The Evolution of the Trial by ps94506

VIEWS: 10 PAGES: 32

									                                                         SPRING 2004




PUBLISHED BY THE LITIGATION SECTION                                          VOLUME 23 • NUMBER 1




                                       The Evolution of the Trial
   In This Issue…
    2   COMMENTS FROM THE
                                       Lawyer
        EDITOR                         By Stephen F. English & Timothy J. Calderbank
        By Dennis P. Rawlinson         Bullivant Houser Bailey

    4   MESSAGE FROM THE CHAIR         1.    The Vanishing Trial
        By Theresa L. Wright

                                       In a recent article in the New
    5   CONSUMER PROJECT
        REPORTING REQUIREMENTS
        UNDER THE FEDERAL
        CONSUMER PRODUCT SAFETY
        ACT: A PRIMER FOR
                                       I
                                       York Times,1 it was reported
                                       that—although the number of
                                       cases filed in federal court have
                                       increased—a new study shows
                                       that actual trials are becoming
        LITIGATORS
        By Chin See Ming               something of a rarity for the trial
                                       lawyer. “In 1962, the study says,
                                                         11.5 percent of
  12    WINNING TAKES CARE OF                            all civil cases in federal court went to trial. By last year [2002], that
        ITSELF
                                                         number had dropped to 1.8 percent. And even though there are five
        By William A. Barton
                                                         times as many lawsuits today, the raw number of civil trials has
                                                         dropped. They peaked in 1985 at 12,529. Last year, 4,569 civil cases
  15    WHEN WAS THE LAST TIME                           were tried in federal court.” According to William G. Young, the chief
        YOU HANDLED A DEATH                              judge of the Federal District Court in Boston, what is happening here
        PENALTY CASE?                    Stephen English is “nothing less than the passing of the common law adversarial sys-
        By Robert D. Newell
                                                         tem that is uniquely American.”
                                                              This same dearth of trials and the “passing of the common law
  19    OH, OH…THE INJURED PARTY                         adversarial system” are also occurring across the country at the state
        IS RECEIVING GOVERNMENT                          level.2 Closer to home, available statistics show that trials in Oregon
        BENEFITS                                         are also becoming a rare event. As a percentage of cases filed, the
        By Donna Meyer
                                                         number of cases actually going to trial in 2001 and 2002 for selected
                                                         counties and state-wide ranged from a low of 0.2% to a high of 3.5%:3
                                             Timothy
  26    FINAL JUDGMENTS IN STATE            Calderbank
                                                                               2001              2002
        COURTS NOT NECESSARILY
        PRECLUSIVE IN BANKRUPTCY
        COURTS                                              Marion     3.5%  2.3%
        By Tara Schleicher                                  Multnomah  2.2%  2.3%
                                                            Clackamas  0.2%  0.3%
                                                            Washington 1.0%  1.7%
  30    RECENT SIGNIFICANT
                                                            ——————————————————————————
        OREGON CASES
        By Stephen K. Bushong                               STATE-WIDE 2.5%  2.6%4

                                                                                                            Please continue on page 28

Printed on Recycled/Recyclable Paper
2                                                  LITIGATION JOURNAL


                                                                       E



    1.    Traditional Method
          A few years into practice,
                                                    Comments                                                  ulty member at National Institute
                                                                                                              of Trial Advocacy Deposition
based on experience and study,                                                                                Preparation seminars:
most of us develop a checklist that
we use as a basis to prepare wit-
                                                      From                                                    3.   Question, Don’t Lecture
nesses for trial and deposition tes-                                                                               Don’t start witness prepara-
timony. It is not unusual for the
checklist to number 10 to 20 items
                                                    the Editor                                                tion sessions by advising and
                                                                                                              coaching. Instead, find out what
or more.                                                                                                      is on the witness’s mind. What
     We then invite our witness to                                                                            concerns does the witness have?
a testimony preparation session.                                                                              Answer and address those con-
We spend half an hour to 45 min-                                                                              cerns so that they do not block the
utes lecturing the witness on how              “Novel Approaches to                                           witness’s ability to pay attention
to be a good witness and cover                 Witness Preparation”                                           to the rest of the session. You may
                                                                                                              even find that such a dialogue will
the 10 to 20 points (the witness
no doubt feels like a worker                                Dennis P. Rawlinson                               cover some of the points you had
caught behind a dump truck                                                                                    hoped to cover.
                                                                Miller Nash LLP
when the truck bed is lifted verti-
cally, the gate opened, and the                                                                             4. Practice Before Lecture
contents dumped). At the end of                                                                                Practice a direct examination
the session we ask the witness if he or she            2.    Novel Approaches                        with the witness or even a difficult, but
                                               ○




                                                                                                 ○
                                               ○




                                                                                                 ○




has understood or has any questions. We                      A number of psychologists have          not brutal, cross-examination. You will
                                               ○




                                                                                                 ○




get either a nod of the head (to avoid the         criticized the traditional form of witness        discover the strengths and weaknesses of
                                               ○




                                                                                                 ○
                                               ○




                                                                                                 ○




embarrassment of admitting that the wit-           preparation. The criticism is usually based       the witness. You may well discover that
                                               ○




                                                                                                 ○




                     ness is not on the same       on a number of factors, including:                a number of the points you had hoped
                                               ○




                                                                                                 ○
                                                                                                 ○
                                               ○




                     intellectual plane as                                                           to cover don’t need to be covered be-
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




                     the lawyer) or perhaps            a.   Witnesses generally have limited         cause the witness already understands
                                                                                                 ○
                                               ○




                     a question or two.                     attention and retention capabili-        and practices those points.
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




                          The witness then                  ties;                                         The same practice examination will
                                                                                                 ○
                                               ○




                     proceeds off to the                                                             raise weaknesses that can be discussed.
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




                     examination not only              b.   Dialogue and participation               These weaknesses will no doubt involve
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




                     with the trepidation of                heightens the possibility of re-         other points you had planned to cover
                                                                                                 ○
                                               ○




  Dennis Rawlinson   facing an unusual or                   tention; and                             and will allow you to:
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




                     unknown experience
                                                                                                 ○
                                               ○




but with the additional baggage of try-                c.   Witness preparation should be                a.    Prioritize those points.
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




ing to remember 10 to 20 foreign and                        confidence-building, not fear-
                                                                                                 ○
                                               ○




                                                                                                 ○




unnatural rules.                                            provoking.                                   b.    Take them one at a time.
                                               ○




                                                                                                 ○
                                               ○




     We are then surprised when the tes-
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




timony doesn’t go the way we had hoped.                Set forth below are a number of sug-              c.    Create pertinence and context
                                                                                                 ○
                                               ○




                                                   gestions collected from a number of                         for the points.
                                                                                                 ○
                                               ○




                                                                                                 ○
                                               ○




                                                   sources, including participation as a fac-
                                                                                                 ○
                                               ○




                                                                                                                      Please continue on next page


                                                      SPRING 2004 • VOL. 23, NO. 1
                                             LITIGATION JOURNAL                                                                      3


Comments From the Editor
continued from page 2


    d.   Promote dialogue with                                                                         breathing, articulation, and fad-
         the witness.                                                                                  ing of sentences. Help the wit-
                                                                                                       ness be positive, clear, and en-
    As the practice and session                                                                        gaging with his or her choice of
continues, interrupted by dia-                                                                         words.
logue, discussion, and suggestions,
consider the following:                                                                             l. Eye contact. Encourage the wit-
                                                                                                       ness to have proper eye contact
    e.   Initial comments should                                                                       with the proper party (in the
         be mostly positive to                                                                         case of a jury, looking comfort-
         build confidence. Initially                                                                   ably from juror to juror and then
         instilling confidence in                                                                      the counsel and then the jurors
         the witness will make the                                                                     again). Ensure that the witness
         coaching session a posi-                                                                      avoids talking to the floor, the
         tive experience. The wit-                                                                     ceiling, and shirt fronts. The wit-
         ness will gain confidence                                                                     ness should also avoid looking
         and more readily accept                                                                       to you for help and approval
         suggestions for improve-                                                                      (and thereby losing credibility).
         ment later in the session.
                                                                                                   m. Consider video sessions. For wit-
    f.   Give good with bad. With every          h.   Role within the overall case. Be                nesses who need work, consider
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○
         negative suggestion, mention                 sure your witness knows how his                 preparing a videotape of their
                                             ○




                                                                                           ○
         something good. If a witness                 or her particular testimony is in-              mock direct and cross-examina-
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○
         believes he or she is doing well,            tended to fit into your overall                 tions and then viewing it with
                                             ○




                                                                                           ○




         he or she is more likely to im-              case. This may prevent voluntary                the witness. Often, when a wit-
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         prove, concentrate, and enjoy                digressions and assist the witness              ness sees his or her nagging id-
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         the preparation experience. For              in using his or her own wits in                 iosyncrasies and bad habits, it
                                             ○




                                                                                           ○




         instance:                                    response to surprise questions.                 will enable the witness to ad-
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




                                                                                                      dress and correct them.
                                             ○




                                                                                           ○




         “Good, calm, deliberate an-             i.   Alert the witness to vulnerabili-
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         swer.”                                       ties. Discuss with the witness                Consider conducting a debriefing
                                             ○




                                                                                           ○
                                             ○




                                                      what you see as probable                 after the testimony. Ask the witness
                                                                                           ○
                                             ○




                                                                                           ○




         Then you may say,                            grounds for attack by the ad-            which portions of the preparation were
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




                                                      verse party, and practice and dis-       helpful and which were not. Witness
                                             ○




                                                                                           ○




         “But remember to answer                      cuss the handling of those at-           preparation is one of the processes on
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         briefly.”                                    tacks.                                   which we have the opportunity to obtain
                                             ○




                                                                                           ○
                                             ○




                                                                                               regular feedback. With this feedback
                                                                                           ○
                                             ○




                                                                                           ○




    g.   Comment positively about the            j.   Conduct a practice cross-exami-          there is no excuse for not improving.
                                             ○




                                                                                           ○
                                             ○




                                                      nation. Conduct or have some-
                                                                                           ○




         witness’s appearance. Everyone                                                             You may not find that by trying some
                                             ○




                                                                                           ○




         cares about his or her appear-               one in your office conduct a             of these testimony preparation ap-
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         ance. Make the witness feel                  more ruthless cross-examination          proaches, you start winning cases that
                                             ○




                                                                                           ○




         good about how he or she looks.              than you believe even the exam-
                                             ○




                                                                                               you otherwise would have lost. On the
                                                                                           ○
                                             ○




                                                                                           ○




         For instance:                                iner will conduct. Discuss and           other hand, I believe you will find that
                                             ○




                                                                                           ○
                                             ○




                                                      cure problems and weaknesses.            you will improve the chances of commu-
                                                                                           ○
                                             ○




                                                                                           ○




         “Don’t be afraid to stop and                                                          nicating effectively with your witnesses
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         think before your answer. As you        k.   Help the witness sound good.             and improve their abilities as witnesses.
                                             ○




                                                                                           ○




         just did, you look thoughtful and            Assist the witness, if necessary,        In a close case, that just might make the
                                             ○




                                                                                           ○
                                             ○




                                                                                           ○




         credible.”                                   with testimony volume, speed,            difference. ❐
                                             ○




                                                                                           ○




                                                 SPRING 2004 • VOL. 23, NO. 1
4                                               LITIGATION JOURNAL




O
Oregon lawyers play an important role in                                                                                     Let me close with a word of thanks
helping our state face its many challenges.                                                                            to the other members of the Section’s Ex-
Whether we litigate, legislate, or provide                                                                             ecutive Committee, who meet at least
legal advice from our desks, Oregon law-                                                                               four times a year (and often more) to pro-
yers make a positive difference in our be-                                                                             mote and plan the Section’s activities. The
loved and sometimes beleaguered state.                                                                                 Committee truly is a representative body.
We are particularly effective when we pull                                                                             This year we have several new members,
together for a cause. This “Message From                      Message                                                  including Mike Mahoney from Vale, Bob
the Chair” column is my opportunity to                                                                                 Thomson from Medford, Tracy Prall and
salute the Oregon lawyers who promote                      From the Chair                                              Sarah Troutt from Salem, and Ray
teamwork, collegiality, and professional-                                                                              Crutchley and Simeon Rapoport from
ism. In particular, I want to highlight the            ○   ○   ○   ○   ○   ○   ○   ○   ○   ○   ○   ○   ○   ○   ○   ○
                                                                                                                       Portland. Returning members include
contributions made by members of our                                                                                   Gene Hallman from Pendleton, John
Litigation Section in the past and current                     Karen E. Saul, Chair                                    Berge from Bend, and Susan Eggum and
year.                                                           Litigation Section                                     Judy Snyder from Portland. Our other of-
     As I write, the 2004 Litigation Insti-                     Oregon State Bar                                       ficers are Terry Wright of Portland (Past
tute and Retreat at Skamania Lodge, tak-                                                                               Chair), Richard Lane of Portland (Chair
                   ing place on March 5 and                                                                            Elect), Marc Spence of Eugene (Secretary),
                   6, is fast approaching.      donated their valuable time and talent to                              and Nancie Potter of Portland (Treasurer).
                   The Litigation Section co-   help others hone their advocacy skills dur-                            Our Board of Governors liaison is Denny
                   sponsors this event with     ing the two day program at the Mark O.                                 Rawlinson of Portland, who also serves as
                   the Oregon State Bar’s       Hatfield United States Courthouse in Port-                             editor of this Journal which is published
                   CLE Seminars Depart-         land.                                                                  three times each year. Our OSB liaison is
                   ment, and our members             Our Section is also proud to co-spon-                             Karen Lee, CLE Seminars Department
                   serve on the Institute’s     sor the Fundamentals of Civil Litigation                               Manager, who is tireless in her work on
planning committee. They are Denny              CLE that occurs every other year in Octo-                              behalf of our Section.
Rawlinson, Greg Mowe, Robert                    ber. It is yet another example of the gen-                                   The Executive Committee has a tradi-
Neuberger, Marie Eckert and Judy Snyder.        erosity shown by experienced trial lawyers                             tion of meeting in a variety of locations
As the result of their year-around efforts,     and judges who volunteer to teach the                                  during the year. In recent times, these
the Institute annually provides a great         trial practice techniques they have mas-                               have included Southern Oregon, the
opportunity to learn from national and          tered. The quality of our trial bar is height-                         Coast, Bend, Portland, and Eugene. Our
local experts on trial practice, and casu-      ened with each and every contribution                                  goal is to encourage state-wide participa-
ally socialize with our bench and trial bar.    that is made by these individuals, and by                              tion and represent the entire constituency
The Institute also gives us a chance to cel-    the program participants who invest in the                             of the Section. We also aim to have a rep-
ebrate the best among us by conferring          excellent educational opportunities of-                                resentative faculty at each CLE we spon-
the Annual Owen M. Panner Profession-           fered by the Litigation Section. The 2003                              sor, so that each region, both genders, and
alism Award on a member of our Section.         program was a big success, and this year                               the entire spectrum of diversity of our
The award for 2004 goes to Michael (Mic)        we will begin planning for the 2005 pro-                               members are recognized. We are the larg-
Alexander of Salem.                             gram.                                                                  est section of the Oregon State Bar, and
     In January, members of our Section              Our Section does more than I can enu-                             one of the most active. It takes the con-
participated in the Oregon State Bar’s Trial    merate in the space available for these                                tributions of many people to be so suc-
Advocacy College. Section member Peter          comments. Countless pro bono hours are                                 cessful. Please contact any member of the
Richter of Portland and the Honorable Ed-       spent by Section members on a wide vari-                               Executive Committee if you would like to
ward Leavy were among the program               ety of worthy causes. In the last few years,                           become more involved. You can use our
planners for this event. The faculty was        the Section has made an annual donation                                new website to find a Section member-
comprised of federal and state judges, as       to the Campaign for Equal Justice. We do                               ship list, a calendar of events, and other
well as many stars of the Oregon trial bar.     so because the vast majority of our mem-                               useful information and links. I am de-
As a program participant myself, I want         bers agree that increasing access to jus-                              lighted to chair the Section this year. I am
to offer my deepest thanks to the judges        tice in Oregon courts is a cause vital to our                          proud to be an Oregon lawyer and to call
and attorneys from all over Oregon who          profession.                                                            you my colleagues. ❐


                                                    SPRING 2004 • VOL. 23, NO. 1
                                                LITIGATION JOURNAL                                                                             5




Consumer
Project
Reporting
Requirements
Under the Federal Consumer
Product Safety Act:
A Primer for Litigators
By Chin See Ming
Perkins Coie LLP

A. Introduction                                                                                           consumption or enjoyment of a
                                                ○




                                                    port to the CPSC under the same Act. Be-
                                                                                                  ○
                                                ○




                                                                                                  ○




     Litigators who handle product liabil-          cause the CPSA provides for civil penalties           consumer in or around a perma-
                                                ○




                                                                                                  ○
                                                ○




ity matters for clients that manufacture,                                                                 nent or temporary household or
                                                                                                  ○




                                                    up to $1.65 million, and criminal sanctions
                                                ○




                                                                                                  ○




distribute, or retail consumer products             that include imprisonment, for failure to             residence, a school, in recreation
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




may unwittingly discover that the client            furnish the reports, the careful counselor            or otherwise[.]
                                                ○




                                                                                                  ○




has certain information that may require            should properly advise the client as to its
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




                      the client to report to       reporting obligations.                            15 U.S.C. § 2052(a)(1). It does not include
                                                ○




                                                                                                  ○
                                                ○




                      the federal Con-                                                                any articles which are “not customarily
                                                                                                  ○
                                                ○




                                                                                                  ○




                      sumer Product Safety          B.  “Consumer Product” Defined                    produced or distributed for sale to, or use
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




                      Commission (“CPSC”                As a threshold matter, the CPSA gov-          or consumption by, or enjoyment of, a
                                                ○




                                                                                                  ○




                      or “Commission”),             erns “consumer products” only. “Con-              consumer[.] Id. § 2052(a)(1)(A). Under
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




                      under the Consumer            sumer product” is broadly defined as:             these definitions, lawn mowers may be
                                                ○




                                                                                                  ○
                                                ○




                                                                                                      “consumer products,” Southland Mower
                                                                                                  ○




                      Product Safety Act
                                                ○




                                                                                                  ○




                      (“CPSA”). 15 U.S.C. §              any article, or component part               Co. v. Consumer Prod. Safety Comm’n., 619
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




                      2051 et seq. Or, the               thereof, produced or distributed             F.2d 499, 505-06 (5th Cir. 1980), as well as
                                                ○




                                                                                                  ○




                      lawyer may learn in                (i) for sale to a consumer for use           aluminum branch circuit wiring. Kaiser
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




the course of representing a manufacturer                in or around a permanent or tem-             Aluminum & Chem. Corp. v. United States
                                                ○




                                                                                                  ○
                                                ○




                                                                                                      Consumer Prod. Safety Comm’n, 574 F.2d
                                                                                                  ○




client that its consumer product has been                porary household or residence, a
                                                ○




                                                                                                  ○




the subject of a number of lawsuits, suffi-              school, in recreation or other-              178 (3d Cir.), cert. denied, 439 U.S. 881, 99
                                                ○




                                                                                                  ○
                                                ○




                                                                                                  ○




cient to require the client to, again, re-               wise, or (ii) for the personal use,          S. Ct. 218, 58 L. Ed. 2d 193 (1978). But see
                                                ○




                                                                                                  ○




                                                                                                                   Please continue on next page


                                                          SPRING 2004 • VOL. 23, NO. 1
6                                                 LITIGATION JOURNAL
Consumer Project Reporting
continued from page 5

Consumer Prod. Safety Comm’n v. The                                                                   Id. Other “consumer products” are re-




                                                                                                  ○
                                              ○




                                                                                                  ○
                                              ○
Anaconda Co. 593 F.2d 1314, 1322 (D.C.                 Certain “consumer                              moved from the CPSC’s jurisdiction alto-




                                                                                                  ○
                                              ○
Cir. 1979) (It is “unlikely” that “aluminum                                                           gether, specifically, those products that




                                                                                                  ○
                                              ○
                                                       products” are within




                                                                                                  ○
                                              ○
branch circuit wiring systems are custom-                                                             pose injury risks that can be reduced un-




                                                                                                  ○
                                              ○
                                                       the CPSC’s jurisdic-




                                                                                                  ○
arily sold or otherwise distributed to con-                                                           der the Occupational Safety and Health




                                              ○




                                                                                                  ○
                                              ○
sumers as distinct articles of commerce.”).            tion, and thus, sub-                           Act of 1970, 29 U.S.C. § 651 et seq.; the




                                                                                                  ○
                                              ○




                                                                                                  ○
                                              ○
Carnival rides are clearly included within                                                            Atomic Energy Act of 1954, 42 U.S.C. §




                                                                                                  ○
                                                       ject to the reporting

                                              ○
the definition. 15 U.S.C. § 2052(a)(1)                                                                2011 et seq. and the Clean Air Act, 42




                                                                                                  ○
                                              ○




                                                                                                  ○
                                              ○
(“Such term [i.e. consumer product] in-                requirements of the                            U.S.C. § 7401 et seq. 15 U.S.C. § 2080(a).




                                                                                                  ○
                                              ○




                                                                                                  ○
cludes any mechanical device which car-       ○
                                                                                                      The CPSC also may not “regulate any risk
                                                       CPSA, only upon a




                                                                                                  ○
                                              ○




ries or conveys passengers along, around,                                                             of injury associated with electronic prod-




                                                                                                  ○
                                              ○




                                                       finding by the CPSC




                                                                                                  ○
                                              ○




or over a fixed or restricted route or                                                                uct radiation emitted from an electronic




                                                                                                  ○
                                              ○




course or within a defined area for the                                                               product” if the risk may be subjected to




                                                                                                  ○
                                                       that regulation
                                              ○




                                                                                                  ○
                                              ○




purpose of giving its passengers amuse-                                                               regulation under 21 U.S.C. 360hh et seq.




                                                                                                  ○
                                                       would be in the pub-
                                              ○




                                                                                                  ○
ment . . . which is not permanently fixed                                                             Id.
                                              ○




                                                                                                  ○
                                              ○




to a site.”).                                          lic interest.




                                                                                                  ○
                                              ○




                                                                                                  ○
                                              ○




      Categorically excluded from the defi-                                                           C.  The CPSA’s Reporting




                                                                                                  ○
                                              ○




                                                                                                  ○
nition of “consumer product” are:                                                                         Requirements
                                              ○




                                                                                                  ○
                                              ○




                                                  ■   Drugs, devices or cosmetics as de-                   The CPSA’s reporting requirements




                                                                                                  ○
                                              ○




                                                                                                  ○
■   Tobacco and tobacco products. 15                  fined in sections 201(g), (h) and (i)           are contained in two different sections
                                              ○




                                                                                                  ○
                                              ○




    U.S.C. § 2052(a)(1)(B)                            of the Food, Drug, and Cosmetic Act,            of the Act, first, under section 15(b) of



                                                                                                  ○
                                              ○




                                                                                                  ○
                                                                                                      the Act, 15 U.S.C. § 2064(b), and second,
                                              ○




                                                      21 U.S.C. § 321(g), (h) & (i). 15 U.S.C.


                                                                                                  ○
                                              ○




                                                                                                  ○
■   Certain motor vehicles, or motor ve-              § 2052(a)(1)(H). Food as defined in             under section 37 of the Act. Id. 15 U.S.C.
                                              ○




                                                                                                  ○
                                              ○




    hicle equipment, as defined by 49                 section 201(f) of the Food, Drug, and       ○
                                                                                                      § 2084.
                                              ○




                                                                                                  ○


    U.S.C. § 30102(a)(6)-(7). 15 U.S.C. §             Cosmetic Act, 21 U.S.C. § 321(f), in-
                                              ○




                                                                                                  ○
                                              ○




    2052(a)(1)(C)                                                                                          (a) Section 15(b) Reporting
                                                                                                  ○




                                                      cluding poultry and poultry products
                                              ○




                                                                                                  ○




                                                                                                               Requirements
                                              ○




                                                      as defined in section 4(e) and (f) of
                                                                                                  ○
                                              ○




                                                                                                  ○




■   Pesticides as defined by the Insecti-             the Poultry Products Inspection Act,                     Section 15(b) of the CPSA re-
                                              ○




                                                                                                  ○
                                              ○




    cide, Fungicide, and Rodenticide Act,             21 U.S.C. § 453(e)-(f), meat, meat              quires “every manufacturer of a con-
                                                                                                  ○
                                              ○




                                                                                                  ○




    7 U.S.C. § 136 et seq. 15 U.S.C. §                food products as defined in section             sumer product distributed in commerce”
                                              ○




                                                                                                  ○
                                              ○




                                                                                                  ○




    2052(a)(1)(D)                                     1(j) of the Meat Inspection Act, 21             and “every distributor and retailer of such
                                              ○




                                                                                                  ○




                                                                                                      product” to “immediately inform” the
                                              ○




                                                      U.S.C. § 601(j), and eggs and egg
                                                                                                  ○
                                              ○




                                                                                                  ○




■   Firearms and ammunition that are                  products as defined in section 4 of             CPSC when the manufacturer, distributor,
                                              ○




                                                                                                  ○
                                              ○




    subject to the tax imposed by section             the Egg Products Inspection Act, 21             or retailer:
                                                                                                  ○
                                              ○




                                                                                                  ○




    4181 of the Internal Revenue Code                 U.S.C. § 1033. 15 U.S.C. §
                                              ○




                                                                                                  ○
                                              ○




                                                                                                  ○




    of 1986, 26 U.S.C. § 4181. 15 U.S.C. §            2052(a)(1)(H)                                        obtains information which rea-
                                              ○




                                                                                                  ○
                                              ○




    2052(a)(1)(E)                                                                                          sonably supports the conclusion
                                                                                                  ○
                                              ○




                                                                                                  ○




                                                      Certain “consumer products” are                      that such product:
                                              ○




                                                                                                  ○
                                              ○




■
                                                                                                  ○




    Aircraft, aircraft engines, propellers,       within the CPSC’s jurisdiction, and thus,
                                              ○




                                                                                                  ○




    or appliances as defined in 49 U.S.C.         subject to the reporting requirements of                 (1) fails to comply with an ap-
                                              ○




                                                                                                  ○
                                              ○




                                                                                                  ○




    § 40102(a). 15 U.S.C. § 2052(a)(1)(F)         the CPSA, only upon a finding by the CPSC                    plicable consumer product
                                              ○




                                                                                                  ○
                                              ○




                                                  that regulation would be in the public                       safety rule or with a volun-
                                                                                                  ○
                                              ○




                                                                                                  ○




■   Boats which could be subject to               interest. 15 U.S.C. § 2079(d). These are                     tary consumer product
                                              ○




                                                                                                  ○
                                              ○




                                                                                                  ○




    safety regulations under 46 U.S.C. ch.        those articles that present injury risks that                safety standard upon which
                                              ○




                                                                                                  ○




    43, and certain vessels, and appurte-         can be reduced under the Hazardous Sub-                      the Commission has relied
                                              ○




                                                                                                  ○
                                              ○




                                                                                                  ○




    nances to vessels, which could be sub-        stances Act, 15 U.S.C. § 1261 et seq., the                   under section 2058 of this
                                              ○




                                                                                                  ○
                                              ○




    ject to certain safety regulations ad-        Poison Prevention Packaging Act of 1970,                     title;
                                                                                                  ○
                                              ○




                                                                                                  ○




    ministered by the Coast Guard. 15             15 U.S.C. § 1471 et seq. and the Flam-
                                              ○




                                                                                                  ○
                                              ○




                                                                                                  ○




    U.S.C. § 2052(a)(1)(G)                        mable Fabrics Act, 15 U.S.C. § 1191 et seq.              (2) contains a defect which
                                              ○




                                                                                                  ○




                                                                                                                      Please continue on next page


                                                      SPRING 2004 • VOL. 23, NO. 1
                                              LITIGATION JOURNAL                                                                           7


Consumer Project Reporting
continued from page 6

         could create a substantial                                                                         (1) a failure to comply with an




                                              ○




                                                                                                ○
         product hazard described in                  The manufacturer,                             applicable consumer product safety rule




                                              ○




                                                                                                ○
                                              ○




                                                                                                ○
         subsection (a)(2) of this sec-                                                             which creates a substantial risk of injury
                                                      distributor, or retailer




                                                                                                ○
                                              ○
         tion; or                                                                                   to the public, or




                                                                                                ○
                                              ○
                                                      must report when it




                                                                                                ○
                                              ○




                                                                                                ○
                                              ○
    (3) creates an unreasonable risk                                                                         (2) a product defect which (be-




                                                                                                ○
                                              ○
                                                      has information that




                                                                                                ○
                                              ○
        of serious injury or death.                                                                 cause of the pattern of defect, the num-




                                                                                                ○
                                              ○
                                                      reasonably supports




                                                                                                ○
                                              ○
                                                                                                    ber of defective products distributed in




                                                                                                ○
                                              ○
15 U.S.C. § 2064(b).                                  the conclusion that                           commerce, the severity of the risk, or oth-




                                                                                                ○
                                              ○




                                                                                                ○
                                              ○
                                                                                                    erwise) creates a substantial risk of injury
                                                      the product “contains




                                                                                                ○
                                              ○

     The above quoted language indi-




                                                                                                ○
                                                                                                    to the public.
                                              ○




cates that the test for whether a report




                                                                                                ○
                                                      a defect which could
                                              ○




                                                                                                ○
                                              ○




is required is an objective one: the manu-




                                                                                                ○
                                              ○




                                                      create a substantial                          15 U.S.C. § 2064(a). As discussed above,




                                                                                                ○
facturer, distributor, or retailer must re-
                                              ○




                                                                                                    the general test is an objective one, that




                                                                                                ○
                                              ○




port when it has information that “rea-               product hazard[.]”




                                                                                                ○
                                              ○




                                                                                                    is, the question whether a “defect” ex-




                                                                                                ○
                                              ○




sonably” supports a conclusion that any




                                                                                                ○
                                                                                                    ists as an initial matter, should be an ob-
                                              ○




one of the (1)-(3) criteria are met. 15




                                                                                                ○
                                              ○




                                                                                                    jective one as well. Arguably, a single




                                                                                                ○
                                              ○




U.S.C. § 2064(b). That information, the




                                                                                                ○
                                              ○




                                                                                                    product liability suit does not establish




                                                                                                ○
CPSC has made clear, may be from a prod-
                                              ○




                                                  ■    Swimming pool slides. Id. pt. 1207           that a “defect” within the meaning of




                                                                                                ○
                                              ○




uct liability or personal injury claim. 16




                                                                                                ○
                                              ○




                                                                                                    15 U.S.C. § 2064(b)(2) exists, if the defect




                                                                                                ○
                                              ○




C.F.R. § 1115.12(f)(3).




                                                                                                ○
                                                  ■
                                              ○




                                                       Cellulose insulation. Id. pt. 1209           at issue in the suit is an isolated manu-



                                                                                                ○
                                              ○




                                                                                                    facturing defect. On the other hand, if


                                                                                                ○
                                              ○




     (i) Failure to Comply with

                                                                                                ○
                                              ○




                                                  ■    Cigarette lighters. Id. pt. 1210             the defect is one of design, a single suit
                                                                                                ○
                                              ○




         Consumer Product Safety
                                                                                                ○
                                                                                                    may be sufficient to establish the exist-
                                              ○




         Rules or Voluntary Con-
                                                                                                ○
                                              ○




                                                  ■    Residential automatic garage doors.          ence of a reportable “defect” under 15
                                                                                                ○
                                              ○




         sumer Product Safety
                                                                                                ○
                                              ○




                                                       Id. pt. 1211                                 U.S.C. § 2064(b)(2).
                                                                                                ○




         Standards
                                              ○




                                                                                                          Before reporting is required, the “de-
                                                                                                ○
                                              ○




         The manufacturer, distributor, or
                                                                                                ○
                                              ○




                                                  ■    Multi-purpose lighters. Id. pt. 1211         fect” must “create a substantial risk of
                                                                                                ○
                                              ○




retailer must report when it has informa-
                                                                                                ○




                                                                                                    injury to the public.” Id. Whether the
                                              ○




tion that reasonably supports the conclu-
                                                                                                ○
                                              ○




                                                  ■    Bunk beds. Id. pt. 1213.                     defect “creates a substantial risk of in-
                                                                                                ○
                                              ○




sion that the product fails to comply with
                                                                                                ○
                                              ○




                                                                                                    jury to the public” is measured by the
                                                                                                ○
                                              ○




either an “applicable consumer product
                                                      Voluntary safety standards on                 “pattern of defect, the number of defec-
                                                                                                ○
                                              ○




safety rule” or with a “voluntary con-
                                                                                                ○
                                              ○




                                                  “which the Commission has relied under            tive products distributed in commerce,
                                                                                                ○
                                              ○




sumer product safety standard upon
                                                                                                ○
                                              ○




                                                  [15 U.S.C. § 2058]” include American Na-          the severity of the risk, or otherwise.” Id.
                                                                                                ○




which the Commission has relied under
                                              ○




                                                  tional Standards Institute (“ANSI”) stan-         The CPSC considers, under “pattern of
                                                                                                ○
                                              ○




[15 U.S.C. § 2058.]” Consumer product
                                                                                                ○
                                              ○




                                                  dards for gas-powered chain saws and              defect” the cause of the defect (design,
                                                                                                ○
                                              ○




safety rules exist for, among other things:
                                                                                                ○




                                                  gas-fired room heaters. Id. pt. 1115 app.         construction, warnings, etc.) and the con-
                                              ○




                                                                                                ○
                                              ○




■   Certain architectural glazing mate-                                                             ditions under which the defect manifests
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




    rials. 16 C.F.R. pt. 1201                          (ii) Defect Which Could Create A             itself. 16 C.F.R. § 1115.12(g)(1)(i). The
                                                                                                ○
                                              ○




                                                            Substantial Product Hazard              other measurements appear self-explana-
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




■   Matchbooks. Id. pt. 1202                                The manufacturer, distributor, or       tory. Applying these criteria, an electri-
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




                                                  retailer must report when it has informa-         cal appliance that presents a shock haz-
                                                                                                ○
                                              ○




■   Bicycle helmets. Id. pt. 1203                 tion that reasonably supports the conclu-         ard because its case can be electrically
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




                                                  sion that the product “contains a defect          charged by full-line voltage is defective,
                                                                                                ○
                                              ○




■
                                                                                                ○




    Certain citizen band radio antennas,          which could create a substantial product          but a knife with a sharp blade is not. Id.
                                              ○




                                                                                                ○
                                              ○




    Id. pt. 1204                                  hazard[.]” 15 U.S.C. § 2064(b)(2). A “sub-        § 1115.4.
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




                                                  stantial product hazard” is defined to
                                                                                                ○
                                              ○




■   Walk-behind power mowers. Id. pt.             mean:
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




    1205
                                                                                                ○
                                              ○




                                                                                                                    Please continue on next page


                                                       SPRING 2004 • VOL. 23, NO. 1
8                                                   LITIGATION JOURNAL
Consumer Project Reporting
continued from page 7

     (iii) Unreasonable Risk of                                                                             (6) To the extent such information




                                                ○




                                                                                                    ○
                                                ○




                                                                                                    ○
           Serious Injury or Death                      A distributor or re-                                    is then available the data speci-




                                                ○




                                                                                                    ○
                                                ○
           A report is also required if the                                                                     fied in § 1115.13(d) [i.e. the in-




                                                                                                    ○
                                                        tailer who receives




                                                ○




                                                                                                    ○
manufacturer, distributor, or retailer ob-                                                                      formation required in “full re-




                                                ○




                                                                                                    ○
                                                        reportable informa-




                                                ○
tains information that reasonably sup-                                                                          ports,” discussed below].




                                                                                                    ○
                                                ○




                                                                                                    ○
ports the conclusion that that the prod-                tion from a manufac-


                                                ○




                                                                                                    ○
                                                ○




                                                                                                    ○
uct “creates an unreasonable risk of seri-                                                              Id. § 1115.13(c). The initial report may be



                                                ○
                                                        turer or importer




                                                                                                    ○
                                                ○
ous injury or death.” 15 U.S.C. §                                                                       made by any means, but if it is not in writ-




                                                                                                    ○
                                                ○




                                                                                                    ○
2064(b)(3). The CPSC rules provide that                 must provide the                                ing, it should be confirmed within 48
                                                ○




                                                                                                    ○
                                                ○
in evaluating whether such a risk exists,                                                               hours of the initial report. Id.




                                                                                                    ○
                                                        CPSC with an initial
                                                ○




                                                                                                    ○
the manufacturer, distributor, or retailer                                                                   A distributor or retailer who receives
                                                ○




                                                                                                    ○
                                                        report, unless the
                                                ○




                                                                                                    ○
should:                                                                                                 reportable information from a manufac-
                                                ○




                                                                                                    ○
                                                                                                        turer or importer must provide the CPSC
                                                ○




                                                        manufacturer has




                                                                                                    ○
      examine the utility of the prod-
                                                ○




                                                                                                    ○
                                                                                                        with an initial report, unless the manu-
                                                ○




                                                                                                    ○
      uct, or the utility of the aspect of              already reported to
                                                ○




                                                                                                    ○
                                                                                                        facturer has already reported to the CPSC.
      the product that causes the risk,
                                                ○




                                                                                                    ○
                                                        the CPSC.                                       Id. § 1115.13(b). Otherwise, a distributor
                                                ○




                                                                                                    ○
      the level of exposure of consum-
                                                ○




                                                                                                    ○
                                                                                                        or retailer who is not a manufacturer or
                                                ○




                                                                                                    ○
      ers to the risk, the nature and
                                                                                                        importer may fulfill its reporting obliga-
                                                ○




                                                                                                    ○
      severity of the hazard presented,                  (v) What Reports are Required
                                                ○




                                                                                                    ○
                                                                                                        tions by contacting the CPSC directly, by
                                                ○




                                                                                                    ○
      and the likelihood of resulting in                      and What They Must Contain
                                                ○




                                                                                                    ○
                                                                                                        sending a letter describing the defect or
      serious injury or death.                                The CPSC’s own regulations also
                                                ○




                                                                                                    ○
                                                                                                        risk of injury to the manufacturer or im-
                                                ○




                                                                                                    ○
                                                    require a manufacturer, distributor, or re-
                                                ○




                                                                                                    ○
                                                                                                        porter, copied to the CPSC, or by forward-
                                                ○




                                                                                                    ○
16 C.F.R. § 1115.6(b). In addition, the             tailer to provide “immediately” to the
                                                                                                        ing to the CPSC reportable information
                                                ○




                                                                                                    ○
manufacturer, distributor, or retailer              CPSC the above-mentioned information.
                                                ○




                                                                                                    ○
                                                                                                        received from elsewhere. Id. The distribu-
                                                ○




                                                                                                    ○
should also:                                        16 C.F.R. § 1115.10(a). The CPSC’s regula-
                                                ○




                                                                                                    ○


                                                                                                        tor or retailer should provide the infor-
                                                    tions contemplate an “initial report,” as
                                                ○




                                                                                                    ○




      evaluate the state of the manu-                                                                   mation that is required for an initial re-
                                                ○




                                                                                                    ○




                                                    well as a “full report.” The “initial report”
                                                ○




                                                                                                    ○




      facturing or scientific art, the                                                                  port insofar as the distributor or retailer
                                                ○




                                                                                                    ○




                                                    must contain, insofar as reasonably avail-
      availability of alternative designs                                                               knows it. Id.
                                                ○




                                                                                                    ○




                                                    able:
                                                ○




                                                                                                    ○




      or products, and the feasibility                                                                       Manufacturers must also file “full re-
                                                ○




                                                                                                    ○
                                                ○




                                                                                                    ○




      of eliminating the risk.                                                                          ports.” Id. § 1115.13(d). The regulations
                                                        (1) An identification and description
                                                ○




                                                                                                    ○




                                                                                                        are silent as to when such a report is due.
                                                ○




                                                                                                    ○




Id.                                                         of the product.
                                                ○




                                                                                                    ○




                                                                                                        A full report must contain, among many
                                                ○




                                                                                                    ○




                                                        (2) The name and address of the
     (iv) Timing of the Report                                                                          other things, to the extent the informa-
                                                ○




                                                                                                    ○




                                                            manufacturer (or importer) or, if
                                                ○




                                                                                                    ○




           The manufacturer, distributor, or                                                            tion is reasonably available and appli-
                                                ○




                                                                                                    ○




                                                            the manufacturer or importer is
                                                ○




                                                                                                    ○




retailer must report “immediately” upon                                                                 cable:
                                                            not known, the names and ad-
                                                ○




                                                                                                    ○




receipt of the pertinent information. 15
                                                ○




                                                                                                    ○




                                                            dresses of all known distributors
                                                ○




                                                                                                    ○




U.S.C. § 2064(b)(2); 16 C.F.R. § 1115.10(a).                                                            ■   Retail prices, model numbers, serial
                                                ○




                                                                                                    ○




                                                            and retailers of the products.
                                                ○




“Immediately” means within 24 hours of                                                                      numbers, and date codes
                                                                                                    ○
                                                ○




                                                                                                    ○




receipt of the information. 16 C.F.R. §
                                                ○




                                                                                                    ○




                                                        (3) The nature and extent of the pos-
                                                ○




                                                                                                    ○




1115.14(e).                                                                                             ■   Technical drawings, test results, sche-
                                                            sible defect . . . or the risk.
                                                ○




                                                                                                    ○




     A manufacturer, distributor, or re-                                                                    matics, diagrams, blueprints, or other
                                                ○




                                                                                                    ○
                                                ○




                                                                                                    ○




tailer is exempted from reporting only if                                                                   graphic depictions
                                                ○




                                                                                                    ○




                                                        (4) The nature and extent of the in-
                                                ○




it “has actual knowledge that the Com-
                                                                                                    ○




                                                            jury or risk of injury associated
                                                ○




                                                                                                    ○




mission has been adequately informed of                                                                 ■   Copies of any complaints related to
                                                ○




                                                                                                    ○




                                                            with the product.
                                                ○




                                                                                                    ○




such defect . . . .” 15 U.S.C. § 2064(b). The                                                               the safety of the product or any al-
                                                ○




                                                                                                    ○




CPSC, however, has interpreted “ad-                                                                         legations or reports of injuries asso-
                                                ○




                                                                                                    ○




                                                        (5) The name and address of the per-
                                                ○




                                                                                                    ○




equately informed” to mean that the                                                                         ciated with the product
                                                ○




                                                                                                    ○




                                                            son informing the Commission.
                                                ○




CPSC has the information required of the
                                                                                                    ○
                                                ○




                                                                                                    ○




rather extensive reports contemplated by                                                                ■   A chronological account of facts or
                                                ○




                                                                                                    ○
                                                ○




the regulations. 16 C.F.R. § 1115.3(a).                                                                     events
                                                ○




                                                                                                                      Please continue on next page


                                                       SPRING 2004 • VOL. 23, NO. 1
                                                 LITIGATION JOURNAL                                                                           9


Consumer Project Reporting
continued from page 8




                                                 ○




                                                                                                   ○
■     The dates when products and units                                                                         involved in the discharge of any




                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○
      were manufactured, imported, dis-                 …a full report will                                     obligation owed to the plaintiff




                                                 ○




                                                                                                   ○
      tributed, and sold at retail                                                                              under the settlement of or in




                                                 ○




                                                                                                   ○
                                                       have to state how the




                                                 ○




                                                                                                   ○
                                                                                                                satisfaction of the judgment af-




                                                 ○




                                                                                                   ○
■     The total number of products and                 manufacturer plans to                                    ter adjudication in each of the




                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○
      units involved                                   correct the defect, fail-                                suits; and




                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○
                                                       ure to comply, or risk at                       (d) During one of the 24-month periods


                                                 ○




                                                                                                   ○
■     The number of products and units in

                                                 ○




                                                                                                   ○
                                                                                                           defined in § 1116.2(a), each of the
                                                 ○




                                                                                                   ○
      the possession of the manufacturer               issue, to contact con-
                                                 ○




                                                                                                   ○
                                                                                                           three actions results in either a final
      or importer, private labelers, distribu-   ○




                                                                                                   ○
                                                       sumers, and whether                                 settlement involving the manufac-
                                                 ○




                                                                                                   ○
      tors, retailers, and consumers
                                                 ○




                                                                                                   ○
                                                       the manufacturer will                               turer or in a court judgment in favor
                                                 ○




                                                                                                   ○
                                                                                                           of the plaintiff.
                                                 ○




                                                                                                   ○
■     A detailed explanation and descrip-              refund the consumer,
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○
      tion of the marketing and distribu-
                                                 ○




                                                                                                   ○
      tion of the product from the manu-
                                                       replace the product at                          16 C.F.R. § 1116.3. Unlike section 15(b) of
                                                 ○




                                                                                                   ○
                                                                                                       the CPSA, section 37 does not impose re-
                                                 ○




                                                                                                   ○
      facturer to the consumer                         issue or repair it.
                                                 ○




                                                                                                   ○
                                                                                                       porting requirements on distributors or
                                                 ○




                                                                                                   ○
Id.                                                                                                    retailers. Compare 15 U.S.C. § 2064(b)
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○
                                                         court judgment in favor of the                with 15 U.S.C. § 2084.
                                                 ○




                                                                                                   ○
     Perhaps more importantly, a full re-
                                                 ○




                                                                                                   ○
                                                         plaintiff, the manufacturer must
port will have to state how the manufac-
                                                 ○




                                                                                                   ○
                                                         report to the Commission each                      (i) The Reporting Periods
                                                 ○




                                                                                                   ○
turer plans to correct the defect, failure
                                                 ○




                                                                                                   ○
                                                         such civil action within 30 days                       The 24-month periods referred
                                                 ○




                                                                                                   ○
to comply, or risk at issue, to contact con-
                                                         after the final settlement or                 to in 15 U.S.C. § 2084(a) and 16 C.F.R. §
                                                 ○




                                                                                                   ○
sumers, and whether the manufacturer
                                                 ○




                                                                                                   ○
                                                         court judgment in the third of                1116.3 are, beginning with the current
                                                 ○




                                                                                                   ○
will refund the consumer, replace the
                                                 ○




                                                                                                   ○
                                                         such civil actions, and, within 30            operative period:
product at issue or repair it. Id. This as-
                                                 ○




                                                                                                   ○




                                                         days after any subsequent settle-
                                                 ○




                                                                                                   ○




pect of the reporting requirement dove-
                                                 ○




                                                                                                   ○




                                                         ment or judgment in that 24-                  (1) January 1, 2003, to December 31,
                                                 ○




                                                                                                   ○




tails into product recall provisions of the
                                                 ○




                                                                                                   ○




                                                         month period, any other such                      2004;
CPSA as well the CPSC’s power to impose
                                                 ○




                                                                                                   ○




                                                         action.
                                                 ○




                                                                                                   ○




a recall, both of which are beyond the                                                                 (2) January 1, 2005, to December 31,
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○




scope of this article. Suffice it to say here                                                              2006;
                                                     15 U.S.C. § 2084(a) (emphasis added).
                                                 ○




                                                                                                   ○




that these portions of the report will have
                                                 ○




                                                                                                   ○




                                                     Stated in the terms of the Code of Fed-           (3) January 1, 2007, to December 31,
                                                 ○




                                                                                                   ○




to be drafted in close cooperation with
                                                 ○




                                                                                                   ○




                                                     eral Regulations:                                     2008; and
the client, and with the CPSC staff in
                                                 ○




                                                                                                   ○




                                                          A manufacturer of a consumer prod-
                                                 ○




                                                                                                   ○




mind.                                                                                                  (4) so forth.
                                                 ○




                                                                                                   ○




                                                     uct must report if:
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○




    (b) Section 37 Reporting                                                                           See 15 U.S.C. § 2084(b); 16 C.F.R. §
                                                 ○




                                                                                                   ○




                                                     (a) A particular model of the product is
                                                 ○




                                                                                                   ○




        Requirements                                                                                   1116.2(a). There were no reporting peri-
                                                 ○




                                                                                                   ○




                                                         the subject of at least 3 civil actions
        Section 37 of the CPSA requires                                                                ods before January 1, 1991. 15 U.S.C. §
                                                 ○




                                                                                                   ○




                                                         filed in Federal or State Court;
                                                 ○




                                                                                                   ○




that:                                                                                                  2084(b); 16 C.F.R. § 1116.2(a).
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○




                                                     (b) Each suit alleges the involvement of
                                                 ○




                                                                                                   ○




           If a particular model of a                                                                       (ii) Final Settlement or Judg-
                                                 ○




                                                                                                   ○




                                                         that particular model in death or
                                                 ○




                                                                                                   ○




      consumer product is the subject                                                                            ment and Time to Report
                                                 ○




                                                                                                   ○




                                                         grievous bodily injury;
      of at least 3 civil actions that                                                                           A report is due 30 days after the
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○




      have been filed in Federal or                                                                    last of the three suits is resolved, either
                                                 ○




                                                                                                   ○




                                                     (c) The manufacturer is –
                                                 ○




                                                                                                   ○




      State court for death or grievous                                                                by way of “final settlement” or a “court
                                                 ○




                                                                                                   ○




      bodily injury which in each of the                                                               judgment,” within an operative 24-
                                                 ○




                                                                                                   ○




                                                         (1) a party to, or
                                                 ○




                                                                                                   ○




      24 month periods defined in sub-                                                                 month period. 15 U.S.C. § 2084(a); 16
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○




      section (b) of this section result                 (2) is involved in the defense of or          C.F.R. § 1116.5(a). The dates on which any
                                                 ○




                                                                                                   ○




      in either a final settlement in-                       has notice of each action prior           of the suits were filed are irrelevant. 16
                                                 ○




                                                                                                   ○
                                                 ○




                                                                                                   ○




      volving the manufacturer or a                          to entry of a final order, and is
                                                 ○




                                                                                                   ○




                                                                                                                       Please continue on next page


                                                          SPRING 2004 • VOL. 23, NO. 1
10                                                    LITIGATION JOURNAL
Consumer Project Reporting
continued from page 9

C.F.R. § 1116.7(c). Any subsequent settle-                after an analysis of information                     (1) the allegations of the complaint;




                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
ment or judgment is reportable within 30                  relating to one or more of the




                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
days of each settlement or judgment. 15                   statutory characteristics [i.e., func-               (2) pre-complaint investigation;




                                                  ○




                                                                                                       ○
U.S.C. § 2084(a); 16 C.F.R. § 1116.5(a).                  tional design, construction, warn-




                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
     A settlement is “final” when the court               ings, etc., 15 U.S.C. § 2084(a)], a                  (3) post-complaint discovery;




                                                  ○




                                                                                                       ○
                                                          manufacturer, acting in accor-




                                                  ○
enters an ensuing order disposing of the




                                                                                                       ○
                                                  ○




                                                                                                       ○
suit with respect to the manufacturer                     dance with the customs and prac-                     (4) or informal settlement negotia-



                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
“even though the case may continue with                   tices of the trade of which it is a                      tion.


                                                  ○




                                                                                                       ○
respect to other defendants.” Id. §                       member, could reasonably con-

                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
1116.7(c). A subject settlement is one in                 clude that the difference be-                    Id. § 1116.7(b). Conclusory language in a
                                                  ○




                                                                                                       ○
                                                          tween that product and other
                                                  ○




                                                                                                       ○
which the manufacturer is involved “in the                                                                 complaint that the plaintiff suffered griev-
                                                  ○




                                                                                                       ○
discharge of any obligation owed to the                   items of the same product class                  ous bodily injury does not make a result-
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
plaintiff.” Id. § 1116.3(c)(2). A “court judg-            manufactured or imported by the                  ing settlement reportable “unless the de-
                                                  ○




                                                                                                       ○
ment” is reportable “upon entry of a fi-                  same manufacturer is substantial                 fendant manufacturer elects to settle
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
nal order disposing of the matter in favor                and material.                                    …without any investigations of the under-
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
of the plaintiff and from which an appeal                                                                  lying facts.” Id. (emphasis added). The
                                                  ○




                                                                                                       ○
lies.” Id. § 1116.7(d). It does not matter            16 C.F.R. § 1116.8(a) (emphasis added). The          manufacturer’s opinion as to the validity
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
that an appeal has not yet been sought or             Commission’s rules provide for a lengthy             of the allegations is irrelevant. Id.
                                                  ○




                                                                                                       ○
resolved. Id.                                         list of information relevant to a
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
                                                      manufacturer’s determination whether a                   (vi) Content of the Report
                                                  ○




                                                                                                       ○
                                                  ○




                                                      product is a “particular model.” 16 C.F.R.




                                                                                                       ○
      (iii) The Single Multiple-Plaintiff                                                                           The report must contain, with re-
                                                  ○




                                                                                                       ○
            Lawsuit                                   § 1116.8(a)(1)-(10). The list will not be re-        spect to each lawsuit:
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
            A single multiple plaintiff lawsuit       peated here and the reader is directed to
                                                  ○




                                                                                                       ○
may satisfy the three cases requirement if            the rule at issue.                                   (A) The name and address of the manu-
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○
the suit involves “three or more separate                                                                      facturer.
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




incidents of injury.” 16 C.F.R. § 1116.3. The              (v) Grievous Bodily Injury
                                                  ○




                                                                                                       ○




reporting requirement arises when “at                           The reportable settlements or              (B) The model or model number or des-
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




least three plaintiffs have settled their             judgments must arise from lawsuits for                   ignation of the consumer product
                                                  ○




                                                                                                       ○




claims or when a combination of settled               death or grievous bodily injury. “Grievous               subject to the civil action.
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




claims or adjudications favorable to plain-           bodily injury” includes: “mutilation, am-
                                                  ○




                                                                                                       ○




                                                                                                           (C) A statement as to whether the civil
                                                  ○




                                                                                                       ○




tiffs reaches three.” Id. On the other hand,          putation, dismemberment, disfigurement,
                                                                                                               action alleged death or grievous
                                                  ○




                                                                                                       ○




“multiple lawsuits arising from one inci-             loss of important bodily functions, debili-
                                                  ○




                                                                                                       ○




                                                                                                               bodily injury, a statement of the cat-
                                                  ○




                                                                                                       ○




dent involving the same product only                  tating internal disorder, severe burn, se-
                                                  ○




                                                                                                       ○




                                                                                                               egory of such injury.
count as one lawsuit.” Id.                            vere electric shock, and injuries likely to
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




                                                      require extended hospitalization.” 15                (D) A statement as to whether the civil
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




      (iv) Particular Model                           U.S.C. § 2084(e)(1); see 16 C.F.R. § 1116.2(b)           action resulted in a final settlement
                                                  ○




                                                                                                       ○




           The three or more suits must in-           (elaborating on each type of injury listed               or a judgment in favor of the plain-
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




volve the same “particular model” of                  in the quote). In addition, the                          tiff.
                                                  ○




                                                                                                       ○




products. 15 U.S.C. § 2084(a); 16 C.F.R. §            Commission’s rules contain a catch-all defi-
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




1116.3. A “particular model” is “one that             nition: “any allegation of traumatically             (E) In the case of a judgment in favor of
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




is distinctive in functional design, construc-        induced disease.” 16 C.F.R. § 1116.2(b)(7).              the plaintiff, the name of the civil ac-
                                                  ○




                                                                                                       ○




tion, warnings or instructions related to             Each of the lawsuits need not involve the                tion, the number assigned to the civil
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




safety, function, user population or other            same category of injury. Id. § 1116.8(d).                action, and the court in which the civil
                                                  ○




                                                                                                       ○




                                                           Whether a suit involves death or
                                                  ○




characteristics which could affect the                                                                         action was filed.
                                                                                                       ○
                                                  ○




                                                                                                       ○




product’s safety related performance.” 15             grievous bodily injury is to be determined
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




U.S.C. § 2084(a).1 A product is “distinctive”         from:                                                15 U.S.C. § 2084(c)(1); see 16 C.F.R. §
                                                  ○




                                                                                                       ○




if:                                                                                                        1116.6(a). The report need not disclose any
                                                  ○




                                                                                                       ○
                                                  ○




                                                                                                       ○




                                                                                                           settlement amount paid by the manufac-
                                                  ○




                                                                                                       ○




                                                                                                                            Please continue on next page


                                                          SPRING 2004 • VOL. 23, NO. 1
                                              LITIGATION JOURNAL                                                                11

Consumer Project Reporting
continued from page 10

turer. 15 U.S.C. § 2084(c)(3); 16 C.F.R. §        manufactured and distributed by                 2004 OREGON STATE BAR




                                              ○
                                              ○
1116.6(c). The filing of such a report is         Brunswick. 68 Fed. Reg. 54204-06.
                                                                                                  CALENDAR FOR LITIGATORS




                                              ○
not deemed to be an admission of:                      The CPSA also provides for crimi-




                                              ○
                                              ○
                                                  nal penalties. Knowing and willful




                                              ○
                                              ○
     (1) an unreasonable risk of injury;          failures, after having received notice




                                              ○
                                                  of noncompliance from the Commis-




                                              ○
                                              ○
     (2) a defect in the consumer prod-           sion, are subject to criminal sanctions



                                              ○
         uct which was the subject of             of up to $50,000 in fines and/or im-


                                              ○
                                              ○
         such action;                             prisonment up to a year. 15 U.S.C. §

                                              ○
                                              ○
                                                  2070(a). Individual directors, officers,
                                              ○

     (3) a substantial product hazard,            and agents of a corporation may also
                                              ○
                                              ○




                                                  be subject to such criminal sanctions.
                                              ○




     (4) an imminent hazard, or                   Id. § 2070(b). ❐
                                              ○
                                              ○
                                              ○




                                                                                                   APRIL
                                              ○




     (5) any admission of liability un-
                                              ○




         der any statute or under any             (Endnotes)
                                              ○




                                                                                                         Workers’
                                                                                                    2
                                              ○




         common law.
                                                                                                         Compensation
                                              ○
                                              ○




                                                  1   The Commission’s rules define “func-
                                                                                                         Basics
                                              ○




15 U.S.C. § 2084(d). The manufacturer                 tional design” as “those features that
                                              ○




                                                                                                         DoubleTree Hotel
                                              ○




may deny in the report that the prod-                 directly affect the ability of the prod-
                                                                                                         Lloyd Center,
                                              ○




uct caused death or grievous bodily in-               uct to perform its intended use or
                                              ○




                                                                                                         Portland
                                              ○




jury. Id. § 2084(c)(2); 16 C.F.R. §§                  purpose.” 16 C.F.R. § 1116.2(c)(1). The
                                              ○




                                                                                                         Time & credits to be
                                              ○




1116.6(b)(3), 1116.7(b).                              “construction” of a product is de-
                                                                                                         announced
                                              ○




                                                      fined as “its finished assembly or fab-
                                              ○
                                              ○




D. Where to Send Reports                              rication, its materials, and its compo-
                                              ○




   Both section 15(b) and section 37                  nents.” Id. § 1116.2(c)(2). “Warnings
                                              ○




                                                                                                         Working With
                                              ○




Reports should be sent to:                            or instructions related to safety,”           23
                                              ○




                                                                                                         Difficult People
                                              ○




                                                      among other things, “may be writ-
Office of Compliance and Enforcement                                                                     9 am - 4:30 pm
                                              ○




                                                      ten or graphically depicted and may
                                              ○




Division of Corrective Action                                                                            Oregon Convention
                                              ○




                                                      be attached to the product or appear
                                              ○




Consumer Product Safety Commission
                                                      on the product itself, in operating
                                                                                                         Center, Portland
                                              ○




Washington, D.C. 20207                                                                                   6.5 General CLE or
                                              ○




                                                      manuals, or in other literature that
                                              ○




                                                                                                         Practical Skills
                                              ○




16 C.F.R. §§ 115.13(a)&(b) & 1116.46.                 accompanies or describes the prod-
                                                                                                         credits
                                              ○




Oral section 15(b) initial reports can be             uct.” Id. § 1116.2(c)(3). The “func-
                                              ○
                                              ○




made by calling telephone number                      tion” of a product refers to its in-
                                              ○




(301) 504-0608. Id.                                   tended use or purpose.” Id. §
                                              ○




                                                                                                         Family Law
                                              ○




                                                      1116.2(c)(4). “User population”               30
                                              ○




                                                                                                         9 am - 4:30 pm
                                              ○




E.   Penalties for Failing to Report                  means “the group of people by
                                              ○




     Knowing failures to report under                 whom a product is principally used.”               Oregon Convention
                                              ○




                                                                                                         Center, Portland
                                              ○




the CPSA are subject to civil penalties               Id. § 1116.2(c)(5). Finally, “other char-
                                              ○




                                                                                                         5.5 General CLE and
                                              ○




of up to $7,000 a day, not to exceed a                acteristics which could affect the
                                              ○




total of $1.65 million. 64 Fed. Reg.                  product’s safety related perfor-                   .75 Ethics credit
                                              ○
                                              ○




51963; see 15 U.S.C. § 2069(a)(1) (pro-               mance” includes “safety features in-
                                              ○




viding for civil penalties). Most recently,           corporated into the product to pro-
                                              ○
                                              ○




in September 2003, the CPSC imposed                   tect against foreseeable risks that
                                              ○
                                              ○




a $1 million civil penalty on Brunswick               might arise during the use, handling,
                                              ○




Corporation for failing to timely report              or storage of a product.” Id. §
                                              ○
                                              ○




to the CPSC defective forks on bicycles               1116.2(c)(6).
                                              ○




                                                      SPRING 2004 • VOL. 23, NO. 1
12                                                  LITIGATION JOURNAL



Winning…
Takes Care of Itself
ByWilliam A. Barton
Barton Strever




I
I hold that the odds of winning in the              always deliver perfect ba-
                                                ○
                                                ○




courtroom increase once the lawyer stops            bies, but they can control
                                                ○
                                                ○




focusing on results and instead empha-              their competence and ef-
                                                ○




sizes process or simply doing their best.           fort. When nature pre-
                                                ○
                                                ○




This is true for many reasons. The best             cludes perfection, it al-
                                                ○
                                                ○




reason is that our effort is the only vari-         lows the good doctor, and
                                                ○




able we can completely control. Juries              the expectant parents,
                                                ○
                                                ○




                     decide who wins law-           the best opportunities to
                                                ○
                                                ○




                     suits, not lawyers.            accept an unfortunate re-
                                                ○
                                                ○




                     Lawyers can’t sell             sult. So it is with lawyers
                                                ○




                     wins. We don’t pos-            and their clients.
                                                ○
                                                ○




                     sess them to barter.               Focusing on effort also helps in view-       When either side has better legal repre-
                                                ○
                                                ○




                     Winning and losing             ing losses as growth opportunities. With         sentation, it follows that their chances of
                                                ○




                     are results that flow,         the right attitude there is much more to         winning are just that much better; how-
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




                     in significant part,           learn from losses than wins. The lawyer          ever, jurors are later sure they voted for
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




                     from effort.                   who lacks the temperament and emo-               the winning side, not because of the law-
                                                ○




                                                                                                 ○
                                                ○




     While it is true that as lawyers we            tional maturity to objectively view the          yering, but because that side was “right”
                                                                                                 ○
                                                ○




                                                                                                 ○




shouldn’t hold ourselves accountable for            facts is often the same lawyer who has           or “had the better facts,” and therefore
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




things beyond our control, i.e., wins, con-         the greatest trouble learning from their         should have won. It is in the effective
                                                ○




                                                                                                 ○
                                                ○




versely it is just as important that we             losses. This is because when losses occur,       presentation of the facts that true legal
                                                                                                 ○
                                                ○




                                                                                                 ○




broadly interpret what we can impact,               they minimize their contribution to the          skill resides. The greatest compliment a
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




meaning almost everything short of the              outcome. Instead of asking, “What can I          lawyer can receive is none, meaning the
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




ultimate jury verdict.                              do better?” they tend to deflect account-        jurors voted in your client’s favor, not
                                                ○




                                                                                                 ○
                                                ○




     What is the difference between im-             ability. While there are certainly many          because of your obvious talent or effort,
                                                                                                 ○
                                                ○




                                                                                                 ○




properly accepting responsibility for the           factors that contribute to any jury ver-         but because of the facts. You should be
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




jury’s result, and virtually everything short       dict, from the lawyer’s perspective it is        satisfied when later overhearing the jury
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




of it? It is probably more psychological            always most productive to focus on how           foreperson saying to her friend in the line
                                                ○




                                                                                                 ○




than substantive. Drawing a relatively              the lawyer’s conduct, in the broadest            at your local grocery store, “Last week I
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




bright line between the jury’s verdict and          sense, may have contributed to the loss.         served as a juror on a case that was so
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




everything short of it promotes an atti-                In my view lawyers generally don’t           open and shut any first year law student
                                                ○




                                                                                                 ○
                                                ○




                                                    win cases, the opposing side loses them.
                                                                                                 ○




tude that respects the sanctity of what                                                              could have won it!” Now that, my friend,
                                                ○




                                                                                                 ○




jurors do, and promotes a quicker closure           When lawyers are equal in talent and             is a real compliment . . .
                                                ○




                                                                                                 ○
                                                ○




                                                                                                 ○




when a loss does occur. Obstetricians can’t         preparation, they neutralize each other.             Yes, the facts are primary; however,
                                                ○




                                                                                                 ○




                                                                                                                      Please continue on next page


                                                       SPRING 2004 • VOL. 23, NO. 1
                                               LITIGATION JOURNAL                                                                             13


WINNING TAKES CARE OF ITSELF
continued from page 12

exactly how those key facts are presented                                                             be in furtherance of their self-interest.




                                               ○




                                                                                                  ○
                                               ○
is almost as important. Let me explain.                                                                   Undue focus on winning also places




                                                                                                  ○
                                                       Most effective jury




                                               ○




                                                                                                  ○
                                               ○
Rarely does anything exist without a con-                                                             unhealthy emphasis on the ends rather




                                                                                                  ○
                                               ○
                                                      trial lawyers I know




                                                                                                  ○
text that impacts how the facts are inter-                                                            than the means. This devalues the impor-




                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
preted. There is little in the real world                                                             tant process ingredients such as ethics,
                                                      are confident in their



                                               ○




                                                                                                  ○
                                               ○
that is an immutably fixed external real-                                                             civility, and collegiality. When a trial law-




                                                                                                  ○
                                               ○




                                                                                                  ○
ity without a context.                                skills and exude a                              yer makes the numerous difficult choices


                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
    The relationship between “the facts”                                                              that are made in private, it is easier to

                                               ○
                                                      certain charisma. They




                                                                                                  ○
                                               ○




                                                                                                  ○
and the skills attendant to their presen-                                                             take the ethical high road when the im-
                                               ○




                                                                                                  ○
                                                      possess stamina and
                                               ○

tation finds many analogies. Consider the                                                             portance of winning is kept in perspec-




                                                                                                  ○
                                               ○




                                                                                                  ○
work of a skilled gem cutter or portrait                                                              tive. I know that no lawyer ever says it’s
                                               ○




                                                                                                  ○
                                                      strength that can be
                                               ○




                                                                                                  ○
artist. Compare the core facts of a case                                                              about winning at all costs, but you move
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
to a large uncut diamond. Individual dia-             tapped by the trial                             closer to the edge of morality and ethics
                                               ○




                                                                                                  ○
                                               ○




mond cutters, each with their preferences                                                             when the focus is on winning rather than




                                                                                                  ○
                                               ○




                                                      team, client and their




                                                                                                  ○
and skills, will begin with the same start-                                                           process.
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
ing point or rough stone, yet produce                 family.                                             When one unduly focuses on win-
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
different final products. A second anal-                                                              ning, the entire litigation process psycho-
                                               ○




                                                                                                  ○
                                               ○




ogy is that of portrait painters. Have the                                                            logically becomes less about winning and




                                                                                                  ○
                                               ○




                                                                                                  ○
same individual painted by several                                                                    more about avoiding losing. At its core,
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
equally qualified artists, then compare            the litigation process and its final result.       this is fear, a strong emotion that the ju-
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
the final products. Each portrait can be           When lawyers gather to discuss “win-               rors and everyone else can sense. All ju-
                                               ○




                                                                                                  ○
remarkably different, yet each artist was          ning” and “losing,” the conversation is            rors are your friends: you must trust them,
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○
painting the same person. The same score           necessarily slanted toward the lawyer’s            they want to do the right thing. It is your
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○




performed by different musicians will              perspective, rather than that of the ju-           job to help them to do just that, i.e., the
                                               ○




                                                                                                  ○
                                               ○




once again produce dramatically differ-                                                               right thing. This has a different genesis
                                                                                                  ○




                                                   rors.
                                               ○




                                                                                                  ○




ent results, yet the notes on the page are             It is difficult to remember not to take        from fear avoidance. By helping the ju-
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○




the same. The preparation of a lawsuit is          ourselves seriously, but to take what we           rors in their difficult job, you not only
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○




an equally artistic and creative enterprise.       do seriously. Most effective jury trial law-       help yourself, but more important, your
                                               ○




                                                                                                  ○
                                               ○




    Finally, let’s compare the preparation         yers I know are confident in their skills          client.
                                                                                                  ○
                                               ○




                                                                                                  ○




of a trial to that of a play. The lawyer           and exude a certain charisma. They pos-                You will also find yourself thinking
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○




concurrently wears the hat of every con-           sess stamina and strength that can be              differently when the accent shifts from
                                               ○




                                                                                                  ○
                                               ○




                                                                                                  ○




tributor. He or she is the director who is         tapped by the trial team, client and their         winning to doing your best. You will see
                                               ○




                                                                                                  ○




ultimately responsible for the final prod-         family. This kind of confidence has a self-        the case in bigger terms, meaning justice.
                                               ○




                                                                                                  ○
                                                                                                  ○
                                               ○




uct; the economic producer when                    fulfilling quality. If the lawyer doesn’t          You will paint with larger and larger
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




fronting costs in a contingency fee case;          believe they are going to win, why should          brush strokes. With justice as your goal,
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




in charge of casting when selecting the            the jury?                                          winning becomes more likely. Why? Not
                                                                                                  ○
                                               ○




witnesses, and script generation and ed-               Stripped of all veneer, for most of the        only because you now have your priori-
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




iting when preparing the witnesses for             best plaintiff’s jury trial lawyers I know,        ties correct from the jury’s perspective,
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




their testimony. In no small way the law-          going to court is emotionally a “winner            but you are also doing the “right” thing.
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




yer is also dynamically both an “exhibit”          take all enterprise.” You are either the           This is what I mean when I say, “Winning
                                                                                                  ○
                                               ○




and “witness.” Short of being responsible          victor or the vanquished. The ultimate             takes care of itself.”
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




for the ultimate win, it is proper for a           economic consequence of losing is that a               As you know, each participant in the
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




trial lawyer to accept as much responsi-           repetitive “loser” is driven from the mar-         litigation process has unique tasks and
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




bility as he or she can.                           ket. This Darwinian harshness is tempered          interests, and you must carefully consider
                                                                                                  ○
                                               ○




    Focusing on process instead of results         by the reality that most cases do settle           what each really wants in light of their
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




acknowledges the primacy of the jury in            for a sum that is viewed by each side to           differing jobs.
                                                                                                  ○
                                               ○




                                                                                                                  Please continue on next page



                                                           SPRING 2004 • VOL. 23, NO. 1
14                                                  LITIGATION JOURNAL
 WINNING TAKES CARE OF ITSELF
 continued from page 13




                                                                                                 ○
a.   The clients: They want to win, it’s just                                                        ries? This is the answer. Why? Because




                                                ○




                                                                                                 ○
                                                ○
     that simple. Each of them are certain            In a predictable way,




                                                                                                 ○
                                                                                                     this is where every juror begins and ends.




                                                ○




                                                                                                 ○
                                                ○
     they are entitled to win for every                                                              The jury alone, as the conscience of the




                                                                                                 ○
                                                ○
                                                      with each loss that




                                                                                                 ○
                                                ○
     reason imaginable.                                                                              community, has the power to allocate




                                                                                                 ○
                                                ○




                                                                                                 ○
                                                      occurs for the right                           justice in the form of a “win” or a “loss.”




                                                ○




                                                                                                 ○
                                                ○
b.   The jurors: They certainly don’t, and                                                           The acquired perspective of carefully




                                                                                                 ○
                                                ○
                                                      reasons, the slope of




                                                                                                 ○
                                                ○
     really shouldn’t, care about what any                                                           framing your case in the context of com-




                                                                                                 ○
                                                ○




                                                                                                 ○
     client or lawyer wants, or thinks they

                                                ○
                                                      that lawyer’s learning                         munity values, and thereby justice, is one




                                                                                                 ○
                                                ○




                                                                                                 ○
     are entitled to. The juror’s job is sim-                                                        of the headwaters from whence a trial
                                                ○




                                                                                                 ○
                                                      curve accelerates as
                                                ○


     ply to do “justice.” To them, and the                                                           lawyer’s real power hails.




                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     community they represent as a re-                                                                   When any lawyer embraces this per-
                                                      the lawyer’s skills




                                                                                                 ○
                                                ○




                                                                                                 ○
     flection of its values, this means “to                                                          spective, something important begins to
                                                ○




                                                                                                 ○
                                                ○




     return the right verdict - for the right         grow. This is because




                                                                                                 ○
                                                                                                     happen, and happen quickly. The law-
                                                ○




                                                                                                 ○
                                                ○




     reason.”                                                                                        yer will start losing for the right reasons,




                                                                                                 ○
                                                ○




                                                      they have learned




                                                                                                 ○
                                                ○




                                                                                                     meaning they will lose because they




                                                                                                 ○
                                                ○




                                                                                                 ○
c.   The lawyer: The lawyer’s view is myo-            from the loss.                                 didn’t have the facts, rather than for
                                                ○




                                                                                                 ○
                                                ○




     pic. It is, within the rules, TO WIN,                                                           something they did that compromised




                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     for the client! Acknowledged                                                                    their credibility with the jury. That is ex-




                                                                                                 ○
                                                ○




                                                                                                 ○
     byproducts of winning for the client
                                                ○




                                                                                                     actly what should happen. Losing “on




                                                                                                 ○
                                                ○




                                                                                                 ○
     are the furtherance of one’s own                   counsel out of the presence of the           the facts” permits the lawyer’s learning
                                                ○




                                                                                                 ○
                                                ○




     economic, professional and psycho-                 jury. Don’t make speaking objec-             curve to dramatically increase, resulting

                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     logical ends.                                      tions. Do these things and most of           in fewer losses. This is because the in-
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                        the judges I know will stay out of the       stincts for what are the outcome deter-
                                                ○




                                                                                                 ○
                                                ○




d. The judge: In the abstract, the judge                way and let you try your case. Are
                                                                                                 ○




                                                                                                     minative facts, supported by their predi-
                                                ○




                                                                                                 ○
                                                ○




     should not even be mentioned here.                 there exceptions? Yes; however, they         cate values, within the case grow keener
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     Your job is to keep it that way. Judges            are small in number, well known to           with each new trial.
                                                                                                 ○
                                                ○




                                                                                                 ○




     should only be interested in seeing                all, and to the extent they are auto-            In a predictable way, with each loss
                                                ○




                                                                                                 ○
                                                ○




     that the trial operates within the                 cratic or unfair, they generally are         that occurs for the right reasons, the
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     proper rules of process. We all know               equally unfair to both sides.                slope of that lawyer’s learning curve ac-
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     that with the many discretionary rul-                                                           celerates as the lawyer’s skills grow. This
                                                                                                 ○
                                                ○




                                                                                                 ○




     ings judges make they can and do                   With a little insight, what emerges          is because they have learned from the
                                                ○




                                                                                                 ○
                                                ○




     affect the outcomes of jury trials.            from this swirling vortex is the notion          loss. Once losses for the wrong reasons
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     With this concession, I mention the            that attorneys will win more when they           are out of the way, it is easier to see the
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     bench here because it is your job, as          focus less on winning and more on do-            core ingredients of any case in all its po-
                                                                                                 ○
                                                ○




     a trial lawyer, to keep the judge as           ing their best. When an attorney has
                                                                                                 ○




                                                                                                     tency.
                                                ○




                                                                                                 ○
                                                ○




     neutral as possible. In many ways it           done their job correctly and properly cast           It is appropriate to close with the
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     is doing all the little things well that       their case, it will be apparent to all the       obvious systemic comment that while a
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     results in excellence. Read and fol-           jurors that when your side wins, every-          lawyer’s contributions in trying the case
                                                                                                 ○
                                                ○




     low the trial court rules. File every-         one (except the recalcitrant opponent)           are obviously important, it is primarily
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     thing on time. Honor not just the let-         wins. Why? Because it is “just,” meaning         the facts that are determinative. This is
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     ter of the court’s rulings, but also the       in alignment with your arguments, your           as it should be. In a lawsuit, if you don’t
                                                                                                 ○
                                                ○




                                                                                                 ○




     spirit. If there is a question concern-        client’s position, and most important, in
                                                ○




                                                                                                     have the “best” facts or case, then you
                                                                                                 ○
                                                ○




     ing the admissibility of evidence, first       furtherance of basic community values.           should lose. What is wrong with that?
                                                                                                 ○
                                                ○




                                                                                                 ○
                                                ○




     consult with the court and opposing            So you want to be a winner before ju-            Nothing. ❐
                                                                                                 ○
                                                ○




                                                       SPRING 2004 • VOL. 23, NO. 1
                                               LITIGATION JOURNAL                                                                              15




When Was the Last Time You Handled a…

Death Penalty
                  Case?
By Robert D. Newell
DavisWright Tremaine LLP

I grew up on a farm and one of my self-            cent people will be



I
                                               ○
                                               ○




appointed jobs on that farm was to keep            executed. The ABA
                                               ○




the birds out of the strawberries. Really it       identified four flaws
                                               ○
                                               ○




was just an excuse to use my BB gun, but           in the administration
                                               ○
                                               ○




initially I had some trouble hitting the           of the death penalty:
                                               ○




small birds that were the biggest consum-               1. Inadequate
                                               ○
                                               ○




ers of strawberries. So one day in my early        representation;
                                               ○




career as a marksman, I saw a much big-                 2. Inadequate
                                               ○
                                               ○




ger bird and successfully brought it down.         opportunity for re-
                                               ○
                                               ○




                       When I showed the           view of death sen-
                                               ○




                       trophy robin to my          tences by indepen-
                                               ○
                                               ○




                       Mom she, knowing            dent courts;
                                               ○




                       that robins were not             3. Intractable
                                               ○
                                               ○




                       usually strawberry          and widespread ra-
                                               ○
                                               ○




                       thieves, looked at          cial discrimination;
                                               ○




                       me and said “you’ve         and
                                               ○
                                               ○




                       done a good job of               4. Execution of the mentally ill and                 Before my involvement in this case, I
                                                                                                   ○
                                               ○




                                                                                                   ○




                       shooting it, now
                                               ○




                                                   those who were juveniles at the time of             could probably have been best described,
                                                                                                   ○
                                               ○




                       how are you going           the offense.                                        in Scott Turow’s phrase, as a “death pen-
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




to bring it back to life?”                              This article will address just the first       alty agnostic.” Death did not seem too
                                                                                                   ○
                                               ○




                                                                                                   ○




     That is a parable which describes our         flaw.                                               harsh a punishment for monsters like
                                               ○




                                                                                                   ○
                                               ○




problem with the death penalty in this                  The ABA didn’t stop with just a reso-          Timothy McVeigh and John Wayne Gacy.
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




country.                                           lution. One of the steps it has taken to try        My experience with this case and my
                                                                                                   ○
                                               ○




     The American Bar Association has rec-         to implement the resolution is a program
                                                                                                   ○




                                                                                                       broader study has moved me to conclude
                                               ○




                                                                                                   ○
                                               ○




ognized that there are serious flaws in the        it began called the ABA Death Penalty               that our system cannot be relied upon to
                                                                                                   ○
                                               ○




                                                                                                   ○




death penalty system in this country. In           Representation Project, which seeks to              flawlessly carry out an irreversible penalty.
                                               ○




                                                                                                   ○
                                               ○




February 1997, it adopted a resolution             recruit civil law firms to represent death          What follows is intended to illustrate the
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




calling for a moratorium on further execu-         row inmates in post-conviction proceed-             reasons for that change of position.
                                                                                                   ○
                                               ○




tions. That resolution concluded that the
                                                                                                   ○




                                                   ings. My firm, Davis Wright Tremaine, was                 My background has been entirely in
                                               ○




                                                                                                   ○
                                               ○




capital punishment system in this country          one of the first such firms recruited. I am         civil litigation and I have been doing that
                                                                                                   ○
                                               ○




                                                                                                   ○




does not meet the basic standards of due
                                               ○




                                                   the primary lawyer on our case, but I’ve            for over 28 years. Before this, the closest
                                                                                                   ○
                                               ○




process and fundamental fairness, the lack         had abundant help from many lawyers                 I’d ever come to criminal law was in my
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




of which increases the chance that inno-           and staff throughout the firm.                      first year of practice when I was instructed
                                                                                                   ○
                                               ○




                                                                                                                        Please continue on next page



                                                        SPRING 2004 • VOL. 23, NO. 1
16                                                  LITIGATION JOURNAL
DEATH PENALTY
continued from page 15


to appear at criminal call and enter a plea         defense attorney who presented no evi-               the crime scene, didn’t interview the




                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
of nolo contendere for a ship owner in an           dence later testified he didn’t know he              state’s witnesses or discover the state’s




                                                ○




                                                                                                     ○
oil spill case. With that background, it was        was allowed to. In 43 of the cases (1/3),            evidence (too busy) and barely spoke to




                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
only natural for the ABA to come knock-             the defendant was represented at trial or            their client. Husband left during the key




                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
ing on my door, asking us to handle a               on initial appeal by a lawyer who had been           prosecution witness’ testimony but later




                                                ○




                                                                                                     ○
death penalty case. What could be more              or later was disbarred or suspended. In 29           cross-examined that witness, and the pair




                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
logical?                                            cases, the State called a psychiatrist to tes-       presented no mitigation evidence because



                                                ○




                                                                                                     ○
     Actually, the ABA is a little more             tify, in response to a hypothetical ques-            they didn’t know there was a sentencing


                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
subtle and sophisticated than that. They            tion based on defendant’s past, that de-             phase. They failed to offer evidence that
                                                ○




                                                                                                     ○
                                                ○
                                                    fendant would commit future violence. In             the victim was alive at the alleged time of




                                                                                                     ○
pointed out that habeas corpus proceed-         ○




                                                                                                     ○
ings are technically civil actions with some        23 cases, the State’s evidence included a            death and that their client had an iron-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
familiar civil proceedings such as deposi-          jailhouse informant, which is so unreliable          clad alibi for the certified time of death.
                                                ○




                                                                                                     ○
tions and document discovery. But still —           that it formed part of the basis for Gov.            They failed to appear on their own mo-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
a murder case???                                    Ryan’s moratorium in Illinois. 23 of the             tion for new trial. One of them was later
                                                ○




                                                                                                     ○
                                                    cases included evidence based on visual              disbarred for this performance.
                                                ○




                                                                                                     ○
     The basic premise of the Project is that
                                                ○




                                                                                                     ○
anyone facing the death penalty ought to            examination of hairs, which is so inexact                  Another Georgia defendant spent 11
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
have our system’s full measure of due pro-          it is barred in some states.                         years on death row. His solo practitioner
                                                ○




                                                                                                     ○
cess and fundamental fairness. The best                   A lawyer in Alabama recently submit-           lawyer was paid less than $20 per hour at
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
way in our system to guarantee those                ted a bill for about $11,000 for 200 hours           a time when the lawyer was having per-
                                                ○




                                                                                                     ○
rights is for the accused to have compe-            of work as second chair on a case that               sonal financial problems. He got no funds
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
tent counsel.                                       settled for a life sentence during jury se-          for co-counsel, investigation or experts.
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
     Well, death row inmates do have com-           lection. Three thousand dollars of that had          Closing argument was 255 words. The at-
                                                ○




                                                                                                     ○
petent counsel, don’t they? The simple              been pre-approved for investigation. The             torney was later disbarred. This story
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
answer is “no,” and the more refined ver-           case lasted for over a year, and the judge           ended better than most, however, because
                                                ○




                                                                                                     ○

sion of that answer is “rarely.”                    allowed $4,500 after sitting on the fee pe-          an Atlanta firm stepped in and cleared the
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




     Virtually all of these death row in-           tition for months. The lawyer paid the in-           defendant of all charges. During his 11
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




mates are poor, unable to hire counsel,             vestigator and was left with $1,500 for his          years on death row, he witnessed 15 ex-
                                                ○




                                                                                                     ○




and many, if not most, are mentally ill.            trouble. Think he’ll be taking another case          ecutions in the electric chair and said that
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




Nearly all were represented at trial by             anytime soon? In Mississippi, a lawyer was           the smell of burning flesh is something
                                                ○




                                                                                                     ○




appointed counsel, most of whom were                appointed in a death penalty case which              he’ll never forget.
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




overworked public defenders with inad-              was his first felony case. His total fee —                 You’ve heard the stories about other
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




equate resources. Several states with the           $1,000. He cannot do what he probably                lawyers who were drunk or slept through
                                                ○




                                                                                                     ○




death penalty have no public defender               should — refuse the appointment — be-                trial, or committed some other egregious
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




program. Few have any provision for post-           cause if he does, he won’t get more crimi-           act of incompetence — things that would
                                                ○




                                                                                                     ○




conviction counsel. Those that have any             nal defense appointments from the judge,             get any civil lawyer fired — yet the conse-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




such program fail to fund them ad-                  and those constitute his bread and but-              quences in death penalty litigation are
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




equately — the state virtually always               ter.                                                 borne by the defendant.
                                                ○




                                                                                                     ○




outspends the defense and I can tell you                  Let me be more specific about the ef-                These are the two “I’s” of death pen-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




from the civil side that dollars can make a         fect of bad lawyering with other examples.           alty litigation: INCOMPETENCE and INAD-
                                                ○




                                                                                                     ○




                                                    One female defendant had a strong bat-               EQUACY.
                                                ○




                                                                                                     ○




difference in the outcome of a case. There
                                                ○




                                                                                                     ○




are about 3,500 people on death row in              tered spouse defense to the murder                         So how could things get any worse?
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




the United States and hundreds lack coun-           charge. Her lawyer not only didn’t present           Some might say by having the ABA ap-
                                                ○




                                                                                                     ○




sel for post-conviction proceedings.                it, but got so drunk during trial that he            point a shmo like me who knows abso-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




     Let me give you some examples. These           was held in contempt and sent to jail with           lutely nothing about criminal law or ha-
                                                ○




                                                                                                     ○




                                                                                                         beas corpus, and certainly nothing about
                                                ○




                                                    his client. Her conviction and sentence
                                                                                                     ○




are taken from a study done by the Chi-
                                                ○




                                                                                                     ○




cago Tribune of 131 recent executions in            were upheld on appeal.                               the death penalty.
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




Texas. In 40 of those cases, the defense                  A Georgia defendant was represented                  At least that’s the way I felt when I
                                                ○




                                                                                                     ○




presented no evidence (22) or just one              by a husband and wife team who didn’t                first got involved in my case. To give you
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




witness (18) in the sentencing phase. One           read the death penalty statute, didn’t visit         an example of how naïve I was, during my
                                                ○




                                                                                                     ○




                                                                                                                          Please continue on next page


                                                        SPRING 2004 • VOL. 23, NO. 1
                                               LITIGATION JOURNAL                                                                                17

DEATH PENALTY
continued from page 16




                                                                                                     ○
                                               ○
first read-through of the transcript in my               Keep in mind that though I had no                     Based on my conversations with other




                                                                                                     ○
                                               ○
case, I came to a point early in the trial         previous criminal law experience, our firm,           people doing this kind of work — I’ve been




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○
when the trial judge told all defense coun-        working with four investigators and other             to a number of CLEs to learn as quickly as




                                                                                                     ○
                                               ○




                                                                                                     ○
                                                   experts, has come up with evidence of ac-             I could how to do this — there is nothing




                                               ○
sel that they should make their objections




                                                                                                     ○
                                               ○
to the court reporter during recesses,             tual innocence and a laundry list of major            unique about my case. They are virtually




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○
rather than in open court. I remember              constitutional errors that should result in           all like this. Poverty, race, mental illness




                                                                                                     ○
                                               ○
thinking, “wow, criminal law is really dif-        a new trial. Yet with our system being                and a lack of resources for the defense play




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○
ferent than civil law”. At that point, it          stacked against the defendant the way it              a major role in nearly all death penalty




                                                                                                     ○
                                               ○




                                                                                                     ○
                                                   is, I have no confidence that such will be            litigation. Similarly, the appeals and the
                                               ○
didn’t dawn on me that there might be




                                                                                                     ○
                                               ○
something fundamentally wrong with                 the outcome. My firm has spent more time              habeas cases are done by poorly paid ap-




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○


that unique practice.                              and money on this case than was spent in              pointed attorneys who have too many




                                                                                                     ○
                                               ○




                                                   his three previous trials combined, and               cases and not enough resources. As a con-




                                                                                                     ○
      My defendant had been represented
                                               ○




                                                                                                     ○
                                               ○




by lawyers in the public defender’s office         there can be little doubt that if the work            sequence, a great many of the death pen-




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




who did virtually nothing during the eight         had been done up front, the outcome                   alty verdicts handed down are inherently




                                                                                                     ○
                                               ○




months they were on the case. My case              would have been different.                            unreliable. In the vast majority of these




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




involved six teenage boys murdering my                   Let me illustrate. In the third trial my        cases, habeas corpus proceedings are the




                                                                                                     ○
                                               ○




                                                   client had, the public defenders who rep-             last best hope for what David von Drehele




                                                                                                     ○
client’s grandparents, and if you know
                                               ○




                                                                                                     ○
                                               ○




anything about murder cases, you know              resented him had available two investiga-             has called “the lowest of the dead.”




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




that the murder of parents or grandpar-            tors for the approximately 30 murder tri-                   A recent comprehensive study by Pro-




                                                                                                     ○
                                               ○




ents in virtually every instance follows,          als in their office and about four months             fessor James Leibman of Columbia Univer-




                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




sometimes by years, severe child abuse of          to do the job. We had four investigators              sity School of Law demonstrated that




                                                                                                     ○
                                               ○




                                                                                                     ○
the perpetrator by the victim. Yet the pub-        for four years and there is still more to be          there was reversible error in 68% of the
                                               ○




                                                                                                     ○
                                               ○




lic defender’s office had not done any             done.                                                 death penalty cases in this country. That

                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




mental examinations, had not appointed                   Here are just a few examples from my            study covered 23 years and 4,578 cases
                                                                                                     ○
                                               ○




a psychiatrist, and had not even sought            case that we, as completely inexperienced             nationwide. He found that it took, on av-
                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




funds for such work during the eight               civil litigators, who have had the luxury             erage, 3 judicial reviews to catch these
                                                                                                     ○
                                               ○




                                                                                                     ○




months they were involved. Then sud-               of time and resources, have come up with:             errors, and concluded that there is grave
                                               ○




                                                                                                     ○
                                               ○




denly, just before the preliminary hearing,                                                              doubt that all such errors are caught. Fed-
                                                                                                     ○
                                               ○




                                                   1.   A witness, available at the original
                                                                                                     ○
                                               ○




which was followed immediately by the                                                                    eral courts find serious error in 40% of the
                                                                                                     ○




                                                        trial, who will testify to my client’s ac-
                                               ○




trial, the public defender’s office devel-                                                               cases left after state courts have weeded
                                                                                                     ○
                                               ○




                                                        tual innocence.
                                                                                                     ○
                                               ○




oped a conflict of interest, entirely unex-                                                              out the most obvious ones.
                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




plained in the record, and a new lawyer            2.   Extensive evidence of abuse of my cli-                 As has been widely reported, the State
                                                                                                     ○
                                               ○




was appointed, virtually without warning.               ent by the victims and by his parents,           of Illinois has in recent years released more
                                                                                                     ○
                                               ○




                                                                                                     ○
                                               ○




That new lawyer did not seek appoint-                   not presented to any court.                      prisoners from death row than it has ex-
                                                                                                     ○
                                               ○




ment of co-counsel, did not seek investi-                                                                ecuted. Governor Ryan, who was a strong
                                                                                                     ○
                                               ○
                                               ○




                                                                                                     ○




gative funds, did not hire an investigator,        3.   Evidence of use of psychotropic drugs            supporter of the death penalty before
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




hired no mental health professionals, and               in jail while awaiting trial, provided           leaving office, imposed a moratorium on
                                               ○




                                                                                                     ○




quite simply had no chance to present any               by the state because of my client’s              executions and then commuted all death
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




kind of realistic defense. Despite the fact             mental problems which affected his               sentences in Illinois because of his convic-
                                               ○




                                                                                                     ○




                                                        ability to participate in his defense,           tion that the system was fundamentally
                                               ○




                                                                                                     ○




that there were no fingerprints, no blood
                                               ○




                                                                                                     ○




splatter analysis, and some evidence of my              but no competency hearing.                       flawed. Ten other states have considered
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




client’s innocence, the inevitable guilty                                                                moratoria or abolition. Senator Feingold
                                               ○




                                                                                                     ○




verdict followed a non-defense. That was           4.   Suicide attempts in jail, not presented          introduced the Federal Death Penalty
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




followed by an almost non-existent pen-                 to any court.                                    Abolition Act and with Sen. Levin, spon-
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




alty phase hearing where very little evi-                                                                sored the National Death Penalty Mora-
                                               ○




                                                                                                     ○




dence was presented, no mitigation spe-            5.   Evidence of a close social relationship          torium Act. Other bills in Congress have
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




cialist hired or serious mitigation evidence            between the inexperienced judge and              dealt with DNA evidence and due process
                                               ○




                                                                                                     ○




offered and, of course, a death penalty                 the very experienced lead prosecutor.            protections.
                                               ○




                                                                                                     ○
                                               ○




                                                                                                     ○




sentence was handed down.                                                                                      In connection with his declaration of
                                               ○




                                                                                                     ○




                                                                                                                          Please continue on next page



                                                         SPRING 2004 • VOL. 23, NO. 1
18                                                   LITIGATION JOURNAL
DEATH PENALTY
continued from page 17
                                                                                                               Litigation Journal
a moratorium on execu-                                                   many cases DNA evi-                   Editorial Board
tions, Governor Ryan ap-                                                 dence plays no role, suc-
pointed a “Commission                                                    cumbing to this siren        William A. Barton
on Capital Punishment”                                                   song of certainty would          Barton & Strever, PC
which conducted a com-                                                   undermine the founda-
prehensive study of the                                                  tion of our legal system:    David A. Bledsoe
death penalty in Illinois.                                               due process.                    Perkins Coie LLP
The Commission, in its                                                        To avoid that trap,
report issued in April,                                                  the focus of our judicial    Steve Brischetto
2002, made 85 recom-                                                     system must be on pro-
mendations for specific                                                  cess. We must guarantee      Susan K. Eggum
changes in the death                                                     a fair and impartial pro-       Susan K. Eggum PC
penalty system. Those                                                    cess to every criminal
recommendations en-                                                      defendant, but espe-         Stephen F. English
compassed such things as                                                 cially to those facing the       Bullivant Houser Bailey, PC
the videotaping of all interrogations of             death penalty. That’s what will protect not
                                                 ○
                                                 ○




murder suspects, reform of line-up proce-            only criminal defendants, but each and           David B. Markowitz
                                                 ○




dures, a statewide commission to review              every one of us who might one day find              Markowitz, Herbold, Glade and
                                                 ○
                                                 ○




all cases in which the prosecutor wishes             ourselves as a participant (litigant) in our        Mehlhaf, PC
                                                 ○




to seek the death penalty, elimination of            judicial system or perhaps a member of a
                                                 ○
                                                 ○




reliance on jailhouse informants in death            minority, whether political, religious or        William F. Martson, Jr.
                                                 ○
                                                 ○




penalty cases, and certification of judges           racial, that our system is pledged to pro-           Tonkon Torp LLP
                                                 ○




qualified to hear capital cases. Oregon has          tect.
                                                 ○
                                                 ○




none of these safeguards.                                 The most egregious judicial mecha-          Gregory R. Mowe
                                                 ○




      We say in this country that it is better       nism for upholding death penalty judg-              Stoel Rives LLP
                                                 ○
                                                 ○




to release 99 guilty people than to con-             ments has been the notion of harmless
                                                 ○
                                                 ○




vict one innocent person. We have the                error. The worst example of that occurred        Robert J. Neuberger
                                                 ○




presumption of innocence and the re-                 recently in Texas, where a defendant was
                                                 ○
                                                 ○




quirement that guilt be proved beyond a              convicted on two pieces of evidence; one         Robert D. Newell
                                                 ○




reasonable doubt. Certainly the public, the          was his confession, the other the testi-            Davis Wright Tremaine LLP
                                                 ○
                                                 ○




legislative and executive branches are               mony of a teenager who was demonstra-
                                                 ○
                                                 ○




demonstrating concern about these im-                bly incredible, by all accounts. The courts
                                                 ○




                                                                                                           The Oregon Litigation Journal is pub-
portant concepts, ones that the judicial             found the confession to have been co-
                                                 ○




                                                                                                      lished three times per year by the Litiga-
                                                 ○




system has safeguarded from the begin-               erced and therefore unconstitutionally           tion Section of the Oregon State Bar with
                                                 ○




ning.                                                admitted, but ruled that it was harmless         offices at 5200 S.W. Meadows Road, P.O.
                                                 ○




                                                                                                      Box 1689, Lake Oswego, Oregon 97035-
                                                 ○




      But once there is a verdict, all those         error. How can a violation of the constitu-      0889, 503/620-0222.
                                                 ○
                                                 ○




presumptions disappear in our jurispru-              tion be harmless?                                     Articles are welcome from any Or-
                                                 ○




dence. Once that verdict is in, everything                You need not be an opponent of the          egon attorney. If you or your law firm has
                                                 ○




                                                                                                      produced materials that would be of inter-
                                                 ○




shifts to favor the upholding of that ver-           death penalty to have grave concerns             est to the 1,200 members of the Litigation
                                                 ○




dict. Even DNA evidence which demon-                 about the system of capital punishment           Section, please consider publishing in the
                                                 ○
                                                 ○




                                                                                                      Oregon Litigation Journal. We welcome
strates actual innocence has been strongly           as it currently exists in this country. Civil
                                                 ○




                                                                                                      both new articles and articles that have
                                                 ○




resisted by prosecutors and courts.                  litigators with little or no previous experi-    been prepared or published for a firm
                                                 ○




      The current focus on DNA analysis and          ence in criminal law can play a critical role    newsletter or other publication. We are
                                                 ○




                                                                                                      looking for timely, practical, and informa-
                                                 ○




actual innocence is misplaced. Taken to its          in assuring that due process protections
                                                 ○




                                                                                                      tional articles.
logical extreme, we seem to be saying that           are available to those least able to achieve
                                                 ○




                                                                                                         Dennis P. Rawlinson, Editor
                                                 ○




if, through the use of DNA evidence, we              it on their own.                                    Miller Nash LLP
                                                 ○




                                                                                                         111 S.W. Fifth Avenue
                                                 ○




can satisfy ourselves of a defendant’s guilt,             We find it all too easy to bring down          Portland, Oregon 97204 • 503/224-5858
                                                 ○




the fairness of that defendant’s trial does          the bigger birds, but impossible to bring
                                                 ○
                                                 ○




not matter. Setting aside the fact that in           them back to life. ❐
                                                 ○




                                                         SPRING 2004 • VOL. 23, NO. 1
                                                  LITIGATION JOURNAL                                                                              19




Oh, Oh…
The Injured Party is
Receiving Government
Benefits
By Donna Meyer
Fitzwater & Meyer, LLP




Y
You have just successfully settled a per-                 1.   Many
                                                  ○
                                                  ○




sonal injury claim on behalf of your cli-                      Shapes and
                                                  ○




ent. You feel good about your work and                         Sizes.
                                                  ○
                                                  ○




pleased that injured party, who has greatly                    Government
                                                  ○




suffered, will receive some financial ben-            benefits come in
                                                  ○
                                                  ○




efit. You talk to the structured settlement           many shapes and
                                                  ○
                                                  ○




                         professional to dis-         sizes. Benefits may be
                                                  ○




                         cuss the terms of the        based on disability,
                                                  ○
                                                  ○




                         settlement. When             age, unemployment,
                                                  ○




                         you call your client         or workplace injury.
                                                  ○
                                                  ○




                         with the news she is         Some benefits are “needs based” or                       3.   Injured Party is Participating
                                                                                                      ○
                                                  ○




                                                                                                      ○




                         thrilled. Then she
                                                  ○




                                                      “means tested;” that is, based on finan-                      in More Than One Program.
                                                                                                      ○
                                                  ○




                         asks you the ques-           cial need, while others are based on a                        Almost always the injured party
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




                         tion. Will this affect       work record. Typically if a government              is receiving more than one type of public
                                                                                                      ○
                                                  ○




                                                                                                      ○




my government benefits?                               benefit is not means-tested, receipt of a           benefit, and the eligibility criteria are not
                                                  ○




                                                                                                      ○
                                                  ○




      For most personal injury lawyers, this          personal injury award will have no effect           the same for all programs.
                                                                                                      ○
                                                  ○




                                                                                                      ○




question triggers a deep sigh at best. Try-
                                                  ○




                                                      on the client’s government benefits.
                                                                                                      ○
                                                  ○




ing to understand public benefits, with the                                                               B.   DON’T WORRY ABOUT PROGRAMS
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




myriad of programs and ever-changing                      2.    Don’t Rely on Your Client.                     NOT BASED ON FINANCIAL NEED
                                                                                                      ○
                                                  ○




                                                                                                      ○




eligibility criteria, is like hiking in quick-                  Getting accurate information                   If your client is not receiving means
                                                  ○




                                                                                                      ○
                                                  ○




sand. But if left unaddressed, your client            about what government benefits your cli-            tested benefits, and if it does not appear
                                                                                                      ○
                                                  ○




                                                                                                      ○




may receive no benefit from the settle-
                                                  ○




                                                      ent is receiving can be surprisingly diffi-         that he or she will need them in a fore-
                                                                                                      ○
                                                  ○




ment, and could ultimately be the worse               cult. For example, the client may tell you          seeable time, then you can proceed as you
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




off for it. You have no choice but to move            he or she is receiving Social Security Dis-         would with any other client. Among the
                                                                                                      ○
                                                  ○




bravely forward. What do you do next?
                                                                                                      ○




                                                      ability Income, when in fact it is Supple-          most common government benefit pro-
                                                  ○




                                                                                                      ○
                                                  ○




                                                      mental Security Income (SSI). You should            grams that are not means tested are So-
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




A. DETERMINE WHAT GOVERNMENT                          never rely on the client to accurately iden-        cial Security Benefits and its accompany-
                                                                                                      ○
                                                  ○




     BENEFITS YOUR CLIENT IS                          tify the benefits he or she is receiving. The       ing health benefit program, Medicare. The
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




     RECEIVING                                        wise approach is to require verification. It        Social Security Act provides for a range of
                                                                                                      ○
                                                  ○




     The first task is to identify the gov-           is usually a good idea to obtain a release
                                                                                                      ○




                                                                                                          cash and health benefits, including old-
                                                  ○




                                                                                                      ○
                                                  ○




ernment benefits the injured party is re-             and request the list of benefits from the           age (retirement), survivor’s, and disability
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




ceiving. The answer will tell you whether             caseworker.                                         insurance benefits. These benefits are paid
                                                                                                      ○
                                                  ○




or not the settlement will affect his or her                                                              to retired or disabled wage earners and
                                                                                                      ○
                                                  ○




                                                                                                      ○
                                                  ○




benefits.                                                                                                 their dependents, or, if the wage earner
                                                                                                      ○
                                                  ○




                                                                                                                           Please continue on next page


                                                           SPRING 2004 • VOL. 23, NO. 1
20                                                    LITIGATION JOURNAL
INJURED PARTY
continued from page 19

is deceased, to that person’s survivors. So-                                                              empt assets under the Medicaid rules,




                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○
cial Security is a public insurance benefit,                                                              such as a house, car, clothing, other tan-




                                                  ○




                                                                                                     ○
and eligibility for Social Security payments              Timing is important,




                                                  ○
                                                                                                          gible personal property, or a prepaid




                                                                                                     ○
                                                  ○




                                                                                                     ○
is based on the earnings record of the in-                because every month                             burial fund.




                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○
dividual (or another wage earner on                                                                            Timing is important, because every
                                                          that the recipient has




                                                  ○




                                                                                                     ○
whose record the individual is eligible to                                                                month that the recipient has funds in ex-




                                                  ○




                                                                                                     ○
                                                          funds in excess of the



                                                  ○




                                                                                                     ○
draw).                                                                                                    cess of the resource eligibility limits he or




                                                  ○




                                                                                                     ○
     A Social Security beneficiary may have                                                               she will not receive government benefits,



                                                  ○




                                                                                                     ○
                                                          resource eligibility

                                                  ○




                                                                                                     ○
any amount of assets, and unearned in-                                                                    and the award or settlement can quickly

                                                  ○




                                                                                                     ○
                                                          limits he or she will
                                                  ○




                                                                                                     ○
come is not restricted. In some instances a                                                               dissipate. For example, if the injured party
                                                  ○




                                                                                                     ○
person is eligible for such a small amount        ○
                                                          not receive govern-                             is receiving $10,000, and will be using it




                                                                                                     ○
                                                  ○




                                                                                                     ○
of Social Security Disability Income ben-                                                                 to purchase a car or pay off debt, then
                                                          ment benefits, and
                                                  ○




                                                                                                     ○
efits that he/she is also eligible for Supple-                                                            ideally he or she will have time to accom-
                                                  ○




                                                                                                     ○
                                                          the award or settle-
                                                  ○




                                                                                                     ○
mental Security Income (“SSI”) [see discus-                                                               plish this before the first of the follow-
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○
sion regarding SSI below].                                ment can quickly                                ing month. If he or she receives the funds
                                                  ○




                                                                                                     ○
                                                                                                          on the 30th of the month, then spend
                                                  ○




                                                                                                     ○
                                                          dissipate.
                                                  ○




                                                                                                     ○
C.   EVALUATE EFFECT OF LUMP SUM                                                                          down may not be accomplished immedi-
                                                  ○




                                                                                                     ○
     OR INCOME STREAM ON ELIGIBILITY
                                                  ○




                                                                                                          ately, and eligibility will be affected for




                                                                                                     ○
                                                  ○




                                                                                                     ○
     FOR MEANS TESTED PROGRAMS                                                                            the month of receipt and the following
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○
     If the injured party is receiving means          ment notice. SSA typically administratively        month. Ideally funds from the settlement
                                                  ○




                                                                                                     ○
tested benefits, you should understand                waives overpayments if they are under              should be received at the beginning of the
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○
what effect receipt of a lump sum or in-              $500.                                              month in order to allow adequate time
                                                  ○




                                                                                                     ○
come stream will have on the benefits.                     If the recipient still has the funds on
                                                  ○




                                                                                                         for spend down to be completed.


                                                                                                     ○
                                                  ○




                                                                                                     ○
Some of the most common government                    the first of the following month, and if
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○
benefit programs for which eligibility is             this puts him or her over the resource eli-             c. Gift. Sometimes the recipient wants
                                                  ○




                                                                                                     ○


based on financial need are described be-             gibility limit for non-exempt assets, then         to give away the funds. This will trigger a
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




low.                                                  he or she will be ineligible for SSI. Even         penalty period of ineligibility for SSI. The
                                                  ○




                                                                                                     ○




                                                      recipients of SSI who might feel that they
                                                  ○




                                                                                                         formula to determine the ineligibility pe-
                                                                                                     ○
                                                  ○




                                                                                                     ○




     1.   Supplemental Security                       can forgo the monthly SSI payment once             riod for SSI is to take the value of the gift
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




          Income (SSI).                               they have access to some other source of           and divide by $565.70.2 The resulting num-
                                                  ○




                                                                                                     ○




          a. Eligibility for SSI. SSI is a fed-       funds may decide that they must maintain           ber is the number of months of ineligibil-
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




eral benefit program. 1 SSI provides a                their SSI because it automatically qualifies       ity. This long ineligibility period makes
                                                  ○




                                                                                                     ○




                                                      them for basic Medicaid Assistance.
                                                  ○




monthly cash payment in order to provide
                                                                                                     ○




                                                                                                         gifting in SSI cases impractical in most
                                                  ○




                                                                                                     ○




a minimum level of income for persons                      If the recipient receives an income           cases.
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




who are disabled, blind or age 65 or over.            stream, his or her SSI will be reduced each
                                                  ○




                                                                                                     ○




The income eligibility is very low ($564 in           month by the amount received.                           d. Trusts to Preserve SSI. In the Omni-
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




2004). Further, the asset eligibility limit for                                                          bus Reconciliation Act of 1993 (“OBRA
                                                  ○




                                                                                                     ○
                                                  ○




an individual is $2,000, excluding exempt                  b. Spend Down. If the recipient still         ’93”)3, Congress explicitly carved out two
                                                                                                     ○
                                                  ○




                                                                                                     ○




assets. Exempt assets effectively include a           has the funds on the first of the following        exceptions in the otherwise restrictive
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




residence, one car, household goods and               month, and if this puts him/her over the           rules regarding trusts for beneficiaries of
                                                  ○




                                                                                                     ○




furnishings, prepaid funeral plan, and                applicable resource limit for non-exempt           Medicaid, which Congress later adopted
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




term life insurance.                                  assets, then he or she may be ineligible           for SSI in the Foster Care Independence
                                                  ○




                                                                                                     ○
                                                  ○




                                                      for SSI. One solution to insure that the in-       Act of 1999.4 This law changed the Social
                                                                                                     ○




     Funds received by SSI recipients are
                                                  ○




                                                                                                     ○




treated as income in the month received               jured party actually receives a benefit from       Security law to adopt the exceptions in the
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




and an asset on the first of the month fol-           the lump-sum is to spend down. This works          Medicaid rules. One exception is a “pay-
                                                  ○




                                                                                                     ○




lowing receipt. Receipt of funds must be              particularly well when the client will re-         back trust” or “under 65 disability trust,”
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




reported by the recipient. Technically, the           ceive a relatively small amount. The client        which allows disabled individuals who are
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




receipt of funds in the first month causes            may use the funds to purchase needed               under the age of 65 to place their assets
                                                  ○




                                                                                                     ○




an overpayment, and the Social Security               goods and services and/or to pay off any           in a trust provided certain criteria are met.
                                                  ○




                                                                                                     ○
                                                  ○




                                                                                                     ○




Administration (SSA) will issue an overpay-           debt. Any goods purchased should be ex-            Transfer of the individual’s assets to this
                                                  ○




                                                                                                     ○




                                                                                                                          Please continue on next page


                                                          SPRING 2004 • VOL. 23, NO. 1
                                                LITIGATION JOURNAL                                                                                21

INJURED PARTY
continued from page 20

type of trust will not cause the trust as-                                                                avoid spousal impoverishment apply to




                                                                                                      ○
                                                ○




                                                                                                      ○
sets to be deemed “available” for pur-                                                                    married couples, which are based on a




                                                ○




                                                                                                      ○
                                                      There is some concern




                                                ○
poses of eligibility for Medicaid, nor will                                                               formula and are beyond the scope of this




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                      that even income




                                                ○
such a transfer cause a penalty period of                                                                 outline.




                                                                                                      ○
                                                ○
ineligibility. The second exception allows




                                                                                                      ○
                                                ○
                                                      streams directed to the




                                                                                                      ○
                                                ○
a disabled individual of any age to trans-                                                                     Similar to SSI, funds received by an




                                                                                                      ○
                                                ○
                                                      trustee of a special




                                                                                                      ○
fer assets into a pooled trust. These ex-                                                                 individual needing long term care are




                                                ○




                                                                                                      ○
                                                ○
ceptions are described below.                         needs trust will be                                 treated as income in the month received




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○
                                                                                                          and an asset on the first of the month fol-




                                                                                                      ○
                                                      treated by the Social
                                                ○
      e. Structured Settlements. There are                                                                lowing receipt. Technically, the receipt of




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○
special issues to consider in cases involv-           Security Administration                             funds in the first month causes an over-




                                                                                                      ○
                                                ○




                                                                                                      ○
ing a structured settlement. If the claim-                                                                payment, and the state agency adminis-
                                                ○




                                                      in the future as available




                                                                                                      ○
                                                ○




ant or the conservator is named as the di-                                                                tering the program can issue an overpay-




                                                                                                      ○
                                                ○




                                                      to the beneficiary and




                                                                                                      ○
                                                ○




rect beneficiary of an annuity purchased                                                                  ment notice.




                                                                                                      ○
                                                ○




in the context of a structured settlement,




                                                                                                      ○
                                                      thus reduce or eliminate
                                                ○




                                                                                                      ○
                                                ○




then it could cause him or her to perma-                                                                       b. Spend Down. Spend down can be




                                                                                                      ○
                                                ○




                                                      eligibility for SSI.




                                                                                                      ○
nently lose eligibility for public benefits.                                                              a solution to preserve government ben-
                                                ○




                                                                                                      ○
                                                ○




If the payments are “unassignable” then                                                                   efits and still receive some benefit from




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




some government agencies will treat                                                                       the settlement. The process is the same as




                                                                                                      ○
                                                ○




them as received by the individual each             varying subprograms, with different eli-




                                                                                                      ○
                                                                                                          described above under SSI.
                                                ○




                                                                                                      ○
                                                ○




month even if the payments are contrib-             gibility criteria. If the client receives an




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




uted to a properly drafted special needs            income stream as a result of a structured                  c. Gift. A gift will trigger a penalty



                                                                                                      ○
                                                ○




trust. Therefore, it is essential payments          settlement in a personal injury case, then            period of ineligibility for Medicaid for long


                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




be made directly to the trustee.                    the income will cause ineligibility for the           term care. The length of the penalty pe-
                                                                                                      ○
                                                ○




      There is some concern that even in-           OHP if the income is over the allowed limit.      ○   riod depends on the amount of the gift.
                                                ○




                                                                                                      ○
                                                ○




come streams directed to the trustee of a           If the client receives a lump-sum payment,            A formula is used: the value of the gift is
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




special needs trust will be treated by the          then this may cause the client to be over             divided by $4,300.00 (this amount changes
                                                                                                      ○
                                                ○




Social Security Administration in the fu-           the resource limit and ineligible for OHP,            periodically). The resulting number is the
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




ture as available to the beneficiary and            unless the assets are spent down or trans-            number of months of ineligibility.
                                                                                                      ○
                                                ○




                                                    ferred to a trust.5
                                                                                                      ○




thus reduce or eliminate eligibility for SSI.
                                                ○




                                                                                                      ○
                                                ○




Although that is not the policy now in our                                                                     d. Trusts to Preserve Medicaid Assis-
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




region, purchase of an annuity is irrevo-               3.    Medicaid Assistance for                     tance. In OBRA ’93, Congress explicitly
                                                                                                      ○
                                                ○




cable, and the possibility of a different                     Long Term Care.                             carved out exceptions in the otherwise
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




future interpretation is unsettling. All                      a. Eligibility. Medicaid Assistance         restrictive rules regarding trusts, which
                                                                                                      ○
                                                ○
                                                ○




                                                                                                      ○




things being equal, a lump sum settlement           for long term care covers persons with lim-           Congress later adopted for SSI as well (see
                                                ○




                                                                                                      ○




is safer for the beneficiary. If a structured       ited income and resources who need as-                above). Two of these exceptions, the pay-
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




settlement is being considered, the plain-          sistance with the activities of daily living.         back trust and the pooled trust, are de-
                                                ○




                                                                                                      ○




tiff should be made aware of the risk.              Long term care includes nursing homes,                scribed below.
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




                                                    assisted living facilities, adult foster homes,
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




    2.   Medical Coverage.                          and in-home care. To meet the financial                   4.     Public and Subsidized
                                                ○




                                                                                                      ○




         A person who receives SSI auto-            criteria, a person must meet both an in-                         Housing.
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




matically receives Medicaid coverage for            come test and a resource test. Under the                          Many low and moderate income
                                                ○




                                                                                                      ○




his or her basic health care needs. Even
                                                ○




                                                    income test a person’s gross monthly in-
                                                                                                      ○




                                                                                                          individuals receive assistance through fed-
                                                ○




                                                                                                      ○




someone who is willing to forgo cash as-            come must be at or below $1,692.00 (a                 eral rent subsidy programs. Rents are a
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




sistance may not be able to give up medi-           2004 amount; three times the SSI stan-                percentage of monthly income, generally
                                                ○




                                                                                                      ○




cal benefits. These benefits are usually es-        dard). People over this income cap but                not more than 30%. There is no resource
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




sential for people with disabilities. Main-         otherwise eligible may still qualify by cre-          limit for federally subsidized housing. Eli-
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




taining some SSI, even a dollar, can pre-           ating an income cap trust. The person’s               gibility is based on income, including fixed
                                                ○




                                                                                                      ○




serve eligibility for medical coverage.             resources must be at or below $2,000 for              and investment income.
                                                ○




                                                                                                      ○
                                                ○




                                                                                                      ○




     The Oregon Health Plan (OHP) has               single persons. Different rules designed to                Since eligibility for federal housing is
                                                ○




                                                                                                      ○




                                                                                                                          Please continue on next page


                                                         SPRING 2004 • VOL. 23, NO. 1
22                                                  LITIGATION JOURNAL
INJURED PARTY
continued from page 21




                                                ○
based on income, any situation in which




                                                                                                     ○
                                                                                                         conservator to create a trust, but only with




                                                ○




                                                                                                     ○
the person will receive automatic payment                                                                prior court approval.




                                                ○




                                                                                                     ○
                                                      The trust must provide




                                                ○




                                                                                                     ○
of monthly income may make the indi-                                                                         Probate court approval is always re-




                                                ○




                                                                                                     ○
vidual ineligible for a federal housing sub-          that upon the death of                             quired when the recipient is a minor or




                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
sidy or result in an increase in rent.                the individual, any                                mentally incapacitated. If a conservator




                                                ○




                                                                                                     ○
                                                ○
     Receipt of a lump-sum will not auto-                                                                has not been appointed, and no parent




                                                                                                     ○
                                                      remaining trust



                                                ○




                                                                                                     ○
matically make the recipient ineligible. If                                                              or grandparent is available, then a peti-




                                                ○




                                                                                                     ○
                                                      property will be

                                                ○




                                                                                                     ○
the recipient immediately spends the as-                                                                 tion may be filed with the probate court


                                                ○




                                                                                                     ○
sets on needed items or pays debts, then                                                                 to establish or authorize the establish-

                                                ○




                                                                                                     ○
                                                      distributed to the State
                                                ○




                                                                                                     ○
investment income will not be generated                                                                  ment of a trust on behalf of the disabled
                                                ○




                                                                                                     ○
by the assets that would affect the client’s
                                                ○
                                                      agency, up to the                                  individual.




                                                                                                     ○
                                                ○




                                                                                                     ○
monthly income. If the recipient receives             amount paid in
                                                ○




                                                                                                     ○
                                                                                                             2.    Under 65.
                                                ○




                                                                                                     ○
a large lump-sum, and does not spend
                                                      Medicaid benefits on
                                                ○




                                                                                                                   The life beneficiary must be un-




                                                                                                     ○
down, then the amount of investment in-
                                                ○




                                                                                                     ○
                                                                                                         der 65 when the trust is created. The trust
                                                ○




                                                      behalf of the individual.




                                                                                                     ○
come received or imputed to the indi-
                                                ○




                                                                                                     ○
                                                                                                         is excepted for purposes of Medicaid eli-
                                                ○




vidual will translate into increased rent or




                                                                                                     ○
                                                                                                         gibility after the individual reaches 65, but
                                                ○




                                                                                                     ○
possibly even ineligibility.
                                                ○




                                                                                                     ○
                                                                                                         assets of the individual cannot be added
                                                ○




                                                                                                     ○
                                                ○




                                                                                                         to the trust after age 65.




                                                                                                     ○
     5.   Food Stamps.
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
          Food stamps is a program which            personal injury or wrongful death settle-                3.    Disabled.
                                                ○




                                                                                                     ○
provides assistance to purchase food for
                                                ○




                                                    ment will be treated as owned by the in-                       The trust must be established for




                                                                                                     ○
                                                ○




                                                                                                     ○
low income households. There are no as-             dividual for purposes of eligibility for pub-        an individual who is disabled as defined
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○
set limits for some participants. Eligibility       lic assistance.                                      in the Social Security Act. If the beneficiary
                                                ○




                                                                                                     ○
for food stamps works in a similar man-                  Congress explicitly made an exception           is receiving either Social Security Disabil-
                                                ○




                                                                                                     ○
                                                ○




ner to federal housing. Since eligibility for       from the restrictive provisions in both          ○   ity Income (SSDI) benefits or SSI benefits
                                                ○




                                                                                                     ○
                                                ○




food stamps is based on income, a scenario          OBRA ’93 and FCIA ’99 for disabled ben-              as a disabled person, then the State will
                                                                                                     ○
                                                ○




                                                                                                     ○




designed to give the individual monthly             eficiaries who are under the age of 65.7             accept this determination.
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




income may make the individual ineligible           These trusts have commonly been called
                                                ○




                                                                                                     ○




for food stamps or reduce the benefits.             “payback trusts” (also “under 65 disabil-                4.   State Receives Remaining
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




     Since there is no asset limit for food         ity trusts”).                                                 Trust Property.
                                                ○




                                                                                                     ○
                                                ○




stamps for persons who are eligible based                The key elements of a payback trust                      The trust must provide that upon
                                                                                                     ○
                                                ○




                                                                                                     ○




on receiving certain benefits, such as SSI,         are as follows: (1) the trust is created by a        the death of the individual, any remain-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




receipt of a lump-sum will not automati-            parent, grandparent, guardian/conserva-              ing trust property will be distributed to
                                                ○




                                                                                                     ○




cally make the client ineligible. If the re-        tor, or court; (2) the individual is under 65;       the State agency, up to the amount paid
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




cipient immediately spends the assets on            (3) the trust is created for the benefit of a        in Medicaid benefits on behalf of the in-
                                                ○




                                                                                                     ○
                                                ○




needed items or pays debts, then invest-            disabled person; (4) any remaining trust             dividual. When the individual has received
                                                                                                     ○
                                                ○




                                                                                                     ○




ment income will not be generated by the            balance at the death of the life benefi-             Medicaid benefits in more than one State,
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




assets that would affect the client’s               ciary is first paid to the state agency to           the trust “must provide that the funds re-
                                                ○




                                                                                                     ○




monthly income. If the recipient receives           the extent Medicaid Assistance has been              maining in the trust are distributed to each
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




a large amount, and does not spend down,            provided.8                                           State in which the individual received
                                                ○




                                                                                                     ○
                                                ○




then the amount of investment income                                                                     Medicaid, based on the State’s proportion-
                                                                                                     ○
                                                ○




                                                                                                     ○




received or imputed to the individual will              1.   Grantor/Trustor.                            ate share of the total amount of Medi-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




translate into decreased food stamps or                      Although the disabled individual            caid benefits paid by all of the States on
                                                ○




                                                                                                     ○




possibly even ineligibility.                        is contributing the trust assets, he or she          the individual’s behalf.” There is no re-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




                                                    may not act as the grantor or trustor. The           quirement to pay back SSI. The interest of
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




                                                    trust must be created by a parent, grand-            the State in the remaining trust assets by
                                                ○




                                                                                                     ○




D. DECIDE IF A SPECIAL NEEDS TRUST                  parent, legal guardian, or court. The term           the terms of the trust is completely sepa-
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




     IS APPROPRIATE6                                “legal guardian” is presumably intended              rate from the right of the State to estate
                                                ○




                                                                                                     ○




     Congress has passed laws intended to           to include a conservator in States like Or-          recovery.
                                                ○




                                                                                                     ○
                                                ○




                                                                                                     ○




chill the use of trusts funded with the as-         egon. ORS 125.440 specifically allows a
                                                ○




                                                                                                     ○




sets of recipients of SSI and Medicaid. A                                                                                Please continue on next page


                                                        SPRING 2004 • VOL. 23, NO. 1
                                               LITIGATION JOURNAL                                                                                 23

INJURED PARTY
continued from page 22

E.   DECIDE IF A POOLED TRUST IS A                                                                      stantially increase their quality of life.




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○
     GOOD ALTERNATIVE                                                                                        For example, we may wish to write a
                                                    The term special needs




                                                                                                   ○
                                               ○




                                                                                                   ○
     Under OBRA ’93, a non-profit organi-                                                               trust for someone who is now disabled




                                               ○




                                                                                                   ○
                                                    suggests needs




                                               ○
zation may establish a trust in which the                                                               and receiving public assistance, but who




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○
funds of the disabled recipients are pooled         particular to the person                            later may not be disabled and no longer




                                                                                                   ○
                                               ○
for purposes of investment and manage-                                                                  need public assistance. This particularly




                                                                                                   ○
                                               ○
                                                    and his or her disability,




                                                                                                   ○
                                               ○
ment.9 There is no age limit. The excep-                                                                arises when writing special needs trusts




                                                                                                   ○
                                               ○
                                                    such as medical                                     for minor children or for individuals who




                                                                                                   ○
tion made for pooled trusts found in FCIA


                                               ○




                                                                                                   ○
                                               ○
’99 appears to limit their use to disabled          equipment or                                        have had a recent brain trauma. If the




                                                                                                   ○
                                               ○




                                                                                                   ○
beneficiaries under the age of 65.                                                                      trust prohibits distributions for basic
                                               ○




                                                                                                   ○
     In Oregon, ARC of Oregon has formed
                                               ○    rehabilitative treatment,                           needs, the trustee will be breaching his/




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




a pooled trust, which is available to ben-          and usually special                                 her fiduciary duty if prohibited distribu-




                                                                                                   ○
                                               ○




                                                                                                        tions are made, even though there may




                                                                                                   ○
eficiaries who have been disabled before
                                               ○




                                                    needs trusts do specify




                                                                                                   ○
                                               ○




the age of 65. The pooled trust is a pro-                                                               no longer be a concern about whether a




                                                                                                   ○
                                               ○




                                                    that distributions are




                                                                                                   ○
fessionally managed program. Funds are                                                                  distribution from a trust will affect eligi-
                                               ○




                                                                                                   ○
                                               ○




deposited into a pooled bank trust fund,            allowed for such needs.                             bility for public benefits.




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




although each beneficiary will have a                                                                        As another example, the beneficiary




                                                                                                   ○
                                               ○




separate account consisting of his/her                                                                  may be receiving SSI and Medicaid, and




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




separate share. Information about the                                                                   living in substandard housing. His or her




                                                                                                   ○
                                               ○




                                                                                                   ○
pooled trust is available from Mitch Teal,         anything but food, clothing, and shelter.           parents would like to create a trust that
                                               ○




                                                                                                   ○
                                               ○




Pooled Trust Director, at the ARC of Or-           Typically, distributions for medical ex-            will allow distributions for shelter, to im-




                                                                                                   ○
                                               ○




                                                                                                   ○
egon, (503) 581-2726 or toll-free at (877)         penses are limited by the terms of the trust        prove the living situation. The biggest con-
                                               ○




                                                                                                   ○
                                               ○




581-2726.                                          to medical, dental, and psychological ser-          cern is to maintain Medicaid. If the trust

                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




                                                   vices not otherwise covered by Medicaid.            allows the trustee to make some distribu-
                                                                                                   ○
                                               ○




                                                                                                   ○   tions for basic needs, then the trustee can
F.   DETERMINE IF A SPECIAL NEEDS                       Examples of supplemental needs are
                                               ○




                                                                                                   ○
                                               ○




     TRUST WILL WORK FOR YOUR                      as follows: medical insurance premiums,             pay for rent in a decent apartment. While
                                                                                                   ○
                                               ○




                                                                                                   ○




     CLIENT ON A PRACTICAL LEVEL                   telephone services and equipment, trans-            the beneficiary’s SSI will be reduced un-
                                               ○




                                                                                                   ○
                                               ○




                                                   portation (including automobile, auto               der the in-kind support and maintenance
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




     1.   Special Needs Defined.                   maintenance and repair, gasoline, auto              rules, he or she will continue to receive
                                                                                                   ○
                                               ○




                                                                                                   ○




          A “special needs trust”specifies         insurance, and/or bus pass), recreation,            some SSI to pay for food and clothing, and
                                               ○




                                                                                                   ○
                                               ○




that the trust is intended to pay for the          education, pet care, subscriptions, and             will retain Medicaid.
                                                                                                   ○
                                               ○




                                                                                                   ○




beneficiary’s special (or supplemental)            computer equipment and services.10 The                    One approach to provide more flex-
                                               ○




                                                                                                   ○
                                               ○




                                                                                                       ibility, sometimes called the “hybrid” stan-
                                                                                                   ○




needs. The term special needs suggests             list of potential distributions for supple-
                                               ○




                                                                                                   ○




needs particular to the person and his or          mental needs is unlimited.                          dard, is to clearly state that the purpose
                                                                                                   ○
                                                                                                   ○




her disability, such as medical equipment                                                              of the trust is to preserve the beneficiary’s
                                                                                                   ○




or rehabilitative treatment, and usually                 Perhaps of more use is to know what           ongoing eligibility for public benefits and
                                                                                                   ○
                                                                                                   ○




special needs trusts do specify that distri-       is not considered supplemental: rent,               to provide for the beneficiary’s special
                                                                                                   ○
                                                                                                   ○




butions are allowed for such needs.                mortgage, property taxes, heating, gas              needs, but not to expressly prohibit all dis-
                                                                                                   ○




     However, a trust limiting distributions       and electric power, garbage, sewer, wa-             tributions for food, clothing, and shelter.
                                                                                                   ○
                                                                                                   ○




to special needs can allow distributions for       ter, fire insurance (if required by mortgage        The trust provisions might also expressly
                                                                                                   ○




anything that is not food, clothing, and           holder), clothing, and food.                        allow distributions for some basic needs.
                                                                                                   ○
                                                                                                   ○




shelter. This encompasses many things that                                                                   Courts typically interpret trusts in light
                                                                                                   ○
                                                                                                   ○




are not related to a disability or medical             2.    Distributions Beyond Special              of their express purpose. With the hybrid
                                                                                                   ○




treatment, and may not even be properly                      Needs.                                    approach, the stated purpose is to pre-
                                                                                                   ○
                                                                                                   ○




classified as a need. The term supplemen-                    It is not always necessary to com-        serve the beneficiary’s ongoing eligibility
                                                                                                   ○




tal needs is sometimes used to perhaps             pletely prohibit distributions for basic            for public benefits, but flexibility is incor-
                                                                                                   ○
                                                                                                   ○




more accurately describe the type of dis-          needs. While distributions limited to spe-          porated. This approach is clearly success-
                                                                                                   ○
                                                                                                   ○




tribution that can be allowed by the terms         cial needs trust can work well for many             ful now for SSI beneficiaries in our region.
                                                                                                   ○




of the trust.                                      beneficiaries, for some individuals the re-         In Oregon, the State agency administer-
                                                                                                   ○
                                                                                                   ○




     Supplemental needs distributions are          strictions will limit options that could sub-       ing may or may not accept the “hybrid”
                                                                                                   ○




                                                                                                                        Please continue on next page


                                                        SPRING 2004 • VOL. 23, NO. 1
24                                             LITIGATION JOURNAL
INJURED PARTY
continued from page 23




                                                                                                  ○
                                               ○
distribution standard for a trust created                                                              power to approve structured settlements.




                                                                                                  ○
                                                     Experience suggests that




                                               ○




                                                                                                  ○
with the beneficiary’s own funds. How-                                                                 Under ORS 125.440(5) a conservator may




                                               ○




                                                                                                  ○
                                               ○
ever, if the beneficiary is receiving some           there is little difficulty                        authorize, direct, or ratify any annuity




                                                                                                  ○
                                               ○




                                                                                                  ○
SSI, then the beneficiary will automatically                                                           contract only with court approval. The




                                               ○
                                                     obtaining approval from




                                                                                                  ○
                                               ○
receive medical coverage.                                                                              court will typically approve the purchase




                                                                                                  ○
                                               ○




                                                                                                  ○
                                                     courts for trusts for



                                               ○
      When using this standard, it is advis-                                                           of an annuity in cases involving a minor




                                                                                                  ○
                                               ○




                                                                                                  ○
able to include a provision allowing the             minors who are disabled                           in which there will be a full payout to the



                                               ○




                                                                                                  ○
                                               ○
trustee to amend the trust if necessary to                                                             child at age eighteen.




                                                                                                  ○
                                               ○
                                                     when there is an expec-




                                                                                                  ○
accomplish the stated trust purpose, which                                                                   May the court approve creation or
                                               ○




                                                                                                  ○
                                               ○
is to preserve public benefits.                      tation that the minor                             funding of a trust or annuity for the ben-




                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○



                                                                                                       efit of a minor that will extend beyond
                                                     will be unable to man-




                                                                                                  ○
                                               ○




                                                                                                  ○
     3.  Purchase of Exempt                                                                            the age of majority? ORS 125.440(2) al-
                                               ○




                                                                                                  ○
                                                     age financial affairs well
                                               ○




         Resources.                                                                                    lows the conservator to create trusts “be-




                                                                                                  ○
                                               ○




                                                                                                  ○
                                                                                                       yond the period of disability of the pro-
                                               ○




         A common provision in special               into adulthood and per-




                                                                                                  ○
                                               ○




needs trusts allows distributions for pur-                                                             tected person or beyond the life of the




                                                                                                  ○
                                               ○




                                                     haps for a lifetime.




                                                                                                  ○
                                               ○




chase of exempt resources, such as a home                                                              protected person.” The term “disability”




                                                                                                  ○
                                               ○




                                                                                                  ○
or car.                                                                                                is not defined in the statute, and the term
                                               ○




                                                                                                  ○
                                               ○




                                                                                                       “incapacity” is used to define mental in-




                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




G. DETERMINE WHAT COURT                                                                               capacity. It would appear that the word




                                                                                                  ○
                                               ○




   INVOLVEMENT IS NEEDED                                Alternatively, a petition may be filed        “disability” as used in ORS 125.440(2)




                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




                                                   under ORS 125.650(4) for the appointment           means legal disability, which traditionally



                                                                                                  ○
                                               ○




                                                                                                      refers to both minority and incapacity.11

                                                                                                  ○
     1.   Mechanics of Court Approval              of a temporary conservator with author-
                                               ○




                                                                                                  ○
                                               ○




          of Trusts.                               ity “limited to a specified time and whose               The local rules and practices of pro-
                                                                                                  ○
                                               ○




                                                   power is limited to certain acts needed to     ○
                                               ○




          In some instances, a disabled in-                                                       ○   bate courts will determine whether a court
                                               ○




dividual is not mentally incapacitated, and        implement the protective order.” Under             will approve a trust for a minor that ex-
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




court approval is not required to fund a           this subsection, the fiduciary “need only          tends beyond the age of majority. Some
                                                                                                  ○
                                               ○




                                                                                                  ○




trust and preserve Medicaid assistance.            make such report to the court as the court         judges, in Oregon and elsewhere, do not
                                               ○




                                                                                                  ○
                                               ○




However, court approval is required when           may require.”                                      hesitate to approve such trusts, even for
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




a trust is being created for a minor or                 Some courts require an ongoing con-           minors who are expected to be capable
                                                                                                  ○
                                               ○




mentally incapacitated person with his or          servator to which the trustee must report          of handling their own financial affairs
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




her own funds.                                     each year, who then files the annual ac-           upon majority, while other judges are
                                                                                                  ○
                                               ○




                                                                                                  ○




     Multnomah County probate court                counting to the court. Often the conser-           more reluctant. Experience suggests that
                                               ○




                                                                                                  ○
                                               ○




policy is that the “presumed” vehicle for          vator and trustee are the same person or           there is little difficulty obtaining approval
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




maintaining the funds from a settlement            trust company. Note also ORS 125.440(2),           from courts for trusts for minors who are
                                                                                                  ○
                                               ○




in a civil action involving minors or inca-        which states that the “court may not ap-           disabled when there is an expectation that
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




pacitated adults will be a conservatorship.        prove a trust that has the effect of termi-        the minor will be unable to manage finan-
                                                                                                  ○
                                               ○




                                                                                                  ○




                                                   nating the conservatorship.”                       cial affairs well into adulthood and per-
                                               ○




However, the court will consider requests
                                                                                                  ○
                                               ○




involving payback trusts for individuals                                                              haps for a lifetime.
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




receiving public assistance.                           2.    Extending Term of Trust or                     In summary, the Oregon statute ap-
                                                                                                  ○
                                               ○




     In such cases, a petition can be filed                 Annuity Beyond Age of                     pears to allow the probate court to ap-
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




under ORS 125.650(1), which allows the                      Majority.                                 prove of trusts that will extend beyond the
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




court to exercise any power that could be                   As noted above, ORS 125.650(5)            age of majority. However, the practitioner
                                                                                                  ○
                                               ○




exercised by a conservator in a protective         allows the court to authorize, create, or          should not assume that the court will ap-
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




proceeding (in this case, the power to cre-        ratify “any contract, trust or other trans-        prove a trust or a structured settlement
                                                                                                  ○
                                               ○




ate a trust under ORS 125.440). ORS                action relating to the protected person’s          involving an annuity that will extend past
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




125.650(5) also allows the court to autho-         financial affairs or involving the estate of       the age of majority. Rather, be prepared
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




rize, direct, or ratify any “contract, trust       the person if the court determines that the        to explain why it is desirable and in the
                                                                                                  ○
                                               ○




or other transaction relating to the pro-          transaction is in the best interests of the        best interests of the child. The court is
                                                                                                  ○
                                               ○




                                                                                                  ○
                                               ○




tected person’s financial affairs...”              protected person.” This includes the               likely to look favorably on cases involving
                                                                                                  ○
                                               ○




                                                       SPRING 2004 • VOL. 23, NO. 1
                                               LITIGATION JOURNAL                                                                                   25

INJURED PARTY
continued from page 24




                                               ○




                                                                                                   ○
a child who is expected to remain unable                                                               Endnotes
                                                    A personal injury settle-




                                               ○




                                                                                                   ○
to handle finances in adulthood, or in




                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
those situations involving special needs            ment or award can make                             1    42 USC Sec. 1382




                                               ○




                                                                                                   ○
trusts in which the maintenance of public                                                              2    The maximum SSI benefit (currently $564)




                                               ○




                                                                                                   ○
                                                    a remarkable difference




                                               ○




                                                                                                   ○
benefits is essential.                                                                                      plus the OSIP standard (currently $1.70).




                                               ○




                                                                                                   ○
                                                    in the day to day life of                          3    42 USC Sec 1396p




                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
                                                                                                       4    42 USC Sec 1382b(e)
H. DETERMINE IF THERE ARE ANY                       someone who receives

                                               ○




                                                                                                   ○
                                                                                                       5    The availability and scope of the OHP is


                                               ○




                                                                                                   ○
     GOVERNMENT BENEFIT LIENS

                                               ○




                                                                                                   ○
     Most personal injury lawyers are ex-
                                                    government benefits.                                    subject to the vicissitudes of the state bud-

                                               ○




                                                                                                   ○
                                                                                                            get, and the rules are currently changing.
                                               ○




                                                                                                   ○
perienced in identifying and paying liens.     ○
                                                    This chance for an im-




                                                                                                   ○
                                                                                                       6    Detailed information regarding special
                                               ○




                                                                                                   ○
A thorough treatment of liens is beyond
                                                    proved quality of life can                              needs trusts can be found in the follow-
                                               ○




                                                                                                   ○
the scope of this outline. A brief reminder
                                               ○




                                                                                                   ○
                                                                                                            ing resources: Cynthia L. Barrett, Cinda M.
                                                    be lost in the absence of
                                               ○




                                                                                                   ○
of some of the issues that may particularly                                                                 Conroyd and Donna R. Meyer, SPECIAL
                                               ○




                                                                                                   ○
arise in the context of public benefits and         a timely and thoughtful
                                               ○




                                                                                                   ○
                                                                                                            NEEDS TRUSTS, (OSB CLE Program Materi-
                                               ○




                                                                                                   ○
trusts are as follows:12                                                                                    als 2003); Donna R. Meyer, Tips and Traps
                                               ○




                                                                                                   ○
                                                    analysis of the effect of
                                               ○




                                                                                                   ○
                                                                                                            for Minors and Disabled Clients Receiving
                                               ○




                                                                                                   ○
    1.   Medicaid Liens.                            the settlement.                                         Funds, (Multnomah Bar Association CLE,
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
         These liens arise out of ORS                                                                       May 29, 2002); Cynthia L. Barrett, Creat-
                                               ○




                                                                                                   ○
                                                                                                            ing and Operating the Payback Special
                                               ○




                                                                                                   ○
416.510 to 416.610. The Third Party Recov-
                                                        3.   Risks When Trust or Annuity
                                               ○




                                                                                                   ○
                                                                                                            Needs Trust, OREGON ELDER LAW 2002:
ery Unit will typically issue a lien notice.
                                               ○




                                                                                                   ○
                                                             Involved.                                      THE FACE OF THE FUTURE (OSB CLE Pro-
                                               ○




                                                                                                   ○
However, the personal injury lawyer
                                                                                                            gram Materials, 2002); Donna R. Meyer,
                                               ○




                                                                                                   ○
                                                             When the net proceeds will be
should confirm whether there are any liens
                                               ○




                                                                                                   ○
                                                   paid to a Medicaid payback trust with the                Special Needs Trusts, ELDER LAW BOOK
                                               ○




                                                                                                   ○
by contacting the Third Party Recovery                                                                      (OSB Handbook, 2002), in revision 2004.
                                                                                                   ○
                                               ○




                                                   State Medicaid agency as the payee at the
                                                                                                   ○
                                               ○




Unit in Salem at (503) 373-0333. The pro-                                                              7    See 42 USC 1396p(d)(4)(A); 42 USC
                                                   death of the beneficiary, both the trust
                                                                                                   ○
                                               ○




cedure is set out in OAR 461-195-320 and                                                                    1382(b)(e)(5).
                                                                                                   ○
                                               ○




                                                   lawyer and the personal injury lawyer are
                                                                                                   ○
                                               ○




325.                                                                                                   8    See also OAR 461-145-540(10)(a).
                                                                                                   ○
                                               ○




                                                   at risk if the liens are not paid prior to
     The issue of whether the use of a                                                                 9    42 USC 1396p(d)(4)(C)
                                                                                                   ○
                                               ○




                                                   transfer of the net proceeds to the trust.14
                                                                                                   ○
                                               ○




Medicaid payback trust obviates the need                                                               10   For more information about the operation
                                                                                                   ○
                                               ○




                                                   There are numerous complications that                    of special needs trusts, see Wesley D.
                                                                                                   ○
                                               ○




to pay any Medicaid liens until the time
                                                   can arise when a lien is not fully paid and
                                                                                                   ○
                                               ○




of ultimate payback of remaining trust                                                                      Fitzwater and Richard Pagnano, “Special
                                                                                                   ○
                                               ○




                                                   the funds are no longer in the control of                Needs Trusts,” Oregon State Bar CLE pub-
                                                                                                   ○
                                               ○




property at the beneficiary’s death has ef-
                                                                                                   ○
                                               ○




                                                   the beneficiary or the lawyers. This can                 lication, Administering Trusts in Oregon,
                                                                                                   ○




fectively been resolved. There is a line of
                                               ○




                                                   also be an issue if virtually all of the net             1995, updated 2000, 2004 revision in pro-
                                                                                                   ○
                                               ○




cases that hold that the Medicaid lien must
                                                                                                   ○
                                               ○




                                                   proceeds are used to purchase an annu-                   cess.
                                                                                                   ○
                                               ○




be paid prior to transfer of the net pro-                                                              11   See Donna R. Meyer, Tips and Traps for
                                                                                                   ○




                                                   ity.
                                               ○




ceeds to the trust.13
                                                                                                   ○
                                               ○




                                                                                                            Minors and Disabled Clients Receiving
                                                                                                   ○
                                               ○




                                                                                                            Funds, (Multnomah Bar Association CLE,
                                                                                                   ○
                                               ○




                                                   I.   SUMMARY
                                                                                                   ○




    2.   Medicare Liens.
                                               ○




                                                                                                            May 29, 2002) for a more thorough treat-
                                                        A personal injury settlement or award
                                                                                                   ○
                                               ○




         Medicare does not issue lien no-                                                                   ment of this issue.
                                                                                                   ○
                                               ○




                                                   can make a remarkable difference in the
                                                                                                   ○
                                               ○




tices. You must determine if your client is                                                            12   See Tips and Traps for Minors and Disabled
                                                                                                   ○




                                                   day to day life of someone who receives
                                               ○




receiving or was receiving Medicare ben-                                                                    Clients Receiving Funds, supra note 11, for
                                                                                                   ○
                                               ○




                                                   government benefits. This chance for an
                                                                                                   ○
                                               ○




efits, and whether a lien is appropriate.                                                                   information about who to contact.
                                                                                                   ○
                                               ○




                                                   improved quality of life can be lost in the         13   Cricchio v. Pennisi, 683 N.E.2d 301 (N.Y.
                                                                                                   ○
                                               ○




Part A and Part B recoveries are handled
                                                                                                   ○




                                                   absence of a timely and thoughtful analy-
                                               ○




                                                                                                            1997), Medica v. Billingslea, 618 NW 2d 616
by different agencies.
                                                                                                   ○
                                               ○




                                                   sis of the effect of the settlement. Luckily,            (Minn.App.2000)
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




                                                   with careful planning many injured par-             14   See Great-West Life and Annuity Insurance
                                                                                                   ○
                                               ○




                                                   ties who receive income or assets from a                 Co. v. Knudson, number 99-1786 (January
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




                                                   settlement or award will not lose needed                 8, 2002). Affirming 208 F3d 221 (9th Cir
                                                                                                   ○
                                               ○




                                                   government benefits. ❐                                   2000).
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




                                                        SPRING 2004 • VOL. 23, NO. 1
26                                           LITIGATION JOURNAL

Final Judgments in State Courts
Not Necessarily Preclusive in
Bankruptcy Courts
By Tara Schleicher
Farleigh,Wada &Witt, PC




W
What effect does the state court judgment you are
seeking have if one of the parties is or was a debtor
in bankruptcy court? It may have no effect depend-
ing on two things: (1) whether the bankruptcy court
has granted relief from the “automatic stay;” and (2)
whether the issues involved are “core proceedings”
under federal bankruptcy law.
     Once a debtor files for bankruptcy, federal law
imposes an “automatic stay” that prohibits the con-
                  tinuation or commencement of ju-
                  dicial proceedings against the debtor
                  that could have been brought or
                  were brought pre-bankruptcy.1 It
                  also stays the enforcement of any
                  judgment obtained against a debtor
                  pre-bankruptcy and any act to ob-
                  tain possession of property of the
bankruptcy estate. You may file a motion with the
bankruptcy court to obtain relief from the automatic
stay to continue litigation against a debtor. If, instead,
you continue to litigate against the debtor in state
court without having obtained relief from the auto-
matic stay, any judgment or other relief you obtain
may be void if challenged by the debtor in bankruptcy
court. Furthermore, if you willfully violate the auto-
matic stay, the bankruptcy court could award any
party injured by your violation of the automatic stay
actual damages, including costs and attorney fees,
and possibly punitive damages.
     Even if the automatic stay is not in effect at the time you         risdiction over all of the property, wherever located, of the
                                                                     ○
                                                                     ○




obtain a state court judgment, your judgment against a former            debtor as of the commencement of the case and of property of
                                                                     ○




debtor may be subject to collateral attack if the subject matter         the estate.3
                                                                     ○
                                                                     ○




of the litigation is within the exclusive jurisdiction of the fed-            Congress has also granted non-exclusive jurisdiction over
                                                                     ○




eral courts. Congress has granted the district courts2 exclusive         matters “arising under,” “arising in,” and “related to” bank-
                                                                     ○
                                                                     ○




jurisdiction over “cases under title 11” (the Bankruptcy Code).          ruptcies.4 Such matters include certain proceedings called “core
                                                                     ○
                                                                     ○




That means that the petition and the rights established by title         proceedings.” Core proceedings include, but are not limited to,
                                                                     ○




11 are within the exclusive jurisdiction of the bankruptcy courts.       a number of types, such as counterclaims by a bankruptcy es-
                                                                     ○
                                                                     ○




Additionally, Congress granted the district courts exclusive ju-         tate against persons who have filed claims against the estate;
                                                                     ○




                                                  SPRING 2004 • VOL. 23, NO. 1
                                              LITIGATION JOURNAL                                                                            27

FINAL JUDGMENTS
continued from page 26

the termination, annulment or modi-                                                                    ruptcy court. The bankruptcy court held
fication of the automatic stay; deter-            It may be more productive                            that the determination of the state li-
minations regarding the discharge-                                                                     censing board that its proceedings were
ability of debts; and the determination           and efficient to litigate                            exempt from the automatic stay was
of the existence, extent, or priority of                                                               binding under the principle of collat-
                                                  once in bankruptcy court if
liens against property of the estate.5                                                                 eral estoppel and denied the debtor’s
     In 2000, the Ninth Circuit Court of          you are dealing with core                            request for an injunction. The Ninth Cir-
Appeals stated in In re Gruntz, that “fi-                                                              cuit reversed, holding that the state li-
                                                  proceedings, like the effect
nal judgments in state courts are not                                                                  censing board’s decision regarding the
necessarily preclusive in United States           of the discharge received                            scope of the automatic stay was not
bankruptcy courts. Indeed the rule has                                                                 binding on the bankruptcy court. The
long stood that ‘a state court judgment
                                                  by the debtor in his or her                          court stated, “[a]t least with respect to
entered in a case that falls within the           bankruptcy; the effect of                            ‘core’ bankruptcy proceedings (of which
federal courts’ exclusive jurisdiction is                                                              hearings to determine the scope of the
subject to collateral attack in the fed-
                                                  the automatic stay; or the                           automatic stay are a type) the federal
eral courts.’”6 Because of the bank-              extent, priority, or validity                        courts have final authority.”
ruptcy court’s plenary power over core                                                                      These cases indicate that debtors
proceedings, the state courts cannot              of a lien against property                           (and former debtors) may take their
have concurrent jurisdiction over them            of the estate.                                       chances in state court, and take a sec-
absent relief from the automatic stay.                                                                 ond bite at the litigation apple in bank-
     Even assuming that the state                                                                      ruptcy court if they are dissatisfied with
courts had concurrent jurisdiction, their         sexually molesting his stepson. There was         the state court’s decisions. It may be more
                                              ○




                                                                                                ○
                                              ○




                                                                                                ○
judgments would have to defer to the ple-         an issue regarding whether the stepson            productive and efficient to litigate once
                                              ○




                                                                                                ○
nary power vested in the federal courts           received adequate notice of the bank-             in bankruptcy court if you are dealing with
                                              ○




                                                                                                ○
                                              ○




                                                                                                ○

over bankruptcy proceedings because of            ruptcy. The stepson failed to challenge the       core proceedings, like the effect of the
                                              ○




                                                                                                ○




the congressional grant of exclusive juris-       debtor’s discharge during the bankruptcy          discharge received by the debtor in his or
                                              ○




                                                                                                ○
                                              ○




                                                                                                ○




diction to the federal courts, which in-          proceeding and the debtor received his            her bankruptcy; the effect of the auto-
                                              ○




                                                                                                ○
                                              ○




                                                                                                ○




cludes the implied power to protect that          discharge. Post-discharge, the stepson            matic stay; or the extent, priority, or va-
                                              ○




                                                                                                ○




grant.                                            sued the debtor in state court and the            lidity of a lien against property of the es-
                                              ○




                                                                                                ○
                                              ○




                                                                                                ○




     In Gruntz, the debtor was convicted          state court determined that the notice of         tate. ❐
                                              ○




                                                                                                ○




                                                  the bankruptcy to the stepson was inad-
                                              ○




post-petition in state court for failure to
                                                                                                ○




                                                                                                    (Endnotes)
                                              ○




                                                                                                ○




support his dependent children. After con-        equate. The debtor then sought to reopen
                                              ○




                                                                                                ○
                                              ○




                                                  his bankruptcy case, which the bankruptcy         1   11 USC §362(a).
                                                                                                ○




viction, the debtor requested that the
                                              ○




                                                                                                ○




bankruptcy court declare the state court          court denied, holding that the state court
                                              ○




                                                                                                ○




                                                                                                    2   28 USC §1334(a). Federal district
                                              ○




                                                                                                ○




proceedings void as a violation of the au-        had jurisdiction to make that decision. The
                                              ○




                                                                                                ○




                                                                                                        courts refer cases and proceedings
                                              ○




tomatic stay. The Ninth Circuit Court of          Ninth Circuit held that the state court had
                                                                                                ○
                                              ○




                                                                                                        under title 11 of the United States
                                                                                                ○




Appeals held that the state court did not         no jurisdiction to effectively modify the
                                              ○




                                                                                                ○




                                                                                                        Code (the “Bankruptcy Code”) to
                                              ○




have the power to modify or dissolve the          discharge order and injunction, and the
                                                                                                ○
                                              ○




                                                                                                        bankruptcy courts pursuant to 28 USC
                                                                                                ○




automatic stay, but that the automatic stay       state court decision was invalid and in-
                                              ○




                                                                                                ○




                                                                                                        §157(a).
                                              ○




                                                                                                ○




did not apply to enjoin state criminal ac-        fringed upon the bankruptcy court’s juris-
                                              ○




                                                                                                ○
                                              ○




tions.                                            diction.
                                                                                                ○




                                                                                                    3   28 USC §1334(e).
                                              ○




                                                                                                ○




     Since Gruntz, the Ninth Circuit Court             In Dunbar, clients of the debtor-con-
                                              ○




                                                                                                ○
                                              ○




of Appeals has effectively overturned state       tractor commenced actions against the             4   28 USC §1334(b).
                                                                                                ○
                                              ○




                                                                                                ○




court judgments when those judgments              debtor with the state licensing board af-
                                              ○




                                                                                                ○




                                                                                                    5   28 USC §157(b)(2)(K).
                                              ○




involved core proceedings.7 The Ninth Cir-        ter the debtor filed bankruptcy. The state
                                                                                                ○
                                              ○




                                                                                                ○
                                              ○




cuit held that the bankruptcy court did not       licensing board issued a decision that its        6   202 F3d 1074, 1079 (9th Cir 2000).
                                                                                                ○
                                              ○




                                                                                                ○




need to give the state court judgments full       exercise of powers was excepted from the
                                              ○




                                                                                                ○
                                              ○




faith and credit.                                 automatic stay and it issued an award of          7   In re McGhan, 288 F3d 1172 (9th Cir
                                                                                                ○
                                              ○




                                                                                                ○




     In McGhan, the debtor filed bank-            monetary damages to the claimants. The                2000); In re Dunbar, 245 F3d 1058 (9th
                                              ○




                                                                                                ○
                                              ○




ruptcy shortly after pleading guilty to           debtor then sued the claimants in bank-               Cir 2001).
                                                                                                ○
                                              ○




                                                       SPRING 2004 • VOL. 23, NO. 1
28                                                  LITIGATION JOURNAL
EVOLUTION OF TRIAL LAWYER
continued from page 1

2.   The Vanishing Trial Lawyer                     during negotiation, as well as in obtain-             of retired Ninth Circuit Judge Edward




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○
     Given the rise of alternative dispute          ing the best result for the client, is signifi-       Leavy, whose earlier successful mediation




                                                                                                      ○
                                                ○
resolution methods either contractually             cantly buttressed if the other side knows             of the Wen Ho Lee spy case made him a




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○
agreed to by the parties or mandated by             that that litigator is ready, willing, and            logical choice to serve as the mediator in




                                                                                                      ○
                                                ○




                                                                                                      ○
the courts, the above-cited statistics likely       more than able to take a case to trial.               this complicated case. Finally, it was clear




                                                ○




                                                                                                      ○
                                                ○
come as no surprise to most civil litigators.                                                             from the outset of the process that many




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○
Moreover, and as reported in the New                3.Capital Consultants: A Case Study                   of the counsel involved for both plaintiffs




                                                                                                      ○
                                                ○
                                                      on Negotiation and the Value of                     and defendants would bring to bear




                                                                                                      ○
York Times article, the decrease in actual


                                                ○




                                                                                                      ○
                                                ○
trials is likely also due to a growing “an-           Cooperation by and Between                          strong trial skills and experience if the




                                                                                                      ○
                                                ○




                                                                                                      ○
tagonism to trials by lawyers and judges              Counsel for Plaintiffs and                          cases did not settle.
                                                ○




                                                                                                      ○
                                                ○
[and clients] who consider them costly and            Defendants.                                              The lessons learned here can be ap-




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




risky. They prefer negotiated settlements”            The Capital Consultants matter re-                  plied to the resolution of complex cases




                                                                                                      ○
                                                ○




                                                 sulted in 22 suits which were filed against              of any nature:




                                                                                                      ○
and other alternative dispute resolution
                                                ○




                                                                                                      ○
                                                ○




avenues that provide—in contrast to the          over 50 defendants in Oregon. Given the




                                                                                                      ○
                                                ○




                                                                                                      ○
expensive win-or-lose trial—a level of cer-      sheer number and complexity of the claims                    a. Creative solutions are necessary
                                                ○




                                                                                                      ○
                                                ○




tainty in the outcome at substantially less      involved, full blown litigation would have               and are frequently the only realistic alter-




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




cost. In today’s world, the “sheer complex-      been a nightmare, stretching over decades                natives to protracted litigation; “scorched




                                                                                                      ○
                                                ○




                                                 and resulting in little or no return of funds




                                                                                                      ○
ity and cost of litigation” simply makes                                                                  earth” tactics can be counterproductive to
                                                ○




                                                                                                      ○
                                                ○




“settlements more attractive” to litigants       to those affected, with defense costs and                a business solution;




                                                                                                      ○
                                                ○




                                                                                                      ○
on both sides of the table.5                     damages far in excess of insurance policy
                                                ○




                                                                                                      ○
                                                ○




     The New York Times article also raises      limits.                                                       b. Parties on both sides of the liti-




                                                                                                      ○
                                                ○




                                                                                                      ○
                                                                            With this in mind,            gation must have an incentive to cooper-



                                                                                                      ○
                                                                                                      ○
                                                                       the skilled Oregon                 ate in creative alternatives, including a

                                                                                                      ○
   Even with exceptional resolution                                    lawyers retained to                way for defendants and their insurers to
                                                                       represent both sides of        ○
                                                                                                      ○   have airtight settlements within policy lim-
   skills, it is clear that, in many cases, a
                                                                                                      ○



                                                                       the case worked coop-              its;
                                                                                                      ○




   more advantageous result can be
                                                                                                      ○




                                                                       eratively to develop a
                                                                                                      ○




   obtained during mediation if the
                                                                                                      ○




                                                                       creative negotiation                    c. Although the concept of trun-
                                                                                                      ○




   other side is convinced that you are                                strategy that would—               cated discovery to facilitate early media-
                                                                                                      ○
                                                                                                      ○




                                                                       in the end—help to re-             tion runs counter to a trial lawyer’s in-
   more than willing, able, and prepared
                                                                                                      ○




                                                                       solve the case in record           stincts to uncover all facts before discuss-
                                                                                                      ○




   to go to trial.
                                                                                                      ○




                                                                       time and with an un-               ing settlement, you don’t always need to
                                                                                                      ○
                                                                                                      ○




                                                                       precedented recovery,              know every fact to settle a case; and
                                                                                                      ○




another reason why so few cases filed in while preserving the assets of the insurers
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




state and federal courts end up going to and the defendants. (Hazzard v. Capital                               d. If the attorneys involved are
                                                                                                      ○
                                                ○




trial. Specifically, as a result of this “dearth Consultants, USDC Oregon No. CV0-                        known to have a strong reputation and
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




of trials,” many “lawyers who call them- 1388HU). This unconventional—and ulti-                           will proceed to trial if needed, a request
                                                                                                      ○
                                                ○




                                                                                                      ○




selves litigators have little trial experience, mately successful—resolution strategy in-                 for negotiation or mediation shows
                                                ○




                                                                                                      ○
                                                ○




which, in turn, may in turn make them volved, among other things, the voluntary                           strength, not weakness.
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




wary of taking cases to trial,” the prover- exchange of limited documents under a
                                                                                                      ○
                                                ○




                                                 confidentiality order and then mediation                       Even with exceptional resolution
                                                                                                      ○




bial vicious circle.
                                                ○




                                                                                                      ○
                                                ○




      Although the trends discussed here a mere six months after the filing of the                        skills, it is clear that, in many cases, a more
                                                                                                      ○
                                                ○




                                                                                                      ○




may speak volumes about the fact that initial complaint, a tall order given the                           advantageous result can be obtained dur-
                                                ○




                                                                                                      ○
                                                ○




trial lawyers are fast becoming the last, amount of documents involved and the                            ing mediation if the other side is convinced
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




true legal artisans, they also reveal that, complexity of the claims.                                     that you are more than willing, able, and
                                                                                                      ○
                                                ○




                                                                                                      ○




in order to thrive in today’s evolving legal          Why was this resolution strategy so                 prepared to go to trial. The question is,
                                                ○




                                                                                                      ○
                                                ○




reality, litigators and litigation firms must successful? A principal reason was the high                 however, how can such skills be honed,
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




be skilled in the art of negotiation and level of cooperation and professionalism                         and honed early by newer associates,
                                                                                                      ○
                                                ○




settlement. At the same time, however, exhibited by the Oregon lawyers. Another                           given the dearth of cases actually going
                                                                                                      ○
                                                ○




                                                                                                      ○
                                                ○




experience shows that a litigator’s success reason was the instrumental involvement                       to trial?
                                                                                                      ○
                                                ○




                                                         SPRING 2004 • VOL. 23, NO. 1
                                                LITIGATION JOURNAL                                                                             29

EVOLUTION OF TRIAL LAWYER
continued from page 28

4.   Innovative Way To Establish and                helpful if the trial is video-taped.                litigators and their firms can significantly




                                                ○




                                                                                                    ○
                                                ○




                                                                                                    ○
     Maintain Trial Skills—The Internal                 The value of such internal trial acad-          increase the chances of a successful out-




                                                ○




                                                                                                    ○
                                                ○
     Trial Academy.                                 emies is clear:                                     come during negotiations if they can dem-




                                                                                                    ○
                                                ○




                                                                                                    ○
     Given the present dearth of trials and                                                             onstrate that they are ready, willing and




                                                ○




                                                                                                    ○
                                                ○
                                                    ■                                                   able to take any case to trial. ❐




                                                                                                    ○
the trend toward settlement, the current                It provides a “real” trial experience for




                                                ○




                                                                                                    ○
and next generation of litigation lawyers               associates that will better prepare




                                                ○




                                                                                                    ○
                                                ○




                                                                                                    ○
will have fewer and fewer opportunities                 them for the actual event;                      (Endnotes)




                                                ○




                                                                                                    ○
                                                ○
to get trial experience. In order to address




                                                                                                    ○
                                                ○




                                                                                                    ○
this problem, litigation firms, over the last       ■   It hones trial skills early in an               1   The New York Times, Sunday, Decem-

                                                ○




                                                                                                    ○
                                                ○
few years, have taken advantage of trial                associate’s career, which will be put               ber 14, 2003, Adam Liptak.




                                                                                                    ○
                                                ○




                                                                                                    ○
practice academies offered by outside en-               to good use in subsequent negotia-
                                                ○




                                                                                                    ○
                                                ○




                                                                                                        2




                                                                                                    ○
tities such as the Oregon Bar’s Trial Advo-             tions and trials;                                   As reported in the New York Times ar-
                                                ○




                                                                                                    ○
                                                ○




cacy College, the National Institute for                                                                    ticle, the National Center for State




                                                                                                    ○
                                                ○




                                                                                                    ○
Trial Advocacy and other programs such              ■   It is an effective marketing and ne-                Courts has studied available data and
                                                ○




                                                                                                    ○
                                                ○




as DA-For-A-Day.                                        gotiation tool, showing existing and                states that the patterns in state courts




                                                                                                    ○
                                                ○




                                                                                                    ○
                                                        potential clients and adversaries that              around the country are “consistent
                                                ○




     In addition to these programs, litiga-




                                                                                                    ○
                                                ○




                                                                                                    ○
tion firms should also consider providing               the firm is committed to providing—                 with those in the federal courts.”
                                                ○




                                                                                                    ○
                                                ○




an additional avenue for gaining trial ex-              and can put forward—associates with




                                                                                                    ○
                                                ○




                                                                                                    ○
perience that is both cost-effective and can            real trial skills;                              3   The following statistics were obtained
                                                ○




                                                                                                    ○
                                                ○




                                                                                                            on-line from the State of Oregon Law




                                                                                                    ○
be tailored to the needs of individual
                                                ○




                                                                                                    ○
                                                    ■                                                       Library at www.ojd.state.or.us/osca.
                                                ○




litigators and firms. Specifically, some Or-            It attracts and retains top-level sum-




                                                                                                    ○
                                                ○




egon law firms now offer an internal trial              mer and first-year
                                                ○
                                                ○




academy to incoming summer associates                   associates inter-
                                                ○




and new associates needing trial experi-                ested in pursuing        Given the present dearth of trials
                                                ○
                                                ○




ence. Such programs are administered                    careers as trial law-
                                                ○




                                                                                 and the trend toward settlement,                           the
                                                ○




entirely by seasoned, in-house trial law-               yers;
                                                ○




yers and support staff, and generally take                                       current and next generation of
                                                ○
                                                ○




place over a two to three day period.               ■   It is a cost-effective
                                                                                 litigation lawyers will have fewer
                                                ○




     These internal trial academies usually             alternative         to
                                                ○




                                                                                 and fewer opportunities to get trial
                                                ○




commence with mini-courses relating to,                 other traditional
                                                ○
                                                ○




among other things, evidence, pre-trial                 trial academies;         experience.
                                                ○




motions, trial decorum, witness prepara-
                                                ○
                                                ○




tion, examination and cross-examination             ■   The content of the
                                                ○




                                                        program can be specifically tailored                Statistics from earlier years were not
                                                ○




of lay and expert witnesses, jury instruc-
                                                                                                    ○
                                                ○




                                                                                                    ○




tions, voir dire and opening and closing                to the needs of the associates in-                  available at the time this article was
                                                ○




                                                                                                    ○
                                                ○




statements. This is followed by an investi-             volved; and                                         published.
                                                                                                    ○
                                                ○




                                                                                                    ○




gation/discovery phase where the students
                                                ○




                                                                                                    ○
                                                ○




review and select exhibits and then meet            ■   The law firm maintains quality-con-             4   On a state-wide basis, approximately
                                                                                                    ○
                                                ○




                                                                                                    ○




                                                                                                            one-half of the cases going to trial are
                                                ○




with and interview “clients” and “wit-                  trol over the program.
                                                                                                    ○
                                                ○




                                                                                                            tried to a jury.
                                                                                                    ○




nesses” who are provided with a set of
                                                ○




                                                                                                    ○
                                                ○




known facts and certain unknown (but                     In order to be successful in today’s
                                                                                                    ○
                                                ○




                                                                                                    ○




discoverable) facts. Finally, a full-blown          evolving legal landscape, today’s litigators        5   Settlement may be more attractive,
                                                ○




                                                                                                    ○
                                                ○




mock trial is conducted in front of a se-           and litigation firms must possess strong                but “some studies suggest that indi-
                                                                                                    ○
                                                ○




                                                                                                    ○
                                                ○




nior litigation partner serving as the judge        and creative resolution skills. Related to              viduals suing companies fare consid-
                                                                                                    ○
                                                ○




and panel of associates acting as jurors.           this, members of our bar must foster and                erably better before juries than they
                                                                                                    ○
                                                ○




                                                                                                    ○
                                                ○




To the extent it can be arranged, it adds a         maintain between themselves a high de-                  do in settlement.” Liptak, Adam, NY
                                                                                                    ○
                                                ○




                                                                                                    ○




                                                                                                            Times, Dec. 14, 2003.
                                                ○




sense of reality if the trial can be con-           gree of cooperation and professionalism.
                                                                                                    ○
                                                ○




ducted in an actual courtroom. In addi-             Nowhere is this more important than in
                                                                                                    ○
                                                ○




                                                                                                    ○
                                                ○




tion, and for evaluation purposes, it is            the area of complex litigation. Lastly,
                                                ○




                                                                                                    ○




                                                         SPRING 2004 • VOL. 23, NO. 1
30                                                  LITIGATION JOURNAL




I. Claims for Relief                                                                                   his case-in-chief at trial. The trial court

                                                ○




                                                                                                   ○
                                                ○




                                                                                                   ○
                                                                                                       concluded that plaintiff was a “licensee”
                                                ○




                                                                                                   ○
    A. Tort claims.                             ○                                                      on his son’s property—not an “invitee”—




                                                                                                   ○
                                                ○




                                                                                                   ○
          The Supreme Court clarified the
                                                            Recent                                     and that “regardless of his status, plain-
                                                ○




                                                                                                   ○
                                                ○




                                                                                                   ○
law on the issues of duty, causation and                                                               tiff had failed to present any evidence
                                                ○




                                                                                                   ○
foreseeability in a negligence action in                                                               that would put defendant on notice of a
                                                ○




                                                                                                   ○
                                                ○




                                                                                                   ○
Oregon Steel Mills, Inc. v. Coopers &
                                                          Significant                                  potentially dangerous propensity of his
                                                ○




                                                                                                   ○
                                                ○




Lybrand, LLP, ___ Or. ___, Case No. S48978                                                             dog to run into people,” as required to




                                                                                                   ○
                                                ○




                                                                                                   ○
(Jan. 23, 2004). Plaintiff sued its account-                                                           impose liability under Newport v. Moran,
                                                ○




                                                                                                   ○
                                                            Oregon
                                                ○




                                                                                                   ○
ing firm for negligence, seeking to re-                                                                80 Or. App. 71 (1986). 190 Or. App. at 76.
                                                ○




                                                                                                   ○
cover damages it suffered when the mar-                                                                The Court of Appeals disagreed and dis-
                                                ○




                                                                                                   ○
                                                ○




                                                                                                   ○
ket price of its stock declined. The trial                                                             tinguished Newport, finding that defen-
                                                ○




                                                                                                   ○
                                                             Cases                                     dant knew that (1) his dog and his
                                                ○




court granted defendant’s motion for




                                                                                                   ○
                                                ○




                                                                                                   ○
                      summary judgment,                                                                neighbor’s        dog     would        “run
                                                ○




                                                                                                   ○
                                                ○




                                                                                                   ○
                      holding that defen-                                                              rambunctiously back and forth” when


                                                                                                   ○
                                                ○




                      dant was not liable                    Stephen K. Bushong                        they were together, as they were when

                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




                      because market fac-                   Department of Justice                      plaintiff was injured; and (2) his dog “was
                                                                                                   ○
                                                ○




                                                                                                       both large and immature.” 190 Or. App.
                                                                                                   ○
                      tors—not defen-
                                                ○




                                                                                                   ○
                                                ○




                      dant’s negligent ac-                                                             at 77-78. The court explained that these
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




                      counting practices—                                                              facts, taken together, “are sufficient to
                                                                                                   ○
                                                ○




                      caused the decline in         matter of law. The court explained that,           support a finding that it was reasonably
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




                      the price of plain-           “although defendant breached its duty              foreseeable to defendant that his dog
                                                                                                   ○
                                                ○




                                                                                                   ○




                      tiff’s stock. The Court       to plaintiff by failing to provide compe-          would run into and injure a person who
                                                ○




                                                                                                   ○
                                                ○




of Appeals reversed, applying the “fore-            tent accounting services, defendant had            was walking in the fenced-in area while
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




seeability” test of Fazzolari v. Portland           no duty to protect plaintiff against mar-          the dogs were running and playing to-
                                                                                                   ○
                                                ○




School Dist. No. 1J, 303 Or. 1 (1987). The          ket fluctuations in plaintiff’s stock price.       gether.” 190 Or. App. at 78. The court
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




Court of Appeals concluded that whether             The decline in plaintiff’s stock price in          explained that, for liability under a neg-
                                                                                                   ○
                                                ○




                                                                                                   ○




defendant’s actions “foreseeably caused”            June 1996 was, as a matter of law, not             ligence claim to attach, it was “not nec-
                                                ○




                                                                                                   ○
                                                ○




plaintiff’s damages “presents a triable             reasonably foreseeable, and defendant              essary for defendant’s dog previously to
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




question for the factfinder.” 176 Or. App.          cannot be liable for damages based on              have run into someone while it played
                                                                                                   ○
                                                ○




at 322. The Supreme Court reversed. The             that decline.” Slip op. at 10.                     with the neighbor’s dog in order to make
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




court explained that the focus should not                                                              it reasonably foreseeable to defendant
                                                                                                   ○
                                                ○




                                                                                                   ○




be on causation because “[t]here is suffi-                            ****                             that that could happen if the dogs were
                                                ○




                                                                                                   ○
                                                ○




cient evidence of factual causation, and                                                               not controlled.” Id.
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




proximate cause is not a useful inquiry in              An elderly man who was injured
                                                                                                   ○
                                                ○




Oregon tort law.” Slip op. at 8. Instead,           when his son’s dog “ran into him and                                ****
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




“the critical issue is whether plaintiff’s          knocked him to the ground” had a viable
                                                                                                   ○
                                                ○




                                                                                                   ○




market losses were a reasonably foresee-            claim for negligence against the son, the               Under ORS 18.550(2), a claim for pu-
                                                ○




                                                                                                   ○
                                                ○




able result of defendant’s wrongful con-            Court of Appeals held in Van Zanten v.             nitive damages may be asserted against
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




duct.” Id. Resolution of that issue in this         Van Zanten, 190 Or. App. 73, 75 (2003).            a health practitioner who acts with “mal-
                                                                                                   ○
                                                ○




case did not present a jury question be-            The trial court granted defendant’s mo-            ice.” In Johannesen v. Salem Hospital, 336
                                                                                                   ○
                                                ○




                                                                                                   ○
                                                ○




cause defendant could not be liable as a            tion to dismiss after plaintiff presented          Or. 211 (2003), the Supreme Court held
                                                                                                   ○
                                                ○




                                                                                                                     Please continue on next page



                                                       SPRING 2004 • VOL. 23, NO. 1
                                               LITIGATION JOURNAL                                                                               31


RECENT SIGNIFICANT OREGON CASES
continued from page 30


that (1) “malice” includes tortious con-           18.592(1) did not abolish that remedy               Pollack was retained to oversee Horton-




                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
duct that is so reckless as to be in disre-        because “the portion of [plaintiff’s] rem-          Portland’s operations after the transac-




                                               ○




                                                                                                   ○
                                               ○
gard of social obligations (336 Or. at 217);       edy that remains unaffected by that stat-           tion closed. He resigned when Horton-




                                                                                                   ○
                                               ○




                                                                                                   ○
and (2) a “no evidence” standard—not               ute is substantial.” 190 Or. App. at 108.           Portland imposed a limitation on the




                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
clear and convincing evidence—applies in           The right-to-jury theory failed because             business’s inventory of unsold housing




                                               ○




                                                                                                   ○
determining whether plaintiff should be            Article I, section 17 only “guarantees the          “starts.” Pollack believed that the limita-



                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
allowed to amend her complaint to al-              right to have a jury decide those factual           tion would make it impossible for the


                                               ○




                                                                                                   ○
                                               ○
                                                   issues that are validly presented by                business to generate sufficient profits for




                                                                                                   ○
lege a punitive damages claim. 336 Or.
                                               ○




                                                                                                   ○
at 218.                                        ○
                                                   plaintiff’s claim[.]” 190 Or. App. at 110. It       him to receive compensation under the




                                                                                                   ○
                                               ○




                                                                                                   ○
                                                   “does not prohibit the legislature from             terms of the contract. Pollack sued, al-
                                               ○




                                                                                                   ○
                  ****                             altering—or even abolishing—common                  leging that Horton-Portland’s conduct
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
                                                   law causes of action, and it does not guar-         violated the agreement and the implied
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
     In Jensen v. Medley, 336 Or. 222              antee a right to particular types of dam-           covenant of good faith and fair dealing.
                                               ○




                                                                                                   ○
(2003), the Supreme Court held that the            ages recoverable in such claims.” Id.               The trial court granted summary judg-
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
familiar “right to control” test for deter-                                                            ment to defendant on the grounds that
                                               ○




                                                                                                   ○
                                                                                                       Pollack voluntarily resigned and Horton-
                                               ○




mining whether a principal is liable for




                                                                                                   ○
                                               ○




                                                                                                   ○
the tortious acts of its agents applies in             B.     Contract claims.                         Portland did not act in bad faith. The
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
the employer/employee agency relation-                        A trial court properly reformed          Court of Appeals reversed, finding that
                                               ○




                                                                                                   ○
ship but not in other agency relation-             a written contract for the sale of an apart-        genuine issues of material fact existed on
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
ships. The court explained that liability          ment complex, the Court of Appeals held             whether (1) Horton-Portland breached its
                                               ○




                                                                                                   ○
                                                                                                       contractual obligation of good faith; (2)
                                               ○




outside the traditional master-servant             in Kish v. Kustura, 190 Or. App. 458 (2003).


                                                                                                   ○
                                               ○




                                                                                                   ○
context “depends not only on whether               The written contract prepared by the                the breach was material (if it was, then
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○
the second entity is an ‘agent’ of the first       buyer did not reflect the parties’ intent           Pollack was justified in resigning); (3)
                                               ○




                                                                                                   ○


for some purpose, but also on whether              in two respects. First, the document gave           Pollack’s personal use of company funds
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




the principal authorized or intended the           the seller—not the seller and his wife—             and facilities amounted to “actual
                                               ○




                                                                                                   ○
                                               ○




agent to act on its behalf with respect to         the right to live in an apartment rent-             fraud”; and (4) Pollack’s alleged acts of
                                                                                                   ○
                                               ○




                                                                                                   ○




the conduct that gave rise to the third            free. Second, it provided that interest             self-dealing “were entirely fair to the
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




party’s claim.” 336 Or. at 237.                    payments on the mortgage assumed by                 corporation” (and thus could not be a
                                               ○




                                                                                                   ○




                                                   the buyer would apply to the purchase               breach of Pollack’s fiduciary duties). 190
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




                  ****                             price, contrary to the parties’ oral agree-         Or. App. at 23.
                                               ○




                                                                                                   ○
                                               ○




                                                   ment. The Court of Appeals concluded
                                                                                                   ○
                                               ○




                                                                                                   ○




    Noneconomic damages are not re-                that defendant proved each of the re-                                  ****
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




coverable in a negligence action arising           quired elements of a reformation claim—
                                               ○




                                                                                                   ○




from an automobile accident, the Court             an antecedent agreement, a unilateral                    The plaintiff in VTech Communica-
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




of Appeals held in Lawson v. Hoke, 190             mistake by one party coupled with ineq-             tions, Inc. v. Robert Half, Inc., 190 Or. App.
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




Or. App. 92 (2003). ORS 18.592 barred              uitable conduct by the other, and no gross          81 (2003), probably expected to prevail
                                               ○




                                                                                                   ○




recovery of noneconomic damages in                 negligence by the party seeking reforma-            on at least 50 percent of his breach of
                                               ○




                                                                                                   ○
                                               ○




                                                                                                   ○




such cases. The trial court ruled, however,        tion—by clear and convincing evidence.              contract and negligence claims. But the
                                               ○




                                                                                                   ○




that the statute (1) violated plaintiff’s          190 Or. App. at 462.                                Court of Appeals affirmed a summary
                                               ○




                                                                                                   ○
                                                                                                   ○
                                               ○




right to a remedy under Article I, section                                                             judgment in defendant’s favor. The de-
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




10 of the Oregon Constitution, and (2)                               ****                              fendant—a temporary employment
                                                                                                   ○
                                               ○




interfered with her right to a jury trial                                                              agency—provided a temporary payroll
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




under Article I, section 17. The Court of              A business deal gone bad led to                 clerk to plaintiff VTech. The clerk ulti-
                                                                                                   ○
                                               ○




Appeals reversed. The court acknowl-               claims for breach of contract, fraud, and           mately embezzled substantial funds from
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




edged that Article I, section 10 guaran-           breach of fiduciary duty in Pollack v. D.R.         VTech. The Court of Appeals concluded
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




teed plaintiff a remedy against defen-             Horton, Inc.-Portland, 190 Or. App. 1               that defendant could not be liable for
                                                                                                   ○
                                               ○




dant for his negligent operation of a              (2003). Pollack sold his real estate devel-         breaching a contract to “check refer-
                                                                                                   ○
                                               ○




                                                                                                   ○
                                               ○




motor vehicle, but concluded that ORS              opment business to Horton-Portland.                 ences” of the temporary clerk because
                                                                                                   ○
                                               ○




                                                                                                                        Please continue on next page



                                                        SPRING 2004 • VOL. 23, NO. 1
   LITIGATION SECTION
  EXECUTIVE COMMITTEE




                                                        Portland, Oregon
                                                         Permit No. 341
          2004




                                                         PRESORTED
                                                          STANDARD
                                                          U.S. Postage
                                                              PAID
EXECUTIVE BOARD
Chair
    KAREN E. SAUL
    Farleigh, Wada & Witt PC
Chair-Elect
    RICHARD LANE
    Lawrence Wobbrock PC
Secretary
    MARC A. SPENCE
    Spence & Sabitt LLP
Treasurer




                                                       Lake Oswego, OR 97035-0889
    NANCIE K. POTTER
    Foster Pepper Tooze LLP
Past Chair
    THERESA L. WRIGHT                                  Section on Litigation
    Lewis & Clark Legal Clinic
OSB REPRESENTATIVE
                                                       Oregon State Bar



   KAREN D. LEE
                                                       P.O. Box 1689

   Oregon State Bar
BOG REPRESENTATIVE
   DENNIS P. RAWLINSON
   Miller Nash LLP




EXECUTIVE BOARD MEMBERS AT LARGE

     JOHN A. BERGE
     Bryant Lovlien & Jarvis PC
     SUSAN K. EGGUM
     Susan K. Eggum PC
     W. EUGENE HALLMAN                           RECENT SIGNIFICANT OREGON CASES
     Hallman & Dretke                            continued from page 31
     MICHAEL R. MAHONY                           there was “no evidence of mutual assent             (2003). A prayer for “such other relief as
                                                                                                 ○




     Law Offices of Michael R. Mahony
                                                                                                 ○




                                                 as to the essential terms of the alleged oral       the court may deem equitable and just”
                                                                                                 ○




     TRACY A. PRALL
                                                 agreement.” 190 Or. App. at 89. The neg-            is insufficient to support an award of non-
                                                                                                 ○




     Garrett Hemann et al
                                                                                                 ○




                                                 ligence claim failed because the parties            economic damages that were not specifi-
                                                                                                 ○




     JUDY SNYDER
                                                 “entered into an arms-length [business]
                                                                                                 ○




     Law Offices of Judy Snyder                                                                      cally requested in the complaint. Rieman
                                                                                                 ○




                                                 transaction” that did not give rise to “a           v. Swope, 190 Or. App. 516 (2003).
                                                                                                 ○




     SARAH RHOADS TROUTT
                                                                                                 ○




     McClinton & Troutt LLC                      duty of reasonable care that was indepen-
                                                                                                                       ****
                                                                                                 ○




                                                 dent of the terms of the parties’ contract.”
                                                                                                 ○




     LITIGATION JOURNAL
                                                                                                 ○




     Dennis P. Rawlinson, Editor                 190 Or. App. at 90.                                      A plaintiff can voluntarily dismiss his
                                                                                                 ○




     Miller Nash LLP                                                                                 complaint without prejudice after the
                                                                                                 ○
                                                                                                 ○




This publication is designed to help attorneys   II. Procedure                                       trial court rules on defendant’s motion
                                                                                                 ○




                                                                                                     for summary judgment, the Court of Ap-
                                                                                                 ○




maintain their professional competence.
                                                                                                 ○




Although articles and features are reviewed           Filing a timely motion to renew a              peals held in Palmquist v. FLIR Systems,
                                                                                                 ○




prior to publication, in dealing with specific
                                                                                                 ○




legal matters attorneys should conduct their     judgment is insufficient to effectively re-         Inc., 189 Or. App. 552 (2003). The court
                                                                                                 ○




own independent research of original             new the judgment if the court does not              concluded that, “in enacting ORCP
                                                                                                 ○




sources of authority. Neither the Oregon
                                                                                                 ○




                                                 act on the motion and cause the judgment            54A(1), the legislature rejected a rule that
State Bar/Litigation Section nor the
                                                                                                 ○




                                                 to be entered on the register before the            would have cut off the right to obtain a
                                                                                                 ○




contributors to this publication make either
                                                                                                 ○




express or implied warranties regarding the      expiration of the ten-year renewal period           voluntary dismissal when the summary
                                                                                                 ○




use of the information contained in this
                                                 authorized by ORS 18.360(1). Citizens Sav-          judgment has been filed.” 189 Or. App.
                                                                                                 ○




Journal.
                                                                                                 ○




                                                 ings & Loan v. McDonald, 191 Or. App. 45            at 558. ❐
                                                                                                 ○

								
To top