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ADR Association bylaws compel arbitration Real estate brokers whose membership bylaws in a professional association included a pledge to arbitrate disputes with fellow members are bound to arbitrate a conflict over referral fees, even though they have since quit the organization, the Colorado Supreme Court ruled on Oct. 23. Lane v. Urgitus, No. 06SA49. Robert Lane, a member of the Denver Metropolitan Commercial Association of Realtors, sought to recover unpaid referral fees from brokers at another real estate company affiliated with the group. He submitted a request to arbitrate with the association. The other brokers did not respond, but quit the organization. A state trial court ordered them to submit to arbitration. Affirming, a majority of the Colorado Supreme Court noted that in joining the Realtors association, members had agreed to submit to binding arbitration. That constituted their implied consent to arbitrate any subsequent disputes with other members that they cannot evade by quitting the group. A dissent argued that the membership agreement did not in itself bind members to arbitrate particular disputes.   Full text of the decision ATTORNEY DISCIPLINE Sanction inadequate to gravity of the offense Rejecting an attorney’s argument that his conduct was merely zealous advocacy, the Florida Supreme Court ruled on Oct. 26 that a recommended 10-day suspension for the lawyer’s discovery abuse, filing of a frivolous suit and other unprofessional conduct was too lenient, and imposed a 91-day suspension. The Florida Bar v. Tobkin, No. SC04-1493. The Florida Bar filed a complaint against attorney Donald Tobkin, alleging that he committed multiple violation of professional rules by thwarting opposing counsel’s attempts to take depositions, violating a motion in limine, filing a sham lawsuit and creating a public disturbance. Tobkin argued that the evidence against him was insufficient. A bar referee ruled that he violated multiple bar rules and recommended a 10-day suspension. Tobkin petitioned the state’s highest court to overturn the sanction. The Florida Supreme Court rejected Tobkin’s arguments, but it also rejected the referee’s recommended punishment, holding that a 91-day suspension was more in line with disciplinary precedents. “Tobkin continues to believe his conduct was nothing more than zealous advocacy,” the court noted. “He blames his problems on the trial court, defense counsel, The Florida Bar, and the grievance committee.” CIVIL RIGHTS ADA violation sustained for cook with hepatitis A nursing home violated the Americans With Disabilities Act (ADA) when it fired a cook who had hepatitis C but had denied it on her job application, the 10th U.S. Circuit Court of Appeals ruled on Oct. 26, adding that she may be entitled to punitive damages. Equal Employment Opportunity Commission v. Heartway Corp., No. 05-7011. Janet Edwards has hepatitis C. Following treatment, her blood contained no detectable virus, but she will always have the disease. When she applied for a job at a Heartway Corp. nursing home, she falsely declared that she was not under a doctor’s care or taking medications. Heartway hired her and she eventually became a cook. Upon learning of her illness, the nursing home fired her. A manager told her, “You having hepatitis C, you will not work in our kitchen,” and cited her falsified job application. The Equal Employment Opportunity Commission sued Heartway, alleging violation of the ADA. An Oklahoma federal district court ruled out punitive damages, but held a jury trial on the violation. The jury agreed that the home discriminated against Edwards due to perceived disability. The 10th Circuit affirmed the ADA violation, but reversed and remanded for a new trial on punitive damages. The court ruled that the jury reasonably concluded that Heartway treated Edwards’ hepatitis as a disability and fired her on that basis. The jury was entitled to discredit the claim that Heartway fired her for falsification on the job application, it added. Conviction no bar to excessive force claim An excessive force claim by an inmate who has been convicted of assaulting a police officer is not necessarily barred by his conviction, nor does his guilty plea necessarily estop him from arguing excessive force under 42 U.S.C. 1983, the 1st U.S. Circuit Court of Appeals ruled on Oct. 27. Thore v. Howe, No. 06-1627. Charles Thore pleaded guilty in state court to charges including assault and battery on police officers during his arrest for drunken driving. During the encounter, in which Thore crashed a car that also contained his pregnant girlfriend into police cruisers, one of the officers, Jeffrey Howe, shot Thore in the neck. Thore brought suit under Section 1983, raising excessive force and related conspiracy claims. Thore argued that the facts that he admitted in his plea deal were not true, particularly as to any danger the officers were in during the confrontation. A Massachusetts federal district court entered summary judgment for all defendants. The 1st Circuit affirmed, but refused to make bright-line rules on the “two interesting issues not directly addressed before by this circuit.” In Heck v. Humphrey, 512 U.S. 477 (1994), the U.S. Supreme Court held that when a Section 1983 suit would necessarily imply the invalidity of an inmate’s conviction, the inmate must first successfully challenge his conviction. “Heck does not automatically bar consideration of an excessive force claim by an individual who has been convicted of assault,” the 1st Circuit said, but the evidence in this case didn’t support Thore’s claim. The court added that it was not an abuse of discretion to hold Thore judicially estopped from asserting facts inconsistent with his guilty plea, but rejected a per se rule that admissions to facts during an earlier guilty plea colloquy should generally bind that person as a plaintiff subsequently. CONSTITUTIONAL LAW State charter protects same-sex couples The New Jersey Legislature is obliged by the state constitution to amend its marriage statute or else develop a satisfactory parallel accommodation for the rights of same-sex couples, the New Jersey Supreme Court held on Oct. 25. Lewis v. Harris, No. A-68-05. Mark Lewis and Dennis Winslow, and other same-sex couples, applied for marriage licenses, but state officials refused, informing the couples that state law did not permit same-sex couples to marry. The couples sued, seeking a declaration that New Jersey’s marriage statutes violated the liberty and equal protection provisions of the New Jersey Constitution. In addition, they sought injunctive relief requiring state officials to grant them marriage licenses. A trial court granted summary judgment to the state, and an intermediate state appellate court affirmed. Because there was a dissent from the appellate opinion, the couples had right of appeal to the New Jersey Supreme Court. Affirming in part and modifying in part, the New Jersey Supreme Court held that, in order to comply with the New Jersey Constitution, the state Legislature had to either amend the marriage statute or create a parallel civil-union scheme to accommodate the rights of same-sex couples. “Our decision today significantly advances the civil rights of gays and lesbians. We have decided that our State Constitution guarantees that every statutory right and benefit conferred to heterosexual couples through civil marriage must be made available to committed same-sex couples. Now the Legislature must determine whether to alter the long accepted definition of marriage,” the court said. Habeas ruling based on misreading of ‘Apprendi’ Because the U.S. Supreme Court has expressly declined to extend the federal grand jury right to state prosecutions, an Ohio federal district court ruling to the contrary in a habeas proceeding “holds no water,” the 6th U.S. Circuit Court of Appeals ruled on Oct. 26. Williams v. Haviland, No. 05-3986. Samuel Lee Williams, convicted in the drug-related firebombing of a house that killed five people, argued that his indictment under Ohio law by a grand jury did not adequately address the element of mens rea, or intent, underlying the crime. He contended that that failure violated his Fifth Amendment grand jury rights and Sixth Amendment jury trial and notice rights. A federal trial court granted the petition, reasoning that, in Apprendi v. New Jersey, 530 U.S. 466 (2000), the Supreme Court overturned a long line of case law restricting the grand jury right to federal prosecutions. Reversing, the 6th Circuit said the lower court fundamentally misread Apprendi. The passage at issue there referred to another case, Jones v. U.S., 526 U.S. 227 (1999), which involved a federal prosecution, the circuit court said. In fact, the justices expressly declared in a footnote that they were not extending the grand jury right to state prosecutions. “Given this explicit admonition . . . the district court’s reading of Apprendi holds no water,” the 6th Circuit said. DAMAGES Contractor may sue city over construction delays A municipal government may be liable to a road construction contractor for costs caused by an electric utility and cable company that were slow to move their infrastructure, notwithstanding a “no damages for delay” clause in its contract with the company, the Washington Supreme Court ruled on Oct. 26. Scoccolo Construction Inc. v. City of Renton, No. 77459-5. Scoccolo Construction Inc. went to state trial court to recover its costs resulting from delays by Puget Power and Light Co. and TCI Cable in moving their utility poles and lines. The contractor cited a 1979 state law declaring that contract clauses denying damages for “unreasonable delay in performance . . . caused by the acts or omissions of the contractee or persons acting for the contractee is against public policy and is void and unenforceable.” The court dismissed the claim with prejudice but an intermediate appellate court ordered that the case go to trial. On remand, a jury awarded damages of more than $1 million. The appeals court later ruled that the trial had failed to demonstrate that the utilities were agents of the city. Reversing and upholding the damages award, the Washington Supreme Court noted that the statute at issue was adopted in response to two rulings in which it upheld “no damages for delay” clauses. The city was enforcing its police power over its right of way but also its franchise agreements in directing the utilities to move their equipment. “Here, Scoccolo’s performance was delayed by entities bound under contracts with the City to perform relocation tasks necessary for the timely completion of the project. Puget and TCI were therefore ‘acting for’ the City.” LABOR AND EMPLOYMENT Waivers a dead letter in aggregated mass layoff Laid-off workers who waived legal claims against their employer may nevertheless sue for back pay under the Worker Adjustment and Retraining Notification (WARN) Act, in a case that involved a series of workplace cutbacks over nearly two months, the 10th U.S. Circuit Court of Appeals ruled on Oct. 25. Allen v. Sybase Inc., No. 04-4045. The WARN Act requires employers planning mass layoffs to give workers 60 days’ notice or 60 days’ pay. Financial Fusion Inc., a financial services software subsidiary of Sybase Inc., let go of 51 workers in a series of layoffs between Sept. 7 and Oct. 31, 2001, but provided WARN benefits only to the last batch of 11 employees out the door. Twenty-six of the other former employees sued. The company claimed the layoffs were separate reactions to its deteriorating business situation, particularly following the Sept. 11, 2001, attack on New York’s financial center. However, a federal district judge in Utah ruled on summary judgment that the terminations constituted an aggregated mass layoff. Moreover, the judge ruled that the workers were not bound by their severance waiver of claims against the company, because their WARN claims accrued only later, on Oct. 31, when the company reached the threshold for a mass layoff. Affirming in part, the 10th Circuit endorsed the lower court’s reasoning on most points, including that the company offered no acceptable evidence that the Sept. 11 attacks qualified as an unforeseen business circumstance that would exempt it from liability. However, the court ordered additional hearings in the lower court on whether the company knew in advance that the layoffs would reach mass proportion; if not, the employees might not qualify for back pay. Challenge to pension plan changes falls short Amendments to the Oregon Public Employees Retirement System (PERS) that limited potential payouts did not violate the U.S. Constitution’s contracts clause, the 9th U.S. Circuit Court of Appeals held on Oct. 24. Robertson v. Kulongoski, No. 04-36898. PERS offered multiple options providing substantial benefits to retirees, allowing long-term employees to retire with a higher income than when they were working. In 2003, the Oregon Legislature amended PERS to change the investment options. William Robertson and other plan participants sued, arguing that the changes violated their constitutionally protected contract right to their plan benefits. A federal district court granted summary judgment to the state, and the plan participants appealed. Affirming, the 9th Circuit held that the changes to the plan did not violate the contract clause because they did not impair a term of the PERS contract. The court said that “the Oregon legislature did not promise the Employees a perpetual or ‘immutable’ right to contribute to the regular and variable accounts.” PROPERTY Possession beats state’s claim to Rebel papers A bankruptcy court erred in ruling that Civil War documents were public property, because the long possession of the papers by the debtor’s family created a presumption of ownership that the state of South Carolina failed to rebut, the 4th U.S. Circuit Court of Appeals held on Oct. 27. Willcox v. Stroup, No. 06-1179. Thomas Willcox found a shopping bag full of Civil War documents in his late stepmother’s home. The documents-including gubernatorial papers, military communications and related materials-had an appraised value of approximately $2.4 million. Shortly before Willcox could auction the documents, the state of South Carolina, arguing that the documents were public property, obtained a temporary restraining order enjoining their sale. Willcox filed for Chapter 11 bankruptcy protection and sought a declaratory judgment that the documents were the property of the estate. A bankruptcy court held that the papers belonged to the state, but a district court reversed. The state appealed. Affirming, the 4th Circuit noted that under both federal and South Carolina law, possession creates a presumption of ownership. In this case, Willcox’s family held the documents for 140 years. “[T]he State has failed to establish that South Carolina law at the relevant time treated gubernatorial papers as public property,” the court said. “This conclusion leaves the State with no basis upon which to rebut the strong presumption of possession in the Law and Willcox families and no basis upon which to claim title superior to that of plaintiff Willcox.” TORTS No liability attaches to home’s administrators A nursing home’s administrator and licensee cannot be held personally liable for the deaths of two patients from alleged abuse and neglect, the Mississippi Supreme Court ruled on Oct. 26 in a case of first impression. Howard v. Estate of Harper, No. 2005-IA-00115-SCT. Survivors of Melvin Thead and Earline B. Harper filed wrongful death claims against a Benchmark Healthcare nursing home in Marion, Miss., in 2002, alleging claims including simple and gross negligence, medical malpractice, fraud and breach of fiduciary duty. The actions also targeted Guy J. Howard and Joyce Howard, respectively the facility’s licensee and administrator. A state trial court denied the Howards’ motion to dismiss. Reversing, the Mississippi Supreme Court ruled that nothing in the statutes or case law authorized extending the nursing home’s duty of care to the licensee or administrator. Failure to meet regulatory standards does not give rise to tort liability, and as nondoctors they are not liable for medical malpractice. The allegations of fraud were too vague to constitute a cause of action, and as for the fiduciary duty claims, “a licensee or administrator’s duties are owed to their employer and licensing agencies, not to nursing home patients.”

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