December 18, 2018

Archives for July 2015

New Crowdfunding Rules Released by Division of Securities

The Colorado Crowdfunding Act, HB 15-1246, was signed into law by Governor Hickenlooper on April 13, 2015, with an effective date of August 5, 2015. The goal of the Act was to increase equity opportunities for Colorado start-ups by creating a crowdfunding option with limitations to protect investors. The Act required the Securities Commissioner to promulgate rules and regulations in order to protect small businesses and investors.

The Colorado Department of Regulatory Agencies’ Division of Securities released comprehensive new crowdfunding rules on Thursday, July 30, 2015. The regulations are available here. The Division of Securities also issued guidelines about the new rules, noting that before a business can take advantage of the new crowdfunding rules it must file various forms with the Division of Securities; there are limits to how much money can be raised and how much individual investors can contribute; and all aspects of the transaction must take place between Colorado residents. The Division’s guidelines are available here.

Tenth Circuit: District Court Abused Discretion by Rejecting Plea Bargain Based on Appeal Waiver

The Tenth Circuit Court of Appeals issued its opinion in United States v. Vanderwerff on Wednesday, June 10, 2015.

Timothy Vanderwerff was indicted in the District of Colorado on three child pornography-related counts: Count 1 charged him with receipt of child pornography and Counts 2 and 3 charged him with possession. Vanderwerff entered into a plea agreement with the government wherein he would plead guilty to Count 2, which carried a statutory sentencing range of zero to ten years, in exchange for dismissal of Counts 1 and 3. The plea agreement contained an appeal waiver. The district court rejected the plea agreement, citing a “tectonic shift” in jurisprudence following the Supreme Court’s decision in Lafler v. Cooper which suggested the court should be a participant in the plea bargaining process. The district court also relied on United States v. Booker to support its finding that sentencing requires a court to consider context and apply criteria instead of performing mechanical judgment. The district court suggested that some of the judges on the Tenth Circuit were not “paying attention to their obligations” in reviewing lower court decisions. The district court rejected the proposed plea agreement.

Vanderwerff sought review of the district court’s rejection of the first plea agreement, but the Tenth Circuit determined it lacked jurisdiction because the issues were premature. The parties then negotiated a new plea agreement, wherein Vanderwerff would plead guilty to Count 1 in exchange for dismissal of Counts 2 and 3. Notably, the new plea agreement did not contain an appeal waiver. The statutory sentencing range for Count 1 was five to twenty years’ imprisonment. The district court sentenced Vanderwerff to 108 months’ imprisonment, and Vanderwerff timely appealed.

On appeal, the government agreed that the district court abused its discretion in rejecting the first plea agreement. The Tenth Circuit appointed pro bono amicus counsel to independently assess the legal propriety of the district court’s sentence decision. The amicus also agreed that the district court abused its discretion. The Tenth Circuit similarly concluded the district court abused its discretion in rejecting the plea agreement based on the appeal waiver, since its decision was premised on legally erroneous and irrelevant considerations. The Tenth Circuit opined that the district court’s reading of Lafler as a basis for rejecting the plea agreement evinced a serious misunderstanding of the case. The Tenth Circuit did not read Lafler to introduce a new role for the judiciary in the plea bargaining process.

The Tenth Circuit also disagreed with the district court’s interpretation of Booker, finding nothing in the case to suggest that district courts were obligated to exercise a wider scope of discretion in evaluating plea agreements. The Tenth Circuit noted the core holding of Booker was that the Guidelines are advisory, and found the district court seriously misconstrued Booker‘s mandate, constituting an abuse of discretion. In fact, the Tenth Circuit found nothing in Booker that spoke to appellate waivers at all, much less anything that allowed the district court to restrict a defendant’s ability to knowingly and voluntarily waive his or her appellate rights.

Finally, the Tenth Circuit disapproved of the district court’s use of the § 3553(a) factors as a basis for its rejection of the appeal waiver. The Tenth Circuit found the court committed serious error by applying the sentencing factors to the entry of guilt phase. The Tenth Circuit also did not appreciate the suggestion that it was not paying attention to its obligations to review the decisions of district court judges, and noted that it had its responsibilities firmly in hand. The Tenth Circuit found that plea bargaining was strongly favored and the appellate waiver was an important bargaining tool for a defendant.

The district court’s judgment was reversed and remanded. Judge Hartz separately concurred.

Tenth Circuit: No Fundamental Right Exists to Limitless Taxation in Order to Fund Education

The Tenth Circuit Court of Appeals issued its opinion in Petrella v. Brownback on Monday, June 1, 2015.

Plaintiffs, parents of students in the relatively wealthy Shawnee Mission School District (SMSD) in Kansas, sued various Kansas officials in U.S. District Court in 2010, seeking to enjoin enforcement of Kansas’ cap on local property taxes for education. The district court dismissed their suit for lack of standing, but the Tenth Circuit reversed in an opinion limited to the sole issue of standing. The district court dismissed Plaintiffs’ claims that the tax cap is subject to heightened scrutiny but allowed the rational basis claims to proceed. Plaintiffs filed a motion to reconsider and a notice of appeal. When the district court denied the motion for reconsideration, plaintiffs again appealed. The Tenth Circuit consolidated the appeals.

Plaintiffs sought relief as to four district court rulings: (1) the denial of Plaintiffs’ motion for a preliminary injunction; (2) denial of Plaintiffs’ motion for summary judgment; (3) partial grant of Defendants’ motion to dismiss; and (4) denial of Plaintiffs’ motion for reconsideration. First addressing jurisdiction, the Tenth Circuit found it lacked jurisdiction to consider the denial of Plaintiffs’ motion for summary judgment. Next, the Tenth Circuit considered whether Plaintiffs’ claims were moot because of subsequent amendments to Kansas’ school financing system, and found they were not, since the slight increases to the budget cap did not ameliorate their claims that the cap burdened their constitutional rights. The Tenth Circuit proceeded to address the merits of Plaintiffs’ claims.

The district court concluded Plaintiffs were unlikely to prevail on their claims that the budget cap violated their First Amendment rights, burdens their fundamental rights, imposes an unconstitutional condition, and denies them equal protection. The Tenth Circuit agreed. Plaintiffs argued the budget cap violated their First Amendment rights because education is speech and the budget cap burdens education, therefore the budget cap burdens speech. The Tenth Circuit found each premise seriously flawed, and noted that no court has recognized that a limit on public funding for education constitutes a limit on speech. Plaintiffs argued the budget cap limits their free association rights because it prevents them from coming together as a community to vote to raise property taxes for education at the district level. However, the Tenth Circuit found that there is no First Amendment right to a voter initiative, and Plaintiffs were free to raise funds for the school district privately, which they did.

As to Plaintiffs’ argument that the cap violates their civil liberties, the Tenth Circuit found there is no fundamental right to tax one’s neighbors without limitation in order to fund education. Plaintiffs also argued the cap undermines their right to direct the education of their children, but the Tenth Circuit reiterated that there is no fundamental liberty interest in setting public policy for public education funding, and the cap only prevents Plaintiffs from compelling their neighbors to vote on a tax increase. As to Plaintiffs’ argument that the cap burdens their fundamental voting rights, the Tenth Circuit again disagreed, finding that precedential case law only scrutinized who may be subject to voting restrictions, not which topics may be restricted.

The Tenth Circuit similarly dismissed Plaintiffs’ argument that the cap should be reviewed under heightened scrutiny because it denies them equal protection of the law in a base desire to harm them, holding that wealth, or residence in a wealthy school district, is not a suspect class subject to heightened scrutiny. The district court dismissed Plaintiffs’ various claims that the budget cap should be reviewed under heightened scrutiny, and the Tenth Circuit affirmed this dismissal.

The Tenth Circuit dismissed Plaintiffs’ challenge to the district court’s denial of summary judgment, and otherwise affirmed and remanded for further proceedings.

Tenth Circuit: Unpublished Opinions, 7/30/2015

On Thursday, July 30, 2015, the Tenth Circuit Court of Appeals issued one published opinion and nine unpublished opinions.

Janczak v. Tulsa Winch, Inc.

Landmark American Insurance Co. v. VO Remarketing Corp.

Carlson v. Pryor

United States v. Chisholm

Peterson v. Timme

In re Harth: Tal v. Harth

Villanueva v. Frawner

United States v. Charre

United States v. Cervantes

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

The Culture of Law (Part 4): Changing Our Default Cultural Setting

rhodes“We cannot solve problems by using the same kind of thinking we used when we created them.”
Einstein

Let’s start this week by revisiting the premise of this series:

The law of the future requires the law culture of the future. Culture is the context in which the future will occur. If we understand what culture is and where it comes from, we can most effectively shape both the law and its future… if we choose to do so.

Key words: If we choose to do so. We might not. Let’s look at what’s going on in our heads one way or the other.

As we saw last time, our brains are patterned with our cultural expectations through the creation of new brain cells (neurons) and new brain wiring (neural pathways).

When we resist cultural change, judge new developments as “bad,” insist the old ways were better, we think we’re making a reasoned assessment of the pros and cons of old vs. new, and we’re convinced our assessment is correct. Maybe so, but the neurobiological reality is that our brains are encountering a new cultural model that won’t run on their existing neurons and neural pathways. Turns out we’re not saving the citadel from the invading hordes, we’re experiencing a brain reality: hormones secreting and electrical charges firing within our skulls.

Kinda puts the kibosh on the righteousness indignation, doesn’t it?

When we promote cultural change, our brains need to generate new neurons (a process called neurogenesis) and lay down new neural pathways (a process called neuroplasticity). Once in place, this new neurological infrastructure will support the change we want.

Until our brains are rewired to the point where they can find and maintain the internal-external brain concordance Dr. Wexler talked about (see last time), we will continuously revert to our old cultural patterning. This is why we can leave a firm to set up a solo or small firm practice, or launch ourselves on a mission to reform law education. or whatever our focus of change might be, only to wake up one day to find ourselves back in the same culture where we started. We revert and self-sabotage because our brains weren’t rewired to support the change we wanted.

We begin the process of deliberate change with an awareness of what our default cultural setting already is, as patterned into us during law school and our early practice years. I previously quoted Simon D’Arcy of Next Level Culture. Here he is again:

You cannot change what you cannot accept. Creating a thriving team and workplace culture starts with revealing, acknowledging and embracing your default culture.

To know where we’re going, we first need to know where we are, which means the cultural beliefs and behaviors, assumptions and expectations currently patterned in our brains. Finding out is an essential exercises in honesty, and honesty requires reflection.

We think we don’t have time for reflection. We want results.

We’ll get results if we take time for reflection.

New culture means new thoughts and behaviors. We won’t have either if our brains haven’t been rewired to accommodate them. We won’t get anywhere unless we first understand where we are now. And we won’t gain that understanding unless we step back and reflect about it.

That is the inside-out game of cultural change.

A collection of Kevin Rhodes’ Legal Connection blog posts for the past three years is now available in print from Amazon. Also available from Amazon as a Kindle, and as an ebook from Barnes & Noble, iTunes, Smashwords, and Scribd.

Finalists Selected for Rio Grande County Court Vacancy

On Wednesday, July 29, 2015, the Colorado State Judicial Branch announced the selection of two finalists to fill a vacancy on the Rio Grande County Court. The vacancy was created by the appointment of Hon. Patrick H. Hayes, Jr., to the Twelfth Judicial District Court, effective July 1, 2015.

The two nominees are Mérida I. Zerbi and Barbara A. Zollars, both of Monte Vista. Mérida I. Zerbi is a solo practitioner in Monte Vista, where she practices in the areas of criminal law, domestic relations, immigration, probate, and water law. Barbara A. Zollars of the San Luis Valley Law Firm is a former public defender who currently practices criminal defense.

Under the Colorado Constitution, the governor has fifteen days in which to appoint one of the nominees to the bench. Comments regarding the nominees may be emailed to the governor at gov_judicialappointments@state.co.us. For more information about the nominees, click here.

Colorado Court of Appeals: Announcement Sheet, 7/30/2015

On Thursday, July 30, 2015, the Colorado Court of Appeals issued six published opinions and 28 unpublished opinions.

People v. DeGreat

People v. Froehler

In the Interest of Neher v. Neher

Zeke Coffee, Inc. v. Pappas-Alstad Partnership

Todd v. Hause

People in Interest of C.G.

Summaries of these cases are forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

Tenth Circuit: Complete Prohibition on Internet Access Constitutes Greater Deprivation of Liberty than Reasonably Necessary

The Tenth Circuit Court of Appeals issued its opinion in United States v. Ullmann on Tuesday, June 9, 2015.

Ronald Ullmann pleaded guilty to making a false statement, arising from a sexually explicit online conversation he had with an undercover FBI agent posing as a 13-year-old. He served a 60-month prison term and began his three years of supervised release. Ullmann contended that the district court’s imposition of a special condition restricting his use of the internet and a panoply of electronic devices impose a greater deprivation of liberty than is reasonably necessary.

The Tenth Circuit noted that its prior precedent suggested that a complete prohibition on internet access would constitute a greater deprivation of liberty than reasonably necessary, and in the decade since the two precedential cases were decided the internet has become an even more indispensable tool of everyday life. The Tenth Circuit found the probation office’s restriction as written to be unreasonable, but because in this case the district court orally modified the condition to be not a blanket prohibition but rather a restriction, there was no error. The Tenth Circuit cautioned the probation office that adjudicating further appeals based on the prohibitive language would not be a valuable use of its judicial resources.

Ullmann also argued the modified condition is inconsistent with the Sentencing Guidelines, but the Tenth Circuit disagreed because the condition restricts rather than prohibits Ullmann’s internet use. Ullmann further contended the modified condition unconstitutionally delegated authority to perform a judicial function to the probation office. The Tenth Circuit disagreed, finding a district court’s oral delegation to a probation officer controls over the written conditions of probation imposed by the probation office. The district court exercised its authority at the sentencing hearing when it clarified that Ullmann would only have to comply with the written restrictions related to internet-capable devices.

The Tenth Circuit affirmed the district court’s judgment.

Tenth Circuit: Unpublished Opinions, 7/29/2015

On Wednesday, July 29, 2015, the Tenth Circuit Court of Appeals issued one published opinion and three unpublished opinions.

United States v. Le

Tlalpan-Ochoa v. Lynch

United States v. Little

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Hon. Timothy Tymkovich Named New Chief Judge of Tenth Circuit

On Monday, July 27, 2015, the U.S. Court of Appeals for the Tenth Circuit announced that Hon. Mary Beck Briscoe will step down as Chief Judge, effective September 30, 2015, with Judge Timothy Tymkovich taking her place as chief. Judge Briscoe was appointed to the Tenth Circuit in 1995, and became Chief Judge since 2010. She will remain an active judge on the Tenth Circuit after stepping down as Chief Judge.

Judge Tymkovich was appointed to the Tenth Circuit in 2003. Prior to his appointment, he was in private practice in Denver, where he specialized in civil and constitutional matters ranging from election law to water law. He was Solicitor General for the Colorado Office of the Attorney General from 1991 to 1996 and clerked for Hon. William H. Erickson from 1982 to 1983. He received his law degree from the University of Colorado and his undergraduate degree from Colorado College.

Tenth Circuit: District Court Empowered to Consider All Relevant Conduct When Calculating Loss for Sentencing Purposes

The Tenth Circuit Court of Appeals issued its opinion in United States v. Alisuretove on Monday, June 8, 2015.

Elvin Alisuretove pleaded guilty to one count of conspiracy to commit wire fraud after authorities discovered his connection in a scheme to “skim” bank information off debit cards and make cash withdrawals from ATM machines. Alisuretove was sentenced to 63 months’ imprisonment followed by 36 months’ supervised release and was ordered to pay $240,682.27 in restitution. Alisuretove appealed both his sentence and restitution amount, arguing the district court erred in determining his total offense level, in calculating the amount of loss associated with his conduct, and in determining the amount of restitution owed under the Mandatory Victims Restitution Act (MVRA).

The Tenth Circuit first examined the total amount of loss attributed to Alisuretove. Under the Sentencing Guidelines, a loss between $200,000 and $400,000 would result in a 12-level increase to Alisuretove’s base offense level of 1. Alisuretove contends the district court’s calculation of $360,856.80 total loss was “clearly erroneous” because no evidence showed he placed or used the skimming devices. Alisuretove asserted that the only loss that should be attributed to him was the $140,000 he told officers about after arrest. The Tenth Circuit noted that the district court was empowered to consider not just the conduct proffered by defendant but also all of defendant’s relevant conduct. In this case, Alisuretove’s guilty plea, statements to law enforcement, and other evidence supported the district court’s calculation of $360,856.80 total loss. The Tenth Circuit found no error in this calculation.

The Tenth Circuit next evaluated the restitution amount under the MVRA. Alisuretove contended the district court erroneously took into account losses suffered by twelve financial institutions even though only five were named in the indictment. The Tenth Circuit found the word “victim” in the MVRA is not limited to only those victims named in the indictment but rather encompasses any person harmed in the course of defendant’s criminal conduct. However, because neither the PSR nor the district court made any factual findings regarding the specific losses suffered by the financial institutions, the Tenth Circuit remanded for recalculation of restitution.

The district court’s judgment was affirmed in part, reversed in part, and remanded for further findings.

Tenth Circuit: Unpublished Opinions, 7/28/2015

On Tuesday, July 28, 2015, the Tenth Circuit Court of Appeals issued two published opinions and six unpublished opinions.

Esparza v. Falk

United States v. Magnan

Rodriguez-Casillas v. Lynch

United States v. Romero-Leon

United States v. Bartley

Jackson v. Park Place Condominiums Association, Inc.

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.