May 25, 2015

Bills Regarding Businesses Permitted to Provide PACE Services, Release of Information Regarding Juvenile Facility Incidents, and More Signed

On Friday, May 8, 2015, Governor Hickenlooper signed 13 bills into law. To date, the governor has signed 197 bills this legislative session. Although the 2015 session has ended, the governor will continue to sign bills for the next few weeks.

The bills signed by Governor Hickenlooper on Friday are summarized here.

  • SB 15-239 – Concerning the Transfer of Vocational Rehabilitation Programs from the Department of Human Services to the Department of Labor and Employment, and, in Connection Therewith, Making an Appropriation, by Sen. Kent Lambert and Rep. Dave Young.
  • HB 15-1299 – Concerning Use of the Petroleum Storage Tank Fund for Incentives for Significant Operational Compliance with Regard to Petroleum Storage Tanks, by Reps. Millie Hamner & Dan Nordberg and Sen.  Ray Scott. The bill allows petroleum storage tank funds to be used for upgrades to both underground and above-ground tanks.
  • HB 15-1187 – Concerning Mental Health Evaluations of Licensed Veterinarians Conducted by a Veterinarian Peer Health Assistance Program as Ordered by the State Board of Veterinary Medicine, by Rep. Steve Lebsock and Sen. Leroy Garcia. The bill allows the State Board of Veterinary Medicine to require a veterinarian to undergo a mental health exam if it has reason to suspect the veterinarian has a mental health problem.
  • SB 15-137 – Concerning Business Entities Permitted to Provide the Program of All-Inclusive Care for the Elderly, by Sen. David Balmer and Reps. Brian DelGrosso & Joann Ginal. The bill allows public, private, and for-profit entities to provide care to the elderly in the PACE program.
  • SB 15-247 – Concerning the Augmentation of the Scope of Services of the State Drug Assistance Program Administered by the Department of Public Health and Environment to Authorize Funding for Prevention, Intervention, and Other Services, and, in Connection Therewith, Making an Appropriation, by Sen. Pat Steadman and Rep. Dave Young. The bill increases the scope of services provided by the AIDS drug assistance program and makes several changes to the program.
  • HB 15-1131 – Concerning a Ban on Powdered Alcohol, by Rep. JoAnn Windholz and Sen. Nancy Todd. The bill prohibits the use, sale, possession, transfer, purchase, or manufacture of powdered alcohol, with an exemption for certain institutions conducting bona fide research.
  • HB 15-1242Concerning the Right of a Medical Patient to Designate a Caregiver to Assist the Patient with Basic Tasks Following Release from a Medical Facility, by Rep. Jessie Danielson and Sen. Irene Aguilar. The bill requires that general hospitals in Colorado give a patient the option to designate at least one caregiver.
  • HB 15-1243 – Concerning Increased Spending Authority for the Division of Parks and Wildlife, and, in Connection Therewith, Establishing the Parks for Future Generations Trust Fund, Amending the Wildlife for Future Generations Trust Fund, and Giving the Division of Parks and Wildlife Explicit Spending Authority Over Moneys Received to Mitigate or Offset Adverse Impacts to the State’s Parks and Wildlife Resources, by Rep. Ed Vigil and Sen. Jerry Sonnenberg. The bill establishes the Parks for Future Generations Trust Fund, amends the Wildlife for Future Generations Trust Fund, and provides funding for both trust funds.
  • HB 15-1267 – Concerning Conditions of Probation Relating to Medical Marijuana, by Rep. Joseph Salazar and Sen. Lucia Guzman. The bill allows probationers to use and possess medical marijuana unless the offense for which they are on probation is a medical marijuana-related offense.
  • HB 15-1304 – Concerning a Plan to Study the Available Bear Management Tools Year Round to Address Bear-Human Conflicts, by Reps. Yeulin Willett  & Steve Lebsock and Sens. David Balmer & Ray Scott. The bill requires the Division of Parks and Wildlife to study available tools for better management of the black bear population.
  • HB 15-1284 – Concerning Measures to Enhance Program Efficiency for Shared Photovoltaic Energy Generation Facilities, by Reps. Faith Winter & Kit Roupe and Sens. Kevin Grantham and Mary Hodge. The bill eliminates population requirements for community solar garden use across counties.
  • HB 15-1015 – Concerning the Creation of an Interstate Compact Allowing States that Enter the Compact to Share Emergency Medical Service Providers Under Certain Circumstances, by Rep. Faith Winter and Sen. John Cooke. The bill allows the governor to enter into a compact with other states to enable emergency medical service providers to provide services in Colorado.
  • HB 15-1134 – Concerning the New Vehicle Exemption for Emissions Testing of Heavier Diesel Vehicles with a Model Year That is No Older than 2014, by Rep. Don Coram and Sen. John Cooke. The bill extends the new vehicle exemption for heavy diesels to six years as long as the vehicle has a model year of 2014 or later.

For a complete list of Governor Hickenlooper’s 2015 legislative decisions, click here.

Water Right Quantification, Earned Time for Certain Offenders, and More Bills Signed

On Monday, May 4, 2015, Governor Hickenlooper signed seven bills into law. He signed one more bill on Tuesday, May 5, 2015. To date, the governor has signed 184 bills into law. The bills signed on May 4 and 5 are summarized here.

May 4, 2015

  • HB 15-1239 – Concerning an Exception to the Prohibition Against Paying Postemployment Compensation for the Denver Health and Hospital Authority, by Reps. Beth McCann & Susan Lontine and Sen. Pat Steadman. The bill removes the Denver Health and Hospital Authority from the list of government agencies prohibited from offering post-employment compensation to employees who have been terminated.
  • HB 15-1203 – Concerning Earned Time for Certain Offenders Serving Life Sentences as Habitual Offenders, by Rep. Paul Rosenthal and Sen. Pat Steadman. The bill allows offenders sentenced before July 1, 1993 for crimes committed after July 1, 1985 to accrue earned time.
  • HB 15-1215 – Concerning In-State Tuition Classification for Dependents of Active Duty Military Members who have Attended School in Colorado, by Rep. Kevin Priola and Sen. Michael Johnston. The bill allows an institute of higher education to provide in-state tuition to active duty military members.
  • HB 15-1218 – Concerning Requiring Certain Disclosures by Defense-Initiated Victim Outreach Specialists, by Rep. Rhonda Fields and Sen. Michael Johnston. The bill specifies parameters for defense-initiated victim outreach in cases involving a Class 1 felony.
  • HB 15-1220 – Concerning Response to Sexual Assault on Campuses of Colorado’s Institutions of Higher Education, by Reps. Jessie Danielson & Su Ryden and Sens. John Cooke & Beth Martinez Humenik. The bill requires institutions of higher education to create Memoranda of Understanding with local hospitals to provide sexual assault examinations.
  • HB 15-1136 – Concerning the Number of Disabled Veteran License Plates with the Identifying Figure Authorizing the Use of Parking Privileges that May Be Issued to a Qualified Individual, and, in Connection Therewith, Making an Appropriation, by Rep. Clarice Navarro and Sen. Laura Woods. The bill increases the number of disabled veteran license plates available to two sets of place per veteran.
  • SB 15-183 – Concerning the Quantification of the Historical Consumptive Use of a Water Right, by Sens. Mary Hodge & Jerry Sonnenberg and Reps. Jeni James Arndt & Jon Becker. The bill specifies use periods for a judicial decree of historical consumptive use of a water right.

May 5, 2015

  • SB 15-225 – Concerning the Governance Structure of the State Historical Society, and, in Connection Therewith, Changing the Method of Appointment of a Board of Directors and Creating a Directors Council, by Sens. Chris Holbert & Nancy Todd and Reps. Su Ryden & Lori Saine. The bill changes the procedures for electing members to the board of directors for the Colorado State Historical Society.

For a complete list of Governor Hickenlooper’s 2015 legislative decisions, click here.

Tenth Circuit: Jury Improperly Instructed on Direct Threat in Employment Discrimination Case

The Tenth Circuit Court of Appeals issued its opinion in Equal Employment Opportunity Commission v. Beverage Distributors Company, LLC on Monday, March 16, 2015.

Michael Sungaila, who is legally blind, worked for Beverage Distributors until his position was eliminated, at which time he obtained a higher paying job in the company’s warehouse that required him to pass a physical. He passed the physical, but the doctor said Mr. Sungaila would require accommodations for his impaired vision. Beverage Distributors declined to make the accommodations, concluding instead that Mr. Sungaila’s condition created a significant risk of harm to himself or others, and rescinded its job offer. Mr. Sungaila subsequently received a lower-paying position with a different company. The EEOC brought suit on his behalf under the ADA.

At trial, Beverage Distributors asserted two defenses: (1) Mr. Sungaila’s limited vision created a direct threat of harm to himself or others and no reasonable accommodations could mitigate the risk, and (2) should he prevail, Mr. Sungaila’s award should be reduced because of his failure to mitigate damages. The jury found that Beverage Distributors was liable for discrimination and Mr. Sungaila was not a direct threat, but also found he had failed to mitigate his damages. The jury reduced his back-pay award for failure to mitigate. The EEOC filed two post-trial motions, first invoking F.R.C.P. 50(a) and arguing Beverage Distributors had not proved failure to mitigate as a matter of law, and also seeking a tax-penalty offset for the lump sum award. The district court granted both motions. Beverage Distributors appealed.

The Tenth Circuit first addressed Beverage Distributors’ claim that the jury was erroneously instructed on direct threat and this constituted reversible error. The Tenth Circuit evaluated the instruction and found it inaccurately conveyed the direct threat standard. The instruction stated that Beverage Distributors must prove that Mr. Sungaila’s employment posed a direct risk of harm, while the actual standard is simply that Beverage Distributors reasonably believed there was a direct risk. Because the jury instruction conveyed the wrong standard for the direct threat defense, and because the jury likely relied on this instruction in determining liability, the Tenth Circuit reversed.

Next, Beverage Distributors argued the district court improperly granted the EEOC’s Rule 50(a) motion, but the Tenth Circuit declined to reach the issue, finding that the evidence for the fact-intensive issue might be different on remand.

Finally, the Tenth Circuit found that the tax penalty offset was properly awarded. If the issue arises again on remand, it is properly before the court to decide whether to award a tax penalty offset, and there is no impropriety in such an award.

The Tenth Circuit reversed and remanded on the direct threat instruction and found the tax penalty offset was proper.

Tenth Circuit: One-Time Deduction from Salaried Employee’s Check Not Impermissible

The Tenth Circuit Court of Appeals issued its opinion in Ellis v. J.R.’s Country Stores, Inc. on Monday, March 9, 2015.

Sandra Ellis was a salaried manager for J.R.’s Country Stores, and as such she was required to work 50 hours per week. When she worked 40.91 hours one week, J.R.’s deducted $31.20 from her paycheck for the missed time. Ellis resigned, then sent a letter to J.R.’s claiming she was owed $42,187.50 in overtime wages and that she had lost her exempt status for FLSA purposes when J.R.’s made the one-time deduction. J.R.’s responded by paying Ellis $332.88, which it explained as reimbursement for the deduction plus all the overtime compensation she would have received for that pay period had she been an hourly employee.

Ellis filed a lawsuit in the U.S. District Court for the District of Colorado, alleging she was not a true exempt employee under the FLSA because of the one-time deduction and signaling an intent to certify a class of similarly situated managers. J.R.’s moved for summary judgment, attaching as exhibits all of Ellis’ time sheets and payroll records. Instead of responding to the summary judgment motion, Ellis filed a motion to certify a class. J.R.’s then sought a temporary stay of class certification pending determination of its summary judgment motion, and Ellis filed a response to the summary judgment motion. The district court granted J.R.’s summary judgment motion, finding the one-time deduction did not change the company’s intent to pay Ellis a salary, but even if Ellis were correct, the company was entitled to the window-of-correction defense detailed in the FLSA. The court denied Ellis’ class certification motion as moot. Ellis appealed.

The Tenth Circuit first addressed Ellis’ contention that the district court misapplied the salary-basis test associated with her FLSA exemption. Ellis contended the district court’s order only addressed the frequency factor of the salary-basis test, but the Tenth Circuit found that the district court properly applied all five factors in finding against Ellis. Ellis next disputed the district court’s conclusion that she failed to make findings of material fact concerning the existence of a company practice of making deductions. The Tenth Circuit disagreed, finding the district court properly applied Auer in determining that a one-time deduction could not be considered a practice. Addressing her argument that the company had a policy of enforcing improper deductions against salaried employees, the Tenth Circuit again disagreed, finding instead that J.R.’s policy as stated in its employee handbook essentially disallows improper deductions. Ellis also complained of J.R.’s policy of requiring managers to maintain 50 hour work weeks, but, after examining DOL policy and caselaw, the Tenth Circuit found no error.

The Tenth Circuit next addressed Ellis’ contention that the district court’s reliance on the window-of-correction defense was misplaced, and disagreed. After examining the record, the district court concluded that because J.R.’s reimbursed Ellis for the one-time deduction in a timely manner, it was entitled to the window-of-correction defense. The Tenth Circuit agreed. The Tenth Circuit found that although sister circuits had found the window-of-correction defense only applied to “inadvertent” deductions, it was not bound by those decisions and instead ruled the defense was applicable to “isolated” incidents.

Finally, the Tenth Circuit addressed Ellis’ contention that the district court erroneously denied her motion to defer summary judgment so she could conduct additional discovery. The Tenth Circuit found no error because the affidavit in issue failed to demonstrate a need for any further discovery, and Ellis’ contentions were speculative at best.

The Tenth Circuit affirmed the district court.

Colorado Court of Appeals: All Separations from Base Period Employers Must Be Evaluated to Determine Unemployment Eligibility

The Colorado Court of Appeals issued its opinion in Nagl v. Industrial Claim Appeals Office on Thursday, April 23, 2015.

Unemployment Compensation—CRS § 8-73-108(5)(e)(IV)—Constitutional Right to Travel.

Claimant worked as a front desk agent for Destination Vail Hotel, Inc. He quit this job to be located closer to his girlfriend in Telluride. Claimant found a new position in Telluride, but was subsequently laid off.

Claimant then sought unemployment insurance benefits. A deputy for the division of unemployment insurance denied claimant’s request for benefits based on his employment with Destination Vail Hotel. However, claimant did receive benefits based on his work for his Telluride employer. Claimant appealed, and the hearing officer affirmed the deputy’s decision. The Industrial Claim Appeals Office (Panel) affirmed.

On appeal, claimant contended that the Panel’s decision was inconsistent with the express purpose of the Colorado Employment Security Act (CESA), which is to provide unemployment benefits to persons who are unemployed through no fault of their own. Whether a claimant is entitled to unemployment benefits attributable to wages paid by a particular employer depends on the reason for the separation from that employment. Because it was undisputed that claimant voluntarily quit his employment with Destination Vail Hotel, and thus was at fault for that separation, the hearing officer and the Panel did not err in determining that he was disqualified from receiving benefits from that employer.

Claimant also argued that the move to Telluride was not a disqualifying event under CRS § 8-73-108(4)(n). However, the hearing officer properly limited the proceeding to the circumstances surrounding his Vail job, not his subsequent employer. The fact that he accepted work after leaving the Vail job does not bear on whether he refused to accept work following the termination of his Telluride job. Thus, CRS § 8-73-108(4)(n) does not provide a basis for awarding benefits to claimant based on his employment with Destination Vail Hotel.

Claimant further argued that the hearing officer’s application of CESA violated his right to travel, as protected by the Colorado Constitution, because it effectively penalized his right to move within the state. To succeed on an “as applied” challenge, a party must show that the statute is unconstitutional under the circumstances in which the party acted. Here, the loss of benefits resulting from claimant’s decision to quit his job to move closer to his girlfriend is not a constitutionally significant restriction. The order was affirmed.

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

Tenth Circuit: Panel Rehearing Granted to Limited Extent but Rehearing En Banc Denied

The Tenth Circuit Court of Appeals issued its revised opinion in Fulghum v. Embarq Corporation on Monday, April 27, 2015. The Tenth Circuit granted panel rehearing to a limited extent and issued a revised opinion. The opinion was circulated to all judges and none requested a poll, so en banc rehearing was denied. The Legal Connection summary of the original opinion is available here.

Tenth Circuit: Garcetti/Pickering Test Applies to Pretextual Termination of Police Officer

The Tenth Circuit Court of Appeals issued its opinion in Seifert v. Unified Government of Wyandotte County/Kansas City, Kansas on Friday, February 27, 2015.

Max Seifert was a reserve deputy for the Wyandotte County Sheriff’s Department in Kansas. In July 2003, Barron Bowling was involved in a minor car accident with a DEA agent, after which the DEA agent and another agent pulled Bowling from the car and pummeled, kicked, and insulted him while he was forced to lay shirtless on hot pavement. Seifert, then a detective with the Kansas City, Kansas Police Department (KCKPD), investigated the incident and documented the agents’ misconduct, despite pressure from others in the KCKPD to cover up the facts. He testified at Bowling’s criminal trial in 2005, and was forced into retirement from the KCKPD later that year.

Seifert then received a commission as a reserve deputy with the Wyandotte County Sheriff’s Department (WCSD). From January 2006 to June 2009, he assisted the WCSD with criminal investigations to satisfy his requisite 16 hours per month of volunteer time. In June 2009, KCKPD and the Unified Governments settled their claims with Bowling, and five days later, Seifert was removed from investigations by the WCSD. Seifert’s supervisor, undersheriff Roland, informed Seifert that the Wyandotte County District Attorney and an AUSA refused to accept cases involving Seifert because of concerns about his credibility. Roland also informed Seifert that by department rule he could not continue his work as a reserve deputy while simultaneously maintaining a civilian position in the jail. Seifert met with the police captain shortly thereafter, who told him there was no such rule precluding dual roles. Seifert also encountered the DA, who relayed it was not his office that had problems with Seifert but people in other jurisdictions.

In early 2010, the reserves supervisor asked Roland if he could have Seifert conduct training of other officers, since there was no other reserve work, but Roland would not allow it, citing the credibility issue. The trial of Bowling’s claims with the remaining defendants began on March 1, 2010, and Seifert testified on March 4 and 9. On April 8, 2010, the trial concluded. Five days later, Seifert received a memorandum signed by Roland and the reserves supervisor with Sheriff Ash copied, stating Seifert’s service as a deputy was no longer needed.

Seifert brought claims in federal district court under §§ 1983 and 1985 and under Kansas state law, all of which alleged that the actions against him were taken to deter him from testifying for Bowling or punish him for doing so. His § 1983 claims alleged defendants’ actions violated his First Amendment rights, and the § 1985 claims violated that statute’s prohibition against conspiracies to deter witnesses from testifying. The district court granted defendants’ motion to dismiss based on the two-year time bar in §§ 1983 and 1985 and granted summary judgment to defendants on all remaining claims. Seifert appealed.

The Tenth Circuit first evaluated the 2014 Supreme Court decision in Lane v. Franks, 134 S. Ct. 2369 (2014), which evaluated free speech concerns in the context of a government employee testifying as a citizen based on events discovered while in the employee’s official capacity. Turning to the instant case, the Tenth Circuit applied the five-pronged Garcetti/Pickering test. Defendants disputed the first, fourth, and fifth prongs, and the Tenth Circuit analyzed them in turn. Lane directly impacted the first prong, whether the speech was made pursuant to the employee’s official duties. Plaintiff’s testimony in this case was protected speech, because he was testifying as a citizen about matters that concerned his work but were not part of it. Although police officers routinely testify as part of their work, plaintiff’s testimony in the Bowling case was different from routine testimony given by police officers at standard trials. The Tenth Circuit found that plaintiff satisfied the first prong.

Since the second and third prongs were not in dispute, the Tenth Circuit turned to the fourth prong—whether the protected speech was a motivating factor in the adverse employment action. The Tenth Circuit found the timing suspicious for both of plaintiff’s adverse employment actions. Likewise, it found defendants’ proffered excuse, i.e., plaintiff’s “Giglio problem,” not credible because the adverse order involving Seifert was remote in time, Seifert had testified in several matters since then, Roland had a similar adverse order that did not affect his employment, the impeachment evidence against Seifert would not be significantly helpful to defense counsel, and it likely would not matter at all in state court.

The Tenth Circuit next evaluated the fifth prong, whether defendant would have reached the same employment decision regardless of the testimony. The Tenth Circuit found that plaintiff satisfied this prong as well, as defendant’s proffered explanations for termination of Seifert were pretextual as explained in the analysis of the fourth prong. The Tenth Circuit therefore reversed summary judgment on plaintiff’s § 1983 claim against the Unified Government. However, the Tenth Circuit  affirmed qualified immunity against Roland and Ash individually, as they could not reasonably have been expected to know the impact of Lane on their actions as employers since the actions predated Lane by several years.

Turning next to the § 1985 claim, the Tenth Circuit found sufficient evidence that Seifert was punished for testifying in the Bowling matters, and reversed on this claim. Because Roland and Ash did not raise individual qualified immunity arguments, the Tenth Circuit did not evaluate them. Finally, the Tenth Circuit affirmed the district court’s dismissal of Seifert’s state law claims, finding a sufficient remedy existed in federal court.

The judgment was affirmed in part, reversed in part, and remanded. Plaintiff’s motion to seal was granted.

Tenth Circuit: Six-Year Statute of Repose for Breach of Fiduciary Duty in ERISA Contains Exception for Fraud or Concealment

The Tenth Circuit Court of Appeals issued its opinion in Fulghum v. Embarq Corporation on Tuesday, February 24, 2015.

A class of retirees (plaintiffs) of Sprint-Nextel Corporation, Embarq Corporation, or a predecessor or successor of those companies (collectively, defendants) brought suit after defendants altered or eliminated health and life insurance benefits for retirees. Plaintiffs asserted defendants violated ERISA by breaching their obligation to provide vested health and life insurance benefits, breached their fiduciary duty by misrepresenting the terms of multiple welfare benefit plans, and violated the ADEA and state laws by reducing or eliminating health and life insurance benefits. The district court granted summary judgment to defendants on the breach of fiduciary duty claims, the ADEA claims, the state-law age discrimination claims, and some of the contractual vesting claims. Plaintiffs obtained a Rule 54(b) certification and appealed.

The Tenth Circuit examined the applicable insurance contracts and summary plan descriptions (SPDs). Defendants organized 32 SPDs into five groups based on language and coverage similarities, and the district court used these groupings in its analysis of plaintiffs’ claims. Because plaintiffs did not object to the groupings, the Tenth Circuit also based its analysis on the defendants’ classifications.

The first group of SPDs contained 16 documents, each including a statement that the retiree’s coverage ends upon death and a reservation of rights clause where the employer reserved the right to modify or terminate benefits at any time. Plaintiffs argued the plan language was ambiguous because it both offered coverage until death and reserved the right to modify or terminate benefits. The Tenth Circuit found the language unambiguously informed plaintiffs of defendants’ right to modify or terminate coverage, and therefore affirmed the district court’s summary judgment as to group 1.

Next, the Tenth Circuit analyzed the three SPDs in group 2, and found none containing “clear and express language” promising vested benefits. Plaintiffs pointed to language in the SPDs, but the Tenth Circuit found the language more pertinent to amount of benefits and not duration. The Tenth Circuit affirmed summary judgment as to group 2, finding the SPDs unambiguously contemplated termination of the plans.

The third group contained 4 SPDs regarding medical benefits. Plaintiffs claimed entitlement to lifetime benefits because the plans contained language that they “will be insured” and benefits “will continue after retirement.” The Tenth Circuit found the language insufficient to confer lifetime benefits, since it did not clearly and expressly promise unaltered lifetime benefits. The Tenth Circuit also noted that each SPD contained reservation of rights language. The district court’s summary judgment was affirmed as to group 3.

As for the benefits for group 4, the Tenth Circuit found the plaintiffs “wholly failed” to point to any language in the plans promising lifetime benefits. The Tenth Circuit found as to all groups that “no reasonable person in the position of a plan participant would have understood any of the language identified by Plaintiffs as a promise of lifetime health or life insurance benefits,” and that the same reasonable person would have understood defendants’ rationale for amending the plans.

The Tenth Circuit similarly rejected plaintiffs’ attempt to incorporate by reference arguments made in district court regarding why the district court’s denial of plaintiffs’ motion for reconsideration was abuse of discretion, commenting “this is not acceptable appellate procedure.” The Tenth Circuit deemed this argument waived. The Tenth Circuit conceded defendants were only entitled to summary judgment on the claims presented to the district court based on SPDs considered by the district court, and reversed the grant of summary judgment to the extent a class member’s claim for benefits arose from an SPD not presented to the court.

Turning to the breach of fiduciary duty claims, the district court had dismissed all claims as untimely, but the Tenth Circuit found that the district court applied the wrong statutory analysis. The Tenth Circuit reversed the district court’s dismissal of the breach of fiduciary duty claims. The Tenth Circuit examined 29 U.S.C. § 1113, finding the six-year statute of repose undisputed by the parties, but discovered a circuit split on whether § 1113’s statute of limitations applies solely to claims where a fiduciary fraudulently conceals the alleged breach of fiduciary duty or if it applies where the underlying breach of fiduciary duty claim involves allegations of fraud. The Tenth Circuit declined to conflate “fraud or concealment” to “fraudulent concealment” and also declined to consider the clause a separate statute of repose. Instead, the Tenth Circuit found the language to create an exception to the six-year statute of repose for instances when the breach of fiduciary duty resulted from fraud or concealment. The Tenth Circuit found support for its construction in the legislative purpose of ERISA.

Applying its framework to the instant case, the Tenth Circuit did not find evidence of concealment by defendants, and instead looked at whether there was fraud. The district court dismissed plaintiffs’ breach of fiduciary duty claims based on defendants’ claim that the argument was not properly briefed. The Tenth Circuit reversed on this point, finding instead that defendants did not move to dismiss plaintiffs claims on the basis on which the district court granted dismissal, resulting in error.

Finally, the Tenth Circuit addressed plaintiffs claims that the reduction or termination of benefits violated the ADEA because it constituted disparate impact discrimination based on age. Defendants produced evidence of effecting the policy changes based on reasonable factors other than age, and the district court granted summary judgment to defendants. The Tenth Circuit affirmed, finding that the narrow scope of ADEA disparate impact claims only required a showing that defendants’ decision was based on reasonable factors other than age and defendants made that showing.

The Tenth Circuit affirmed in part, reversed in part, and remanded for further proceedings.

Crowdfunding, Medical Testing of Assault Victims, and PERA Supplemental Needs Trust Bills Signed

As the 2015 legislative session continues, Governor Hickenlooper continues to sign legislation that crosses his desk. To date, the governor has signed 136 bills this legislative session. The bills signed in the past week are summarized here.

April 10, 2015

  • HB 15-1008 – Concerning the Classification of Agricultural Land When the Land is Destroyed by a Natural Cause, by Rep. Millie Hamner and Sen. Ellen Roberts. The bill allows agricultural land destroyed by natural causes to retain its agricultural classification for the year of destruction and four more property tax years.
  • HB 15-1256 – Concerning the Reclassification of Routt County to a Category II County for the Purpose of Establishing the Salaries of County Officers, by Rep. Diane Mitsch Bush and Sen. Randy Baumgardner. The bill recategorizes Routt County as a category II county for the purpose of setting salaries for county officers.
  • HB 15-1073 – Concerning Allowing a Driver to Challenge the Validity of a Law Enforcement Officer’s Initial Contact With the Driver, by Rep. Joseph Salazar and Sen. Jessie Ulibarri. The bill allows drivers who successfully challenge an officer’s initial stop in an administrative hearing to avoid revocation.
  • HB 15-1197 – Concerning Limitations on Indemnity Obligations in Public Construction Contracts, by Rep. Jack Tate and Sen. Cheri Jahn. The bill clarifies the manner in which indemnification clauses may be used in public construction contracts.
  • HB 15-1224 – Concerning Accounting for State Moneys Received by Public Postsecondary Institutions That Do Not Participate in the College Opportunity Fund Program, by Rep. Diane Mitsch Bush and Sens. Owen Hill & Nancy Todd. The bill separates the appropriation allocation for the two local district junior colleges affected.
  • HB 15-1183 – Concerning the Admission of a Child’s Statements Describing Attempted Acts of an Unlawful Sexual Offense, by Rep. Rhonda Fields and Sen. Lucia Guzman. The bill allows admission of a child’s statements regarding attempted sexual offenses.
  • HB 15-1191 – Concerning the Addition of Dentists to the “Physician Designation Disclosure Act,” by Rep. Brittany Pettersen and Sen. Kevin Grantham. The bill specifies that the standards and requirements for health care entities that assign designations to physicians based on performance assessments also apply to dentists.

Monday, April 13, 2015

  • HB 15-1245 – Concerning the Authority of the State Board of Land Commissioners to Use a Specified Portion of the Investment and Development Fund Moneys for Asset Maintenance, by Rep. Edward Vigil and Sen. Jerry Sonnenberg. The bill allows the State Board of Land Commissioners to spend up to $1 million from the Investment and Development Fund for certain maintenance projects.
  • HB 15-1246 – Concerning the Authorization of Crowdfunding of Intrastate Securities, by Reps. Pete Lee & Dan Pabon and Sens. Mark Scheffel & Owen Hill. The bill creates the Colorado Crowdfunding Act, which allows online investments in Colorado companies through a simple regulatory regime.

Thursday, April 16, 2015

  • SB 15-005 – Concerning Medical Testing for Certain First Degree Assault Cases, by Sen. John Cooke and Rep. Mike Foote. The bill requires a defendant in a first degree assault to submit to blood testing for communicable diseases if his or her bodily fluids contact another person.
  • SB 15-015 – Concerning a Clarification of Benefits for Autism Spectrum Disorders in Health Benefit Plans Issued in this State, by Sen. John Kefalas and Rep. Dianne Primavera. The bill allows mental health benefits under health benefit plans for autism spectrum disorders, and removes caps on the number of visits.
  • SB 15-030 – Concerning Removing Culpability for Prostitution for a Victim of Human Trafficking, by Sen. Morgan Carroll and Rep. Mike Foote. The bill creates an affirmative defense of human trafficking for those charged with prostitution and establishes a procedure to petition courts to seal records.
  • SB 15-058 – Concerning Statewide Policies and Procedures for Law Enforcement Agencies that Conduct Eyewitness Identifications, by Sen. Lucia Guzman and Rep. Elena Kagan. The bill requires law enforcement agencies to develop policies and procedures regarding eyewitness identifications.
  • SB 15-097 – Concerning the Eligibility of a Supplemental Needs Trust to Receive Certain Public Employees’ Retirement Association Benefits, by Sen. Irene Aguilar and Rep. Lois Landgraf. The bill allows a PERA member to designate a supplemental needs trust as a co-beneficiary.
  • SB 15-099 – Concerning Eliminating Certain Duties for Probation Officers, by Sen. John Cooke  and Rep. Polly Lawrence. The bill eliminates  certain duties of probation officers to conform to actual practice.
  • SB 15-105 – Concerning the Continuation of the Regulation of Respiratory Therapists by the Director of the Division of Professions and Occupations in the Department of Regulatory Agencies, and, in Connection Therewith, Implementing the Recommendations of the Department in its Sunset Review of and Report on the Profession, by Sen. Beth Martinez Humenik and Rep. Diane Primavera. The bill makes changes to licensing of respiratory therapists as recommended by the sunset review committee.
  • SB 15-126 – Concerning Medical Tests for Victims of Crimes of Assault, by Sens. John Cooke & Michael Johnston and Rep. Mike Foote. The bill requires defendants in second or third degree assault cases to undergo medical testing for communicable diseases if their bodily fluids came in contact with another person.
  • SB 15-171 – Concerning the Continuation of the “Private Occupational Education Act of 1981″, and, in Connection Therewith, Implementing the Recommendations of the 2014 Sunset Review by the Department of Regulatory Agencies, by Sen. Owen Hill and Rep. Dominick Moreno. The bill extends the Private Occupational School Board and the Division of Private Occupational Schools.
  • SB 15-186 – Concerning the Exemption of Yoga Teacher Training from Regulation Under Statutes Governing Private Occupational Education and, in Connection Therewith, Reducing an Appropriation, by Sen. Laura Woods and Reps. Timothy Dore & Alec Garnett. The bill exempts yoga teacher training from the Private Occupational Education Act.
  • SB 15-187 – Concerning Authorization for the High-Performance Transportation Enterprise to Deposit Money Received as a Loan from the State Highway Fund to a Separate Account Within the Statewide Transportation Enterprise Special Revenue Fund, by Sen. Kevin Grantham and Rep. Dave Young. The bill allows money loaned from the State Highway Fund to the High Performance Transportation Enterprise to be deposited into the Statewide Transportation Enterprise Operating Fund.
  • SB 15-188 – Concerning the Use of the First Tier of Statutorily Allocated Tobacco Litigation Settlement Money, and in Connection Therewith, Making an Annual Statutory Allocation of Such Money to the Tobacco Settlement Defense Account of the Tobacco Litigation Settlement Cash Fund and Making an Offsetting Reduction in the Annual Statutory Allocation of Such Money to the Children’s Basic Health Plan Trust, Authorizing the Department of Revenue to Use Money in the Tobacco Settlement Defense Account for Settlement Enforcement Related Activities, and Making an Appropriation, by Sen. Pat Steadman and Rep. Bob Rankin. The bill allocates tobacco settlement funds from the Children’s Basic Health Plan Trust to the defense fund for tobacco litigation.
  • SB 15-189 – Concerning the Repeal of Consolidated Tobacco Settlement Program Monitoring and Reporting Requirements and, in Connection Therewith, Reducing an Appropriation, by Sen. Pat Steadman and Rep. Bob Rankin. The bill repeals the current requirement that the State Board of Health monitor programs receiving funding from the state’s tobacco settlement fund.
  • SB 15-190 – Concerning the Repeal of the Requirement that the Executive Director of the Department of Personnel Promulgate Rules to Establish State Archives’ Fees, by Sen. Kevin Grantham and Rep. Millie Hamner. The bill eliminates a statutory requirement that fees for the State Archives must be established through a formal rulemaking process.

For a complete list of Governor Hickenlooper’s 2015 legislative decisions, click here.

Colorado Court of Appeals: Separate Challenge to Attorney Fee Award Not Prerequisite to Filing C.R.C.P. 60 Motion

The Colorado Court of Appeals issued its opinion in Oster v. Baack on Thursday, April 9, 2015.

Employment Agreement—Attorney Fees—First Impression—Challenge Under CRCP 60.

Doctors Oster and Baack owned and practiced medicine at Horizon Women’s Care. Oster and Horizon severed Baack’s employment following the loss of her medical license and brought a declaratory judgment action seeking a declaration that Baack’s employment had been terminated “for cause,” which meant that Baack would only be entitled to 25% of the value of her ownership interest in Horizon. The court entered judgment in favor of Oster and Horizon and ordered Baack to pay their attorney fees. This decision was reversed on appeal, and Baack thereafter filed a CRCP 60 motion to vacate the attorney fees award. The trial court denied the motion to vacate.

This case raised an issue of first impression—whether a party who has not directly appealed from an order awarding attorney fees and costs may still challenge that award under CRCP 60. The trial court had jurisdiction to consider Baack’s CRCP 60 motion, and Baack did not need to separately appeal the attorney fees award before filing her CRCP 60 motion. Because the appellate court reversed the underlying judgment, the trial court had awarded fees and costs under the prevailing party provision of the Employment Agreement, and the remaining agreements between the parties did not entitle Oster and Horizon to an attorney fees award. Accordingly, the attorney fees award in favor of Oster and Horizon was vacated and the case was remanded to the trial court to award Baack a reasonable amount of attorney fees and costs incurred on appeal.

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

Tenth Circuit: Discrimination Claims Fail Where Plaintiff Cannot Perform Essential Job Function

The Tenth Circuit Court of Appeals issued its opinion in Hawkins v. Schwan’s Home Service, Inc. on Thursday, February 19, 2015.

David Hawkins was a facility supervisor for Schwan’s Home Service (SHS), in which position he was occasionally required to drive company delivery trucks but mainly was responsible for ordering products, scheduling, and loading trucks. In 2010, Hawkins began experiencing severe health problems and was repeatedly hospitalized with heart problems. He had a mild stroke in June 2010 but returned to work shortly after. Hawkins’ supervisor, Mr. Hillaker, began assigning truck driving duties to Hawkins and communicated to several coworkers that Hawkins was “a liability.”

On June 21, 2010, Hawkins failed a routine DOT medical evaluation and did not receive the DOT certification required of all SHS supervisors. The next day, Hawkins received a letter that he was being placed on a 30-day unpaid leave, and he had 30 days to receive the certification or find a non-DOT position. On June 23, 2010, Hawkins signed a voluntary termination form but wrote on the form that he was forced to quit for medical reasons. He filed a complaint in the U.S. District Court for the Western District of Oklahoma, bringing claims under the ADAAA, the Oklahoma ADA, and asserting a Burk tort. The district court granted summary judgment to SHS and Hawkins timely appealed.

The Tenth Circuit evaluated Hawkins’ claims as disparate treatment claims, and noted Hawkins must show that at the time he was terminated: (1) he was disabled as defined by statute, (2) he was qualified to perform the essential functions of his job, with or without reasonable accommodations, and (3) he was fired because of his disability. The Tenth Circuit found Hawkins’ discrimination claims failed at step two, because he was unable to obtain the DOT certification and it was an essential job function.

Hawkins disputed the district court’s determination that driving a company truck was an “essential function” of a supervisor’s job, and asserted the district court incorrectly allocated burdens between the parties. The Tenth Circuit discussed “burdens” at length, noting that the term was tricky, but Tenth Circuit precedent required the plaintiff at all times to bear the burden of persuasion. Hawkins also argued the district court erroneously conflated the terms “qualification” and “function,” but the Tenth Circuit again disagreed, finding the district court’s opinion was well-reasoned and thoughtfully followed Tenth Circuit precedent.

The Tenth Circuit affirmed the district court’s grant of summary judgment to SHS.

Appropriations, Adoption Records, Crime Victim Compensation, and More Bills Signed

On Monday, March 30, 2015, Governor Hickenlooper signed 11 bills into law. To date, he has signed 89 bills in this 2015 legislative session. The bills signed Monday are summarized here.

  • SB 15-191 – Concerning Payment of Expenses of the Legislative Department, by Sens. Mark Scheffel & Morgan Carroll and Reps. Crisanta Duran & Brian DelGrosso. This is the appropriations bill, setting the budget for the 2015-16 state fiscal year.
  • HB 15-1254 – Concerning the Elimination of the General Appropriations Act Limitation in the Definition of “Total Governing Board Appropriation” for the Treatment of Higher Education Appropriations, by Rep. Millie Hamner and Sen. Kent Lambert. The bill clarifies the definition of “Total Governing Board Appropriation” used in the description of higher education funding formulas.
  • HB 15-1188 – Concerning Clarifications to the State Vocational Rehabilitation Program, by Reps. Su Ryden & Dianne Primavera and Sen. Tim Neville. The bill makes several changes to the state vocational rehab program for persons with disabilities.
  • HB 15-1106 – Concerning the Clarification of Access by Eligible Persons to Unredacted Adoption Records that Contain Identifying Information, by Rep. Lori Saine and Sen. Jerry Sonnenberg. The bill clarifies that persons who are able to request and receive certain adoption records under the law may receive unredacted versions of those records.
  • HB 15-1035 – Concerning Changes to Crime Victim Compensation, by Rep. Rhonda Fields and Sen. John Cooke. The bill makes several changes to the crime victim compensation program.
  • HB 15-1004 – Concerning Authorization for Firefighter License Plates to be Issued for Motorcycles and, in Connection Therewith, Making an Appropriation, by Rep. Max Tyler and Sen. Nancy Todd. The bill creates a special firefighter license plate for motorcycles.
  • HB 15-1031 – Concerning a Ban on Powdered Alcohol, by Rep. JoAnn Windholz and Sen. Nancy Todd. The bill prohibits the use, possession, sale, purchase, transfer, or manufacture of powdered alcohol.
  • HB 15-1048 – Concerning Authority of the Commissioner of Insurance to Adopt Principle-Based Life Insurance Reserve Requirements for Life Insurance Policies, by Rep. Angela Williams and Sen. David Balmer. The bill enacts National Association of Insurance Commissioners model legislation that requires the insurance commissioner to adopt the NAIC Standard Valuation Model.
  • HB 15-1209 – Concerning the Highway Maintenance Division of the Department of Transportation, by Rep. Max Tyler and Sen. Ray Scott. The bill updates state law to reflect actual operations of the Department of Transportation, clarifies powers and duties of CDOT’s executive director and chief engineer, and clarifies that annual reports will be filed with the highway maintenance division.
  • HB 15-1150 – Concerning Annual Tier 2 Transfers from the Severance Tax Operational Fund to an Existing Special Account in the General Fund Established by the Mined Land Reclamation Board for the Purpose of Funding Reclamation of Lands that were Obligated to be Reclaimed Under Permits Upon Which Financial Warranties Have Been Forfeited, by Rep. Bob Rankin and Sen. Kevin Grantham. The bill provides funding for the Division of Reclamation, Mining, and Safety to conduct reclamation projects at mine sites with insufficient or failed bonds.
  • SB 15-128 – Concerning Reports to Law Enforcement by Medical Facilities with the Consent of a Victim of Sexual Assault, by Sen. Morgan Carroll and Reps. Lois Landgraf and Dianne Primavera. The bill adds nurses to the list of medical personnel required to report sexual assaults to law enforcement. The bill also clarifies the types of reports required and allows a victim to speak anonymously to law enforcement.

For a complete list of Governor Hickenlooper’s 2015 legislative decisions, click here.