October 31, 2014

Burying the Body—Dismantling the Corpus Delicti Rule and Adopting the Trustworthiness Standard (Part 1)

Evig_SamuelBy Samuel A. Evig

Editor’s Note: This is Part 1 of a two-part series.

This article originally appeared in the November 2013 issue of The Colorado Lawyer.

In People v. LaRosa, announced in January 2013, the Colorado Supreme Court overturned Colorado’s corpus delicti rule.[1] That rule, generally speaking, requires evidence of guilt beyond a defendant’s confession. In jettisoning the corpus delicti rule, the Colorado Supreme Court negated more than 100 years of its own precedent.[2] The decision, in a sort of circle-of-life for legal rules, signals both the death of one doctrine and the beginning of a new one by setting forth a new standard of evidentiary sufficiency for cases where a confession is the major (if not only) piece of truly incriminating evidence. The new test, labeled by the Court as the “trustworthiness standard,”[3] comes from federal cases, and the opinion provides some limited guidance in its application for practitioners.[4] This article examines the opinion with an eye toward helping attorneys recognize situations in which the trustworthiness standard applies, and looks at how other courts have handled issues soon to confront Colorado practitioners.

The Facts of LaRosa

LaRosa confessed to his wife, mother, pastor, a police dispatcher, and a detective that days before he had molested his daughter in a private area of a recreation center by performing oral sex on her while he masturbated.[5] At the time of the offense, his daughter was only 2-and-a-half years old and therefore unable to recall the incident. Besides multiple confessions, the prosecution presented evidence that LaRosa appeared lucid and not mentally ill during his confessions; introduced visitor logs proving he had, indeed, visited the recreation center on the date in question; and provided photographs of the shower area where he said the offense occurred.[6] Both before and during the trial, the defense argued the corpus delicti rule operated to preclude his conviction.[7] The trial court rejected those arguments.

Although LaRosa took the stand in his own defense and explained why he confessed to something that did not happen, the jury nevertheless convicted him of all charges.[8] In an unpublished opinion, the Colorado Court of Appeals reversed the convictions based on the corpus delicti rule.[9] The prosecution petitioned for certiorari, requesting that the Colorado Supreme Court join a growing number of jurisdictions abandoning the corpus delicti rule, and the Court agreed to hear the case.

In a 5–2 decision written by Chief Justice Bender, in which Justices Eid and Coats dissented, the Court discarded the corpus delicti rule, and announced a new standard applicable to situations like LaRosa’s—where a confession is the principal piece of incriminating evidence. It also concluded that due process prevented applying the new standard to LaRosa’s case, and thus affirmed the reversal of his convictions.[10]

The Corpus Delicti Rule

The corpus delicti rule is the sort of classic legal rule lawyers love. It is Latin, and thus sounds impressive. It means literally (if still mysteriously) the “body of the crime.”[11] The rule requires the prosecution to prove the crime described in a confession actually happened—using evidence other than the confession itself.[12] The LaRosa majority found “little consensus” concerning the reasoning behind the rule,[13] but other sources indicate the original purpose of the rule was to prevent the conviction of people who confessed to nonexistent crimes.[14] Scholars cite cases involving the disappearance of a victim, the identification of a suspect, the suspect confessing, the subsequent conviction and execution (or near execution) of the suspect, and then the victim being found alive.[15] The driving force behind the rule is the recognition that false confessions sometimes happen, and it contains an implicit policy decision that the danger of a wrongful conviction outweighs the danger of a wrongful acquittal.

As surprising as it may seem, situations triggering the rule—a confession in the absence of any other incriminating evidence, either before or after it—do not appear to be all that unusual. In Colorado alone there are at least eight reported cases where the rule operated to overturn or preclude a confession-dependent conviction.[16] That number is misleadingly low because prosecutors who are aware of the rule likely decline a number of cases that would have triggered the rule. Indeed, the ubiquity of the stand-alone-confession is what apparently gave rise to the corpus delicti rule.

As noted by the LaRosa majority, the goal of the rule is to “reduce the possibility that a person is convicted based on a confession to a crime that never happened.”[17] Criticism of the rule focuses on three issues. The first criticism is that it prevents the conviction of a suspect confessing to an imaginary crime but does not preclude the conviction of a suspect falsely confessing to an actual crime.[18] If a crime demonstrably happened, a mentally ill person falsely confessing to it could still be convicted. The court referred to this as an “incongruity,” and stated it came from the rule’s “inherently flawed design.”[19]

The second criticism the LaRosa Court noted is that changes in the law, such as the U.S. Supreme Court’s decision in Miranda v. Arizona[20] and the proliferation of statutory crimes, have helped curtail the problem of coerced confessions and made the application of the rule in certain situations very difficult.[21] The Court noted Miranda lessened the danger of “overzealous” police interrogations and that showing a tangible injury for inchoate crimes is sometimes impossible.[22] Further, courts have noted that statutory crimes have become so numerous and well-defined that determining what constitutes the corpus delicti of some offenses is nearly impossible.[23]

Finally, critics have noted the rule carries the very real risk of obstructing justice by preventing the conviction of offenders who commit crimes with no evidence of tangible injury.[24] An easier way to consider this criticism is to think of the rule as being over-inclusive because it may result in wrongful acquittals—that is, it sometimes operates to free those who commit and then confess to an actual as opposed to imaginary crime, but one with no tangible remains of provable harm. These types of crimes tend to be those in which victims are either absent or are unable to articulate what happened to them. For example, the Court identified cases in which the rule resulted in dismissals against defendants who admitted to molesting very young children.[25]

The LaRosa Court found each of these criticisms valid, and concluded that more good than harm would come from departing from precedent.[26] It abrogated the corpus delicti rule and, like many other state and federal courts, replaced it with a more forgiving inquiry grounded in analyzing the trustworthiness of the confession.

Formation of the Trustworthiness Standard

The LaRosa Court adopted the reasoning of a trio of U.S. Supreme Court cases announced in 1954. The cases, Opper v. U.S., U.S. v. Calderon, and Smith v. U.S., all dealt with financial crimes where the most damning evidence came from confessions.[27] Of the three, Opper provides the clearest formulation of the standard.

The government accused Opper of conspiring with and bribing a government employee named Hollifield.[28] At trial, the government presented evidence Opper and Hollifield had met and that, soon after the meeting, Hollifield made a decision favorable to Opper. The rest of the proof presented at trial consisted of statements Opper made to federal authorities about a number of “loans” to Hollifield soon after the favorable decision.[29]

After his conviction, Opper appealed and eventually the Supreme Court reviewed the case. One of Opper’s arguments concerned the sufficiency of the evidence—whether the statements he made were sufficient to support a conviction.[30] Opper’s “confession,” after all, was an admission to providing loans—not that the loans were bribes. The Court formulated a rule requiring the prosecution to “introduce substantial independent evidence which would tend to establish the trustworthiness of the statement.”[31] This, then, was the first formulation of the trustworthiness standard.

The Opper Court went on to conclude that the additional information presented by the government (the timing of Hollifield’s decision and evidence showing the two had met) provided enough corroboration to make the defendant’s statements trustworthy.[32] The statements, when added to the other evidence, were enough to permit a fact finder to find beyond a reasonable doubt that Hollifield committed the charged offense. The Court specifically noted the need for a flexible rule by saying “[e]ach case has its own facts admitted and its own corroborative evidence, which leads to patent individualization of the opinions.”[33]

Versions of this new trustworthiness standard have been adopted by a host of federal and state courts.[34] But a note of caution is appropriate in surveying these cases—a note whose roots are grounded in a philosophical debate about the scope of the original corpus delicti rule, the scope of the trustworthiness rule, and whether the latter really is a substitute for or rather a reinterpretation of the former. Some judges (including the LaRosa dissenters) consider the trustworthiness standard to be the U.S. Supreme Court’s interpretation of the federal common law of corpus delicti.[35] Others assert corpus delicti no longer exists in the federal system and the trustworthiness standard is a wholly new construct.[36] Still others use the two terms somewhat interchangeably.[37]

In any event, the flexibility of the trustworthiness standard, at once its greatest asset and its greatest limitation, caused the Colorado Supreme Court to provide some additional guidance to help trial judges and lawyers apply the standard.[38] In doing so, the Court seemed to shift the focus of the inquiry from whether other evidence proved the crime occurred to whether other evidence proved the confession was reliable.[39] Of course, these two inquiries are related. If there is corroborating evidence of the crime, it automatically corroborates the trustworthiness of the confession, but the discussion in LaRosa seems focused on the circumstances surrounding the confession in a way that the analysis in Opper did not. The Opper court emphasized facts directly supporting the prosecution’s case quite apart from the confession, most critically the timing of the loans compared to the governmental decision. It said virtually nothing about the circumstances of Opper’s confession. The LaRosa Court, in contrast, articulated a test in which facts outside the confession (such as the timing of the loans in Opper) are but one way to establish its trustworthiness. This expanded test is both more and less inclusive than the corpus delicti rule.

The change is less inclusive because the trustworthiness standard can, in some cases at least, prevent the “incongruous” result presented by corpus delicti—where a false confession to a crime that actually happened, but one the confessor did not commit, still would result in a conviction.[40] After all, a strict application of corpus delicti would result in a conviction if the prosecution could show the crime demonstrably happened without the confession. In theory, the trustworthiness standard could prevent the conviction of a mentally ill person falsely claiming credit for an actual crime because the inquiry focuses on the trustworthiness of the confession itself.

The new standard is more inclusive because corroborating the confession is often much easier than showing a crime occurred with independent evidence. This change lessens the possibility of the wrongful acquittal. The LaRosa case itself just might be such an example of a wrongful acquittal under the corpus delicti rule that would, but for the due process issues, have been a rightful conviction under the trustworthiness standard. Of course, by tipping the scales in adopting this standard, the Court also increased the possibility of a wrongful conviction.

This is Part 1 of a two-part series. Stay tuned.

Samuel A. Evig is a deputy district attorney in the 18th Judicial District—sevig@da18.state.co.us. The views expressed in this article are not necessarily those of the 18th Judicial District Attorney’s Office.

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.

 

© 2013 The Colorado Lawyer and Colorado Bar Association. All Rights Reserved. Material from The Colorado Lawyer provided via this World Wide Web server is protected by the copyright laws of the United States and may not be reproduced in any way or medium without permission. This material also is subject to the disclaimers at http://www.cobar.org/tcl/disclaimer.cfm?year=2013.

[1] People v. LaRosa, 293 P.3d 567, 575 (Colo. 2013).

[2] In Dougherty v. People, 1 Colo. 514, 528 (Colo. Terr. 1872), announced in 1872 (before Colorado became a state), the Supreme Court of the Colorado Territory examined the doctrine and upheld a conviction based on the accused administering “boneset” to cause an abortion.

[3] Also sometimes called the “corroboration rule” or the “Opper corroboration rule.” See Moran, “In Defense of the Corpus Delicti Rule,” 64 Ohio State L.J. 817, 851-52.

[4] LaRosa, 293 P.3d at 577-78.

[5] Id. at 570-71.

[6] Id.

[7] Id. at 571.

[8] Id.

[9] Id. The Colorado Supreme Court’s opinion quotes portions of the unpublished decision. Based on those quotes, it appears the court of appeals decided the case based on the fact that prosecution’s non-confession evidence could not establish the crime actually occurred. Instead, the evidence showed only that LaRosa had a chance to commit the offense, something the court of appeals said “every custodial parent has on a virtually continuing basis.”

[10] Id. at 578-79. One of the difficult parts of interpreting this decision is whether, had the trustworthiness standard been applied to this case, the outcome might have been different. Although it is possible to read too much into this opinion, given the Court’s dissatisfaction with the corpus delicti rule and the specific criticism of the rule as sometimes frustrating justice, it is likely that the result would have been very different. Had the dissenters won the day, the result would have been different.

[11] Black’s Law Dictionary 346 (7th ed., West Group, 1999).

[12] LaRosa, 293 P.3d at 572, citing Downey v. People, 215 P.2d 892, 899 (Colo. 1950).

[13] Id.

[14] Moran, supra note 3 at 817, citing 2 Hale, Pleas of the Crown 290 (1678); Moran, supra note 3 at n.60, citing Perkins, “The Corpus Delicti of Murder,” 48 Virginia L.Rev. 173 (1962) and Margolis, “Corpus Delicti, State of the Disunion,” 2 Suffolk University L.Rev. 44 (1968).

[15] Moran, supra note 3 at 826-29. According to Moran, the doctrine came from English commentators and became a part of American jurisprudence. Moran traces the foundations of the rule to 17th century England.

[16] See Meredith v. People, 380 P.2d 227 (Colo. 1963) (rule operated to overturn conviction of man for engaging in “unnatural” sex acts with a 5-year-old boy); People v. Rankin, 554 P.2d 1107 (Colo. 1976) (rule overturned conviction for distributing drugs); People v. Robson, 80 P.3d 912 (Colo.App. 2003) (rule precluded trial of man accused of sexually assaulting his infant daughter); Owen v. People, 392 P.2d 163 (Colo. 1964) (rule overturned conviction for sexual assault and incest of a deceased 16-year-old victim); Cobianchi v. People, 141 P.2d 688 (Colo. 1943) (rule operated to overturn second-degree murder conviction); People v. Maestas, 508 P.2d 782 (Colo. 1973) (theft conviction reversed because of the rule); People v. Applegate, 509 P.2d 1238 (Colo. 1973) (forgery conviction reversed based on the rule); People v. T.A.O., 36 P.3d 180 (Colo.App. 2001) (rule operated to overturn adjudication of a juvenile who confessed to sexually touching his sister).

[17] LaRosa, 293 P.3d at 572, citing McCormick on Evidence § 145 at 595.

[18] Id. at 574. The Court used this argument to conclude the rule was “originally erroneous.” This reasoning is somewhat puzzling because the rule did stop the conviction of someone falsely confessing to a crime that did not happen, a laudable if narrow goal. See Moran, supra note 3 at 836-37. If the original purpose of the rule was to stop the conviction and subsequent execution of someone for a crime that did not happen, how is the rule originally erroneous when it protects against the very harm it was designed to prevent?

[19] Id.

[20] Miranda v. Arizona, 384 U.S. 436 (1966).

[21] Id. at 574-75. But see generally Moran, supra note 3. Moran defends the corpus delicti rule using a murder case he defended to show that no constitutional doctrines involving confession would have operated to prevent the conviction of his client, and further asserts the trustworthiness standard is too malleable to protect suspects.

[22] Id.

[23] See State v. Mauchley, 67 P.3d 477, 487-488 (Utah 2003) (noting that different states have taken different approaches to whether corpus delicti applies to aggravators for capital murder, that some states specifically exclude the rule from applying to some crimes because of the difficulty, and ultimately abolishing the rule rather than attempting to work around the rule’s limitations). The problem of deciding what elements exactly establish the body of the crime is an even greater difficulty in states such as Utah, which require proving corpus delicti before the confession is admitted.

[24] LaRosa, 293 P.3d at 575, citing State v. Parker, 337 S.E.2d 487, 494 (N.C. 1985) (noting the difficulty of applying corpus delicti in crimes without a tangible injury and providing a broad discussion of the rule), and Mauchley, 67 P.3d at 488 (noting that other jurisdictions had to “selectively apply” the rule and ultimately deciding to abandon the rule). As noted by the Court in LaRosa, “the rule may operate to bar conviction for crimes committed against the most vulnerable victims, such as infants, young children and the mentally infirm.” Such concerns are valid; a number of cases involving the corpus delicti rule are horror shows. See supra note 16. See also Gibbard, “Corpus Delicti: Three Unusual Colorado Cases,” 38 The Colorado Lawyer 83 (March 2009) (a historical examination of the rule reversing three convictions, one involving a victim possibly being beaten to death, the second involving a victim dying after a possible illegal abortion and a “rabbit test,” and the third involving a man’s body being interred in his yard by his wife after either a murder or suicide). See also Williams v. People, 158 P.2d 447 (Colo. 1945) (mother put on trial after the discovery of the bodies of three of her babies—two of them mummified—found in her belongings). The Court is correct in articulating that the rule operates to prevent convictions in some cases where proving an actual injury is difficult; however, some might argue this is one purpose of the rule.

[25] LaRosa, 293 P.3d at 575, citing Robson, 80 P.3d at 913-14, and Meredith, 380 P.2d at 228.

[26] Id.

[27] Opper v. U.S., 348 U.S. 84 (1954) (prosecuting defendant for bribing a federal employee); Smith v. U.S., 348 U.S. 147 (1954) (prosecution for tax evasion); U.S. v. Calderon, 348 U.S. 160 (1954) (prosecution for tax evasion).

[28] Opper, 348 U.S. at 84-87.

[29] Id. at 88.

[30] Id. at 91-95.

[31] Id. at 93.

[32] Id. at 93-94.

[33] Id. at 93.

[34] See generally Schopler, Annotation, “Corroboration of Extrajudicial Confession or Admission,” 45 A.L.R.2d 1316 (originally published in 1956); Weisman, Annotation, “Sufficiency of Evidence to Support Homicide Conviction Where No Body Was Produced,” 65 A.L.R.6th 359 (originally published in 2011).

[35] See LaRosa, 293 P.3d at 580 (stating the trustworthiness standard “was therefore not a new restriction on the effect of confessions at all, but rather the Court’s definitive interpretation of the common-law rule, for the federal courts”).

[36] See Fontenot v. State, 881 P.2d 69, 78 (Okla.Crim.App. 1992) (Fontenot II),citing U.S. v. Kerley, 838 F.2d 932, 940 (7th Cir. 1988).

[37] See State v. Heiges, 779 N.W.2d 904, 909-12 (Minn.App. 2010) (Minnesota also has a statute requiring corroboration to sustain a conviction based on a confession—indicating it is a codification of the common-law rule—and using trustworthiness standard cases to support its position). See also State v. Weisser, 150 P.3d 1043, 1048 (N.M.C.A. 2006) (conflating the trustworthiness doctrine with corpus delicti) distinguished by State v. Wilson, 248 P.3d 315 (N.M. 2010).

[38] LaRosa, 293 P.3d at 577-78. In footnote 9 of the opinion, the Court notes several attempts by other courts to outline a proper application of the rule.

[39] Id.

[40] See In re K.A., 60 A.3d 442 (D.C.App. 2013). There, police searched a home and found guns under the mattress of a grandfather living at the home. About an hour after learning of the arrest, and while police were still on scene, K.A. confessed that the guns belonged to him and told officers to release his grandfather. K.A. provided a more detailed statement in which he identified the guns, but the court found his confession to be insufficiently corroborated. A strict application of the corpus delicti rule in this case would have created a different result because K.A. did, indeed, confess to a crime that actually occurred (possession of unregistered firearms).

Crowdfunding Securities Under the CROWDFUND Act

Andrew SchwartzBy Andrew A. Schwartz, Associate Professor of Law, University of Colorado

The “crowdfunding” of securities is poised to democratize the financing of startups, small businesses, farmers and others. Securities crowdfunding, defined as the sale of unregistered securities over the Internet to large numbers of retail investors, each of whom contributes a small amount, had previously been banned by federal law, but this prohibition was overturned by Congress in 2012. This new marketplace will go live once the SEC issues regulations to govern it. Although those rules were officially due in late 2012, they were just proposed on Oct. 23, 2013, and are likely to go into effect in 2014.

Securities crowdfunding has its origins in “reward” crowdfunding, practiced on websites like Kickstarter and IndieGoGo. In reward crowdfunding, artists, entrepreneurs and others ask “the crowd” to contribute capital to their ventures, generally in exchange for the fruits of the project, such as a book or CD. The investors never receive stock, bonds or other securities, however, because federal securities law effectively banned the crowdfunding of securities.

This all changed in 2012, when Congress amended the federal securities laws to overturn this prohibition. In Title III of the Jumpstart Our Business Startups (JOBS) Act—the “CROWDFUND Act”—Congress established a new exemption from the registration requirement for crowdfunded securities. President Obama signed the JOBS Act into law in April 2012, and it will go into effect once the SEC completes its rulemaking process.

The purpose of the CROWDFUND Act is twofold. First, it is designed to liberate startup companies, small businesses and others to use peer networks and the Internet to obtain modest amounts of business capital at very low cost. Second, Congress sought to democratize the market for financing speculative startup companies by allowing investors of modest means to make investments that had previously been offered solely to wealthy, “accredited” investors.

The new CROWDFUND Act has important limitations and places significant obligations on participants in this new marketplace. Under the statute, issuers may only raise up to $1,000,000 annually via securities crowdfunding. Issuers also must state a minimum amount and can only collect the proceeds of the offering if they reach or exceed that target.

Issuers must provide some very basic disclosures to the SEC, designated intermediaries, and potential investors. The financial disclosures depend on the size of the offering: For offerings of $100,000 or less, income tax returns for the last fiscal year and unaudited financial statements certified as accurate by the principal executive officer are required. For offerings of between $100,000 and $500,000, financial statements reviewed by an independent public accountant must be provided. And for offerings of between $500,000 and the maximum of $1 million, audited financial statements are mandated. Finally, following a crowdfunding round, an issuer must annually file with the SEC, and make available to investors, a report on the results of operations.

As for investors, the maximum annual aggregate amount of crowdfunded securities that any one investor may purchase depends on her wealth and income: If an investor’s net worth or annual income is under $100,000, she can invest the greater of $2,000, or five percent of her annual income, in crowdfunded securities each year. If her net worth or annual income is over $100,000, she can invest 10% of her annual income each year.

The Act provides that crowdfunding transactions may not be consummated directly between issuer and investor. Rather, they must be executed via a financial intermediary registered with the SEC as either a broker-dealer or a “funding portal,” a creation of the Act. The Act imposes a number of serious obligations on these financial intermediaries, such as a requirement that they take measures to reduce the risk of fraud, including obtaining a background check on officers, directors and substantial investors in crowdfunding issuers.

As for a secondary market, the Act provides that crowdfunded securities may not be transferred or sold by investors for one year after the date of purchase, unless being transferred to the issuer, an accredited investor, a family member of the purchaser, or as part of an offering registered with the SEC.

The CROWDFUND Act expressly pre-empts state law regarding registration or qualification of securities. That said, states must be provided with notice of crowdfunded offerings, and they retain the right to bring enforcement actions for fraud or other violations of state securities law not relating to registration.

To police fraudulent behavior, the Act expressly authorizes civil actions against an issuer, its directors and officers, if they make an untrue statement of a material fact. In addition, the SEC is granted examination, enforcement and other rulemaking authority over funding portals, and presumably retains authority to enforce the various statutory and regulatory mandates for both issuers and intermediaries.

How securities crowdfunding will play out in practice remains to be seen, and depends greatly on the rules that the SEC just proposed on October 23, 2013. Those proposed rules, called “Regulation Crowdfunding,” are available online, and the SEC invites comments from the public before they become final.

In short, the CROWDFUND Act represents an opportunity for enterprising and creative practitioners to shape a brand new market for securities.

Editor’s Note: This article originally appeared in the October 2013 CBA Business Law Section newsletter.

Andrew A. Schwartz is an associate professor of law at the University of Colorado, where he teaches and publishes on Contracts, Corporations and other aspects of business law.  He is a graduate of Brown University and Columbia Law School, where he served on the Columbia Law Review.  Prior to entering academia, he clerked for two federal judges and practiced with Wachtell, Lipton, Rosen & Katz in New York.  His most recent law review article is Crowdfunding Securities, published in the Notre Dame Law Review earlier this year.

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.

Enforcing Drug-Free Workplace Policies In Light of Colorado’s Legalization of Marijuana Use

Johnson_JeffBy Jeffrey T. Johnson

Does an employer’s drug-free workplace policy trump an employee’s use of medical marijuana to treat disabling medical conditions? Yes, according to a recent decision by a Colorado federal judge. In Curry v. MillerCoors, Inc., Judge John Kane rejected a terminated employee’s claim that his employer discriminated against him on the basis of his disability when it discharged him for testing positive for marijuana. Curry v. MillerCoors, Inc., No. 12-cv-02471 (D. Colo. Aug. 21, 2013).

Discharging Employee for Positive Drug Test Not Disability Discrimination

Paul Curry asserted that he suffered from hepatitis C, osteoarthritis and pain. He obtained a medical marijuana license from the State of Colorado to manage the symptoms of his disabling medical conditions. He claimed that he never used marijuana on his employer’s premises and was never under the influence of marijuana at work. He sued after his employer fired him for testing positive for marijuana in violation of the company’s written drug policy. He alleged, among other things, that his termination constituted disability discrimination under C.R.S. § 24-34-402(1)(a).

Despite Curry’s claim that he used marijuana legally to treat his medical conditions, the court found that it was lawful for the company to terminate him under its drug-free workplace policy. Judge Kane wrote “. . . a positive test for marijuana, whether from medical or any other use, is a legitimate basis for discharge under Colorado law.” Moreover, he stated that “anti-discrimination law does not extend so far as to shield a disabled employee from the implementation of his employer’s standard policies against employee misconduct.” The court concluded that MillerCoors’s enforcement of its drug-free workplace policy was a lawful basis for its decision to fire Curry.

No Violation of Colorado’s Lawful Activities Statute

Curry also asserted that his termination violated Colorado’s lawful activities statute, C.R.S. § 24-34-402.5(1). The statute prohibits employers from terminating an employee due to the employee engaging in a lawful activity off-duty and off the employer’s premises. The court found no violation, relying on the recent Colorado Court of Appeals decision in Coats v. Dish Network LLC, which held that because marijuana use remains illegal under federal law, an employee’s use of medical marijuana is not a “lawful activity” under the state lawful activities statute. In the Curry case, the court concluded that under established Colorado law, discharging an employee who tests positive for marijuana in violation of an employer’s drug-free workplace policy is lawful, “regardless of whether the employee consumed marijuana on a medical recommendation, at home or off work.”

Medical vs. Recreational Marijuana Use – Does it Matter?

The Curry and Coats decisions both addressed the termination of an employee who used marijuana for medical purposes within the limits of a state-issued medical marijuana license. With the passage of Amendment 64 last November legalizing the adult use and possession of small amounts of marijuana, the next question is whether an employee’s use of marijuana for recreational purposes will be treated similarly by the courts. Based on the broad, sweeping language used by the Colorado Court of Appeals in Coats and the U.S. District Court for the District of Colorado in Curry, the answer is yes. Both courts expansively upheld employer terminations of employees who tested positive for marijuana in violation of company drug policies, suggesting that their reasoning is not limited to the use of medical marijuana. It may take some time for a recreational marijuana termination case to reach the courts so we may not know definitively for a few years. In addition, either or both of these cases may be reversed on appeal. Absent that, however, all indications point to the same result for an employee discharge due to any positive drug test, regardless of whether the employee used marijuana for medical or recreational purposes.

Employers Should Strengthen, Communicate and Enforce Their Drug-Free Workplace Policies

Employers should review their drug testing and/or drug-free workplace policies to ensure that the policies apply to all controlled substances, whether illegal under state or federal law. Policies should clearly indicate that a positive drug test may result in termination of employment, regardless of whether the employee appears to be “under the influence” at work.  Employers then should communicate their drug-free workplace policies to their employees and enforce the policies in a consistent and uniform manner. Under these recent court decisions, terminating an employee who violates a written company drug-free policy will be lawful, even when the employee used marijuana legally under Colorado law.

Learn more about how new laws and rulings in Colorado and elsewhere will affect businesses large and small. From marijuana and social media to credit reports and arbitration agreements, employers need to adapt their policies to stay compliant and minimize liability. Experienced labor and employment lawyers Jeffrey T. Johnson, Esq., of Holland & Hart LLP and Todd J. McNamara, Esq., of McNamara Roseman & Kazmierski LLC will present “Advising Your Business Client on Employment Law – Recent Developments,” at CBA-CLE’s Business Law Institute on October 16, 2013. To register for the Business Law Institute, click here or call (303) 860-0608.

With more than three decades of experience, Jeffrey T. Johnson counsels employers on virtually every area of labor and employment law, including employment discrimination, wrongful discharge, wage and hour, WARN, employee policies, discipline, National Labor Relations Act matters, non-compete and non-disclosure agreements and employee safety and health.  When litigation arises, he serves as a battle-tested, effective advocate for his clients in federal and state courts and agencies as well as in arbitration.  Mr. Johnson is a Fellow of the College of Labor and Employment Lawyers and is recognized as a top labor and employment lawyer by Chambers USA, Best Lawyers in America, Colorado Super Lawyers, and Who’s Who Legal USA. He is also an arbitrator for the American Arbitration Association, Employment Law Panel (Denver).

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.

Resolve to Be More Civil

becky_byeBy Becky Bye

October is a bit of a new year for attorneys. The month marks a time when the Colorado bar admits hundreds of new attorneys, wide-eyed and anxious to begin practicing law. It is also a time where many law firms and other entities hire new attorneys to allow more senior attorneys to eventually transition out to retirement or other opportunities beyond their current practice.

I suggest, given that this is a time for new beginnings for all attorneys, that all attorneys also assess their practice and make some professional resolutions. One resolution I propose is for attorneys to practice with more civility and add camaraderie to their everyday practice.

The inherent adversarial nature surrounding the practice of law can easily polarize opposing counsel, opposing parties, and other people involved in any legal matter, whether it be a transactional matter or in the course of litigation. Many unfortunately interpret the language that “… a lawyer must act … with zeal in advocacy upon a client’s behalf…” to include unwarranted viciousness toward the opposing counsel, opposing parties, and even attorneys’ own office colleagues and peers. Subsequently, any negativity that results in the course of practicing law can create a negative perception of attorneys by the public and help trigger a general lack of civility within the practice of law.

Over the course of my legal career (which is relatively short in comparison to many others out there), I have often heard people complaining about how mean attorneys can be to each other. I also have heard more senior attorneys lamenting about their observations of newer attorneys being rude and unprofessional. In sum, many attorneys do not take the privilege of practicing law seriously.

Many of these attorneys believe that they cannot reconcile advocacy and respect with getting along with the opposing counsel, or even common decency. However, I beg to differ based on my own observations. All of the most respected legal minds of the Denver community and lawyers known nationally have several things in common. Of course, they were excellent, smart, and diligent legal scholars, but they also were known for their professionalism in all of their interactions.

Additionally, when I recently received the honor of an American Inns of Court Pegasus Scholarship, I was able to witness barristers (masters of the art of “advocacy” on behalf of clients in the United Kingdom) for six weeks in England. One of my foremost observations from this experience, which still resonates with me today, is that in spite of being known for their advocacy and legal eloquence, the barristers, even on opposing sides of a legal matter, worked together to the point where they coordinated a case before a tribunal. I was shocked when I attended breakfasts, lunches, and other meetings, between barristers of opposing parties, to discuss the next chain of events in their trial or hearing and what types of questions they would be asking their witnesses. In the courtrooms themselves, the barristers were pleasant and displayed a substantial amount of fellowship toward each other. It was soon very clear that this was the most effective way to represent clients, as courts and parties in legal proceedings were not bogged down in an unproductive exchange of communications with the intention of bullying the other party. The parties and courts could cut through that superfluous, tangential aspect of legal representation to get to the real issues at hand.

Although I understand the British legal system differs from ours in many respects, and not all aspects of it translate over to our legal system, all attorneys can still learn from trying to resolve small issues among attorneys in a courteous, respectable way. When things get too heated between opposing attorneys, ego and anger can unfortunately drive a case to go in the wrong direction, which is ultimately detrimental for clients and the legal system as a whole.

One of Merriam-Webster’s online dictionary definitions for “professional” is “exhibiting a courteous, conscientious, and generally businesslike manner in the workplace.” I urge you to take this definition to heart as a legal professional, and to conscientiously resolve to be sincerely courteous to everyone you encounter.

This article originally appeared in the October 2013 issue of The Docket.

Becky Bye is a public attorney. She received her J.D. from the University of Denver Sturm College of Law in 2005. Bye is actively involved in the legal community, including serving on the University of Denver Law’s Alumni Council and the DBA Docket Committee. She is a past chair of the CBA Young Lawyers Division. Bye may be reached at beckybye@gmail.com. 

DOJ: Amendment 64 Implementation can Proceed Without Federal Interference (For Now)

Bill_KyriagisBy Bill Kyriagis

On August 29, 2013, the federal government issued a long-anticipated policy statement regarding Amendment 64, which made clear that the federal government does not currently intend to interfere with Colorado’s efforts to implement a system to regulate the cultivation, distribution and sale of marijuana to adults for recreational purposes. Federal authorities also clarified their approach toward state-regulated medical marijuana industries.

Specifically, United States Deputy Attorney General James M. Cole issued a memorandum directed to all United States Attorneys, setting forth the Department of Justice’s (DOJ) policy toward marijuana businesses in states that have legalized marijuana for medical and/or recreational use. The memorandum is cast as guidance for prioritizing the “limited investigative and prosecutorial resources” available to the federal government.

Like the two previous federal memoranda addressing state-level efforts to liberalize marijuana laws, which were issued in 2009 and 2011, the new memorandum makes clear that marijuana remains illegal for all purposes under federal law, and that federal authorities will enforce federal drug laws where appropriate. Particularly, the memorandum highlights eight enforcement priorities that will guide federal authorities:

  • Preventing distribution of marijuana to minors;
  • Preventing revenue from marijuana businesses from going to criminal organizations;
  • Preventing diversion of marijuana from states where it is lawful to other states;
  • Preventing state-authorized marijuana activities from being used as a pretext for other illegal activity;
  • Preventing violence and use of firearms in the marijuana industry;
  • Preventing driving under the influence of marijuana and other adverse public health consequences associated with marijuana use;
  • Preventing cultivation of marijuana on public lands; and
  • Preventing marijuana possession or use on federal property.

While the memorandum stresses that it does not change federal law, and does not bind federal authorities, it makes clear that federal authorities are at least willing to allow Colorado and Washington state an opportunity to implement “strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health, and other law enforcement interests.” Federal authorities will watch the implementation of these regulatory regimes closely, and, if they fail to live up to expectations, federal authorities may act. If anything, this reinforces the importance of the process playing out at the state and local level in Colorado, as final regulations and procedures are developed and implemented to regulate the coming recreational marijuana industry.

The memorandum also provides clarifying guidance concerning medical marijuana businesses, noting that they should not be an enforcement priority, regardless of their size or commercial nature, provided that the operation in question “is demonstrably in compliance with a strong and effective state regulatory system.” This represents a reversal of policy guidance provided in the 2011 memorandum, which had drawn a distinction between medical marijuana patients and their caregivers, on the one hand, and large-scale, for profit commercial enterprises, on the other hand. In some states, U.S. Attorneys had seized on this distinction to justify targeting large-scale medical marijuana businesses. In Colorado, however, federal authorities have generally taken a hands-off approach toward state-regulated medical marijuana businesses, which seems even more likely to continue in light of the recent memorandum.

It is important to emphasize that the August 29 memorandum is nothing more than a statement of current policy. It is not law, and it binds no one. U.S. Attorneys in various states may have differing interpretations of the policy guidance, which could lead to variations in enforcement from state to state. If state-level regulatory regimes fail to live up to federal scrutiny, federal authorities could quickly change their approach. Indeed, nothing prevents federal authorities from issuing new policy guidance down the road, which could reverse course. For example, when a new presidential administration comes into office in 2017, it could choose to completely ignore the Obama administration’s approach, and instead aggressively enforce federal marijuana laws.

That said, the significance of the August 29 memorandum cannot be understated. The previous two DOJ memoranda on state-sanctioned marijuana activities have had an enormous impact on the development of medical marijuana industries in a number of states. In removing the most significant potential barrier to the full implementation of Amendment 64 (and Washington state’s similar measure), the recent memorandum will likely have a similarly profound impact.

The legal situation relating to marijuana in Colorado is thus complex and confusing, but recreational marijuana businesses are going to become a part of the landscape in Colorado soon.  This will present business lawyers with new challenges and opportunities. Learn more about advising marijuana businesses at the Colorado Business Law Institute on October 16 and 17 at the Grand Hyatt in Denver. Click here to register for the live program, or click here to order the homestudy.

Bill Kyriagis represents business and real estate clients in litigation, bankruptcy and land use matters. In the land use context, Bill counsels clients on a variety of local government issues, including posturing land use matters for potential litigation and pursuing claims when necessary. Bill has also developed expertise regarding the issues faced by landlords and  property owners related to Colorado’s medical marijuana industry. Bill has worked on a number of pro bono cases, including a successful First Amendment challenge to local government land use regulations, and assisting tenants in landlord/tenant disputes. Bill contributes to his firm’s blog, where this post originally appeared.

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.

Consumer Financial Protection Bureau Regulations and their Impact on Real Estate Transactions

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created the Consumer Financial Protection Bureau (CFPB), a federal agency charged with regulating consumer protection for United States financial products and services. According to the CFPB website, the group is focused on one goal: “watching out for American consumers in the market for consumer financial products and services.”

In order to achieve its goal of consumer protection, the CFPB has promulgated many rules and regulations since its inception in 2011. Prior to the creation of the CFPB, there were many agencies regulating financial transactions, but some non-bank lending institutions were federally unregulated, such as pay day loan companies, private mortgage lenders, debt collectors, credit reporting agencies, and private student loan companies. These types of lenders are now covered by the new CFPB regulations.

The CFPB regulations have had a significant impact on real estate transactions. The scope of the regulations is surprisingly broad. Attorneys, real estate brokers, and mortgage loan originators especially are affected by the changing regulatory climate propounded by the CFPB.

A half-day CLE program is going be held on September 27 to clarify the CFPB’s new rules and how they will affect residential mortgage lending. Members of the faculty include Debra Still, President and CEO of Pulte Mortgage, Terry Jones of Cherry Creek Mortgage Company, Joey Lubinski of Ballard Spahr, Craig Wildrick of Zions Bancorporation and Tom DeVine of Holland & Hart. If you are involved in any aspect of mortgage lending, or have clients who are, this is an important program to attend.

CLE Program:  The New Consumer Financial Protection Bureau Regulations: What Do They Mean for Your Clients

This CLE presentation will take place on September 27, 2013, in the CLE Large Classroom. Click here to register for the live program and click here to register for the live webcast.

Can’t make the live program? Click here to order the homestudy.

More Changes to the SEC’s “Neither Admit Nor Deny” Consent Decrees

HerrickLidstoneBy Herrick K. Lidstone, Jr., Esq.

The Securities and Exchange Commission (the “SEC”) has the power and authority under the Securities and Exchange Act of 1934 to bring enforcement actions against persons who violate the securities laws. Most of these actions are settled well before trial by the defendant agreeing to a court-ordered “obey the law” injunction, where the defendant neither admits nor denies the factual statements alleged by the SEC to support the injunction. The SEC has received significant criticism from commentators and legislators for entering into settlements without requiring the respondent to admit allegations against it. These have included significant criticisms by Hon. Jed. S. Rakoff (S.D.N.Y.) in his November 28, 2011 memorandum order denying a joint motion by the SEC and Citigroup for approval of a $285 million settlement of certain allegations by the SEC. (SEC v. Citigroup Global Markets, Inc.) This was discussed in more detail in the January 2012 Business Law Section Newsletter.

Obtaining settlements where the defendant “neither admits nor denies” the allegations is a practice that commenced long before 1972, but was formalized in 1972 (17 CFR § 205.5) with the additional SEC requirement that consent judgments be accompanied by a formal written agreement by the defendant “not to take any action or to make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis.” This changed the prior practice by defendants who would deny the underlying facts immediately after entering into a consent decree with the SEC.

Perhaps as a result of the outcry from Judge Rakoff and others, in January 2012, the Director of the SEC’s Division of Enforcement announced that the Division would no longer permit those convicted or who otherwise admitted the facts in a parallel criminal action to settle with the SEC based on ““not admitting or denying” the facts.

On June 18, 2013, SEC Chair Mary Jo White further refined the SEC’s “neither admit nor deny” policy when she advised the investment community that even in non-criminal settings, the SEC may require admissions in cases “where heightened accountability or acceptance of responsibility through the defendant’s admission of misconduct may be appropriate” (as reported in the New York Times at page B-1, June 22, 2013). In those cases, the SEC enforcement staff has been advised to seek admissions or litigate the case. This may, of course, make litigation more frequent since many defendants may have believed in their innocence, but chose the “neither admit nor deny” settlement to avoid the time, expense, and uncertainty of litigation. Chair White anticipates that the admissions will be required in cases involving “particularly widespread harm to investors” and “egregious intentional misconduct.”

The SEC defense bar has raised a number of concerns about Chair White’s announcement and the anticipated effect of the new SEC practice. Among these concerns is whether this new policy might be subject to arbitrary application by staff. Equally significant, where a defendant is given the option of making admissions (which can then be used in subsequent shareholder litigation or even a criminal proceeding) or contesting the claims, defendants are more likely to contest the claims and seek vindication. Where settlements used to be simpler, the resulting litigation will likely involve a significantly greater amount of SEC resources to prosecute and corporate (that is, shareholder) resources to defend. Defense lawyers have also pointed out that the SEC’s recent track record on significant litigation has not been stellar.

Predictably, the plaintiffs’ attorneys applauded this change since they will now be able to use any admissions in their civil litigation. This fact, itself, will be a significant disincentive to targets of investigation to settle cases with admissions of wrongdoing.

It will be interesting to see how this new policy plays out.

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

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.

Floodgates: Riding the Wave of New Immigration Practitioners

KatharineSpeerBy Katharine Speer

Comprehensive immigration reform looks more promising now than at any time in the last 15 years. Approximately 11 million unauthorized immigrants—your neighbors, co-workers, and classmates—could benefit from the proposed changes. More immediately, the Supreme Court just eliminated DOMA’s barrier to same-sex spousal visa petitions, and about a third of the U.S. population now lives in a marriage-equality state.

What does this mean for young lawyers? A lot of prospective clients in a frequently overlooked area of the law and the chance to put your law degree to work making dreams come true!

Corny, perhaps, but true.

At the same time, immigration law is notoriously complex; equal parts rewarding and frustrating.

Remember your administrative law class? Your favorite subject? Yeah, me neither.

Where does a young lawyer begin when faced with such a challenge? First, why not talk to some immigration lawyers to see if the practice area interests you? We don’t bite, and you can find a bunch of us at AILAlawyer.com. If this piques your legal interest, consider taking a pro bono case through the Rocky Mountain Immigrant Advocacy Network. You will be matched with a client in desperate need of your services and an experienced mentor.

Okay, so you’ve finished your pro bono case, and now you’re hooked. How do you become a competent immigration lawyer? One way is to land a job as an associate at an immigration firm, but these scarce positions can be highly competitive and may require years of experience. Another way is to start your own firm or an immigration practice within an existing firm. If you choose one of these options, the following could be your life raft.

  1. Reach out ~ Join the American Immigration Lawyers Association (AILA) and the Immigration Section of the Colorado Bar Association. Meet all the immigration lawyers you can. They will be your best resource.
  2. Don’t reinvent the wheel ~ Ask about the best treatises and research tools for your immigration niche. Check out free resources from the National Immigration Project, American Immigration Counsel, AILA (which you joined, right?), and other non-profits.
  3. Address language and cultural differences ~ No one can be proficient in every language and culture. Learn to work with translators and interpreters. Understand that your clients may see the judicial system differently and take time to talk through their fears, expectations, rights, and responsibilities.
  4. Expect the unexpected ~ Each immigration case is unique. The stakes for your client may range from career advancement, to family unity, to protection from torture. Take time to assess (and re-asses) every case to be sure you are safeguarding your client’s immediate and long-term interests.

Don’t stop here. Your curiosity, sense of adventure, and willingness to admit what you don’t know will serve you well as an immigration practitioner. When the wave of new immigration lawyers hits, your preparation will help you ride the tide to an intellectually and personally rewarding career.

Katharine Speer is a solo immigration practitioner in Denver. She currently serves on the Executive Committee of the Colorado Chapter of AILA, chairs the Spanish Speaking Lawyers Committee of the Colorado Bar Association, and participates in Denver Legal NightGreeley Legal Night, and Ya Es Hora De Ciudadanía. She hopes to see you there! In the meantime, she can be reached on her homepage, by email, on Twitter, orLinkedIn. She also writes for the DBA Young Lawyers Division blog, where this post originally appeared.

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.

But Are You Helping?

Richard Pennington 1By Richard Pennington

In 2009, psychologist and MIT professor emeritus Edgar Schein published a book, Helping, that described a general model for effective helping. Schein is widely known for his work in organization development; he wrote the business classic Organization Culture and Leadership (2004).

I reached Schein circuitously. I had retired from the private of law in 2010 and was researching models for teaming, leadership, project management, problem solving, and organizational learning. In one of the better books on leadership in teams, Lateral Leadership, authors Roger Fisher and Alan Sharp distilled their advice down to one piece: “Choose to help.” But what was helping?

The idea lay dormant for a year while I finished a book on effective team performance. Then, during preparation for a short training seminar about consultancy and learning, the relevance of Schein’s ideas to law practice suddenly dawned on me.

Schein’s model is based on the conclusion that helping relationships – and he uses attorney-client relationship as one of his many examples – have a life cycle much like teams. They move from a period of pure inquiry to various roles: the expert, the doctor, and the process consultant. Here is how Schein would see the development of an effective attorney-client relationship.

1. Begin always with a period of pure inquiry. Effective helping begins with readiness. Early in a relationship, perhaps at the stage when many attorneys have initial consultations, there is an imbalance in the social economics. Clients feel “one down,” a feeling that they don’t bring anything of value to the relationship, uncertainty about their ability to influence the outcome, and insecurity about whether their goals will be achieved. The attorney needs to do something to adjust the imbalance in order to build trust. By simply listening to the client’s story, using “humble inquiry” as Schein calls the process strategy at this stage, the client begins to feel like there is a better balance in the relationship just by being heard. That begins the development of trust.

2. Use caution not to fall into the diagnostic trap too early. Experts are more comfortable with the kinds of questions that lead to solutions. Who was at the meeting? When did you meet? What did the other party say? How did the language in that meeting compare to prior email communications? Use of those kinds of diagnostic questions too early may impede the development of the relationship. The attorney is walking a tightrope here, because this also is the time when attorneys are hoping to gain a client. The quality of informed questions is an important factor in a client’s decision, and informed questions tend to be diagnostic.

3. Start with process inquiry and return to it often. Schein uses process inquiry to describe the underlying process of relationship building and problem solving, not a focus on the substance of the problem. For example, the question, “How would you see a successful outcome?,” at the conclusion of an initial consultation turns the focus to the client’s expectation of the process outcome. That question might uncover a discomfort with the unintended consequences of litigation, for example. Occasional questions during the engagement like, “How can we better communicate about the drafts?,” or “How am I doing keeping you informed about the progress of the case?,” turns the focus to the relationship, keeps it in balance as client input is sought, and continues to build trust. These also are the kinds of questions that help a relationship out of the quicksand when it gets bogged down.

Lawyers eventually move into the expert role in writing documents or handling litigation. This may be where the Schein model pauses in its relevance somewhat, because some consultants stay in the process mode throughout. “Clients own the problem” Schein says, but lawyers are paid to solve them. “Don’t give unwanted help,” counsels Schein, but the cost of legal services probably mitigates the risk of over-helping in unwanted ways.

Still, Schein’s emphasis on the importance of process feedback is relevant. So is the inquiry approach to developing the relationship. Attorneys are taught the art of questioning, but not this way. Pure inquiry and the use of real questions are key to fostering development of the relationship. Competency, professionalism and ethics are critical parts of client relationships. But effective helping may be the most important.

Richard Pennington returned to the practice of law in April 2013 as General Counsel for WSCA-NASPO Cooperative Purchasing Organization LLC. WSCA-NASPO is the nonprofit subsidiary of the National Association of State Procurement Officials that supports cooperative purchasing by the states and what formerly was the Western States Contracting Alliance. Richard is a member of the CBA/DBA Professionalism Coordinating Council. His book, Seeing Excellence: Learning from Great Procurement Teams, is scheduled for release in August 2013.

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.

Supreme Court Ruling on DOMA Raises More Questions Than it Answers for Colorado Families

By Ann Gushurst and Kristi Wells

On Wednesday, June 26, 2013, the Supreme Court struck down, in a 5-4 decision, Section 3 of the Federal Defense of Marriage Act, known as DOMA, which act defined and recognized marriages only as contracted between a man and a woman.  It did so on the basis that Section 3 of DOMA created a two tiered marriage system under Federal law, under which valid same-sex marriages were denied validity under Federal laws.

The Obama Administration released the following statement after the Supreme Court announced its ruling:

This ruling is a victory for couples who have long fought for equal treatment under the law; for children whose parents’ marriages will now be recognized, rightly, as legitimate; for families that, at long last, will get the respect and protection they deserve; and for friends and supporters who have wanted nothing more than to see their loved ones treated fairly and have worked hard to persuade their nation to change for the better.

This ruling will have interesting repercussions for states like Colorado, which has its own DOMA provision in the Colorado Constitution, although this ruling does not strictly challenge the constitutionality of DOMA in states that have state DOMA provisions.

In Colorado, we have the opposite problem to the DOMA case addressed by the Supreme Court in that Colorado recognizes complete state rights for same sex relationships as civil unions, but denies them the status of marriage.  By doing this, Colorado effectively denies those in same sex relationships from enjoying the benefits of marriage under federal statutes.  The question remains—is Colorado’s similar DOMA provision equally unconstitutional and how (and when) will that issue be addressed?

Until that issue is resolved, Colorado will be the Petri dish for issues that remain unaddressed by this Supreme Court decision.  For example, the Colorado statute recognizing civil unions specifically grants those in civil unions all of the rights of marriage, except that the right to file a joint income tax return is not permitted until federal law is changed to allow those who are not considered legally married to file joint income tax returns.

The Supreme Court’s decision regarding Section 3 of DOMA does nothing to require the federal government to recognize civil unions as equivalent to marriages.  Thus, couples in Colorado civil unions will continue to experience the exact disparate tax treatment that the Supreme Court struck down in its DOMA ruling.  And this disparate treatment will continue in Colorado until the Colorado Constitution is amended to repeal Colorado’s state DOMA provision, or until a federal statute is enacted which treats state-recognized civil unions the same as state-recognized marriages.

Further, the decision did nothing to address Section 2 of DOMA, which allows states to refuse to recognize same-sex marriages performed under the laws of other states.   While Section 2 still stands, Colorado can continue to refuse to recognize the same-sex marriages performed in other states, transforming the status of those couples who come to Colorado into civil unions.

This results in an anomaly for federal tax purposes.  The same-sex couple who marries in Massachusetts will be eligible to file a joint federal tax return as long as they continued to live in that state.  However, if the couple subsequently moves to Colorado and their marriage is no longer recognized, do they suddenly lose the right to file a joint federal tax return?

Perhaps most critical, this decision does not begin to unravel the complex issues that arise when same-sex couples have children.  As long as the non-biological parent formally adopts a child, these issues are fairly straightforward.  However, Colorado recognizes presumptions in favor of both a biological parent and a psychological parent in cases regarding allocation of parental responsibilities.  Thus, where a woman in a Colorado civil union becomes impregnated by a third party who is not involved in raising the child thereafter, Colorado Courts are still required to give weight to the biological connection between the child and the sperm donor when making decisions regarding who should have parenting time with that child.  However, a child born to a woman in a traditional marriage is presumed to be the child of that marriage.

For those fighting for equality, this decision is a powerful (yet mixed) step forward.  The other side of the equality coin is, of course, that with the ability to become legally married comes the need to legally end the marriage if a relationship ends.  As we move forward, divorce lawyers in Colorado now must begin the process of figuring out how to help these individuals deal with the questions left unanswered by today’s decision.

 

Ann Gushurst, Esq. has been practicing exclusively in family law for most of her law career. Her practice with Gutterman Griffiths PC in Littleton is currently a mixture of litigation, collaboration, and mediation. She is also responsible for the firm’s research and appellate work. Ms. Gushurst is the editor of the CBA Family Law Section newsletter, is on the section’s Executive Council, and is one of the three chairs of the Family Law Ethics Task Force.

Kristi Anderson Wells, Esq. has over 15 years of experience in the areas of taxation, benefits and executive compensation law which she brings to the practice of family law. Kristi’s practice focuses on the division of executive compensation, retirement assets and stock options in dissolution. In addition to her law degree, Kristi has a Master’s degree in Taxation (LL.M.) from the University of Washington School of Law.

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

Colorado Anti-Discrimination Act Now Provides Remedies in Employment Discrimination Cases

Roseman, BarryBy Barry Roseman

In 2013, the Colorado General Assembly enacted remedies for the employment discrimination provisions of the Colorado Anti-Discrimination Act (CADA) that have been part of Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA) for decades.

The bill, HB 13-1136, provides that Colorado employers found guilty of unlawful discrimination or retaliation, in violation of the CADA, can be held liable for compensatory damages, punitive damages and attorney fees. CADA cases also will be able to be tried to juries. The amounts that can be awarded for compensatory or punitive damages will depend on the size of the employer. Those caps are:

For employers with 1-4 employees: $10,000

For employers with 5-14 employees: $25,000

For employers with 15-100 employees: $50,000

For employers with 101-200 employees: $100,000

For employers with 201-500 employees: $200,000

For employers with more than 500 employees: $300,000

These remedies will not go into effect until 2015, and will apply only to discrimination or retaliation claims that are based on conduct in 2015 or later. Several groups will benefit the most from this bill:

  • Employees who work for smaller employers, who are not covered by Title VII, the ADEA or the ADA. Those statutes apply only to personnel decisions by companies with at least 15 employees (Title VII and the ADA) or at least 20 employees (the ADEA).
  • Employees who have claims not recognized under federal law, such as claims for discrimination because of sexual orientation or gender identity.
  • State employees in ADA and ADEA cases. The U.S. Supreme Court has held that the Tenth Amendment bars claims for monetary damages against State governments and State agencies under those statutes.
  • Employees who live and work far from the Denver area. Claims arising under federal law can be removed to federal court. Claims arising under state law will stay in state court, at least where diversity jurisdiction does not apply.

Public employees cannot recover punitive damages under CADA or under federal law. Employees of the State of Colorado who can file discrimination claims with the State Personnel Board (SPB), and private or public employees who bring claims in Colorado Civil Rights Commission (CCRC) hearings, will not be able to recover compensatory or punitive damages in CCRC hearings or compensatory damages in SPB hearings. Instead, if they prevail on liability in those hearings, those employees will have to file a civil action to try to recover those damages. The CCRC and the SPB will stay their proceedings, including appeal rights, for at least 30 days and possibly longer, to give employees an opportunity to file and prosecute those civil actions.

These amendments track provisions in federal law in several respects:

  • Employers that demonstrate that they acted in good faith to prevent discrimination cannot be held liable for punitive damages.
  • An employer cannot be held liable for punitive damages where that employer has established that it made good-faith efforts to provide a reasonable accommodation to an employee’s disability.
  • Employment discrimination that is unlawful because of the disparate impact of employment policies will not support an award for compensatory or punitive damages.

The courts also are to consider the size and assets of the employer and the egregiousness of its unlawful conduct in determining the appropriate level of damages.

In addition, the bill provides that it unlawful to discriminate against a person who is 70 years of age or older because of that person’s age. That has been part of the ADEA since the 1980s.

The delayed implementation of the bill will give smaller employers an opportunity to learn about CADA and to bring their employment practices into compliance, if they are not in compliance already. The CCRC also is required to establish a volunteer working group by September 1, 2013. That working group is to develop an education and outreach plan for employers, and to compile educational resources for employers. The CCRC shall make this information available to employers, including through its Web site.

Before this law was enacted, Colorado was one of only eight states – five of them in the South – that did not enable plaintiffs to recover compensatory damages, punitive damages or attorney fees in employment discrimination or retaliation cases. HB-1136 brought CADA, at long last, into the 21st Century.

Barry D. Roseman is a partner in the firm of McNamara, Roseman & Kazmierski LLP, and has been representing plaintiffs in employment cases since 1975. He currently serves as co-chair of the National Employment Lawyers Association’s (NELA) Judicial Nominations Committee. He served on NELA’s Executive Board between the organization’s founding in 1985 and 2007; is a former vice president of that organization; is one of the founders and is the chair of the executive board of NELA’s Colorado affiliate, the Plaintiff Employment Lawyers Association (PELA); and chairs PELA’s Legislative Committee. He also is a fan of the Colorado Rockies, in both good times and bad.

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.

May is Elder Law Month – a Message for Solo and Small Firm Types to Do Basic Succession Planning for Their Law Practices

CashmanBy Barbara Cashman

In 2013, the National Academy of Elder Law Attorneys has a calendar brimming full of Elder Law Month activities in several states. Our bar’s “signature event” for seniors is Senior Law Day and this year’s program is scheduled for July 27, 2013, once again at the Denver Merchandise Mart. So if folks are feeling left out in Colorado, I urge my fellow solo and small firm attorney types to . . . make it a durable Power of Attorney day!?

Say what Barb? Sure, You’re another year older and another year wiser – but have you made any efforts to put your house in order? I presented a CLE in February called “Death of a Solo, Death of a Practice” and it was well-attended. I distributed my forms to several people as a result of the program, but I suspect there are others who are inclined to get started but need a nudge.  So ask yourself:

  • Are you planning on retiring someday or are you committed to die with your boots on?
  • To stretch that expression: what happens if your boots fall off before you die?
  • Who’s got your back in the event of disaster?
  • How will your clients’ interests (and derivatively yours) be protected in the event of incapacity or disability?
  • Do you intend to leave a big mess from your failure to plan for the inevitable or are you just willing to let that happen?

If I’m sounding cheeky, well it’s because I do like to find humor in end of life scenarios. Thankfully, I’m not alone.

Fear is the cheapest room in the house. I would like to see you living in better conditions.
—Hafiz (14th century Persian-born mystic and poet)

Our death-denying culture takes these things far too seriously! Death is part of life, and for many of us who enjoy the benefits of longevity, disability – in the guise of short-term or long-term incapacity – is one of the byproducts of longevity. It’s time to face the music and recognize that every day is precious and a gift, and that we don’t know or have control over how many more days we will have. Here’s another line about our fear of mortality:

Perhaps all the dragons of our lives are princesses who are only waiting to see us once beautiful and brave.
—Rainer Maria Rilke

So if you would like to observe (no, I’m not going to use the term “celebrate”) Elder Law Month by making a plan for your law practice’s survival or for its demise, I can help. Get in touch with me and I can suggest some useful forms. The best place to get started however, is to identify a trusted colleague with whom you can share – perhaps mutually, that’s the best scenario – duties as each other assisting attorney (click here to read the recent Legal Connection article on succession planning by Amy Symons and Julie Davis). Bottom line is that you need to have documents in place. You can read posts from the current series on solo attorney succession planning on the CBA’s SOLOinCOLO blog.

Questions? You can reach me at barb@DenverElderLaw.org.

Barbara Cashman is a solo practitioner in Denver, focusing on elder law, estate law, and mediation. She is active in the Trust & Estate and Elder Law sections of the CBA and is the incoming chair of the Solo/Small Firm section. She contributes to the SOLOinCOLO blog and blogs weekly on her law firm blog.  She can be contacted at barb@DenverElderLaw.org.

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.