January 31, 2015

Colorado Supreme Court: Actual Conflict Requires Showing of Both Conflict of Interest and Adverse Effect

The Colorado Supreme Court issued its opinion in West v. People on Tuesday, January 20, 2015.

Conflicts of Interest—Post-Conviction and Extraordinary Relief—Ineffective Assistance of Counsel.

In these appeals, defendants alleged that their trial counsel labored under conflicts of interest because counsel concurrently or successively represented trial witnesses against them. The court of appeals remanded both cases to the trial courts to determine whether, under Cuyler v. Sullivan, 446 U.S. 335 (1980), defendants’ attorneys labored under an “actual conflict.” Defendants separately petitioned for review of the court of appeals’ judgments, asking the court to clarify whether the Sullivan standard requires a defendant to demonstrate, in addition to a conflict of interest, that an “adverse effect” arose from the conflict.

In People v. Castro, 657 P.2d 932 (Colo. 1983), the Supreme Court held that an adverse effect was inherent in a “real and substantial” conflict of interest and thus a separate showing was unnecessary. In this consolidated opinion, the Court overruled Castro because the U.S. Supreme Court recently held that an actual conflict, under the Sullivan standard, requires a defendant to show both a conflict of interest and an adverse effect on his or her attorney’s performance.

The Court held that to show an adverse effect, a defendant must (1) identify a plausible alternative defense strategy or tactic that trial counsel could have pursued; (2) show that the alternative strategy or tactic was objectively reasonable under the facts known to counsel at the time of the strategic decision; and (3) establish that counsel’s failure to pursue the strategy or tactic was linked to the actual conflict. The Court therefore affirmed the court of appeals’ judgments in part and instructed the trial courts to consider whether, under this framework, defendants received ineffective assistance of counsel by virtue of their attorneys’ alleged conflicts and are therefore entitled to new trials.

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

The Future of Law (Part One): Beyond the Borg

rhodesWe finished last year talking about the law profession’s cultural ethos, and how new practice models and wellness initiatives are liberating lawyers from its harmful aspects (the Legal Borg). An earlier 2014 series also looked at alternative practice models. Another considered how the law’s cultural ethos can cause stress-induced cognitive impairment and how mindfulness practice can help.

These developments may have sneaked in unnoticed, but now they’ve become the elephant in the room, and it’s time to deal with them. They’re causing a seismic shift in the profession’s ethos, and a new ethos requires a new ethic: i.e., new standards for how to enter the profession and how to behave once you’re in it.

The ABA Journal published a piece on that very topic on New Year’s Day, entitled “Does The UK Know Something We Don’t About Alternative Business Structures?” The article begins as follows:

For two nations sharing a language and legal history, the contrast in the visions at play in the legal systems of the United States and United Kingdom is more than striking. It’s revolutionary.

The debates in the U.S. go on: Should ethics rules blocking nonlawyer ownership of law firms be lifted? Is the current definition of unlicensed law practice harming rather than protecting clients? What about the restrictions on multidisciplinary practices?

And those debates are by no means ending: Witness the newly created ABA Commission on the Future of Legal Services. Though ABA President William C. Hubbard does not mention ethics rule changes in the commission’s primary task of identifying the most innovative practices being used in the U.S. to deliver legal services, some of those practices have been questioned as possible ethical breaches. Meanwhile, the rules and restrictions stay in place. The situation in the United Kingdom couldn’t be more different: Such restrictions have largely been lifted, and under the Legal Services Act the creation of new ways of providing legal services—including through alternative business structures—is more than simply permitted; it is actively encouraged.

Nonlawyer ownership of law firms, unlicensed practice, multidisciplinary practice… those are big issues. We’ll let the ABA tackle them. If you’ve been following these issues for awhile, you’ll remember the ABA did just that at their summer convention 17 years ago, and again the following year.

This blog won’t try to keep pace with the pros on that debate’s current version. We will, however, do some guessing of our own about how current trends in law practice and lawyer wellbeing might change not just lawyers and law practice, but our very stock and trade: the law itself. A new cultural ethos in the law will do precisely that. It is already. We’re going to talk about that, and speculate about what it might look like going forward.

According to Wikipedia, futurology is an “attempt to systematically explore predictions and possibilities about the future and how they can emerge from the present.” We’re not going to be systematic here. Instead, we’ll engage in some moderately-well-informed-but-we-don’t-know-what-the-insiders-know curiosity.

Should be fun. So draw the shades and polish up your crystal ball (maybe you prefer this kind, or maybe that) and let’s take a look!

Kevin Rhodes has been a lawyer for nearly 30 years, in firms large and small, and in solo practice. Years ago he left his law practice to start a creative venture, and his reflections on exiting the law practice appeared in an article in the August 2014 issue of The Colorado Lawyer. His free ebook, Life Beyond Reason: A Memoir of Mania, chronicles his misadventures in leaving the law, and the lessons he learned about personal growth and transformation, which are the foundation of much of what he writes about here.

A collection of Kevin’s blog posts, Enlightenment, Apocalypse, and Other States of Mind, is now available as an ebook. Click the book title to sample and download it from the distributor’s webpage. It’s also available on from Barnes & Noble, iTunes, Amazon, and Scribd. The collection includes Forewords from Debra Austin, author of the Killing Them Softly law journal article which has been featured here, and from Ron Sandgrund, author of The Colorado Lawyer article mentioned above.

You can email Kevin at kevin@rhodeslaw.com.

Rules from Chapters 18 and 20 of Colorado Rules for Civil Procedure Amended

On January 14, 2015, the Colorado Supreme Court adopted Rule Change 2015(02), amending Rules 205.3, 205.5, 205.6, 224, and 227 of Chapter 18 of the Colorado Rules of Civil Procedure, and amending Rules 251.1, 260.2, and 260.6 of Chapter 20 of the Colorado Rules of Civil Procedure.

The change to Rule 205.3, “Pro Hac Vice Authority Before State Courts — Out-of-State Attorney,” updated the reference in subparagraph (7) to Colo. RPC 1.15A through E. Rules 205.5, “Pro Hac Vice – Foreign Attorney,” and 205.6, “Practice Pending Admission,” were similarly updated to cite to Colo. RPC 1.15A through E. The updates to Rule 227 were also minor, changing the reference in subparagraph (2)(a)(4) to Colo. RPC 1.15B and updating citations in the Comment to the “Regstration Fee of Non-Attorney Judges” section of the rule.

In Rule 224, “Provision of Legal Services Following Determination of a Major Disaster,” subparagraphs (2) and (3) were amended to change citations from C.R.C.P. 220(1)(a) and (b) to C.R.C.P. 205.1(a) and (b), and from C.R.C.P. 220 to C.R.C.P. 205.1; citations in subparagraphs (5)(a) and (b) were updated from C.R.C.P. 221 and 221.1 to C.R.C.P. 205.3 and 205.4; and subparagraph (6) was amended to change the citation from C.R.C.P. 220(3) to 205.1(3) and add a citation to Colo. RPC 8.5.

Citations were also updated in Rules 251.1, 260.2, and 260.6. Rule 251.1, “Discipline and Disability; Policy — Jurisdiction,” was changed to reference Rules 204 and 205 instead of Rules 220, 221, and 222. Subsection (4) of Rule 260.2, “CLE Requirements,” was amended to clarify that the subsection was repealed and replaced by C.R.C.P. 203.2(6), 203.3(4), and 203.4(6). Citations in subsections (5)(a) and (6) of Rule 260.6, “Compliance,” were also amended, updating references from Rule 201.14 to Rules 203.2(6), 203.3(4), and 203.4(6).

Click here for the Colorado Supreme Court’s 2015 rules changes.

Tenth Circuit: Attorney’s Failure to Appear at Rescheduled Hearing Justified Finding of Contempt

The Tenth Circuit Court of Appeals issued its opinion in United States v. Hernandez on Friday, November 14, 2014.

Miguel Ramon Velasco was Adrian Hernandez’s criminal attorney. In the criminal proceeding, Hernandez pleaded guilty to two counts of an indictment charging conspiracy to distribute a controlled substance. On the day before a scheduled hearing to change his client’s plea, Velasco filed a motion for continuance, citing a problem with his computer. The court granted the continuance and the hearing was rescheduled for a date two months later. Again, the day before the hearing, Velasco filed a motion to continue. The court granted the motion but admonished Velasco that no more continuances would be granted. The parties agreed on August 7, 2013, for the hearing date.

Ten days before the third hearing date, Velasco again filed a motion to continue, citing a family vacation that could not be postponed due to his children’s school schedules. Velasco asserted that his client would not agree to substitute counsel. The court did not grant the continuance, and substitute counsel appeared at the hearing, to which Hernandez objected. Substitute counsel made an oral motion for continuance, and the court, recognizing the prejudice to Hernandez if a continuance was not granted, agreed. The court directed Velasco to show cause why he should not be held in contempt of court. At the show cause hearing, the court discovered that Velasco had knowingly made vacation plans after agreeing upon the hearing date. The court held Velasco in contempt and imposed a $2,000 fine. The following day, Velasco filed a motion to reconsider, citing the fact that his client’s brother had agreed to substitute counsel, but not explaining why the brother had any authority to so agree. The court entered an opinion and order reaffirming its finding of contempt, and Velasco appealed.

Velasco asserted five points of error, each generally arguing that the court erred by employing the summary contempt procedures in F.R.C.P. 42(b) for direct contempt rather than the full notice-and-hearing procedures from F.R.C.P. 42(a) for indirect contempt. Velasco contended that review should be conducted for abuse of discretion. However, since he did not properly raise his objections in the lower court, the Tenth Circuit reviewed for plain error and found none. Under a plain error review, the court must find that (1) there was error, (2) that was plain, and (3) the plain error affected his substantial rights. If these three criteria are met, the court may act to correct the error if it seriously affects the fairness or integrity of the proceedings. The Tenth Circuit found that Velasco’s arguments failed at the second step because it is not plain that his contempt was direct. The Tenth Circuit briefly explained the differences between direct contempt and indirect contempt, and found that it was plain to the trial judge and to the Tenth Circuit that his planned vacation was directly subversive of the court’s previous ruling.

The contempt order and fine were affirmed.

Colorado Court of Appeals: Reasonableness Implied Term in All Contracts for Attorney Fees

The Colorado Court of Appeals issued its opinion in Southern Colorado Orthopaedic Clinic Sports Medicine & Arthritis Surgeons, P.C. v. Weinstein, M.D. on Thursday, December 18, 2014.

Attorney Fees—Employment Agreement—Fee-Shifting Provision—Reasonableness.

In this litigation between a professional corporation and Dr. David M. Weinstein, the professional corporation alleged that the doctor had breached his employment agreement with the professional corporation. Dr. Weinstein filed counterclaims.

This appeal involves a fee-shifting provision in an employment agreement. The provision stated that the prevailing party in any action to enforce the agreement “shall be entitled to recover . . . all attorney fees [and] costs.” The trial court held that neither the professional corporation nor the doctor had prevailed at trial; it then declined the professional corporation’s request for attorney fees and costs under the provision. The appellate court reversed, holding that the professional corporation did prevail at trial. The trial court thereafter ordered Dr. Weinstein to pay a portion of the professional corporation’s attorney fees.

On appeal, the professional corporation contended that the trial court erred by not awarding it all of its attorney fees and costs. As a matter of public policy, reasonableness is an implied term in every contract for attorney fees, and trial courts must consider whether the requested attorney fees and costs are reasonable even if the contract does not mention reasonableness. Therefore, the trial court did not err when it determined reasonableness in awarding fees. Further, the trial court did not abuse its discretion when it reduced the award of attorney fees based on all the relevant reasonableness factors set forth in Colo. RPC 1.5(a), including the professional corporation’s success at trial. The case was remanded to the trial court for a determination of attorney fees to award Dr. Weinstein as the prevailing party in this appeal.

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

Colorado Rules of Judicial Discipline Amended by Colorado Supreme Court

On Friday, December 12, 2014, the Colorado Supreme Court announced Rule Change 2014(16), amending the Colorado Rules of Judicial Discipline. The rule change was adopted and effective December 10, 2014.

The rule changes were extensive and covered many of the rules. Significant changes were made to the rules regarding review of complaints, investigation, determination, statement of charges, and many others. For a redline of the changes, click here.

Comment Period Open for Changes to Colorado Rules of Judicial Discipline

The Colorado Supreme Court is seeking comments regarding proposed changes to the Colorado Rules of Judicial Discipline. The public comment period is now open, and will close at 4 p.m. on October 14, 2014. Comments should be submitted to Christopher Ryan, the clerk of the supreme court, at 2 E. 14th Ave., Denver, 80203.

The changes to the Rules are extensive. Several rules have been moved or deleted, including the rules on confidentiality, screening of complaints, investigation, discovery, and special masters. For a redline of the changes, click here.

For all of the Colorado Supreme Court’s adopted and proposed rule changes, click here.

New C.J.E.A.B. Opinion States Judges Cannot Ethically Use Marijuana

On Thursday, July 31, 2014, the Colorado State Judicial Branch released Colorado Judicial Ethics Advisory Board (C.J.E.A.B.) Opinion 2014-01, advising Colorado judges that because marijuana is still illegal under federal laws, any use of marijuana violates Rule 1.1 of the Canon of Judicial Conduct.

The C.J.E.A.B. consists of judges and non-judges who provide advice on ethical issues to judicial officers who request an opinion. Any judicial officer in Colorado may request an opinion from the Board. Once the request is received, the C.J.E.A.B. will consider whether to research the question and issue an opinion regarding the propriety of the proposed conduct and the ethical issues presented.

The question raised in Opinion 2014-01 was whether a judge may use marijuana privately and in a manner consistent with the Colorado Constitution in light of the legalization of marijuana in Colorado. The C.J.E.A.B. decided that because marijuana is still illegal under federal law, using marijuana even in a manner consistent with Colorado law is more than a minor violation of the law and constitutes a violation of Rule 1.1 of the Canon of Judicial Conduct. The C.J.E.A.B. decided that virtually every violation of Colorado law is a violation of the CJC, because the exceptions delineated by the committee that crafted the CJCs were extremely minor, such as parking tickets. Further, because drug- and alcohol-related offenses were specifically mentioned as not falling under the exception, the C.J.E.A.B. determined that a judge’s use of marijuana is not a minor violation of law.

Click here for the full text of Opinion 2014-01 and click here for all of the C.J.E.A.B. opinions.

Colo. RPC 1.15 Concerning Fees and Trust Accounts Repealed and Reenacted as Five New Rules

On Wednesday, June 18, 2014, the Colorado Supreme Court released Rule Change 2014(07), which repealed Colo. RPC 1.15 and reenacted it as Colo. RPC 1.15A, 1.15B, 1.15C, 1.15D, and 1.15E. The rule change was signed on June 17, 2014 and is effective immediately.

Colo. RPC 1.15A, “General Duties of Lawyers Regarding Property of Clients and Third Parties,” sets forth rules regarding client property and accountings. Rule 1.15A mostly tracks the language of subsections (a) through (c) of former Rule 1.15, and adds that the provisions of 1.15B through 1.15E apply to all funds or property held or maintained by the lawyer.

Colo. RPC 1.15B, “Account Requirements,” makes significant changes to subsections (d) through (h) of former Rule 1.15. Rule 1.15B sets forth requirements for COLTAF and other accounts in which to maintain client funds, and specifies practical procedures for paying account fees and dispersing interest.

Colo. RPC 1.15C, “Use of Trust Accounts,” rearranges the management provisions previously contained in 1.15(i) and increases the rule’s readability.

Colo. RPC 1.15D, “Required Records,” establishes recordkeeping requirements for client property. Some of the provisions from former 1.15(d) through (h) regarding recordkeeping procedures were moved to Rule 1.15D, and the language of former 1.15(j) through (m) is also incorporated where appropriate.

Colo. 1.15E, “Approved Institutions,” lists requirements for financial institutions housing trust accounts and defines acceptable forms of accounts. Rule 1.15E is expanded from former 1.15(e)(3), and many provisions were added regarding the financial institutions.

For the full text of new Rules 1.15A through 1.15E, click here. For all of the Colorado Supreme Court’s rules changes, click here.

Colorado Supreme Court: Public Censure Appropriate Remedy Where Attorney Engaged in Negligent Conduct

The Colorado Supreme Court issued its opinion in In the Matter of Olsen on Monday, June 2, 2014.

Attorney Discipline—Colo. RPC 3.1 and 8.4(d).

In this attorney discipline proceeding, The Supreme Court held that the hearing board’s order suspending attorney John R. Olsen for six months with the requirement of reinstatement was unreasonable. The hearing board found that Olsen engaged in negligent conduct, not knowing falsehood. After reviewing prior decisions and the American Bar Association’s Standards for Imposing Lawyer Sanctions, the Court concluded that the appropriate sanction against Olsen was public censure. Accordingly, the Court affirmed the hearing board’s conclusions that Olsen violated Colo. RPC 3.1 and 8.4(d), but reversed its imposition of a six-month suspension with the requirement of reinstatement and instead ordered that Olsen be publicly censured for his misconduct.

Summary and full case available here.

Alternative Lawyer Relationships: Ethical Implications of Contract Lawyering

DavidCLittleOutsourced legal work and contract lawyers are becoming more prevalent. There are many reasons to outsource legal services or hire contract lawyers. David C. Little of Montgomery Little & Soren, PC, in Chapter 3, “Alternative Lawyer Relationships,” of Lawyers’ Professional Liability in Colorado – Preventing Legal Malpractice and Disciplinary Actions, proposes four hypothetical scenarios:

  1. A lawyer is not comfortable drafting a special needs trust to settle a minor client’s personal injury claim and seeks assistance from another lawyer (a specialist experienced in the intricacies of such arrangements) to create the trust.
  2. The general counsel of a business corporation being sued in an environmental damage claim hires a contract law firm that specializes in the defense of environmental damage claims.
  3. A lawyer in one state is not admitted to practice in another state and must retain local counsel in order to participate pro hac vice in the other state.
  4. A firm lawyer in charge of the management of complex litigation asks a temporary lawyer service agency to provide a contract lawyer to organize the client’s documents for discovery production.

These scenarios occur regularly in practice, and there is nothing inherently unethical about hiring contract lawyers or outsourcing legal work. However, each scenario has unique ethical pitfalls, as explained by Little:

In the first example, what happens if the contract lawyer engaged to draft the special needs trust makes a mistake and the minor client loses the benefits the trust would have provided? Does it make any difference if the principal lawyer informed the minor’s guardian about the contract lawyer or had the guardian’s consent? Does the knowledge or consent of the client to the contract lawyer arrangement make any difference?

In the second example, what happens if the specialized law firm hired by the corporation’s general outside counsel discovers that the general counsel has been giving incorrect advice to the client that may have compromised the corporation’s defense to the environmental damage claim? What obligations does the contract firm (the specialist) have to the client to advise the client about the incorrect advice? Is there an independent client-lawyer relationship between the contract specialist and the client, and does the existence of any such relationship depend upon the client’s knowledge of and consent to the arrangement?

In the third example, what are the obligations of local counsel to the client for the procedural aspects of the case in the local lawyer’s jurisdiction? Does the local counsel  have any responsibility to either the client or the referring counsel to advise on either procedural or substantive matters involved in the claim?

Finally, what happens in the fourth example if the contract lawyer fails to recognize the proprietary nature of many of the client’s scientific documents and the client is damaged when its scientific secrets are disclosed without a protective order? In this example where a temporary lawyer service agency or referral agency is involved, does the agency have any exposure for the temporary lawyer’s errors or omissions?

On May 12, 2014, David Little will discuss ethical considerations involved in alternative lawyer relationships at a lunchtime CLE program, “Alternative Lawyer Relationships: Contract Lawyering and Its Ethical Implications.” Join us for this informative program.

CLE Program: Alternative Lawyer Relationships: Contract Lawyering and Its Ethical Implications

This CLE presentation will take place on May 12, 2014. Click here to register for the live program and click here to register for the webcast. You can also register by phone at (303) 860-0608.

Can’t make the live program? Order the homestudy here — MP3 audio downloadVideo OnDemand

Colorado Supreme Court: Dismissal for Lack of Subject Matter Jurisdiction Improper in Attorney Discipline Case

On Monday, March 24, 2014, the Colorado Supreme Court issued its opinion in In re People v. Kanwal.

Rules of Procedure Regarding Attorney Discipline and Disability Proceedings—CRCP 251.12.

The People petitioned for relief pursuant to CRCP 251.1(d) and CAR 21 from an order of the Presiding Disciplinary Judge (PDJ) dismissing for lack of subject matter jurisdiction a claim of attorney misconduct. The PDJ concluded that the People were not authorized to plead, and the Hearing Board lacked jurisdiction to consider, any claim for the filing of which the Attorney Regulation Committee had not given specific approval. Because it was undisputed that the Committee had not specifically approved the filing of a claim for the violation of Rule 8.4(c) of the Rules of Professional Conduct, the PDJ dismissed Claim III in the People’s complaint alleging a violation of that rule.

The Supreme Court made the rule absolute and remanded the matter with instructions to reinstate Claim III, because it was undisputed that the conduct giving rise to the grounds alleged in this claim was conduct specifically addressed in the report of investigation presented to the Committee, as a result of which it authorized proceedings for public discipline. Because the Rules of Procedure Regarding Attorney Discipline and Disability Proceedings contemplate merely the Committee’s authorization for the initiation of formal proceedings before a tribunal capable of administering public discipline, rather than mandating the Committee’s approval of the specific claims to be filed, including the identification of precise rule violations, the PDJ misinterpreted the controlling rules.

Summary and full case available here.