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• CIVIL PRACTICE Penalty claims can’t be assigned to third parties An assignee lacks standing to pursue fax solicitation claims because claims for penalties cannot be assigned, the Colorado Supreme Court ruled on March 3. Kruse v. McKenna, No. 06SC555. Harrington Homes Inc. assigned its claims against Michael G. Kruse for violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, to Douglas M. McKenna. McKenna sued Kruse, alleging that he sent unsolicited facsimile advertisements. The act prohibits the sending of advertisements to fax machines unless there exists an established business relationship between advertiser and recipient. McKenna sought $500 per act violation and treble damages for willful violations. The trial court dismissed the action for lack of subject-matter jurisdiction, on the ground that the Colorado Consumer Protection Act precludes Telephone Consumer Protection Act actions in Colorado state courts. An intermediate appellate court reversed. The Colorado Supreme Court reversed. Colo. Rev. Stat. � 13-20-101 states that “All causes of action, except actions for slander or libel, shall survive and may be brought or continued notwithstanding the death of the person in favor of or against whom such action has accrued, but punitive damages shall not be awarded nor penalties adjudged after the death of the person against whom such punitive damages or penalties are claimed.” The claims of McKenna’s assignors are claims for “penalties,” and thus do not survive according to the statute. Because the claims could not be validly assigned to McKenna, he lacks standing to assert his claims under the telephone consumer act.   Full text of the decision • CONSTITUTIONAL LAW Per-signature payment ban restricts speech An Ohio statute that makes paying petition circulators on a per-signature basis criminal is unconstitutional, the 6th U.S. Circuit Court of Appeals ruled on March 5. Citizens for Tax Reform v. Deters, No. 07-3031. Citizens for Tax Reform filed suit in an Ohio federal court challenging an Ohio law that made it a felony to pay anyone for gathering signatures on election-related petitions on any basis other than the time worked, e.g., on the basis of the number of signatures collected. The plaintiffs claimed the law violated their core political speech rights. The state claimed the statute was necessary to prevent fraud. The court said that the law was a breach of the First Amendment to the U.S. Constitution. The 6th Circuit affirmed. The court identified three ways the per-signature ban could detrimentally affect political speech: (1) it can reduce the number and hours of voices that will convey the message; (2) it can limit the audience size; and (3) it can lower the likelihood that a measure will qualify for the statewide ballot. The Ohio ban was not as narrowly tailored as other states’ attempts to reduce petition fraud, and the penalty was greater. While acknowledging that a per-signature basis can prompt circulators to pad their petitions with fraudulent signatures, the court noted that a per-time basis encourages circulators to pad their hours. By “making speech more costly, the State is virtually guaranteeing that there will be less of it,” the court said. • CRIMINAL PRACTICE Court-issued procedural rule isn’t jurisdictional Sua sponte dismissal of a criminal appeal under Federal Rule of Appellate Procedure 4(b)(1) is inappropriate in a case in which an appeal was filed one day late, the 10th U.S. Circuit Court of Appeals held on Feb. 29. U.S. v. Mitchell, No. 05-2052. Roland Lorenzo Mitchell was convicted of possession of marijuana with intent to distribute. He filed his appeal one day outside the 10-day period allowed by Rule 4(b)(1). He also filed a contemporaneous motion for an extension of time to file the appeal due to excusable neglect. A New Mexico federal court granted the motion. At oral argument on the appeal, the 10th Circuit sua sponte raised the issue of whether the motion was improperly granted. The panel held that the untimeliness of the notice of appeal was not due to excusable neglect, and dismissed the appeal for lack of jurisdiction. The U.S. Supreme Court vacated that dismissal and remanded for further consideration in light of Bowles v. Russell, 127 S. Ct. 2360 (2007), in which the justices held that the timeliness requirements in Fed. R. App. P. 4(a) are jurisdictional because they derive from a statute. But court-issued federal procedural rules not derived from statutes are not jurisdictional � they are claim-processing rules. The 10th Circuit affirmed the district court, holding that the government had “forfeited its objection to the untimely notice of appeal.” Thus, sua sponte dismissal would be inappropriate. However, a circuit court “may raise its time bar sua sponte,” but this power is “limited and should not be invoked when judicial resources are not implicated and the delay has not been inordinate.” Here, the one-day delay did not fit those standards. In light of Bowles, Rule 4(b)(1) is a claim-processing rule, so “dismissal for failure to timely file a notice of appeal is no longer mandatory and jurisdictional,” but must be enforced “when properly invoked by the government.” • EMPLOYMENT Individual not liable for retaliation under statute Although employers are liable for acts of retaliation stemming from discrimination complaints, nonemployer individuals are not, the California Supreme Court held in a case of first impression. Jones v. Lodge at Torrey Pines Partnership, No S151022. Scott Jones sued his employer, the Lodge at Torrey Pines Partnership, and his supervisor, Jean Weiss, alleging sexual orientation harassment and discrimination and retaliation in violation of the California Fair Employment and Housing Act (FEHA). A jury found Torrey Pines liable for discrimination and both Torrey Pines and Weiss liable for retaliation. However, the trial court rejected the jury’s $1.5 million verdict, granting judgment notwithstanding the verdict and holding that, as an individual, Weiss can’t be held liable for retaliation. An intermediate appellate court reversed, holding that individuals can be held liable for retaliation. Reversing, the California Supreme Court held that individuals can’t be held liable for retaliation under FEHA. Citing FEHA’s language and the public policy impact of holding individual employees liable, the court said, “The employee would thus be placed in the position of choosing between loyalty to the employer’s lawful interests at severe risk to his or her own interests and family, versus abandoning the employer’s lawful interests and protecting his or her own personal interests. The insidious pressures of such a conflict present sobering implications for the effective management of our industrial enterprises and other organizations of public concern. We believe that if the Legislature intended to place all supervisory employees in California in such a conflict of interest, the Legislature would have done so by language much clearer than that used here.” • IMMIGRATION LAW Adopted girl can’t confer benefits to natural sister Once an adoption occurs, the family to be unified through immigration policies is the adoptive family, while the natural family, including siblings, may not receive immigration benefits by virtue of the adoption, the 3d U.S. Circuit Court of Appeals ruled on March 6. Kosak v. Aguirre, No. 06-4055. Wan-Swin Kosak, a Taiwan native, was adopted by her aunt and uncle and brought to the United States as a lawful permanent resident in 1981. In 1990, she filed an I-130 petition to have her biological sister brought to the country, and the Vermont Service Center of the federal immigration office granted it. The U.S. consulate in Taiwan refused to issue the visa, saying an adopted child can’t confer immigration benefits to her natural sibling. In 2005, the Vermont center revoked the petition. Kosak appealed to the Board of Immigration Appeals (BIA), which dismissed her case. A Pennsylvania federal court upheld the dismissal. The 3d Circuit affirmed, holding that, though the BIA defines siblings as children of at least one common parent, it isn’t unreasonable for the agency to hold that, because adoption terminates the natural parent-child relationship, it must also terminate the natural sibling relationship for immigration purposes. While it may be important to keep families together, natural parents should not obtain “immigration benefits through children they put up for adoption.” Once an adoption occurs, the family to be united is the adoptive one, while the natural family, including siblings, may not receive immigration benefits by virtue of the adoption. • JUDGES Judge’s gross misconduct leads to 60-day removal Finding that A state judge’s actions constituted gross misconduct, the North Carolina Supreme Court on March 6 removed him from the bench for 60 days. In re Inquiry Concerning a Judge, Mark H. Badgett, No. 173A07. In a 2006 complaint, the North Carolina Judicial Standards Commission alleged that state District Judge Mark H. Badgett, elected in 2004, violated seven rules of judicial conduct. The complaint alleged that Badgett had a landlord-tenant business relationship with attorney E. Clarke Dummit, but failed to disclose it to parties or counsel appearing before him and to disqualify himself from matters involving Dummit. The complaint also alleged that Badgett attempted to coerce District Attorney C. Ricky Bowman into signing a remittal of disqualification and engaged in retaliatory conduct against him after he refused. The commission alleged that Badgett was habitually rude and condescending to those who appeared before him. The commission recommended censure. The North Carolina Supreme Court imposed a tougher penalty than mere censure. The judge’s actions, the court said, “constitute an improper or wrongful use of the power of his office acting intentionally or with gross disregard for his conduct and in bad faith. This being so, we further hold that respondent is guilty of gross misconduct.” • LEGAL PROFESSION Dorsey not liable for losses of third parties Banks with participation interests in loans do not have standing to bring a legal malpractice suit against attorneys hired by the company that sold them the interests because the banks aren’t direct and intended beneficiaries of the attorneys’ services, the Minnesota Supreme Court ruled on March 6. McIntosh County Bank v. Dorsey & Whitney, No. A06-486. In order to finance the construction of an Indian casino, Miller & Schroeder Financial Inc. negotiated two separate loans on behalf of President R.C.-St. Regis Management Co. President had an agreement with the St. Regis Mohawk Tribe, according to which President would finance the casino’s development expenses and manage it once it was built. The tribe was required to repay President. President secured loans through its interest in revenues from the casino; 32 banks purchased participation interests in the loans. Miller & Schroeder hired Dorsey & Whitney to assist in the structuring and securing of the loans. President ultimately defaulted on the loans. Miller sued President in a Minnesota federal court for collection of the unpaid loan amounts; a judgment of $15.6 million was entered for Miller. The judgment was not collected because President had no assets. The bank participants sued Dorsey & Whitney, alleging legal malpractice. The trial court granted summary judgment to Dorsey, ruling that there was no attorney-client relationship between the law firm and the bank participants. An intermediate appellate court reversed, saying that there were genuine issues of material fact regarding the scope of Dorsey’s representation. Reversing, the Minnesota Supreme Court said “imposing on attorneys a duty toward beneficiaries of whom they are unaware would risk dampening their zealous advocacy on behalf of clients, for fear of harming a third party to whom a duty might later be found to be owed.” In this case, the bank participants were not direct and intended beneficiaries of the attorney-client relationship between Miller and Dorsey. The mere fact that the bank participants were to benefit from Dorsey’s services did not impose contractual liability on the firm. • SCHOOLS AND EDUCATION IDEA breach results in private education award A Georgia judge didn’t abuse his discretion in awarding a learning-disabled student a private-school education as compensation for the Atlanta public school system’s violation of his rights under the Individuals With Disabilities Education Act (IDEA), the 11th U.S. Circuit Court of Appeals held on March 6. Draper v. Atlanta Independent School System, No. 07-11777. The IDEA provides federal assistance to states that provide a free and appropriate education to children with disabilities. Schools are required to identify children in need of special education services, then develop an “individualized education program” that meets the law’s requirements. In 1994, Jarron Draper entered the Atlanta Independent School System as a second-grader who could not read and did not know the sounds of the alphabet. Though he displayed signs of dyslexia, he wasn’t tested for a learning disability. In 2003, he was diagnosed with dyslexia. Draper still failed to receive adequate instruction or tutoring. Finally, Draper’s family was granted an administrative hearing. By then, the boy was 18 years old, but his reading ability was at a third-grade level. The administrative law judge awarded Draper the choice of substantially increased services in public school or a private education capped at $15,000 a year, paid for by the school system. Both sides appealed, Draper contending that the administrative law judge had provided inadequate compensation to remedy violations of the IDEA and the school system arguing it had not violated the act. A Georgia federal court affirmed, lifted the yearly expense cap and extended the time frame of the remedy to 2011 or when Draper receives a high school diploma, whichever comes first. Affirming, the 11th Circuit said that when “a public school fails to provide an adequate education in a timely manner a placement in a private school may be appropriate.” The court rejected the school system’s claim that the award was punitive. “There is ample evidence to support the administrative law judge’s description of Draper’s educational experience as a ‘tragic tale,’ and there is nothing in this record that suggests to us that the findings adopted by the district court are anything but supported in fact.” • TORTS Evidence about doctor’s insurer can be excluded A trial court hearing a medical malpractice action committed no error in refusing to admit evidence of a testifying expert’s relationship with the defendant physician’s insurer because evidence that the physician was insured could have prejudiced the jury, the Maine Supreme Judicial Court held on March 4. Anderson v. O’Rourke, No. 2008 ME 42. Jacqueline Anderson died from complications arising from necrotizing fasciitis (a rare flesh-eating bacterial infection) while under the care of physician Marsha O’Rourke. Anderson’s estate sued O’Rourke, alleging medical malpractice. Before trial, the court granted a motion in limine permitting the estate to question O’Rourke’s expert, Frederick Radke, about his relationship with O’Rourke’s insurance carrier, Medical Mutual Insurance Co. (MMIC). However, when Radke testified at trial, the court refused to allow the estate to question him on his relationship with the insurer. Radke testified that O’Rourke had treated Anderson properly. The jury returned a defense verdict. The estate appealed, arguing, inter alia, that the trial court erred in refusing to allow the estate to question Radke about his relationship with the insurer. Affirming, the Maine Supreme Judicial Court, the state’s highest court, held that the trial court committed no error because introducing evidence about O’Rourke’s insurance coverage could have prejudiced the jury. Maine R. Evid. 411 states that “Evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully.” The court said, “Here, the probative value of Dr. Radke’s connection to MMIC was outweighed by the danger, otherwise safeguarded against by Rule 411, that evidence that O’Rourke was insured against liability might unfairly prejudice the determination of whether she acted negligently. Under the circumstances, the court struck the proper balance when it excluded evidence of Dr. Radke’s relationship with O’Rourke’s insurer.” Fla. initiative applies to existing medical records A Florida ballot initiative applies to medical records that existed before the initiative passed, allowing discovery of statutorily confidential hospital documents about physician negligence or error, the Florida Supreme Court held on March 6. Florida Hospital Waterman v. Buster and Notami Hospital of Florida v. Bowen, nos. SC06-688 and SC06-912. A 2004 Florida ballot initiative, the Patients’ Right to Know About Adverse Medical Incidents, amended the state constitution. The measure said that patients have a right to access records of a health care facility or provider relating to any adverse medical incident, such as negligence, intentional misconduct or other act that injured or caused the death of a patient. The records included incidents reported to a peer review or quality assurance committee. In the lawsuits at issue, plaintiffs sued hospitals and sought production of documents. The hospitals objected, claiming that the information was confidential because it was created before the initiative passed. Trial judges in both cases overruled the objections, holding that the ballot initiative applied to all existing documents. The hospitals appealed. In one case, an intermediate appellate court held that the amendment does not apply to existing records; in the other, an appellate court concluded it did apply. The Florida Supreme Court consolidated the cases. The Florida Supreme Court affirmed the holding that the amendment does apply to existing records. Based on a plain reading of the ballot summary and the text of the amendment, “the Florida electorate would have logically assumed this amendment would give patients an immediate right of access to existing medical records,” the court said. Moreover, the amendment superseded legislation blocking access to disclosure. “The central focus of the amendment was to provide access to records that existed but were not accessible due to statutory restrictions,” the court said.

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