordance with the terms of the agreement” because the arbitration clause in Cahill’s employment agreement required the parties to pay their share of fees in accordance with AAA rules. Since Cahill failed to pay his fees and the Director terminated the arbitration proceedings, the Tenth Circuit found arbitration had “been had” pursuant to § 3. Similarly, the Tenth Circuit found support for the district court’s actions under § 3’s language regarding default. There was no dispute regarding Cahill’s failure to pay the arbitration fees. Cahill never asserted an inability to pay, nor did he ask for a modified payment schedule or request for Pre-Paid to pay his arbitration fees. Instead, he allowed arbitration to terminate by refusing to pay the fees. The Tenth Circuit found this failure to pay constituted “default” under § 3. Cahill contended the arbitrators were the correct party to determine default, but the Circuit disagreed, finding the district court’s decision to remove the stay appropriate in light of Cahill’s refusal to pay fees. Even assuming the default decision was left to the arbitrators, the Tenth Circuit found that the arbitrators determined Cahill was in default by refusing to pay the fees.

The Tenth Circuit found it had jurisdiction to hear the appeal and affirmed the district court’s lifting of the stay.

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.

Tenth Circuit: Inadequate Briefing Warrants Affirmance of Lower Court Opinion

The Tenth Circuit Court of Appeals issued its opinion in Nixon v. City & County of Denver on Thursday, April 30, 2015.

Ricky Nixon was a Denver police officer who was involved in two highly publicized incidents of excessive force. He was cleared of wrongdoing after the first incident, but the Denver manager of safety ordered a 30-day suspension after the second incident and ordered his termination when he was not truthful about the incident. A panel of the Denver Civil Service Commission reversed the termination but ultimately the Colorado Court of Appeals remanded. While the Commission decision was being challenged by the City, Nixon filed a § 1983 suit against the manager of safety, the City, and others in federal district court. The district court dismissed all his claims, but on appeal Nixon challenged the dismissal of only two: (1) the City and manager violated his First Amendment rights by retaliating against him for protected speech, and (2) a Due Process claim based on his protected status as a police officer.

The Tenth Circuit noted that First Amendment claims should be evaluated under the Garcetti/Pickering test, and that to show a due process violation the employee must prove governmental defamation and alteration in legal status. The district court dismissed Nixon’s claims for failure to state a claim for relief.

The Tenth Circuit analyzed Nixon’s opening brief on appeal and found that no pertinent issue was adequately developed. The Tenth Circuit first affirmed the district court’s dismissal of Nixon’s stigma-plus-due process claim because Nixon’s opening brief “contain[ed] nary a word to challenge the basis of the dismissal.” As for Nixon’s claims that his speech was on a matter of public concern, the Tenth Circuit found only general statements about the protected speech and not specific references as required. Addressing the district court’s ruling that Nixon’s 2013 statement before the Civil Service Commission could not have been a motivating factor in his 2011 termination, the Tenth Circuit found that if it sought to make arguments for Nixon it could read one sentence in his brief to state that the retaliation was the City’s decision to seek state court review of the Commission’s ruling in Nixon’s favor. The Tenth Circuit, however, had “no obligation to address the point because the sentence fails to satisfy minimal standards for intelligibility that we must require from lawyers, it is misleadingly placed under a heading for a different issue, and the brief does not even say that the sentence is intended as a response to a ruling by the district court or an argument by the City.”

The Tenth Circuit affirmed the district court judgment.