A publication of the
Arkansas Bar Association
Vol. 45, No.1, Winter 2010 online at www.arkbar.com
See inside for more about the bald eagles at the Arkansas Bar Center
Inside: State and Federal Procedural Rules New Medicare Reporting Requirements Estate Tax Repeal Electronic Media in the Modern Trial
Raising the Bar with
ARKANSAS BAR ASSOCIATION 112th Annual Meeting
Tradition, Integrity & Trust
YOUâ€™RE INVITED: June 9-12, 2010
Arlington Hotel & Hot Springs Convention Center
Publisher Arkansas Bar Association Phone: (501) 375-4606 Fax: (501) 375-4901 Homepage: www.arkbar.com E-Mail: firstname.lastname@example.org editor Anna K. Hubbard executive director Karen K. Hutchins Editorial Board Gordon S. Rather, Jr., Chair Judge Wiley A. Branton, Jr. O. Milton Fine, II Judge Victor A. Fleming William D. Haught Jim L. Julian Philip E. Kaplan Mary Beth Matthews Drake Mann David H. Williams Teresa M. Wineland OFFICERS President Donna C. Pettus Board of Governors Chair Frank B. Sewall President-Elect Jim L. Julian Immediate Past President Rosalind M. Mouser Secretary F. Thomas Curry Treasurer William A. Martin Parliamentarian Charles D. Roscopf Young Lawyers Section Chair Anthony W. Juneau BOARD OF GOVERNORS Thomas M. Carpenter Richard C. Downing Causley Edwards Robert R. Estes, Jr. Amy Freedman David M. Fuqua Charles L. Harwell L. Kyle Heffley Anthony A. Hilliard Sean T. Keith Paul W. Keith Roy Beth Kelley Harry A. Light Laura E. Partlow Jerry D. Patterson Brian H. Ratcliff John C. Riedel Brian M. Rosenthal John T. Vines Tom D. Womack Dennis Zolper
LIAISON MEMBERS Zane A. Chrisman David B. Vandergriff Jack A. McNulty Karen K. Hutchins Judge Kim Bridgforth Carolyn B. Witherspoon Judge Harry A. Foltz The Arkansas Lawyer (USPS 546-040) is published quarterly by the Arkansas Bar Association. Periodicals postage paid at Little Rock, Arkansas. POSTMASTER: send address changes to The Arkansas Lawyer, 2224 Cottondale Lane, Little Rock, Arkansas 72202. Subscription price to non-members of the Arkansas Bar Association $35.00 per year. Any opinion expressed herein is that of the author, and not necessarily that of the Arkansas Bar Association or The Arkansas Lawyer. Contributions to The Arkansas Lawyer are welcome and should be sent to Anna Hubbard, Editor, email@example.com. All inquiries regarding advertising should be sent to Editor, The Arkansas Lawyer, at the above address. Copyright 2009, Arkansas Bar Association. All rights reserved.
Lawyer Vol. 45, No. 1
12 A “Different” Top Ten List: Significant Differences Between State and Federal Procedural Rules John J. Watkins
18 Cutting Through the Red Tape: The New Medicare Reporting Requirements for Businesses Paying Settlements or Judgments Gary D. Marts, Jr.
22 The Estate Tax Twilight Zone John C. Lessel 28 Electronic Media in the Modern Trial Charles Wright and Jenny Henszey
On the Cover While the bald eagle portrayed on the cover is not one of the Arkansas Bar Center’s resident eagles, the one to the left is. A pair bald eagles are often seen on the trees on the banks of the Arkansas River in front of the Bar Center. Look for them during your next meeting at the Bar Center.
Contents Continued on Page 2
Lawyer The Arkansas Vol. 45, No. 1
in this issue Association News
Board of Governors
Thank you to the 2009 Volunteer CLE Speakers & Program Planners
Lawyer Disciplinary Actions
Arkansas Bar Foundation Memorials and Honoraria
columns President’s Report Donna C. Pettus
Young Lawyers Section Report Anthony W. Juneau
Your Name in Print For information on submitting articles for publication, go to www.arkbar.com and click on The Arkansas Lawyer or email firstname.lastname@example.org.
Arkansas Bar Association
2224 Cottondale Lane Little Rock, Arkansas 72202
HOUSE OF DELEGATES Delegate District C-1: James E. Scurlock Delegate District C-2: Jerrie Grady Delegate District C-3: Keith Chrestman, Brant Perkins, Teresa M. Franklin Delegate District C-4: Curtis Walker Delegate District C-5: A. Jan Thomas, Jr., Marshall A. Wright, Winston B. Collier Delegate District C-6: Charles E. Clawson, III, Shane A. Henry Delegate District C-7: William N. Reed Delegate District C-8: Brandon C. Robinson, Paul T. Bennett, Charles D. Roscopf Delegate District C-9: Timothy R. Leonard, Matthew J. Shepherd, C.C. Gibson III, Phillip A. Pesek Delegate District C-10: Shivali Sharma, and Open Position Delegate District C-11: John C. Finley, III, J. Philip McCorkle Delegate District C-12: Jacob M. Hargraves, Jonathan D. Jones and Open Position Delegate District C-13: Cecilia Ashcraft, Sam E. Gibson Delegate District A-1: Vicki S. Vasser, Anthony W. Juneau, Anthony W. Noblin, Kristin Pawlik and Open Position Delegate District A-2: Brock Showalter, Buddy Chadick, Tim Tarvin, Debby Thetford Nye, Paul D. Reynolds, W. Marshall Prettyman, Jr., Robert R. Estes, Jr., Charles M. Duell, Troy L. Whitlow, Suzanne Clark and Open Position Delegate District A-3: Stephen C. Smith, Farrah L. Fielder, C. Michael Daily, Jeffrey D. Rickard, Joel D. Johnson, Stephanie Harper Easterling Delegate District A-4: Patrick C. McDaniel, John C. Riedel Delegate District A-5: Brent Capehart Delegate District A-6: Emily Sprott McIllwain Delegate District A-7: Jerry D. Patterson Delegate District B: Gwendolyn L. Rucker, Mitchell L. Berry, M. Stephen Bingham, Michelle H. Cauley, David P. Glover, Jay L. Shue, Jr., Elizabeth Thomas Smith, Joel M. DiPippa, Khayyam Eddings, Christian Harris, Ka Tina R. Hodge, Jeffrey Dale Wood, Gill A. Rogers, Alan G. Bryan, Tim J. Cullen, JaNan A. Davis, Jennifer W. Flinn, Anne Hughes White, Tasha Sossamon Taylor, Patrick L. Spivey, Shaneen Kelleybrew Sloan, Jason Earley, Jerald “Cliff” McKinney, II, John P. Perkins, III, Victor D. “Trey” White, Mark W. Hodge, Cathy Underwood, Jodie Lynn Hill, Grant M. Cox Law Student Representatives: Austin Easley, University of Arkansas School of Law; Aimie Lockwood, UALR William H. Bowen School of Law
The Arkansas Lawyer
WHO’S WATCHING YOUR FIRM’S 401(k)?
WHO’S WATCHING YOUR FIRM’S 401(k)?
• Is your firm’s 401(k) subject to quarterly reviews by an independent board of directors? • Does it include professional investment fiduciary services? • Is your firm’s 401(k) subject to 23 contracted service standards? • Does it have an investment menu with passive and active investment strategies? • Is your firm’s 401(k) sponsor a not-for-profit whose purpose is to deliver a member benefit? • Does it feature no out-of-pocket fees to your firm? • Is your firm’s 401(k) part of the member benefit package of 33 state and national bar associations? If you answered no to any of these questions, contact the ABA Retirement Funds to learn how to keep a close watch over your 401(k).
Unique 401(k) Plans for Law Firms Phone: (877) 947-2272 • Web: www.abaretirement.com • email: email@example.com The American Bar Association Members/State Street Collective Trust (the “Collective Trust”) has filed a registration statement (including the prospectus therein (the “Prospectus”)) with the Securities and Exchange Commission for the offering of Units representing pro rata beneficial interests in the collective investment funds established under the Collective Trust. The Collective Trust is a retirement program sponsored by the ABA Retirement Funds in which lawyers and law firms who are members or associates of the American Bar Association, most state and local bar associations and their employees and employees of certain organizations related to the practice of law are eligible to participate. Copies of the Prospectus may be obtained by calling (877) 947-2272, by visiting the Web site of the American Bar Association Retirement Funds Program at www.abaretirement.com or by writing to ABA Retirement Funds, P.O. Box 5142, Boston, MA 02206-5142. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, or a request of the recipient to indicate an interest in, Units of the Collective Trust, and is not a recommendation with respect to any of the collective investment funds established under the Collective Trust. Nor shall there be any sale of the Units of the Collective Trust in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. The Program is available through the Arkansas Bar Association as a member benefit. However, this does not constitute an offer to purchase, and is in no way a recommendation with respect to, any security that is available through the Program. C09-1005-035 (10/09)
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The Arkansas Lawyer
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by Donna C. Pettus
Expanding our Traditions – The Next Small Step
Our very good friend Charlie Owen sends out a thought for the day e-mail to his friends and acquaintances every day. I have never known him to miss a day, even during vacations, illness, and problems. I am sure there have been some missed days, but I am not aware of them. I look forward to his missives. They are usually short thoughtful quotes from famous and not so famous writers, public, and private figures. Today he sent something a little different – 45 lessons on life, accompanied by beautiful winter scenes. I wrote some down: “However good or bad a situation is, it will change.” “Don’t take yourself so seriously. No one else does.” (That one hit home, made me laugh, and totally lightened my day.) “The best is yet to come.” “No matter how you feel, get up, dress up, and show up.” (Particularly useful to a travel-weary bar president). “When in doubt, just take the next small step.” That last one is really what this page is about—the next small step. In holding and maintaining a dynamic and wonderful Annual Meeting we are taking the next small step. First, some history. In August 2009, we held the first Board of Governors meeting in which I served as President of this association. It was a pretty ordinary meeting for the most part, except for the subject of the Annual Meeting, which discussion included quite a few complaints. Governors raised concerns about the Arlington Hotel and its future, its general upkeep and ability to meet the needs of a growing techno-oriented bar. Some wanted to leave the Arlington. Mostly they just wanted someone to fix it. As a result of that discussion, I was directed by the Board of Governors to appoint a Task Force to address as many issues as possible. Representatives from the Annual Meeting Committee and the Task Force met on
two occasions with the owners and representatives of the Arlington. Their concerns included updating sleeping rooms, obtaining in-room wireless connections, additional electrical outlets in meeting rooms, better air conditioning control, handicap accessibility, better parking, and a road map of improvement plans for the hotel. This list is longer but you get the general idea. The Arlington responded with assurances it would begin to meet several areas of concern. Quoting from a letter from the general manager of the Arlington, he stated in part; The hotel will provide complementary wireless service for not only the lobby but all guest rooms…we will have a support individual from the wireless provider on property. We will add and install more outlets for laptop charging capabilities. The current capital plan includes replacing carpet, mattresses, televisions and upgrading bathrooms. This is possibly a 2-3 year plan with our major emphasis on the bedding and carpet in 2010. All stairwell doors will remain unlocked. All guest elevators will be inspected prior to the meeting to insure smooth operation. There are 180 valet spaces on property and 110 spaces in the three-story parking deck one block from the hotel. The hotel will provide overflow parking for 120 spaces near the Majestic and offer complementary shuttle service. The plan will be to open up the lobby by adding Starbucks and the Magnolia room to the reception area. All furniture from the lobby is added to the Veranda. All air conditioners will be checked in the meeting rooms for proper operation. Handicapped accessible areas will be well marked. A map and directional signage will be provided to each attendee on meeting room locations. We will insure there is plenty of food and replenished quickly.
That is what the Arlington is doing. Here is something we will be doing as well. Last year our annual meeting had a record attendance of 1,451. We know overcrowded conditions are unacceptable. Therefore, we will be expanding our traditions by taking the next small step and adding meeting space in the beautiful Convention Center downtown. We will provide continuous shuttles between the Convention Center and the Arlington during meeting hours. While CLE will be divided between the Arlington and the Convention Center, all entertainment and social events will remain at the Arlington. In addition, and this is no small thing, we will gain access to 2,000 additional parking spaces at the Convention Center. Finally, the Board of Governors charged the Task Force with developing contingency plans if it becomes necessary to move the Annual Meeting from the Arlington. The Task Force discussed potential alternative venues and identified the following locations for investigation: Peabody/LR Convention Center, Rogers Embassy Suites/Convention Center, Hot Springs Convention Center, and Fort Smith Convention Center. The Task Force obtained pricing and other information and is positioned to make further recommendations should it become necessary. This year, however, we anticipate that the 2010 Annual Meeting will be another dynamic and exciting meeting at the Arlington Hotel and Hot Springs Convention Center. The Annual Meeting Committee led by chair Gwen Rucker has some great things in store including a wide variety of outstanding CLE programs and fun new children and spouse programs. There very well may be a Gala, a red carpet, and some paparazzi, so don’t miss out on your chance to star. See you there! n
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
Association News Donna Pettus Honored with Gayle Pettus Pontz Award The University of Arkansas School of Law Women’s Law Student Association awarded President Donna C. Pettus with the Gayle Pettus Pontz Award on November 19, 2009. Chancellor G. David Gearhart presented the award to Pettus. The award is given to an outstanding woman attorney who has made a positive difference for her community and state.
Tom D. Womack of Jonesboro is the new President-Elect Designee
Pettus has devoted her career to advancing the legal profession. In her current role as Arkansas Bar Association president, she is making strides in developing strong leadership in the Association and the community. “Being a good lawyer is more than just practicing law. It is also about helping maintain a good government and the freedoms we hold so dear.” Pettus said.
Nomination entry forms are available for this year’s Arkansas Bar Foundation and Arkansas Bar Association Awards. These awards include: (1) Outstanding Lawyer; (2) Outstanding Lawyer-Citizen; (3) C.E. Ransick Award of Excellence; (4) James H. McKenzie Professionalism Award; (5) Equal Justice Distinguished Service Award; and (6) Outstanding Local Bar Association. These awards will be presented jointly by the Foundation and the Association at the Annual Meeting in Hot Springs in June. Deadline for submission of nomination forms: Friday, March 26, 2010. Nominations may be submitted by any Association member. To request an entry form, please call Ann Pyle at the Arkansas Bar Foundation at (501) 375-4606 or (800) 609-5668 or email firstname.lastname@example.org. Nomination entry forms are available for this year’s Young Lawyers Section Frank C. Elcan II Award This award is given in recognition of a lawyer who has demonstrated exceptional leadership skills in and made outstanding contributions to the Young Lawyers Section of the Arkansas Bar Association. This award will be presented at the Annual Meeting in Hot Springs in June. Deadline for submission of nomination forms: Monday, March 15, 2010. Nominations may be submitted by any Association member. To request an entry form, please contact Lorrie Payne at the Arkansas Bar Association at (501) 375-4606 or (800) 609-5668 or email email@example.com.
The Arkansas Lawyer
Tom D. Womack is the new Arkansas Bar Association President-Elect Designee. He was elected on October 31, 2009. He is the president of Womack, Landis, Phelps & McNeill, P.A. in Jonesboro. He obtained his undergraduate degree in accounting from Arkansas State University with distinction and his Juris Doctor from the University of Memphis School of Law. He practices in the areas of business law, corporations, taxation, wills, estates and trusts. Mr. Womack is currently a member of the Association’s Board of Governors and has served as chair of the Probate and Tax Law Section. He recently received the Charles L. Carpenter Award for his exemplary service to the Association. He is a longtime Sustaining Member of the Association. He is a Sustaining Fellow of the Arkansas Bar Foundation. He is also a fellow of the American College of Trust and Estate Counsel where he serves on the Professional Responsibility Committee and is the Arkansas State Chair. He is a past president of the Craighead County Bar Association. Mr. Womack joins the Association’s leadership track composed of President Donna C. Pettus, President-Elect Jim L. Julian and Immediate Past President Rosalind M. Mouser. He will assume the office of President-Elect at the Association’s June 2010 Annual Meeting.
Arkansas Bar Center
ACCOLADES Mary Hatfield Lowe, Coordinator for the Northwest Arkansas Community College ABA Approved Paralegal Program, was recently named NWACC’s Outstanding Faculty Member for 2008-09. The Arkansas Prosecuting Attorney’s Association honored state Rep. Steve Harrelson with a 2009 Advocate for Justice Award. Candice Smith of Arkansas Advocates for Children & Families and Winston Collier of Simpson & Simpson in Searcy were recently listed in Arkansas Business’s new feature: “The New Influentials: 20 in Their 20s.” Brandon J. Harrison was recently appointed to the Arkansas Supreme Court’s Committee on Civil Practice. Lucie K. Brackin has joined The Landers Firm and continues her practice of domestic relations law in Memphis, Tennessee, and Crittenden County, Arkansas. Rashauna A. Norment of the Calhoun Law Firm passed the Patent Bar and is now a Patent Attorney. The Slinkard Law Firm of Rogers, Arkansas, congratulates Pat Moran on his retirement after forty-eight years of legal practice. Association Secretary F. Thomas Curry of McMillan, McCorkle, Curry & Bennington in Arkadelphia was honored with the Distinguished Alumni Award from Henderson State University. Association President Donna C. Pettus was honored with the Gayle Pettus Pontz Award from the The University of Arkansas School of Law Women’s Law Student Association. APPOINTMENTS AND ELECTIONS D. Price Marshall, Jr. has been nominated by President Barack Obama to serve as a federal judge for the Eastern District of Arkansas. If approved by the Senate, Marshall will replace Judge William R. Wilson, Jr., who assumed senior status on the bench. Gov. Mike Beebe appointed William H. Bowen to the Arkansas Supreme Court to fulfill one year of the unexpired term of Justice Annabelle Clinton Imber. Following Mr. Bowen’s resignation as Justice, Gov. Beebe appointed Ron Sheffield to the Arkansas Supreme Court to fulfill the term. Harold Evans of Williams & Anderson in Little Rock was reappointed to the Information Network of Arkansas. J. Cliff McKinney II, who heads the sustainability practice at Quattlebaum, Grooms, Tull & Burrow PLLC, has been appointed by the Arkansas General Assembly to the Arkansas Legislative Task Force on Sustainable Building Design and Practices and was recently elected Secretary/Treasurer of the State Board of the Arkansas Chapter of the U.S. Green Building Council. Dr. Stan Baker of Stanley B. Baker, LTD, was recently appointed by Governor Mike Beebe to the newly formed Arkansas Alternative Energy Commission. David Fuqua was appointed to the Supreme Court Committee on Automation. Drake Mann was appointed to Chair of the Securities Law Section. Association President Donna C. Pettus was appointed to the Arkansas Legislative Task Force on Criminal Justice. WORD ABOUT TOWN Quattlebaum, Grooms, Tull & Burrow PLLC, announced that Billy C. Pharis and Jamie Goss Dempsey have joined the firm as Associates in its Little Rock office. The firm also announced the promotion of three attorneys to membership in the firm: Joseph R. Falasco, J. Cliff McKinney II, and Chad W. Pekron. Williams & Anderson PLC welcomed Jamie K. Fugitt and W. Taylor Marshall as associates to the firm. Zane A. Chrisman recently took a position as Regulatory Counsel for USAble Life. Cathleen Compton announced that she closed her private practice and moved to the Consumer Protection Division of the Attorney General’s Office. U.S. District Judge Robert T. Dawson, Western District of Arkansas, has taken Senior Status. Byron Cole Rhodes of Hot Springs was recently accredited to prosecute veterans benefits claims before the Department of Veteran’s Affairs, appointed to the City of Hot Springs Community Development Advisory Committee and is the new Psychology Instructor at National Park Community College. The McMullan Law Firm in Little Rock welcomed Kelly Hopkins Halstead as a partner and announced a new firm name – McMullan•Halstead. We encourage you to submit information for publication in OYEZ! OYEZ! To do so, please send information to: firstname.lastname@example.org.
Space available for: Meetings Receptions Mediations Arbitrations Depositions Visiting attorneys Video Conferencing
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Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
News A Call to Leadership in the Arkansas Bar Association
Nominating petitions due March 31, 2010
The House of Delegates and Board of Governors address matters important to the legal system, our Association and every attorney in Arkansas. For example, the House decides Association policy on new initiatives before the Arkansas Supreme Court and on legislation before the General Assembly affecting the legal system. Recent examples include rules governing electronic discovery and the Association’s legislative package. The Board handles the business aspects of the Association plus keeps up with trends affecting the legal profession. Being in the House or on the Board is a chance to get acquainted with lawyers all over the state, to be recognized as the representative of lawyers within the individual’s district, and to help shape the future of the profession. Election Process For both Delegates and Governors, a nomination petition signed by three current members of the Association who reside in the geographical area of election, must be filed with the Secretary at the Arkansas Bar Association, 2224 Cottondale Lane, Little Rock, AR 72202, no later than March 31, 2010. A sample petition is available from the Association’s office or Web site. The petitions and current members of both bodies are listed under “About Us” on the Association’s Web site at www.arkbar.com.
Schedule For Election to the House of Delegates Spring 2010
Schedule For Election to the Board of Governors Spring 2010 District 1-BG 8-BG 10-BG 12-BG 17-BG 18-BG
One Governor to be elected
Clay, Craighead, Greene, Mississippi Washington Sebastian Pulaski Pulaski Pulaski All Are Three Year Terms
Qualifications for Board of Governors The attorney must reside in the geographical area for the Board of Governors’ position and must have served one year in the House of Delegates or must have been an Association member for seven years by the time of joining the Board of Governors in June.
Qualifications for YLS Chair-Elect, Secretary/Treasurer & District Representatives Nominating petitions Must be Filed by April 1, 2010 The YLS Officers shall be elected by the majority of those present and voting at the annual Meeting of the Young Lawyers Section, which will occur during the June Annual Meeting of the Association. The Chair-Elect for 2010-11 will be nominated from District B (formerly South & East District). For more information on nominations and qualifications of officers go to www.arkbar.com/what’s new/YLS nominations. 8
The Arkansas Lawyer
District A-1 A-2 A-3 A-7 B C-3 C-5 C-6 C-8 C-9 C-10 C-12 C-13
No. of Delegates to be elected
Benton Washington Crawford, Sebastian, Franklin & Johnson Marion, Baxter, Fulton, Searcy, Stone & Izard Pulaski Craighead Crittendon, Cross, St. Francis, Woodruff, White & Cleburne Van Buren & Faulkner Grant, Jefferson, Arkansas, Lincoln, Phillips & Lee Dallas, Cleveland, Ouchita, Calhoun, Bradley, Drew, Ashley, Desha, Chicot, Columbia, & Union Miller Garland Saline & Hot Spring
2 Delegates 4 Delegates 1 Delegate 1 Delegate 11 Delegates* 1 Delegate 2 Delegates 1 Delegate 1 Delegate 1 Delegate
1 Delegate 1 Delegate 1 Delegate
All Are Three Year Terms *Except One District B Delegate is for a One-Year Term Qualifications for House of Delegates The attorney must be an Association member residing within the Delegate District.
Young Lawyers Section Report
by Anthony W. Juneau
Community Service: Our Responsibility
k for ndboo s al Ha n A Leg g Arkansa Youn
Law Day May 1, 2010 tion
First Edi tion ed by Prepar Associa as Bar s Section Arkans Lawyer Young
Over the last several months, the Young Lawyers Section (“YLS”) has been planning the Wills For Heroes Project (“Project”). Through the Project, the YLS will offer free wills to police officers, firefighters, and other first responders (“Heroes”) in Arkansas. On February 20, 2010, the YLS will hold its first session of the Project at the Arkansas State Police facilities in Springdale. At that time, each Hero in attendance will be provided with a valid will. On behalf of the YLS, I would like to thank Brian Lester, Ryan Pettigrew, Tim Meitzen, Steve Schrantz, Brandon Crawford, and Jean Langford for their work in putting this session together. Sessions of the Project will take place throughout other parts of the state within the next several months. Another significant project of the YLS is the distribution of YLS-published handbook entitled “18 & Life To Go: A Legal Handbook for Young Arkansans” (“Handbook”). The YLS’s goal is to make the Handbook available to each high school senior in the state of Arkansas. Under the leadership of Matt House, the YLS has applied for multiple grants in order to obtain financing to distribute the Handbook. Additionally, President Donna Pettus has appointed a Task Force, with Grant Cox serving as Chair, to develop strategies and funding sources necessary for the distribution of the Handbook. The Handbook, which explains Arkansas law on a variety of topics in easy-to-read language, is a great asset of the Association and will be very beneficial to young Arkansans for many
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tern: ) Northwes Vasser (2010) Vicki S. Davis (2011 L. Matt Lester (2012) Brian R. atives: ) Represent (2010 At Large T. Monaghan Brendan inney (2011) ) Cliff McK Sawyer (2012 N. s: Melissa esentative nt Repr Fayetteville Law Stude sas at y of Arkan University Law: Austin EasleSchool of Law: of Bowen School H. William UALR wood Aimie Lock
years in the future. On January 22-23, 2010, many members of the YLS attended the Association’s Mid-Year Meeting in Memphis, Tennessee. Like all other attendees, the YLS members earned quality CLE hours and enjoyed the world-famous BBQ of the Rendezvous. The Mid-Year Meeting also serves as a precursor to the Annual Meeting, which will be held at the Arlington Hotel in Hot Springs. This year, the YLS will hold its meeting at The Springs Hotel & Spa on Friday, June 11, 2010. The Springs Hotel & Spa, which is only a short walk from the Arlington, has wonderful facilities available for our use. On Friday evening of the Annual Meeting, the YLS will host a social event at The Springs Hotel & Spa, where food and beverages will be served. Music and a karaoke machine will be provided by a local deejay. Several members of the YLS have requested that the YLS conduct more social activities. In response to these requests, I have appointed social chairs for each Bar District. The social chairs for the North and West District are Amanda Thomas, Alan Bryan, William Trentham, and Eric Berger. The social chairs for the Central District are Heather Goodson, Toney Brasuell, and Ben Brenner, while the social chairs for the South and East District are Serena Green and John Houseal. The social chairs are responsible for planning several events throughout the year for YLS members in their Bar Districts. Members of the YLS will be notified of these events via the listserv.
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The YLS newsletter, Inbrief, has evolved from a two-page two-color printed document into a multi-page full color online document under the guidance of Tasha Sossamon Taylor, editor of Inbrief. The newsletter comes out quarterly and includes short articles by young lawyers and news announcements about YLS members. Inbrief is available on www.arkbar.com/whats_new. If you have information on YLS Members who deserve a “Hat’s Off” or would like to submit ideas for articles, please contact Tasha at email@example.com. The Executive Council is the governing body of the YLS and is responsible for its day-to-day activities. The Executive Council consists of the following: Tony Juneau, Chair; Brandon Moffitt, Chair-Elect; Gwen Rucker, Immediate Past Chair; Grant Cox; Tasha Sossamon Taylor; Brian Clary; Eddie Doman; John Houseal; Brian Lester; Vicki Vasser; Matt Davis; Melissa Sawyer; Cliff McKinney; Austin Easley (law student representative); and Aimie Lockwood (law student representative). The YLS consists of members of the Association under the age of thirty-six (36), as well as all members of the Association who have practiced law for less than five (5) years. Whether you live in Eudora or Bella Vista, Pocahontas or De Queen, or anywhere else in Arkansas, the YLS has volunteer opportunities for you. If you are interested in volunteering your abilities to the YLS, please feel free to contact me at 479-464-5657 or firstname.lastname@example.org. n
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
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The Arkansas Lawyer
Association News Association Membership Coordinator Barbara Tarkington Retiring after 39 Years of Service
The Association’s longest-standing staff member, Barbara “Barb” Tarkington, is retiring after 39 years of service. Barbara has been committed to the members since she joined the Association in 1965, minus a few years away early in her career. Barbara has worked in five bar center buildings and for six executive directors. The length of her service is matched only by the late Judith Gray who served as the Associate Executive Director for 40 years. The Association’s Treasurer, William A. Martin, worked closely with Barb during his 14 years as executive director. “No one could be more dedicated to the Association and to making things go right than Barb,” Martin said. “She kept our membership records on cards at first and then learned how to use a computer database. She had a passion for making certain the information was current and correct. She knew our members and when I wrote something that contained names I knew to check with Barb to be sure they were spelled correctly. She is one of our most loyal and valuable employees and we shall miss her.” Don Hollingsworth worked with Barb during his tenure as Executive Director. “I had the pleasure of working closely with Barb on Association membership issues for 11 years, and her dedication to and concern for individual members were unequaled,” Hollingsworth said. “Loyalty to the Arkansas Bar Association and Arkansas attorneys was always her priority, and she will be tremendously missed by all of us.” Association Executive Director Karen Hutchins has worked with Barb for the past five years.
“Barb has been a joy to work with,” Hutchins said. “Her knowledge of our Association’s history and membership has been invaluable. Barb’s behind-the-scene efforts were instrumental in the success of arkansasfindalawyer. Her gracious manner and smiling face at annual meeting registration will be truly missed by both members and staff.” While she has played many roles for the Association over the years, her main focus has always been on the members. Association Membership Chair Brian Rosenthal has worked closely with Barbara the last two years. “Because of Barbara’s tireless efforts, eloquent manner, professionalism and willingness to let others share in her efforts, the Arkansas Bar Association’s membership has grown and members have returned in great numbers once they have joined,” Brian said. “Her ‘can do’ attitude and vast knowledge are bar treasures, as is she.” Barbara’s career is culminating on a high point, with the Association membership reaching a record high for this time of year with 5,007 members.
Above: A clipping from a 1968 Arkansas Lawyer magazine. Barb began her career mailing to members using Addressograph plates before running detailed queries on the computer. Even though her job became more computerized over the years, she continued to personally call members and maintain those personal relationships. Left: A clipping from a 1967 Arkansas Lawyer magazine.
You are Invited to a reception honoring Barbara Tarkington February 17, 2010 11:30 a.m. - 1:30 p.m. Arkansas Bar Center Drop by, enjoy a light lunch and wish Barbara well Vol. 44 No. 4/Winter 2010 The Arkansas Lawyer
A “Different” Top Ten List: Significant Differences Between State and Federal Procedural Rules By John J. Watkins
hree days before the celebration of Independence Day 2009, an anniversary of a different sort went unnoticed: the Arkansas Rules of Civil and Appellate Procedure turned thirty.1 Modeled on their counterparts in the federal system, these rules superseded most provisions of the Code of Civil Practice, which, as amended over time, had governed procedure in the state’s courts for more than a hundred years.2 The title of a 1979 law review article neatly summed up the change: “New Civil Procedure: The Court that Came in from the Code.”3 In the article, authors David Newbern, then a law professor, and Walter Cox, the reporter for the advisory committee that had prepared the proposed rules, compared the Arkansas Rules of Civil Procedure to the federal rules and discussed how they changed state practice. This brief article revisits one of those topics by highlighting Arkansas rules–appellate rules as well as rules of civil procedure–that differ significantly from the corresponding federal rules. As Messrs. Newbern and Cox documented thirty years ago, the original Arkansas Rules of Civil Procedure parted company with the federal model in several respects, and since then both sets of rules have been amended multiple times. The same can be said of the state and federal appellate rules. Unlike the Newbern and Cox article, this one is not comprehensive. Instead, it offers a “top ten” list of significant differences between the Arkansas rules and those that govern federal practice. Your choices may well vary from these. As is the case with formulating almost any kind of list, whether it be the top teams in college football or the best performers on American Idol, reasonable minds can differ. The rules discussed below
The Arkansas Lawyer
are not ranked according to importance. They appear in numerical order, beginning with Rules of Civil Procedure. 1. Ark. R. Civ. P. 8(a): The Complaint By providing in Ark. R. Civ. P. 8(a) that a complaint must state “facts showing . . . that the pleader is entitled to relief,” the Arkansas Supreme Court departed from the language of the corresponding federal rule that requires only a “statement of the claim.”4 The Court’s intent was to retain the Civil Code’s requirements rather than adopt the “notice pleading” approach of the Federal Rules.5 Consequently, the plaintiff must state facts constituting a cause of action,6 not conclusions of law or mere evidence. And he or she cannot circumvent this requirement by filing a sketchy, inadequate complaint with the hope of using discovery to ascertain the facts.7 Deciding whether a complaint passes muster under the Arkansas rule can sometimes be difficult, and the reported decisions are not models of consistency.8 This should come as no surprise, for fact-pleading has long been criticized on the ground that the line between a “fact” and a “conclusion” is fuzzy at best.9 Fact-pleading is also subject to criticism because it operates to keep potentially meritorious claims out of court,10 and for that reason three members of the Supreme Court expressed dissatisfaction with its strict application in a 2003 case involving disposal of hazardous substances.11 Ironically, the U.S. Supreme Court has in two recent decisions12 sounded the death knell for notice pleading in the federal courts13 by imposing requirements strikingly similar to those found in fact-pleading jurisdictions such as Arkansas. A federal plaintiff cannot survive a motion to dismiss by relying on
“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.”14 Rather, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”15 This “plausibility standard” is met when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”16 Although the Court was careful to distinguish its new approach from what it called “the hyper-technical, code-pleading regime of a prior era,”17 it appears to have taken a step in that direction. A good deal more than “notice” is now required, and, perhaps for lack of a better term, some commentators have described the new federal pleading as “notice-plus.”18 Whatever label is attached, it may not be much different in practice than the Arkansas system. Indeed, critics have already complained that the higher bar for complaints in federal court will likely result in the dismissal of meritorious claims.19 2. Ark. R. Civ. P. 11: Frivolous Pleadings & Other Papers What is now subdivision (a) of the Ark. R. Civ. P. 11 was adopted in 1986 and is based on the 1983 version of the federal rule as amended in 1983.20 The federal rule was revised again ten years later to broaden the scope of the signer’s obligations, to make sanctions discretionary rather than mandatory, and to add a “safe harbor” provision.21 The only portion of the 1993 amendment that found its way into the Arkansas rule was the safe harbor, which was adopted in 1997 and placed in subdivision (b) of the rule.22 As part of the 2008 Arkansas rule changes implementing Administrative Order
19, which addresses confidential information in case records, the scope of the certification under subdivision (a) was extended to cover compliance with the redaction requirements of Ark. R. Civ. P. 5(c)(2).23 The principal difference between the two sets of rules is that sanctions are mandatory in the Arkansas courts and discretionary in the federal system. In practice, however, this difference may not amount to much. Although Ark. R. Civ. P. 11(a) is mandatory, the Supreme Court has held that a circuit judge has “broad discretion . . . in determining whether sanctionable conduct has occurred.”24 If the inescapable conclusion is that such conduct has taken place, the judge has considerable flexibility under subdivision (a), which provides for “an appropriate sanction.” In making a choice, the Supreme Court has said, the judge should impose “the least severe sanction adequate to serve the purposes” of the rule, i.e., “to deter future litigation abuse.”25 The federal approach is to the same effect.26 The Supreme Court has not compiled a list of factors for circuit judges to consider in deciding on an appropriate sanction, but it has said that with respect to one possible sanction–an award of attorney’s fees–a judge should take into account the reasonableness of the fees incurred by the opposing party, the minimum necessary to deter, the offender’s ability to pay, and the severity of the violation.27 Federal guidelines are similar.28
Another difference between the state and federal rules should be noted because it has apparently confused the Arkansas Supreme Court. Subdivision (a) of Ark. R. Civ. P. 11 applies to any “pleading, motion, or other paper.” Despite the term “other paper,” the Court has suggested in dicta that Rule 11(a) might not govern discovery requests and responses and pointed out that these materials are not covered by the federal rule.29 To be sure, Fed. R. Civ. P. 11 does not, by virtue of subdivision (d), “apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.” But this provision was added when Federal Rule 26 was revised in 1993 to include a new subdivision (g) with requirements, similar to those in Rule 11, applicable in discovery. Before these changes, Fed. R. Civ. P. 11 applied to discovery materials,30 and that should still be the case under the Arkansas rules, which have not been amended along the lines of Fed. R. Civ. P. 11(d) and 26(g).
3. Ark. R. Civ. P. 15: Amended Pleadings In the federal courts, the right to amend a pleading exists only for a limited time period at the outset of the lawsuit. A party may amend once as a matter of course twenty-one days after service of the pleading or, if it is one to which a responsive pleading is required, twenty-one days after service of a responsive pleading or a motion to dismiss under Rule 12(b), a motion for a more definite statement, or a motion to strike the pleading, whichever is earlier.31 Thereafter, an amendment requires either leave of court or written consent of the opposing party.32 By contrast, Ark. R. Civ. P. 15(a) provides that “[w]ith the exception of pleading the defenses mentioned in Rule 12(h)(1), a party may amend his pleadings at any time without leave of the court.”33 The opposing party may then challenge the amendment because “prejudice would result” from its filing or “disposition of the cause would be unduly delayed,” with the circuit court being authorized to “strike such amended pleading or grant a continuance of the proceeding.” The court has broad discretion in deciding whether to allow an amendment to stand.34 Filing a motion to amend, the vehicle by which leave to amend is sought in the federal courts, is not necessary and may in fact prove harmful. In a 2004 case, for example, appellant argued that the circuit court should have considered her amended complaint and found it sufficient to state claims for relief under Rule 12(b)(6). The problem was that appellant had not amended the complaint, although she had filed a motion for leave to amend with a copy of the revised complaint attached. In rejecting her argument, the Court of Appeals held that “the unsigned and unfiled copy of the amended complaint that appellant attached to her motion for leave to amend was ineffective.”35 While subdivision (a) of the Arkansas rule differs substantially from the federal version, subdivision (c) is essentially the same.36 Yet in the hands of the Arkansas Supreme Court,
John J. Watkins is professor emeritus at the University of Arkansas School of Law in Fayetteville and an advisor to the Arkansas Supreme Court’s Committee on Civil Practice. With Justice David Newbern and Judge Price Marshall, he is co-author of a book on Arkansas civil procedure. Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
simply nothing to amend in this situation when the initial complaint is a nullity.41 Justice Imber concurred in both cases but argued that the majority had “understate[d] the effect of [Rules 15(c) and 17(a)] with respect to permitting the substitution of a new plaintiff to relate back under circumstances not implicated in this case.”42 She McMath Woods seeks to hire urged adoption of the federal courts’ applian attorney. Willing to consider cation of Rule 15(c) described above. varying levels of experience. But the Supreme Court has instead applied Research and writing skills are its narrower approach beyond the wrongfulimportant. Please send resumes death and survival setting. In Bryant v. to Will Bond at 711 West Third, Hendrix,43 the Court rejected appellants’ Little Rock, AR 72201. argument that the relation-back provision of Rule 15(c) should apply to the substitution Since 1953, a tradition of plaintiffs as well as defendants, thereby of legal excellence. keeping alive their claim for trespass based on removal of timber from their land. They had initially filed suit as individuals but amended the complaint to reflect their status as trustees of the revocable family trust that in fact owned the land. “We are aware that Appellants cite us to [federal] Rule 15 . . . and authority applying that rule,” the Court said. “An analysis of these federal www.McMathLaw.com authorities would prolong this discussion 711 West 3rd • Little Rock, AR 72201 needlessly, given the long-standing law of 501-396-5400 this state to the contrary.”44 The Arkansas law to which the Court referred included Ark. R. Civ. P. 15(c) has become narrower not only the wrongful death and survival than the federal rule. The specific question cases, but also decisions pre-dating adoption is whether subdivision (c) may be used to of the Rules of Civil Procedure by as many as change plaintiffs though it speaks in terms 45 of amendments that change “the party or the fifty-two years. Tellingly, the Court failed to explain fully naming of the party against whom a claim is a decision it had handed down only the pre37 asserted.” ceding week. In Bibbs v. Community Bank,46 Federal courts, including the Eighth Circuit, have held the corresponding federal the Court held that appellant lacked standing provision applicable to a change of plaintiffs in an action against the appellee bank that when “determination of the proper [plaintiff] had accrued before he filed for relief under is difficult or when an understandable mis- Chapter 7 of the Bankruptcy Code, at which take has been made.”38 In this context, Rule point his claim became property of the bank15(c) works in conjunction with Rule 17(a), ruptcy estate and could be brought only by the which provides that a federal court “may not trustee. In considering whether the trustee’s dismiss an action for failure to prosecute in purported ratification of appellant’s complaint the name of the real party in interest” until cured the standing deficiency, the Court cited allowing that party a reasonable time to ratify, its wrongful-death and survival cases for the 47 join, or be substituted into the action. Taken “nullity” proposition but also discussed at together, these rules “avoid forfeitures of just some length the federal authorities that were given such short shrift in Hendrix. claims.”39 Most importantly, the Court relied on In its first cases considering this issue, the two federal cases–previously noted by Justice Arkansas Supreme Court held in 2002 that Imber–in support of the view that an amendan amended complaint substituting a new plaintiff in a survival or wrongful death action ment substituting plaintiffs relates back under did not relate back to the date on which a Rules 15(c) and 17(a) when determination complaint by an improper plaintiff had been of the proper party is difficult or when 48 filed.40 The Court reasoned that there is an understandable mistake was made. But 14
The Arkansas Lawyer
because appellant’s failure to determine that the trustee was the proper party could not be described as an understandable or excusable mistake, the Court said, the trustee’s purported ratification “did not . . . breathe new life into [appellant’s] defunct pleading.”49 Also of note is the Court’s observation that it had “recognized the ‘understandable mistake’ requirement . . . by inference” in a 2004 wrongful-death decision.50 In that case, the Court found that “no such understandable mistake [had] occurred” because the pertinent statute “specifically details who may maintain a cause of action for wrongful death.”51 None of this apparently matters, however, in light of Hendrix. 4. Ark. R. Civ. P. 23: Class Actions Although the requirements in Ark. R. Civ. P. 23(a) & (b) for certifying a case as a class action do not differ in any meaningful way from those set out in the federal rule, there is a world of difference in their application. As construed, the Arkansas rule is among the most liberal in the nation, and one consequence is that out-of-state class actions are being exported here. For example, lawyers representing Texas residents are bringing these lawsuits in Arkansas because the Texas Supreme Court, following the lead of the federal courts, has adopted certification requirements that are far more stringent than those in Arkansas.52 Subdivision (a) of the Arkansas rule tracks almost word for word the language of the same provision in the federal rule: the class must be “so numerous that joinder of all members is impracticable,” there must be “questions of law or fact common to the class,” the representative parties’ claims or defenses must be “typical of [those] of the class,” and the representative parties and their counsel must “fairly and adequately protect the interests of the class.”53 Under subdivision (b), which applies in all class actions, the circuit court must determine that “the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” In the federal courts, however, these predominance and superiority requirements apply only in what are generally referred to as “damages class actions” governed by Fed. R. Civ. P. 23(b)(3).54 The Arkansas Supreme Court has taken
what has been described as a “certify now, worry later” approach to class certification.55 As the Court itself has explained, circuit judges have “broad discretion” in determining whether the requirements for certifying a class action have been met, with the understanding that the class “can always be decertified at a later date if necessary.”56 This view is subject to criticism on the ground that it does not take into account the impact of an order certifying the case as a class action. Maryland’s highest court, for example, has observed that “granting class certification significantly increases the pressure on a riskaverse defendant to settle pending class claims rather than face the threat of an exceptional award of damages.”57 Not surprisingly, settlements are reached in almost all cases certified as class actions.58 Central to the Arkansas Supreme Court’s position is disapproval of the federal principle that a class action “may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of [Fed. R. Civ. P. 23] have been satisfied.”59 The Court has steadfastly refused to adopt this requirement,60 although it has said that the trial judge “must undertake enough of an analysis to enable us to conduct a meaningful review of the certification issue on appeal.”61 Citing its “no rigorous analysis” rule, the Court held in a 2008 case, General Motors Corp. v. Bryant, that a circuit court need not conduct a choice-of-law analysis before certifying a multistate class action.62 But deciding the predominance issue without determining the applicable substantive law would seem to be an impossible task,63 and courts elsewhere have held that common issues do not
predominate over individual issues when the laws of multiple states will apply to different class members.64 Other courts have concluded that class actions do not meet the superiority requirement when application of the laws of several states makes the case unmanageable.65 In Bryant, the Supreme Court also relied on another of its oft-stated rules applicable in class actions: the trial court may not examine the merits in making the certification decision.66 As the Court explained in a 1996 opinion, “the proper focus of the inquiry is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 . . . are met.”67 Here the Court was quoting in large part from the leading federal case, Eisen v. Carlisle & Jacquelin.68 However, the federal courts do not consider Eisen an impediment to consideration of the choiceof-law issue in deciding whether a case warrants class certification.69 Nor do they imbue the decision with the talismanic qualities that it seems to have in Arkansas.70 A leading treatise describes its proper application: In order to effectively make the [predominance and superiority] inquiry, it is necessary for the court to consider what will have to be proved at trial and whether those matters can be presented by common proof or whether individual proof will be required. Although that inquiry does require an examination of the elements of the claims and defenses, it does not result in an impermissible examination of the merits of the claims. The Eisen prohibition addresses the concern that the parties should not have to show a probability of success on
the merits in order to prove class certification; it does not limit the court’s necessary inquiry into the underlying elements of the case in order to evaluate whether Rule 23 has been met.71 The Bryant opinion illustrates another aspect of the Supreme Court’s “certify now, worry later” approach: its willingness to affirm a certification order–under the deferential abuse-of-discretion standard of appellate review–without evaluating or requiring a plan for actually trying the case.72 By contrast, courts in other jurisdictions have refused to permit certification in complex cases absent a clear plan for administration of the trial.73 In part, the Supreme Court’s attitude stems from its longstanding position, restated in Bryant, that “as to manageability, . . . a circuit court can always decertify a class should the action become too unwieldy.”74 More fundamentally, the Court has simply left the trial plan up to the circuit judge. “Were we . . . to speculate on class management or direct the trial court at [the certification] stage to present the parties with a management plan,” the Court said several years ago, “we would be interfering in matters that clearly fall within the trial court’s bailiwick.”75 5. Ark. R. Civ. P. 26: Discovery The Arkansas discovery rules are based on the version of the federal rules in effect in 1978. Since that time, the relevant federal rules have been revised substantially, but many of those changes are not mirrored in the Arkansas rules. Most notably, perhaps, the Arkansas Supreme Court has not adopted (nor has its civil practice committee recom-
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Steven F. Schroeder JD, MCBA, ASA Steve@SchwartzandAssociatesLLC.com
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
mended) the mandatory disclosure provisions of Fed. R. Civ. P. 26(a). For its part, the committee was influenced by the fact that the federal district courts in Arkansas opted out of mandatory disclosure, as permitted by the original version of the federal rule. Also, federal changes aimed at limiting discovery abuse have not been made in Ark. R. Civ. P. 26, the committee having determined that abuse has not yet become a widespread problem in the state’s courts. Thus, subdivision (a) of the Arkansas rule still provides that, absent a protective order, “the frequency of use of [discovery] methods is not limited.” This statement was deleted from the federal version more than twentyfive years ago, when a new provision was added to Fed. R. Civ. P. 26(b) authorizing the court to limit discovery in various situations, e.g., when it is unreasonably cumulative or duplicative, is unduly burdensome or expensive, or seeks information that can be obtained more conveniently or economically elsewhere.76 For the same reason, other Arkansas discovery rules do not follow their federal counterparts in limiting the number of depositions77 and interrogatories.78 The scope of discovery also differs in state and federal practice. Under Ark. R. Civ. P. 26(b)(1), the parties may obtain discovery “regarding any matter, not privileged, which is relevant to the issues in the pending actions.” The word “issues” was a departure from the 1978 version of the federal rule, which instead used “subject matter.” That term had been construed quite broadly to include “any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.”79 Because of a 2000 amendment, Fed. R. Civ. P. 26(b)(1) is now narrower, as it provides for discovery “relevant to any party’s claim or defense.”80 However, the federal rule retains the “subject matter” standard by allowing the court, for good cause, to “order discovery of any matter relevant to the subject matter involved in the action.” Arkansas circuit courts do not have similar authority to expand the scope of discovery. The Arkansas and federal rules also take different paths to the discovery of electronically stored information. In 2009, the Arkansas Supreme Court adopted Rule 26.1, an optional framework for e-discovery.81 Federal Rules 26 and 34 categorize “electronically stored information” as simply another kind of information subject to those rules.82 16
The Arkansas Lawyer
Arkansas Rules 26 and 34 are likewise broad enough to cover e-discovery in the mine-run of cases. New Arkansas Rule 26.1, however, gives the parties and the circuit court a specific framework for handling e-discovery in cases involving a large amount of electronic documents. The new rule is optional: either the parties must agree to follow it or the court must so order on motion for good cause.83 Unlike under the parallel federal rule, the requesting party does not get to decide the form of production; instead, the responding party must produce electronically stored information in the form in which it is usually maintained (including any specialized software needed for access and use) or in a reasonably usable form.84 The other details of e-discovery under Rule 26.1 flow from a case-specific order governing the discovery of electronically stored information, which in turn flows from a conference between the parties early in the case and the circuit court’s resolution of any disputes.85 6. Ark. R. Civ. P. 41(a): Voluntary Dismissal As a matter of right, a plaintiff may dismiss a claim without prejudice pursuant to Ark. R. Civ. P. 41(a) at any time before “final submission” of the case to the jury or the court.86 By contrast, the federal version of this rule provides that the plaintiff may unilaterally dismiss an action before the opposing party serves either an answer or a motion for summary judgment. Thereafter, dismissal requires a court order or a stipulation signed by all parties who have appeared in the action.87 The Arkansas rule creates an extremely liberal right of voluntary dismissal. At a hearing on the defendant’s motion for summary judgment, for example, the plaintiff may take a nonsuit at any time before the close of the hearing.88 Likewise, a voluntary dismissal is permissible after closing arguments in a jury trial until the court sends the case to the jury.89 In both situations, the plaintiff is allowed to evaluate his or her chances of a favorable outcome and, if they appear to be poor, pull the plug on the lawsuit and start all over again later.90 Obviously, the nonsuit in these scenarios is a powerful weapon for plaintiffs that has costly consequences for defendants and the court system.91 The plaintiff may use the weapon only once, however. Rule 41(a) provides that the second dismissal of an action based on or including the same claim previ-
ously dismissed in any state or federal court “operates as an adjudication on the merits” unless the parties stipulate in writing that it is without prejudice. This two-dismissal rule, which appears in essentially the same form in Fed. R. Civ. P. 41(a)(1)(B), is intended to “prevent delays and harassment” stemming from “unreasonable use of the plaintiff’s uilateral right to dismiss.”92 7. Ark. R. Civ. P. 56: Summary Judgment Although Ark. R. Civ. P. 56 and the federal rule on which it was based now differ in several respects,93 the two share the same standard for the propriety of summary judgment: “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”94 But this standard is not applied in the same fashion. In the federal courts, summary judgment “is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, speedy and inexpensive determination of every action.’”95 To establish a genuine issue of material fact, the plaintiff must do more than show “[t]he mere existence of a scintilla of evidence” in support of his or her position.”96 Rather, the evidence must be such that a reasonable jury could find in the plaintiff’s favor, taking into account the applicable standard of proof–in most civil cases, preponderance of the evidence.97 This approach requires the trial judge to “view the evidence presented through the prism of the substantive evidentiary burden”98 and “mirrors the standard for a directed verdict” under Fed. R. Civ. P. 50(a).99 For its part, the Arkansas Supreme Court announced in 1998 that summary judgment should no longer be considered a “drastic remedy” but as “one of the tools in a trial court’s efficiency arsenal.”100 The fact remains, however, that a motion for summary judgment can be defeated more easily in Arkansas than in the federal courts. This is so for two reasons. First, the non-moving party in Arkansas can apparently avoid summary judgment by producing relatively little evidence in response to the motion. A 1991 case suggests that a scintilla of evidence will do the trick,101 although further clarification from the Supreme Court has not been forthcoming. If summary judgTop Ten continued on page 36
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Cutting Through the Red Tape: The New Medicare Reporting Requirements for Businesses Paying Settlements or Judgments by Gary D. Marts, Jr. Introduction When Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”) becomes completely effective next year, it will impose a new reporting requirement on businesses paying settlements or judgments to personal injury plaintiffs who are Medicare beneficiaries.1 According to the Centers for Medicare and Medicaid Services (“CMS”),2 the “data collected under Section 111 reporting will be used by CMS in processing claims billed to Medicare for reimbursement for items and services furnished to Medicare beneficiaries and for the 1980 Medicare Secondary Payer statute (“MSP”) recovery efforts, as appropriate.” Whatever its purpose, the new requirements are enforceable by stiff civil penalties and damage claims, meaning that attorneys who handle personal injury lawsuits on behalf of such entities should become familiar with the new requirements, both to advise clients as to what is required and to collect information needed for the client to satisfy its reporting obligations. Background Until 1980, the Medicare program was the primary payer in all cases involving its beneficiaries, with the exception of those involving workers’ compensation (including black lung benefits) or for care that was the responsibility of another government entity. With the enactment of the MSP,3 Medicare became a secondary payer to group health plan coverage in certain situations and a secondary payer to liability insurance, no-fault insurance, and workers’ compensation in all situations. In a sense, MMSEA codifies an interpretation of prior law that the government had been pressing unsuccessfully in courts for many years. Under the MSP, CMS may seek recovery of Medicare payments for medical services if another entity had the obligation 18
The Arkansas Lawyer
to pay those medical costs under the statute.4 Most courts to interpret the MSP held that its provisions applied only to insurers, not to tortfeasors who paid claimants directly.5 Despite this wealth of authority, the government pressed ahead with an interpretation of the MSP as including alleged tortfeasors who settle with injured plaintiffs. The United States Court of Appeals for the Fifth Circuit deemed these efforts to “have proved uniformly feckless—every court that has heard its arguments on this issue . . . has rejected the government’s expansive interpretation of the MSP statute.”6 Responsible Reporting Entities Apparently in response to those “feckless” efforts, Congress amended the MSP in 2003 to expand the definition of the term “self-insured plan,” broadening the term to include any “entity that engages in a business, trade, or profession . . . if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.”7 CMS interprets the MMSEA amendments to the MSP to establish that “individuals/ entities engaged in a business, trade, or profession are self-insured to the extent they have not purchased liability insurance
coverage,” which “includes responsibility for deductibles.”8 Accordingly, any business that either pays a settlement or judgment to a tort claimant or pays a deductible toward defense of a claim is self-insured under the MSP and is subject to its requirements. All entities subject to the requirements of Section 111—including self-insured businesses—must register as “responsible reporting entities” (“RRE”) in order to provide the required information to CMS.9 Under the Revised Implementation Timeline, the official deadline for self-insured businesses to register online with CMS as RREs was September 30, 2009, but CMS advises that registration must at least be completed with sufficient time to conduct a full quarter of data transmission testing before mandated reporting of actual claims data begins in 2010. RREs must register on their own behalf and cannot enlist the services of a third party to complete the registration process. Though RREs are required to register themselves with CMS, an RRE that has registered properly with CMS may use an agent for submission of its required reports. Designation of an agent, however, will not shift the RRE’s reporting responsibility to
must assist their RRE clients in making the determination as to what must be reported and thus must always be aware of the possibility that a claimant is a Medicare beneficiary for whom Medicare has a right to recover medical expense payments.”
the agent—the RRE retains responsibility for reporting, compliance with CMS instructions, and the accuracy of data submitted by the agent. Moreover, the quarterly submission process likely means that an RRE will not be able to have multiple agents handling its reporting requirements. Reporting Requirements Falling under the new definition of selfinsured entities brings those businesses within the scope of several new regulatory requirements designed to allow CMS to enforce the new lien requirements. At the most basic level, those entities have a new duty under the law to: (1) secure information necessary to identifying situations where the entity might be a “primary plan” and thus be responsible for money paid by Medicare for the claimant’s medical costs; and (2) submit such information to CMS in an electronic format.10 RREs will submit their data on a quarterly schedule established by CMS upon registration. Once registration is complete, the selfinsured entity will have an obligation to obtain information about claimants’ Medicare eligibility and report that information to the government.11 RREs do not have any obligation to report settlements, judgments, awards or other payments for “property damage only” claims where the claimant does not claim or release medicals. Accordingly, settlement of a property damage claim—arising, for instance, from a
motor vehicle accident in which the claimant was not injured—does not trigger the reporting requirements. CMS will attempt to ease the process of identifying Medicare beneficiaries by making available a Medicare database that RREs can use to determine a claimant’s status. CMS will allow each RRE only one inquiry per month, though each inquiry may include multiple claimants. A query must contain the claimant’s Social Security Number or Medicare health insurance claim number, along with the claimant’s name, date of birth, and gender. On the query response record, CMS will report whether the individual was identified as a Medicare beneficiary based upon the information submitted and if so, provide the HICN and other updated information for the individual found on the Medicare Beneficiary Database. Determining the claimant’s Medicare status is only the first—and easier—step in the process for RREs. Once that status is determined, RREs must report on all claims involving an injured party who is or was a
Medicare beneficiary that are completely or partially addressed or resolved through a settlement, judgment, award or other payment on or after the implementation date, regardless of the assigned date for a particular RRE’s first submission. This requirement adheres both in situations where the RRE has a single payment obligation (regardless of whether the payment obligation is executed through a single payment, a structured settlement, or an annuity) and in situations where the RRE has ongoing responsibility for medicals. Additionally, RREs must report on claims for which the RRE has an ongoing responsibility for medicals as of the implementation date, even if the responsibility predates the implementation of MMSEA. This reporting must be done through the CMS’s internet portal. The reporting requirements apply whether or not there is an admission or determination of liability, and reporting is required for any payment made in either partial or full resolution of a claim. At this point, RREs must report payments made for “nuisance” settlements or other such payments,
Gary D. Marts, Jr. is an attorney with Wright, Lindsey & Jennings LLP. His practice focuses on appellate advocacy and civil litigation.
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
regardless of the amount, though there has been some suggestion that CMS might later promulgate a regulation dealing with such situations. For the purposes of the required reporting, the RRE does not determine what portion of any settlement, judgment, award, or other payment is for medicals and what portion is not, instead reporting the payment in full. The RRE reports responsibility for ongoing medicals separately from its other payment obligations but should not separate medical and non-medical damages if medicals have been claimed or released or if the settlement, judgment, award, or other payment otherwise has the effect of releasing medicals. When medical expenses are claimed or released, the RRE must report the settlement, judgment, award or other payment regardless of any allocation made by the parties or a determination by the court. When the parties do make such an allocation, CMS is not bound by it, even if a court has approved the allocation. While CMS claims that it will “normally defer to an allocation made through a jury verdict or after a hearing on the merits,” that deference is relevant
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only to whether or not CMS has a recovery claim with respect to a particular settlement, judgment, award, or other payment, and has nothing to do with the RRE’s reporting obligation The reporting requirement is triggered when payment is made—RREs must “report once there has been a settlement, judgment, award or other payment.” Tying the reporting requirement to the date of payment has consequences for the handling of a claim. A claimant who was not eligible for Medicaid at the inception of the claim might become eligible while the claim is pending, so the RRE has an obligation to keep track of the claimant’s Medicare eligibility throughout the claims or litigation process to make sure that the claimant’s status has not changed. RREs also must remember that their reporting obligations are particular to them and may not be satisfied indirectly by others. CMS cautions that providing notice of a pending claim does not satisfy an RRE’s reporting obligations because the reporting requirements arise at the time payment is made. Similarly, providing notice of a settlement, judgment, award or other payment by any means other than the CMS-established Section 111 reporting process does not satisfy an RRE’s reporting obligations. Finally, notice by another individual or entity— i.e., another RRE that has made payments to the claimant—will not suffice, either, because each RRE must report its own settlements, judgments, awards, or other payments to CMS. Each individual RRE involved in joint settlements, judgments, awards, or other payments thus must report individually at the time payment is made through the CMS reporting system. RREs must provide on a beneficiary-bybeneficiary basis, by type of insurance, by policy number, or by RRE. An RRE thus might submit more than one record for a particular individual in a particular quarter’s submission window. For example, if an insurer covers both drivers involved in an automobile accident and both drivers’ policies are making a payment with respect to a particular Medicare beneficiary, there would be a record with respect to each policy. There could also be two records with respect to a single policy if the policy were reporting a medical pay (considered to be no-fault) assumption of ongoing responsibility for medical expenses and a liability payment in the same quarter.
Special rules apply where the date of incident on a claim is prior to December 5, 1980. According to CMS, RREs are not required to report settlements, judgments, awards or other payments where the date of incident as defined by CMS was prior to December 5, 1980, but determining the date of incident is fraught with several other concerns. In the particular context of claims involving “exposure” to a substance such as asbestos—a category that should contain most claims with a date of incident so far in the past—the exposure must occur before December 5, 1980, and no exposure after that date may be released for the reporting requirement not to apply. If the claimant claims or releases exposure on or after that date, the RRE must report because Medicare has a potential recovery claim. For example, if a claimant is first exposed to asbestos before December 5, 1980, but that exposure continues on or after that date, the RRE must report any payment. Moreover, application of this rule is specific to particular claims and defendants. Therefore, if one defendant out of several defendants is alleged to have caused exposure before December 5, 1980, while the other defendants are alleged to have caused exposure after that date, the first defendant need not report, while the others must report. When a claim results in a judgment against the RRE that it appeals, the reporting requirement is contingent upon how the RRE handles the judgment pending appeal. If the RRE pays the judgment pending the results of the appeal, it must report to CMS. On the other hand, if no payment is made pending appeal, the reporting requirement arises upon resolution of the appeal. Penalties for Non-Compliance with the Reporting Requirements Under the MSP as it existed prior to enactment of the MMSEA, the government had the right to collect amounts it paid for medical expenses if those amounts should have been paid by a primary plan. If the government prevailed in such a lawsuit, it could collect double damages against the defendant. The MMSEA provides additional enforcement mechanisms. In addition to possibly being subject to a suit for double damages, an entity that fails to comply with its requireRed Tape continued on page 48
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Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
THE ESTATE TAX TWILIGHT ZONE
by John C. Lessel “You’re traveling through another dimension: A dimension not only of sight and sound, but of mind. A journey into a wondrous land whose boundaries are that of imagination. There’s a signpost up ahead. Your next stop: The Twilight Zone.” With those words, Rod Serling opened each episode of The Twilight Zone. Those same words can equally describe passage into the unknown land of estate tax repeal which occurred on January 1, 2010. What are the signposts which now govern the federal transfer tax regime? What about 2011 and beyond? Assuming that a quick reinstatement of the estate tax is not made retroactive to January 1, 2010, we are in the twilight zone in 2010. Basics of 2010, 2011 and Beyond We entered this realm after a ten-year journey through the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). After enactment it incrementally increased the estate tax exemption to $3.5 million in 2009 and reduced the maximum marginal estate tax rate to 45%. Beginning in 2010, EGTRRA’s final and ultimate estate tax relief took effect with the following elements becoming law: •
Estate and generation skipping transfer (“GST”) taxes are repealed. • The gift tax exemption remains $1 million and the maximum gift tax rate is reduced to 35%. • Instead of beneficiaries of an estate receiving the decedent’s property with a fair market value basis for income taxes (“stepped-up basis1”), the property is received with the decedent’s basis (“carry-over basis”). This provision is mitigated somewhat by a $1.3 million personal adjustment plus a $3 million marital adjustment for built-in gain. 22 The Arkansas Lawyer www.arkbar.com
Transfers to trusts (other than grantor trusts under the income tax rules) are deemed completed gifts.
However, EGTRRA’s provisions “sunset” on December 31, 2010, and like the time traveler in a Twilight Zone episode, we return to the laws as they existed before EGTRRA. •
The estate tax is revived and the unified estate and gift tax exemption amount reverts to $1 million. The GST exemption is also revised with an exemption of $1 million adjusted for inflation. The maximum estate and gift tax rate is 55%, plus the 5% surcharge on estates over $10 million is reinstated. The state death tax credit of 16% once again applies.2
Major Issues for 2010 Allocation Between Bypass and Marital Shares With an elimination of estate taxes, how will a typical bypass/marital trust estate plan be interpreted? Most of these arrangements define the respective shares with reference to a formula to eliminate estate taxes. For example, assume that the applicable estate planning document provides that the bypass trust is to be funded with the largest fractional share of property which can pass free of federal estate tax by reason of the unified credit and the state death tax credit. Does this language mean that 100% of the estate goes into the bypass trust? If so, depending upon the beneficiaries of the bypass trust, a surviving spouse may be disinherited. Alternatively, the estate plan could provide that the bypass trust is funded with the minimum amount necessary to fully avail the estate of the applicable unified credit. In such a case, is zero the minimum amount
necessary given that the unified credit is essentially unlimited? If so, those children from the decedent’s first marriage may have just been disinherited. Gift Tax/GST Issues One might legitimately ask why gifts would be considered if there is no estate tax. Given the low gift tax rate of 35%, the repeal of GST taxes and the changes looming in 2011, a case can be made that 2010 is the best opportunity for taxable gifts that clients may have in the foreseeable future. One particular concern is the GST inclusion ratio. Since there are no GST provisions in the Internal Revenue Code for 2010, one cannot make an allocation of GST exemption. So, assume that a grandparent makes a transfer into a generation skipping trust and that the inclusion ratio would have been 50% under old law. When a taxable distribution is made from that trust in 2011, what is the GST inclusion ratio? Is it zero because it was zero when the trust was created? Is it 50% because it would have been 50% but for the 2010 rules? Is it 100% because no GST exemption was allocated to the transfer in trust? The substantial likelihood that it is 100% makes the creation of GST trusts problematic. The issue even goes to annual exclusion gifts via a 2503(c) (minor’s) trust or an annual gift tax exclusion gift into trust via a present interest withdrawal right (the “Crummey” withdrawal right) which have generation skipping provisions. John C. Lessel is a member of the Tax Section of the Arkansas Bar Association and a Fellow of the American College of Trust and Estate Counsel.
Basis Calculations and Return Requirement As noted above, the stepped-up basis regime is replaced with a modified carry-over basis system. It is modified in two aspects. First, the executor can allocate $1.3 million of gain among the assets acquired from a decedent on a properly filed return. Second, for gifts to a surviving spouse, an additional $3 million of gain can be allocated. For jointly owned property between spouses, only the decedent’s one-half receives the opportunity for a step-up. Contribution rules similar to pre-2010 gifts apply in cases of jointly owned property of a decedent and any other person. Unfortunately, property that would have been included in a decedent’s estate pursuant to a power of appointment is not considered property acquired from a decedent. These allocation rules will require the filing of a new return under IRC § 6018 for large transfers which is defined as property (other than cash) having a fair market value over $1.3 million. Failure to file imposes a fine of $10,000. The information that will be required will exceed that which would have been required for an estate tax return. Basis cannot be allocated above fair market value. The value of the property remains relevant, however, because basis is the lesser of the carry-over basis or the fair market value on date of death.3 These new rules will necessitate investigation into the decedent’s basis so that built-in gain can be determined. While this requirement is no different than on a pre-death sale4, the option of holding property with a difficult-to-calculate basis until death will no longer be available. And, the perennial issue of date of death value remains. There are other significant issues related to the basis rules including excluding income in respect of a decedent from step-up availability (as under pre-2010 law). Thus, the current income tax treatment of qualified retirement plans, IRA’s, government savings bonds and like items will remain consistent with prior law. Transfers Into Trusts Treated as Taxable Gifts IRC § 2511 relating to transfers into trust in general is amended by the addition of a new subsection (c) which states that a transfer in trust shall be treated as a taxable gift unless the trust is a wholly owned grantor trust under the income tax rules. This addition eliminates transfers under prior law which were incomplete gifts for transfer 23
The Arkansas Lawyer
tax purposes but shifted income for income tax purposes. Notwithstanding this change, old exclusions for annual gift exemptions (through “Crummey” withdrawal rights or otherwise), marital deduction gifts and charitable deductions remain in place. Regulations are specifically referenced in the statute and will have to be issued to avoid unintended consequences. What Happens in 2011? As noted above, 2011 starts as though 2010 never existed. Section 901 of EGTRRA provides, “(a) IN GENERAL – All provisions of, and amendments made by, this Act shall not apply…(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010. (b) APPLICATION OF CERTAIN LAWS – The Internal Revenue Code of 1986…shall be applied and administered to years, estates, gifts and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.” In other words, The Twilight Zone meets Back to the Future. While the effects of the sunset of EGTRRA for decedents dying after December 31, 2010, is clear, how is subsection (b) to be applied to what occurred in 2010? Will the basis rules applied in 2010 be relevant to a disposition of property in 2011 or beyond? As noted above, GST tax planning is especially uncertain with respect to taxable terminations or taxable distributions that will occur after 2010. Possibility of Retroactive Reformation Given the fact that 2010 and 2011 have such uncertainty surrounding the application of the transfer tax system, it is possible that Congress could retroactively reinstate the estate and GST taxes as of January 1, 2010. There is a constitutional question regarding the retroactive imposition of a tax (as opposed to a retroactive rate increase). In addition, given that Congress had ten years to reach a compromise before 2010 but was unable to do so, why should one expect a different result in 2010? What To Do With the changes noted above and the ones scheduled to come, what does one do? • Look past 2010 and if the client’s estate, or in the case of a married couple, the joint net worth is below $1 million and likely to remain so, no amendments are needed.
Review all bypass/marital deduction plans to see if an amendment or codicil is advisable to avoid an unintended disinheritance. Use of disclaimers or making specific reference to a death in 2010 or during any period in which the federal estate tax does not exist are two remedies. Include basis relevant provisions to authorize the executor to make basis step-up allocations for both marital and non-marital assets. Amend living wills or medical directives to authorize the agent to consider transfer tax matters in making medical decisions. Consider making taxable gifts to utilize the low gift tax rate, especially direct skips other than in trust.
Conclusion The above discussion is not intended to be a complete examination of transfer tax laws as of January 1, 2010. Nor is it intended to explore all the questions raised by them. Hopefully it alerts the reader to the changes and how they impact the reader’s practice. Endnotes 1. Note that the basis under pre-2010 law became the fair market value of the property on the date of death of the decedent. While generally referred to as “stepped-up” basis, it could also be “stepped-down” basis, especially in light of the declining market value of both financial and real estate assets in 2008 and 2009. 2. Arkansas’s estate tax was repealed when the federal treatment of a state death tax was changed from a credit to a deduction. Will reinstatement of the credit lead to a revival of Arkansas’s estate tax? 3. This is a classic “heads the taxpayer loses—tails the government wins” situation. Beneficiaries do not get the unlimited benefit of step-up in basis but receive the unlimited detriment of “step-down” in basis. 4. There is a fundamental difference in the basis rules related to gifts, however. As noted above, the 2010 rules require property inherited from a decedent to take the lower of the decedent’s basis or fair market value. IRC § 1015 remains unmodified and it provides that the recipient of a gift takes the property with a basis equal to the donor’s basis with the modification that for loss purposes (but not gain), if the fair market value is less than the donor’s basis, the fair market value will be the basis. n
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
Arkansas Bar Association 112th Annual Meeting
Raising the Bar with
Tradition, Integrity & Trust
Speaker Snapshots Raising the Bar with
National Health Care Reform and its Impact on the State of Arkansas
ARKANSAS BAR ASSOCIATION 112th Annual Meeting
Tradition, Integrity & Trust
YOU’RE INVITED: June 9-12, 2010
Arlington Hotel & Hot Springs Convention Center
Dr. Joycelyn Elders Dr. Joseph W. Thompson
The Court of Public Opinion: The Role and Responsibility of Defense Counsel and Prosecutors James P. Cooney, III Lessons from the Duke Lacrosse case in dealing with media in a high-profile case, navigating the state’s open-file discovery law, challenging DNA evidence, and working with the AG’s office towards public exoneration.
Learning the Hard Way: The Road Back from Disbarment Steve Clark’s experience provides him with a unique background in state, local and national issues.
The Razorbacks, the NCAA and the Law, 1995-2010 Professor Howard Brill Professor Howard Brill has been at the School of Law since 1975.
June 9-12, 2010 Arlington Hotel & Hot Springs Convention Center 24
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CLE CLE CLE CLECLE CLE CLE CLE Calendar
6th Annual Construction Industry Conference Feb. 11, 2010, Hot Springs 33rd Annual Labor & Employment Law Conference Feb. 18-19, 2010, Little Rock 49th Annual Natural Resources Law Institute Feb. 24-26, 2010, Hot Springs 1st Annual Northwest Arkansas Conference March 5, 2010, Rogers
The Arkansas Bar Association Civil Litigation Section and International and Immigration Law Section present:
Alternative Dispute Resolution Conference March 12, 2010, Little Rock Advanced Estate Planning & Trust Administration April 23, 2010, Little Rock 14th Annual Bankruptcy Debtor/Creditor Law Institute April 29-30, 2010, Little Rock Environmental Law May 7-8, 2010, Rogers
Arkansas Bar Association 112th Annual Meeting June 9-12, 2010 Arlington Hotel & Hot Springs Convention Center
First Annual NW Arkansas Conference
March 5, 2010
• Evidence For Trial Lawyers: An Update of Irving Younger’s Classic Presentation • Immigration Law
Best of CLE June 21-25, 2010 Little Rock Best of CLE - Northwest June 29-30, 2010, Springdale
For more information contact Lynne Brown or Kristen Scherm 800-609-5668 or 501-375-4606 firstname.lastname@example.org or email@example.com OR go to www.arkbar.com 25
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Program Planners: Evidence David W. Sterling
Immigration Donna S. Galchus Kathy W. Goss
Embassy Suites 3303 Pinnacle Hills Parkway Rogers, AR 6.0 CLE Credit Hours Including up to 1.5 Ethics Hrs Enjoy Networking & Entertainment at the Opening Reception Thursday, March 4th, 2010 • 6:00 - 8:00 p.m. Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
2009-2010 Arkansas Bar Association Board of Governors
Front Row (l to r): Anthony W. Juneau, Tom D. Womack, Rosalind M. Mouser, Frank B. Sewall, Donna C. Pettus, Jim L. Julian, F. Thomas Curry, William A. Martin, Charles D. Roscopf; Second Row: Karen K. Hutchins, Paul W. Keith, Jerry D. Patterson, Brian H. Ratcliff, Laura E. Partlow, Dennis Zolper, John C. Riedel, Amy Freedman; Third Row: Brian M. Rosenthal, Robert R. Estes, Jr., Thomas M. Carpenter, Anthony A. Hilliard, Charles L. Harwell, Sean T. Keith, Harry A. Light, John T. Vines
This photo was taken at the Country Club of Little Rock by Ocken Photography. 26
The Arkansas Lawyer
Board of Governors Report
December 2009 Board of Governors Meeting Report The Association’s Board of Governors met December 11-12, 2009, at the Arkansas Bar Center in Little Rock with Frank B. Sewall presiding as Chair. President Donna C. Pettus announced the election of Governor Tom Womack as President-Elect Designee as well as the following appointments: Arkansas Access to Justice Commission - Ms. Rose Adams; Supreme Court Committee on Automation - Mr. David Fuqua; Securities Law Section - Mr. Drake Mann as Chair. The Annual Meeting Task Force reported on the results of research into other possible venues for the meeting. The Task Force recommended keeping the annual meeting in the Arlington Hotel for the time being. Further evaluation will take place at the 2010 Annual Meeting. The Member Benefits Committee recommended approval of two new membership benefits. The first is a Cyber-Risk Liability coverage by Regions Insurance. The second is a series of member discounts in Little Rock hotels. Members can book a room at the Peabody Hotel in Little Rock for $139 or the Capital Hotel
for $149 by requesting the Arkansas Bar Association rate when making reservations. The Board approved changing the Association fiscal year to July 1 to June 30 with a six-month transition plan recommended by the Finance Committee. The Board requested that the Online Legal Research Committee continue exploring possibilities for an improved online legal research benefit. The board approved the dissolution of the Taskforce on Electronic Discovery and the Bar Leaders Handbook and Benefits Taskforce upon completion of their tasks. To complete their task of creating a policy manual for the Association’s leaders, the Governance Committee recommended the adoption of several procedures by the Board. The Board also approved the Governance Committee’s motions to recommend several policies to the House of Delegates at their January Mid Year meeting. The Board approved the revised and restated By-Laws of the Young Lawyers Section. The Board of Governors will hold its next meeting on April 9-10, 2010, at Mt. Magazine.
2009-2010 Arkansas Bar Association Officers President: Donna C. Pettus Board of Governors Chair: Frank B. Sewall President-Elect: Jim L. Julian Immediate Past President: Rosalind M. Mouser Secretary: F. Thomas Curry Treasurer: William A. Martin Parliamentarian: Charles D. Roscopf Young Lawyers Section Chair: Anthony W. Juneau The Board of Governors of the Arkansas Bar Association is invested with the authority to conduct the business and management of the Association. The Board is composed of seven officers, eighteen governors elected from districts, three appointed at-large governors, and seven liaison non-voting members. Six new governors are elected each year, and one of the at-large governors is appointed each year. For more information on the election process see page 8 or go to www.arkbar.com and click on About Us for petitions. Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
Electronic Media in the Modern Trial by Charles Wright and Jenny Henszey The need to present a case in a simple logical manner is as old as the law itself. Not long ago, graphics for trial were basically chalkboards and hand drawn sketches. Thanks to computers, computer artists, trial presentation software & 3D animators, demonstrative evidence can be more powerful than ever. There are many factors to consider when incorporating technology into your case. We are often consulted on cases and the first thing attorneys asks us is, “How do I need to present my case to be clear to a jury?” They often wonder if they need lots of graphics, an animation, annotation screens, etc. What we usually tell attorneys is, “You need what you need to present a clear case.” Allow me to explain. Some cases are relatively simple to explain and some are more complex. Both types of cases can benefit from visuals. A common question we ask attorneys is, “What MUST you convey to the jury to win?” This sounds so simple, but is often overlooked. More often than not, there are only one or two main points that you need to convey to the jury to get them to find in favor of your client. The focus of the visual strategy begins here, and once you decide what you MUST get across to the jury, you are ready to begin. Opening Statements. This is where the groundwork for your whole case is laid out and powerful graphics can leave a lasting impression on your jury. An effective opening statement is key to getting the jury to think like you are. Remember, the other side is trying just as hard to get the jury to think like they are. The use of graphics is a powerful tool in setting the tone of the case. According to the US Department of Labor, after 72 hours, people remember only 10% of what they hear, 20% of what they see, but an astonishing 65% of what they both see and hear. Here are a few things to remember when selecting the correct media for an opening statement: 1. Computer Slides vs. Boards. This is a common question we hear with respect to openings. The question is usually answered by determining what needs to stay up during the opening and what needs to be presented during key points. Another thing to consider is how many total slides you anticipate using. If you only need one or two slides for your opening, boards may be a better alternative. Timelines are great for boards. They can be put on easels and left up during an opening as a constant reference. Bullet points, charts, graphs, etc., are usually better presented via a computer slide. The slide can be brought up once for the jury to see and then taken down. The main thing to remember when using slides or boards is not to become dependent on the demonstrative aid. The facts are still key and the demonstrative aid is used to enhance the facts. 2. Audio, Video & Animations. Unless a media file has already been pre-admitted as evidence, it can be difficult to use audio/video visuals during an opening. If you have pre-admitted audio/video visual pieces of evidence, the most effective way to present them is via a computer. Computer generated video can easily be inserted in opening statements, direct examinations, cross examinations, and closing arguments. Use of DVD’s, VHS tapes and audio decks can be cumbersome, which slows down and breaks the flow of your presentation. 28
The Arkansas Lawyer
Direct Examinations. This is where technology plays a big advantage. In the past as you examined a witness, you would either pass him/her a document or have him write something on a board and explain it to the jury. The problem was the jury couldn’t easily follow along or comprehend the exhibit since it couldn’t see it. With technology, key documents can be brought up on a big screen where you can highlight, zoom into key areas, compare to other documents, etc. This same technology can be used on photos, transcripts, etc. Singular presentation of evidence is very powerful since everyone is looking at the same thing at the same time while it is being explained. Demonstrative exhibits such as charts, graphs, timelines, etc., can also be created to enhance a witness’s testimony. Many experts’ testimonies can be complicated and difficult to explain to the average person. Well-designed graphics can help explain complex information in a way that most can understand. The main thing to remember with your graphics is to not overcomplicate them. Sometimes a simple bar chart will convey the message and sometimes a complex graphic is needed. If you ever wonder whether your graphic is conveying the message in a logical manner, ask someone in your office or a friend who knows nothing about your case, “Does this makes sense to you?” If he says “I understand it fine,” then leave it alone. If he has no idea what you are trying to convey, ask him “What do I need to do for it to make sense to you?” Remember, it isn’t how pretty a graphic is, it’s whether it does its job. Cross Examinations. Cross-examinations are where you can really benefit from technology. Computers and software have taken crossexaminations to a new level. Most of the old techniques for crossing a witness have been changed with technology. One of the biggest weapons for cross has been the creation of trial presentation software. Trial presentation software such as Sanction or TrialDirector is a database with a presentation function. This software gives you access to any of your case material with the push of a button. These software packages will accept scanned documents, transcripts, photos, video depositions, PDF files and many more file types. Depositions can also be synchronized to court reporters’ transcripts allowing instant access to any portion of a deposition instantly for impeachment. Instead of loading VHS tapes and trying to fast forward or rewind to the portion you need, you can quickly create video impeachment clips or jump to a page and line number of a deposition in seconds. This instant access to testimony is key so that you do not lose the moment. The best
Q. Mr. Johnson, you have previously testified that you didn’t think Ms. Shields has been exposed to enough asbestos to cause cancer. A. That is correct. (July 5, 2000 Depo. P. 50 lines 6- 10) Clip 4 Q. You also wrote in your report that you did not think Ms. Shields had been exposed to enough asbestos to cause cancer? A. That is correct. Exhibit 31 Q. You also agree that Ms. Shields never worked at Smith Industries long enough to have sufficient exposure to asbestos? A. Correct. (August 10, 2000 Depo. P. 10 lines 5-8) Clip 5
way to prepare for a “technology” cross is to take your cross outline and write in after every question the bates number of the document you plan to use or the video impeachment ID. If you take the time to write in your ID numbers in your outline, you can quickly and efficiently bring up documents and impeachment cites.
Closing Statements. The closing is your last chance to speak to the jury before it begins deliberations, but more importantly your last chance to persuade it. Closings can easily be where a case is won or lost. Research has shown that many jurors have not made up their mind about a case until closing arguments. Closing arguments are often more complex when it comes to technology. Large amounts of evidence have usually been introduced during the trial, which can make it difficult to choose what to present. Think back to your original plan with regards to what
you MUST get across to a jury to win. Using a combination of documents, graphics, video clips or animations can be a very powerful and lasting impression on a jury before deliberations. Outsourcing vs. doing it yourself. This is a dilemma that does not have to be that difficult. If your case is relatively simple, you or your firm can create most of this technology easily. If your case involves a lot of documents or visuals, it may be wise to seek assistance - you want it to be professional and efficient. Too Flashy? A common concern, typically among defense firms with large corporate clients, is whether the technology will appear too flashy. Today’s jurors live in a world where technology is all around them. Jurors expect to see evidence and will not be offended if your client is willing to present the best case possible. As more courtrooms around the country become “wired,” this will be less of an argument as judges and juries will expect the use of technology. Never fear technology if it can benefit your client. Final Thoughts. Technology benefits a trial more so than ever. It can be the difference maker in a trial but cannot win it. Technology is a powerful tool but not an alternative to preparation. Trials are still usually won and lost, on the facts. Technology is a way to enhance and better present the facts of your case.
Charles Wright is the President of The Data Company and Jenny Henszey is the National Account Manager. 6
Uncommon Resources = Outstanding Results With a dedicated, seasoned team of six valuation and economics professionals, backed by the staff of one of American’s Top Fifty Accounting firms, FRAZER FROST, LLP is your premier resource for financial expert services. Whether it’s quantifying or defending damages in a complex commercial case, or a forensic accounting or business valuation assignment, we have the resources to deliver product on time, every time. And we guarantee you will not find a more energetic, creative or tough-minded group on this planet. Call Cheryl Shuffield, Director of Litigation Support Services, at 501.975.0100 for more information. Before Opposing Counsel beats you to it.
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Thank You to the 2009 Volunteer CLE Speakers and Program Planners Jordan Abbott Mark H. Allison Margie Alsbrook Elizabeth Andreoli Ronald R. Angel Steve Appleton Vickie Asher Joyce Bradley Babin David A. Bailey Russell Baker Stanley B. Baker Kristine Baker Steve Barnes Melody Peacock Barnett Judge Ben R. Barry Judge Ben T. Barry James P. Beachboard Governor Mike Beebe Judge Kathleen Bell Stanley M. “Jack” Bell Janelle Benefield Don Bennett Garland W. Binns Anthony W. Black Tracy Black Abe Bogoslavsky Stanley V. Bond Rick Borstein Elizabeth Bowles Judge Ellen B. Brantley Judge Wiley A. Branton, Jr. S. Renee Brida Dennis Brown Judge Earnest E. Brown, Jr. Prof. Chauncey Brummer Senator Dale Bumpers John Burgess Patrick A. Burrow Preston Bynum Ellen Carpenter Thomas M. Carpenter Dr. Sarah Cearley Nathan Price Chaney Cory Childs E.B. “Chip” Chiles IV Zane A. Chrisman William M. Clark, Jr. Tamra Cochran Charles T. Coleman Don Lloyd Cook Barry A. Coplin Chris Corbitt Erin C. Couch 30
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Nate Coulter Steve M. Cousins Junius Bracey “J.B.” Cross Gregory L. Crow Kenneth V. Crow Don Culpepper Elizabeth R. Cummings C. Michael Daily Thomas A. Daily L. Dee Davenport Chris Davidson John Gary Davis Lee Matthew Davis Tony Davis Judge Beth Deere Mike DeLoache Brenda DeShields Dr. Paul Deyoub Lyndsey D. Dilks Joel M. DiPippa John M.A. DiPippa Allen C. Dobson Professor Michael Dougan Missy McJunkins Duke Jack East III William A. Eckert Kayham Eddings Steve Engstrom Edie R. Ervin Bob Estes Harold J. Evans Judge Audrey R. Evans Jamie Ewing Brian Farrell Dr. Jerry Farris Fara Faubus Andrew B. Faulkner Farrah L. Fielder Judge Jay T. Finch Rob Fisher Professor Janet Flaccus Judge John N. Fogleman Dr. Richard Ford Professor Lynn Foster Debbie Foster Shannon Foster Judge Tim Fox Amy Freedman G. Spence Fricke Donna S. Galchus Dr. Bob Gale Amanda Gallagher Colene Gaston www.arkbar.com
Allan Gates Josh Gilliland Nancie M. Givens Professor Chuck Goldner David A. Grace James F. Gramling Elbert Grimes Judge Mary Ann Gunn Alan Gura Dawn R. Guthrie Thomas P. Hagen, Sr. Karen Sharp Halbert Judge Milas H. Hale, III Frank S. Hamlin Phil Hampton Jeff Hankins Joel G. Hargis Michael E. Harmon Steven P. Harrelson Morril Harriman James L. Harris John D. Hastie Melissa McMath Hatfield Richard F. Hatfield Kyle Havner Stacy Hazell L. Kyle Heffley J. Blake Hendrix Donald H. Henry Judy S. Henry Judge Courtney Henry Robert L. “Skip” Henry, III Maurico A. Herrera Charles R. Hicks Rob Hileman Gwendolyn D. Hodge Ka Tina R. Hodge Denise Hoggard Cyril Hollingsworth Judge J. Leon Holmes Robert H. Holmes Matthew R. House Prof. D’lorah Lynn Hughes Judge Marion A. Humphrey Tim Humphries Harry S. Hurst, Jr. Justice Annabelle C. Imber David L. Ivers Nelson Jackson Stuart Jackson Jill R. Jacoway Patrick R. James William O. “Bill” James, Jr.
Jonathan Janacek Tim Janacek Amy Dunn Johnson Jarrod Johnson Bruce Jones Jamie Huffman Jones Phllyis McKenzie Jones R. Stan Jorgensen Donald P. Judges Tony Juneau Sean Keith Paul Kelly Michael Kepesky Judd Kessler Shane E. Khoury Christie Kincannon Chris Kinslow Tre Kitchens Joe Kolb Katharine Kores James P. Kreindler Traci LaCerra Dana M. Landrum Jack Lassiter Professor Robert Leflar Julia LeMense Kevin Lemley Eric Levy Tamla J. Lewis Scott Lewis Judge Alice F. Lightle Stark Ligon Adriana Linares James H. Longino Senator Jim Luker Eva C. Madison David Margulies Teresa Marks Judge Price D. Marshall Sarah M. Mathias J. Matthew Mauldin Mark Mayfield Bobby McDaniel Atty. Gen. Dustin McDaniel Greg McKee Don McKenna Jerald “Cliff” McKinney Jack McNulty Julie Mills Michael W. Mitchell Judge James G. Mixon Kristy Allman Monk Gary Monroe
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Judge James M. Moody Heather Moody Michael S. Moore Rodney P. Moore Harry Truman Moore Jeff Moore Charles A. Morgan Rosalind M. Mouser Professor Tara Mullen Adrienne K. Murphy Katherine Myers Dean Cynthia E. Nance Dan Nelson J. Richard Newland Jack Newton Todd L. Newton George H. Niblock Professor Steve Nickles N. Doug Norwood Pat O’Brien Lance Owens Denise Oxley Kay Palmer Sharon E. Pandak Stephen Wade Parker Annabelle Lee Patterson Nicholas H. Patton Claibourne W. “Clay” Patty John F. Peiserich Jennifer Peper G. Alan Perkins Donna C. Pettus Judge Mackie M. Pierce Patt Pine David M. Powell Polly Price Senator David Pryor Jeff Puryear Steve Quattlebaum Bill Ramsey Dr. Ed Ratchford Jordan Ray Catherine Sanders Reach Matthew Reel Mike Reif Carlos Reynolds Thomas E. Robertson, Jr. Mark Robinette Judge Mike Robinson Rick Roderick Jean Rolfs Jeff Rosenzweig Gwendolyn Rucker
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Attorney Disciplinary Actions Final actions from October 1, 2009, through December 31, 2009, by the Committee on Professional Conduct. Summaries prepared by the Office of Professional Conduct. Full text documents are available on-line at http://courts.arkansas.gov and by entering the attorney’s name in the attorney locator feature under the “Attorney” link on the home page. [Note: “Model” Rules refers to the Rules of Professional Conduct as they existed in Arkansas prior to May 1, 2005. “Arkansas” Rules refers to the Rules as they exist in Arkansas from May 1, 2005.] SURRENDER: DON C. COOKSEY, Bar No. 74199, of Texarkana, Texas, petitioned for, and on November 5, 2009, the Supreme Court accepted the surrender of his Arkansas law license, in Case No. 09-1122, in lieu of his facing disbarment proceedings for serious misconduct involving client funds. Mr. Cooksey is also licensed in Texas. MICHAEL KELLY WOOLDRIDGE, Bar No. 95051, of Little Rock, petitioned for, and on December 17, 2009, the Supreme Court accepted the surrender of his law license, in Case No. 09-1314, in lieu of probable disbarment proceedings after his adjudication of guilt and conviction in federal court in October 2009 in USDC (ED-AR) Case No. 08-CR-137 of a felony
offense involving his employer’s funds, and his admission that he had engaged in serious misconduct violating Arkansas Rules 8.4(b) and 8.4(c). SUSPENSION: BRUCE J. BENNETT, Bar No. 92140, of Bentonville, Arkansas, had his law license suspended for six (6) months for violation of Rules 1.1, 1.2(a), 1.3, 1.4(a)(1), 1.4(a) (3), 1.4(a)(4), 1.5(c) and 8.4(d) in No. CPC 2009-058. He was also reprimanded and fined in the amount of $500 for failing to file a response to the formal complaint based on information provided by Derroll Kirby. Mr. Kirby hired Mr. Bennett to represent him in pending civil litigation. Mr. Bennett agreed to do so a contingent fee basis but did not place the agreement in writing as Rule
1.5 requires. There were discovery issues to be addressed immediately, but Mr. Bennett filed incomplete responses for Complainant. Motions to Compel were filed, Mr. Bennett did not respond, and did not communicate with his client either. According to Mr. Kirby, communication was minimal. Mr. Bennett did not comply with the Orders to Compel, failed to respond to a Motion to Dismiss, and allowed an Order to be filed dismissing Mr. Kirby’s claim. Mr. Bennett told Mr. Kirby that he did not know the matter was dismissed. He advised he would look into it and take care of it, but he did not do so. BRUCE J. BENNETT, Bar No. 92140, of Bentonville, Arkansas, had his law license suspended for three (3) months for violations of Rules 1.3, 3.4(c) and 8.4(d). He was also
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Personal Solutions for Positive Change Arkansas JLAP 501-907-2529 firstname.lastname@example.org www.arjlap.org 32
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Vol. 44 No. 4/Fall 2009 The Arkansas Lawyer
Attorney Disciplinary Actions reprimanded and fined $500 for his failure to respond to the Formal Complaint in No. CPC 2009-072 by Committee Findings and Order filed October 2, 2009, on a referral from the Arkansas Supreme Court. Mr. Bennett obtained two extensions of time to file his client’s brief, but his third extension request was denied. The Arkansas Supreme Court directed Mr. Bennett to appear before it on a “show cause,” he entered a guilty plea, was found to be in contempt for failing to timely file his client’s brief, and the matter was referred to the Office of Professional Conduct. REPRIMAND: JAMES SCOTT ADAMS, Bar No. 81001, of Morrilton, was Reprimanded and fined $2,500 by Committee Findings & Order filed October 27, 2009, in No. CPC 2009-083, on a Complaint that resulted from information developed from various grievances filed against him, for violations of Rules 3.4(c), 5.5(a), and 8.4(d). Mr. Adams failed to timely pay his annual Arkansas law license renewal fee for 2006, 2007, 2008, and had not paid in 2009 when this Complaint was filed. As a result, in each of those years his Arkansas law license was automatically administratively suspended on March 2 until he paid his license fee. The information about practice within periods of license suspension came to OPC from various sources, including grievances from clients and court documents. In the matters involving five clients, Adams was contacted informally by OPC. Knowing that OPC was investigating him, he failed to timely pay his license fees for 2006, 2007 and 2008, and failed to pay in 2009 until August 5, 2009, after he was served with this Complaint. During these time periods of license suspension, Mr. Adams filed in Conway County Circuit Court alone a total of thirty (30) cases, and practiced law in three federal civil court cases in the Eastern District of Arkansas. ALVIN D. CLAY, Bar No. 96075, formerly of Little Rock, Arkansas, was Reprimanded and ordered to pay $1,063 restitution to MCH Physical Therapy Clinic in No. CPC 2008-085 on a complaint by Renee Crater for violations of Rules 1.15(a)(5) and 1.15(b). Ms. Crater, the principal of MCH Physical Therapy Clinic in Little
Rock, treated Sonya Whitaker for injuries received in an accident in May 2003. Alvin Clay was Ms. Whitaker’s attorney, and had agreed in writing to adequately protect the claim of MCH in any settlement or recovery. Ms. Whitaker had a $2,088 MCH account balance. After settlement, Ms. Whitaker paid MCH $1,000 cash and was to pay the balance at $25 per month, but she made only one $25 payment, leaving a $1,063 balance still owed on the account. On October 30, 2006, an MCH employee contacted Safeco Insurance and was informed the Sonya Whitaker matter had been closed since May 22, 2006, when two checks were sent to Ms. Whitaker and Mr. Clay. The first check sent to Ms. Whitaker and Mr. Clay, issued August 2, 2005, included MCH’s total charges of $2,088. Information at the hearing showed that on August 2, 2005, Safeco paid Ms. Whitaker’s medical bills, totaling $4,190.60. The check was made payable to Alvin Clay and Sonya Whitaker and was endorsed by both. The check was written solely for the medical bills and was written from Ms. Whitaker’s Personal Injury Protection (PIP) coverage of her insurance policy. On August 9, 2005, Safeco made its final settlement payment of $3,500, from her uninsured motorist coverage, to cover Whitaker’s general damages. The settlement check was made payable to Alvin Clay, attorney, and Sonya Whitaker, single person. Mr. Clay presented Panel A with a copy of a cashier’s check dated August 19, 2005, payable to his client, Sonya Whitaker, in the amount of $5,127.32. Mr. Clay also presented an undated and unsigned Settlement Sheet showing a gross settlement of $7,690.60, the total of the PIP payment check and the general damages check. Mr. Clay’s fee was to be one-third of the gross recovery, or $2,563.28, but he produced no fee contract. Mr. Clay agreed that Ms. Whitaker’s check included the total of the medical bills of $4,190.60. This meant she received $936.72 of her general damages settlement. There was no notice to MCH, as required by Rule 1.15(a)(5) from Mr. Clay that the settlement proceeds were received, nor was payment sent by Mr. Clay to MCH as he agreed to do. Mr. Clay admitted these facts, stating it was an oversight that he did not write the check to MCH. He stated that he cautioned his client to pay the medical bills.
BOBBY K. KEETER, Bar No. 77076, of Mena, Arkansas, was Reprimanded and fined $2,000 for violations of Rules 1.2(a), 1.3, 1.4(a)(1), 1.4(a)(3), 8.4(c) and 8.4(d), by a Findings and Order filed on December 29, 2009, in No. CPC 2009-097, on a complaint by Betty Collingsworth, who hired Mr. Keeter in September 2005 to represent her in pursuing claims against Walmart. She also hired him to recover funds from a concrete company that did unacceptable work at her home. Mr. Keeter filed the Walmart suit for Ms. Collingsworth, but then failed to respond to discovery requests. In May 2007, Mr. Keeter non-suited the lawsuit without prejudice, but without informing Ms. Collingsworth. He did not re-file the matter within the year after obtaining the Order of Dismissal. Mr. Keeter continued to be dishonest with Ms. Collingsworth about the Walmart matter as if it were still pending, even in conversations in April 2009. He failed to pursue any claim for her in the concrete work matter. ROBERT F. MOREHEAD, Bar No. 70050, of Pine Bluff, was Reprimanded, ordered to pay $375 restitution, and fined $450 by Committee Consent Findings & Order filed November 20, 2009, on a Complaint filed by Gary and Norene Gerler in No. CPC 2009-063, for violations of Rules 1.1, 1.3, 1.4(a)(3), 1.4(a)(4), 1.4(b), and 3.2. Mr. Morehead was employed in November 2007 by Norene Gerler of Pine Bluff to file for an “uncontested” divorce for her from Gary Gerler. In January 2008, she paid Mr. Morehead $515, being his $375 fee and the $140 case filing fee. He told her that the uncontested, no-property, and no-children divorce could be completed in about fortyfive days. He filed her Complaint on January 16, 2008, and took no further action. On December 29, 2008, the Court dismissed the case without prejudice for failure to obtain service on Mr. Gerler. A grievance was filed with the Office of Professional Conduct (OPC) on January 5, 2009. OPC wrote Mr. Morehead asking for a status report on the Gerler case. On February 3, 2009, Mr. Morehead responded to OPC, writing that the Gerler case “fell through the cracks,” that he personally paid the refiling fee and was prepared to refund her fees to Ms. Gerler. On February 12, 2009, Mr. Morehead filed a new divorce complaint for Ms. Gerler and
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
Attorney Disciplinary Actions sent necessary waiver documents to Mr. Gerler in Missouri. Ms. Gerler and Mr. Morehead went to court on March 24, 2009, for the “final” hearing and problems ensued there which are stated in the transcript. A final decree was approved and filed later that same day after a second hearing. On April 10, 2009, Mr. Morehead finally mailed Mr. Gerler a copy of the decree. Ms. Gerler did not receive her copy of the final decree until May 4, 2009, after she had earlier gone to the Morehead office asking for a copy after she was notified that Mr. Gerler had received his copy.
telephone calls. The rate or basis of the fee and the scope of the representation was never explained to Mr. Langston. Ms. Dickson closed her private practice and did not advise Mr. Langston. He learned only after going to her office and finding it closed. There was no notice, no refund of unearned fees, and no return of property or papers. By the time Ms. Dickson returned the settlement checks to Mr. Langston, they were stale and had to be reissued. Ms. Dickson was contacted by the Office of Professional Conduct on more than one occasion, the last in January 2009. In spite of e-mails saying she was sending response to the inquiry, she did not do so.
CAUTION: GARFIELD W. BLOODMAN, Bar No. 97053, formerly of Little Rock, Arkansas, now of the Virgin Islands, was Cautioned by Findings and Order filed October 21, 2009, in No. CPC 2009-049, for violations of Rules 3.2 and 8.4(d). The Arkansas Supreme Court dismissed an appeal taken by Mr. Bloodman for his clients, Edward and Linda W. Grays, filed as No. 08-1348. The dismissal was based on opposing counsel’s Motion to Dismiss, filed after no record was filed, to which motion Mr. Bloodman did not respond. He allowed the matter to be dismissed without any information from him. He later stated in response to the Complaint that his clients did not pay him to pursue the appeal, that he closed his law office in Arkansas, moved out of state, and did not receive mailings to him from OPC. NATALIE J. DICKSON, Bar No. 2003122, formerly of Jonesboro, Arkansas, was Cautioned in a Consent Findings and Order filed October 19, 2009, in No. CPC 2009-084, for violations of Rules 1.4(a)(1), 1.5(b), 1.16(d) and 8.1(b) on a complaint by Earvin Langston, who hired Ms. Dickson to help him to obtain additional funds from his insurance company for personal loss and debris removal after a fire at his home. Mr. Langston paid $3,500 for the representation. Mr. Langston believed and understood that Ms. Dickson would be filing a lawsuit on his behalf, but she did not do so. She advised him to accept the $3345.03 already tendered to him by the insurance company before he hired her. Mr. Langston also had great difficulty communicating with Ms. Dickson. She sent no letters to him and did not return 34
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FRANCES M. FINLEY, Bar No. 87059, of Little Rock, Arkansas, was Cautioned by Consent Findings and Order filed on December 11, 2009, in No. CPC 2009-120. Ms. Finley admitted violation of Rules 1.1, 1.2(a), 1.3, and 8.4(d). She was required to file a Motion for Rule on the Clerk in the civil matter of Sisler v. Bramlett, et al, 09781, after she failed to file the record on appeal within ninety (90) days of the filing of the Notice of Appeal. Ms. Finley explained she had medical emergency on the day the record was due to be filed, but also admitted she thought she had one more day to file the
record. The Court found no unavoidable casualty for the failure to file the record in a timely manner and denied her motion, ending the appeal. Ms. Finley’s client is now without opportunity to have appellate review of the lower court’s decision. PAUL HICKEY, Bar No. 75079, of Little Rock, Arkansas, was Cautioned by Consent Findings and Order in No. CPC 2009-095, filed November 20, 2009, for violations of Rules 1.3, 1.4(a)(4), 1.15(a)(1) and 1.15(b) (2), on a complaint by Richard Nance, who hired Mr. Hickey to represent him in seeking recovery of funds made in an investment loan to Bobby D. Jones and/or MI ARK Eco-Recovery Systems. Mr. Hickey was paid a retainer of $2,500 in May 2008, to be worked against by Mr. Hickey. In the following months, Mr. Hickey did not communicate with either Mr. Nance or his Michigan counsel. Finally in March 2009, Mr. Hickey refunded the entire retainer fee. The retainer fee was not placed in the trust account, even though it was not earned at the time of receipt. LAWRENCE W. HONEYCUTT, Bar No. 78074, of Hot Springs, Arkansas, was Cautioned in a Consent Findings and Order
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Accident Investigation and Analysis Contact Cases and Electrocutions Electrical Injuries Property and Equipment Damage Electrical Fires Safety Code Compliance Expert Witness Disputes Settled
Attorney Disciplinary Actions filed in No. CPC 2009-109 on November 20, 2009, for violations of Rules 1.1, 1.3, and 8.4(d). Mr. Honeycutt tendered a record on appeal on behalf of his clients in the matter of Worley v. Patin, No. 09-860, on July 28, 2009, day late. Mr. Honeycutt filed a 90394 one Lawyer Ad:Layout 1 12/28/09 Motion for Rule on the Clerk admitting
the record was filed late, due to a clerical calendering error through his own negligence. The Court denied the Motion, killing his clients’ appeal. GENE McKISSIC, 10:43 AM E.Page 1
Bar No. 76075, of Pine Bluff, was Cautioned and fined $500 by
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the Findings and Order filed November 19, 2009, in No. CPC 2009-043, for violations of Rules 1.3 and 8.4(d). In a criminal appeal for his client Mr. Stewart, Mr. McKissic tendered the record to the Clerk four days late. His Motion for Rule on the Clerk was granted, the appeal went forward, and the Court referred the matter to the Committee on Professional Conduct. DANA A. REECE, Bar No. 87142, of Little Rock, was Cautioned, fined $500, and ordered to pay $698.30 restitution to cover the transcript cost and filing fee in a Consent Findings and Order filed December 11, 2009, in No. CPC 2009082, on information developed from the Supreme Court file in a civil appeal, No. 09-328, for violations of Rules 1.3 and 8.4(d). After she obtained an extension of time to file the record, the Clerk notified Ms. Reece that the extension order did not comply with Rule 5 of the Rules of Appellate Procedure. Ms. Reece tendered a Motion for Rule on the Clerk, but it was not accepted for filing as Ms. Reece had not paid her 2009 annual law license fee by the March 1 deadline. Upon payment of her license fee on March 31, 2009, the motion was filed. On April 23, 2009, the Arkansas Supreme Court denied the Motion for Rule on the Clerk, ending her client’s appeal. R. SCOTT WADDELL, Bar No. 91239, of Jonesboro, was Cautioned in a Consent Findings and Order filed December 11, 2009, in No. CPC 2009-086, for violations of Rules 1.3, 1.4(a)(1), 1.4(a)(3), 1.16(d), and 8.4(d). Kent Longley retained Mr. Waddell to represent him in a lawsuit to be filed against a wrecker service. Mr. Waddell filed the lawsuit but then failed to take action. He failed to respond to pleadings filed by the opposing party and also failed to appear for a hearing in the matter, with no notice to his client or the court. Mr. Waddell failed to communicate with Mr. Longley and did not respond to requests for information. After Mr. Longley secured other counsel, Mr. Waddell agreed to settle the issue by installment payments to Longley, but Waddell delayed in having that finalized. He finally agreed to a consent judgment that would not be filed if he makes his payments. n
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ment is inappropriate when the non-moving party can muster “the smallest trace”102 of evidence in response, the unsurprising result will be “a reluctance to grant [motions for summary judgment] in all but the most obvious cases.”103 Second, an Arkansas plaintiff need not “establish [his or her] case by a preponderance of the evidence or by any other standard of proof” and is required to show only that “there [is] a genuine issue for trial.”104 The Supreme Court has squarely rejected the argument that the standard for evaluating motions for directed verdict applies in the summary judgment context.105 8. Ark. R. Civ. P. 51: Jury Instructions and Plain Error On its adoption, Ark. R. Civ. P. 51 diverged from its federal counterpart with respect to the point at which the court instructs the jury and the timing of a party’s objection to an instruction.106 Differences on these issues remain today, and the rules also vary slightly as to the submission of proposed instructions and the requirements for objections. But most significantly, the federal rule codifies the “plain error” doctrine that the Arkansas Supreme Court has rejected. Under both rules, any party may submit proposed instructions at the close of the evidence or at an earlier time set by the court. The federal rule, however, also provides for submission after the close of the evidence on issues that could not reasonably have been anticipated at the deadline the court had set for requests and on other issues at the court’s discretion.107 And while an Arkansas circuit judge must instruct the jury before closing arguments, a federal district judge may give the instructions “at any time before the jury is discharged.”108 The Arkansas rule requires the court to inform counsel of the instructions it intends to give the jury, as well as its decision regarding any instructions requested by the parties, and to afford them an opportunity to make objections out of the hearing of the jury. Counsel must object “before or at the time the instruction is given” and state “distinctly” the grounds for the objection to preserve a challenge to the instruction for appellate review.109 If the trial court has failed to give an instruction on an issue, Rule 51 requires both an objection and submission of a proposed instruction to preserve the error. The rule is silent as to when the objection and proffer must be placed in the record. Although 36
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the “better and less vulnerable practice” is to make the record before the jury is instructed, waiting until a later point is not necessarily fatal.110 Although the procedure is essentially the same in federal court, the federal rule is written more clearly and takes into account complex cases in which final arguments on particular issues may occur before the close of the entire trial.111 In terms of clarity, the rule provides that the court must afford the parties an opportunity to object “on the record” and out of the jury’s hearing “before the instructions and arguments are delivered.”112 Further, an objection is timely if made at this opportunity or, if a party had not at that point been informed of an instruction or the court’s action on a proposed instruction, made promptly after the party “learn[s] that the instruction or request will be, or has been, given or refused.”113 Another provision makes clear that when a proper request for an instruction has been made, an objection is unnecessary if the court “rejected the request in a definitive ruling on the record.”114 Most federal courts of appeal, including the Eighth Circuit, have for many years been willing to reverse for “plain error” in a jury instruction even though the appellant had made no objection to it.115 In 2003, Fed. R. Civ. P. 51 was amended to codify this practice: “A court may consider a plain error in the instructions that has not been preserved . . . if the error affects substantial rights.”116 The Arkansas rule contains no such provision. Its absence comes as no surprise, for the Arkansas Supreme Court has “said many times” that it “will not consider arguments on those instructions to which there was no objection, or where necessary, an instruction was not offered.”117 This position is consistent with the Court’s general view of the plain-error doctrine, which it has “steadfastly refused” to adopt.118
9. Ark. S. Ct. R. 4-2: The Abstract and Addendum Arkansas appellate practice has one foot in the nineteenth century. The appellant must prepare, as part of its opening brief, an abstract of the important parts of all the transcripts in the record. The abstract is “an impartial condensation, without comment or emphasis, of the transcript.”119 Only the “material parts” of transcripts are to be abstracted, i.e. portions containing information “essential for the appellate court to confirm its jurisdiction, to understand the case, and to decide the issues on appeal.”120 The appellant’s obligation to abstract extends to transcripts of trials, hearings, and depositions, even if the transcript is an exhibit to a motion.121 Abstracting is a relic: the practice originated when transcripts were done by hand and appellate briefs were typeset and printed.122 Distilling a handwritten transcript to its essentials before printing it with an appellate brief made good sense. Notwithstanding the invention of the photocopier, desktop publishing, and a host of electronic media for storing documents, however, abstracting remains the rule in Arkansas. There are no abstracts in federal appellate practice. Instead, the appellant’s brief must include “a statement of the facts relevant to the issues submitted for review with appropriate references to the record.”123 Just as an appellee in state court may supplement an appellant’s deficient abstract, an appellee in federal court may include a statement of the facts in its brief if the appellee deems the appellant’s statement deficient.124 Both Arkansas and the Eighth Circuit require the appellant to gather, index, and file with its opening brief copies of all the court papers necessary to understand and resolve the issues on appeal. These papers include pleadings, orders, motions, exhibits, and the
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Lawyer Disciplinary Actions notice of appeal. In state court, this reference document is called the addendum;125 in federal court, it is called the appendix.126 The state-court addendum may be bound at the back of the brief or separately.127 The federal appendix, however, must be bound separately from the brief.128 The appendix also covers different ground than the state addendum: it may include transcript excerpts, which must be abstracted in state appellate practice.129 The parties may agree on the appendix’s contents and file a “joint appendix,” which the rule encourages, or they may file separate appendices.130 If a party leaves some important document out of any appendix, the parties may agree to file a joint supplemental appendix or any party may move for permission to file a supplemental separate appendix.131 The Arkansas practice is different. If a party leaves something out of its addendum, it must move for permission to file a substituted addendum that cures the omission.132 Note another point of difference, one that may cause confusion. The Eighth Circuit’s rules also require an “addendum” at the end of the main briefs.133 But this addendum is not the comprehensive compilation of record documents that goes by the same name in Arkansas appellate practice. The appellant’s federal addendum is short and sweet:
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the order being appealed from and fifteen pages of any other critical record materials except transcript pages.134 The appellee in the Eighth Circuit may include an addendum in its brief, as in the case in Arkansas practice.135 10. Ark. S. Ct. R. 5-2: Precedential Value of Opinions In the summer of 2009, Arkansas abandoned unpublished opinions. Under the rewritten version of Arkansas Supreme Court and Court of Appeals Rule 5-2, every appellate decision handed down on or after July 1, 2009, “is precedent and may be relied upon and cited by any party in any proceeding.”136 This revolutionary change occurred because the Supreme Court simultaneously adopted the electronic version of all Arkansas appellate court decisions issued after February 14, 2009, as the official report of those decisions.137 The official electronic publication and reporting of all decisions “eliminate[d] the basis for” distinguishing between published and unpublished decisions.138 Though prompted by the advent of the new reports, the abolition of unpublished decisions was the fruit of the late Judge Richard S. Arnold’s decision for an Eighth Circuit panel in
Anastasoff v. United States almost a decade earlier.139 Precedent disciplines judicial power, promotes accountability, and strengthens the rule of law. The Arkansas Supreme Court’s salutary step put our state in the vanguard of reform on this important issue. In the federal appellate courts, by contrast, unpublished opinions remain alive and frequent. Federal Rule of Appellate Procedure 32.1, entitled “Citing Judicial Dispositions,” took a half step forward on this issue.140 This new rule governs the citation of unpublished opinions issued on or after January 1, 2007. It is agnostic on the deep issue–precedential value. Rule 32.1, however, forbids a federal court from “prohibit[ing] or restrict[ing] the citation of federal judicial opinions” that have been designated as unpublished, nonprecedential, or the like.141 In response, the Eighth Circuit amended its companion local Rule 32.1A. The amended local Rule maintains that unpublished opinions are not precedent, but allows their citation in accordance with Rule 32.1.142 “Parties may also cite an unpublished opinion of this court if the opinion has persuasive value on a material issue and no published opinion of this or another court would serve as well.”143 The new federal Rule as implemented in this and similar local rules of the
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Courts of Appeal eliminates the possibility of a lawyer being sanctioned for citing an unpublished opinion.144 It also allows discussion of, and argument from, unpublished opinions on point. These are no small gains. But the foundational issue decided by the now-vacated Anastasoff panel’s opinion–the constitutionality of court rules that accord no precedential value to unpublished federal opinions–remains open. * * * Professor Emeritus Robert Laurence of the University of Arkansas School of Law exhorted students to read the rules, saying that a lawyer could never know too much procedure. He was right. This “top ten” list of significant differences between state and federal rules is idiosyncratic but underscores an important point: Arkansas lawyers must master both sets of rules. In the face of that daunting task, there is no better advice than Professor Laurence’s exhortation. Read the rules, and do so often. Endnotes 1. The Supreme Court promulgated the rules by per curiam order of December 18, 1978, to become effective July 1, 1979. In re Rules of Civil Procedure, 264 Ark. 964 (1978). 2. The General Assembly adopted the “Code of Practice in Civil Cases” in 1868. Previously, civil practice had also been governed by statutes, the earliest of which were enacted in 1837 following statehood. The Arkansas Civil Code, based on the Kentucky version of New York’s influential “Field Code,” did not appear in the 1868 Acts of the General Assembly but was printed separately in 1869. 3. 33 Ark. L. Rev. 1 (1979). A note to younger readers: the article’s title is a play on The Spy Who Came in from the Cold, a 1963 novel by John le Carré. 4. Fed. R. Civ. P. 8(a)(2). 5. Harvey v. Eastman Kodak Co., 271 Ark. 783, 786, 610 S.W.2d 582, 584 (1981). As the Court pointed out in Harvey, this requirement is underscored by Ark. R. Civ. P. 12(b)(6), which allows a motion to dismiss for “failure to state facts upon which relief can be granted.” 6. Country Corner Food & Drug, Inc. v. First State Bank & Trust Co., 332 Ark. 645, 652, 966 S.W.2d 894, 897 (1998); Perrodin v. Rooker, 322 Ark. 117, 120, 908 S.W.2d 85, 87 (1995); Harvey v. Eastman Kodak Co., 271 Ark. 783, 78586, 610 S.W.2d 582, 584 (1981). 7. Treat v. Kreutzer, 290 Ark. 532, 720 S.W.2d 716 (1986). 8. In a malicious prosecution case, for example, the Supreme Court held that the complaint was insufficient as to the element of lack of probable cause. The plaintiff alleged that defendant’s statement to the prosecutor that “he had been
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assaulted and battered . . . [was] false,” that defendant “failed to provide fair and accurate information to the prosecutor resulting in the charges being filed,” and that plaintiff had been “acquitted of the charges.” Perrodin v. Rooker, 322 Ark. 117, 119-20, 908 S.W.2d 85, 87 (1995). By way of comparison, the Court of Appeals held in another malicious prosecution case that plaintiff’s allegation that defendant caused her “to be arrested on false criminal charges knowing the
charges were false” was sufficient on the probable cause issue. Burkett v. Burkett, 95 Ark. App. 314, 320-21, 236 S.W.3d 563, 569 (2006). 9. Also, the required facts must be “ultimate” or “essential” facts, not “mere evidence.” This line is also an elusive one. A leading treatise sums up the problem under code practice this way: [A]s was amply demonstrated by years of frustrating experience, it was difficult, if not impossible, to draw meaningful and
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consistent distinctions between or among “evidence,” “facts,” and “conclusions.” These concepts tended to merge to form a continuum and no readily apparent dividing markers developed to separate them. 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1218 (3d ed. 2004). 10. See, e.g., David M. Roberts, Fact Pleading, Notice Pleading, and Standing, 65 Cornell L. Rev. 390, 396 (1980) (noting arguments of Roscoe Pound and other scholars that any benefit of the system “came at the expense of many otherwise valid claims that were dismissed for inadequate pleadings”). 11. Dissenting in Arkansas Dep’t Envt’l Quality v. Brighton Corp., 352 Ark. 396, 102 S.W.3d 458 (2003), Justice Brown, joined by Chief Justice Hannah and Justice Imber, argued that “[w]hat the majority has required in the way of fact-pleading is simply too restrictive and severely hampers the ability of [ADEQ] to enforce the [Remedial Action Trust Fund] Act.” Id. at 438, 102 S.W.3d at 473. 12. Ashcroft v. Iqbal, 556 U.S. __, 129 S. Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). 13. In Twombly, the Court expressly overruled Conley v. Gibson, 355 U.S. 41 (1957), the case that coined the term “notice pleading” and adopted a liberal pleading standard: a complaint should not be dismissed unless it is “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 45-46. 14. Iqbal, 129 S. Ct. at 1949. “While legal conclusions can provide the framework of a complaint,” the Court added, “they must be supported by factual allegations.” Id. at 1950. 15. Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570). 16. Id. 17. Id. at 1950. 18. E.g., Scott Dodson, Pleading Standards After Bell Atlantic Corp. v. Twombly, 93 Va. L. Rev. In Brief 135, 138 (2007). 19. E.g., A. Benjamin Spencer, Plausibility Pleading, 49 B.C. L. Rev. 431, 433 (2008) (the Court’s new pleading standards “will frustrate the efforts of plaintiffs with valid claims to get into court”); Michael C. Dorf, Should Congress Change the Standard for Dismissing a Federal Lawsuit?, FindLaw’s Writ (July 29, 2009), http:// writ.news.findlaw.com/dorf/20090729.html (“Twombly and Iqbal make it harder for plaintiffs who might have meritorious cases, but need access to defense witnesses and files, to have their cases heard”). 20. See Addition to Reporter’s Notes to Ark. R. Civ. P. 11 (1986 amendment). 21. See 5A Charles Alan Wright & Arthur A. Miller, Federal Practice & Procedure § 1331 (3d 2004) (also noting that the rule was amended again in 2007, “when entirely formal changes were made to reflect the general restyling of the rules and
a provision was included mandating that all papers now must include the signer’s e-mail address”). 22. See Addition to Reporter’s Notes to Ark. R. Civ. P. 11 (1997 amendment). 23. See Addition to Reporter’s Notes to Ark. R. Civ. P. 5 & 11 (2008 amendments). 24. Crockett & Brown, P.A. v. Wilson, 321 Ark. 150, 158, 901 S.W.2d 826, 830 (1995). 25. Id. Sanctions upheld in Arkansas range from an admonition about filing frivolous pleadings, Schueller v. Schueller, 86 Ark. App. 347, 185 S.W.3d 107 (2004), to an assessment of the costs and attorney’s fees incurred by the adverse party in defending a claim clearly barred by res judicata. Elder v. Mark Ford & Associates, 103 Ark. App. 302, 288 S.W.3d 702 (2008). Because the purpose of Rule 11 is to deter litigation abuse rather than to make the opposing party whole, a sanction of attorney’s fees and costs may be less than the full amount sought by that party. Sanford v. Harris, 367 Ark. 589, 242 S.W.3d 277 (2006). 26. A federal judge has broad discretion in determining what sanction, if any, should be imposed for a violation, subject to the restriction in Fed. R. Civ. P. 11(c)(4) that a sanction “must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated.” 27. Crockett & Brown, 321 Ark. at 159, 901 S.W.2d at 830-31. 28. The Advisory Committee Note accompanying the 1993 amendment lists several factors a judge should consider in deciding whether to impose a sanction or what sanction to impose:
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Whether the improper conduct was willful, or negligent; whether it was part of a pattern of activity, or an isolated event; whether it infected the entire pleading, or only one particular count or defense; whether the person has engaged in similar conduct in other litigation; whether it was intended to injure; what effect it had on the litigation process in time or expense; whether the responsible person is trained in the law; what amount, given the financial resources of the responsible person, is needed to deter that person from repetition in the same case; what amount is needed to deter similar activity by other litigants[.]
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Advisory Committee Note to Fed. R. Civ. P. 11 (1993 amendment), 146 F.R.D. 577, 587 (1993). 29. Chlanda v. Killebrew, 329 Ark. 39, 41, 945 S.W.2d 940, 941 (1997) (not reaching the issue). 30. 5A Charles Alan Wright & Arthur A. Miller, Federal Practice & Procedure § 1331 (3d 2004). 31. Fed. R. Civ. P. 15(a)(1) (as amended effective December 1, 2009). Previously, Rule 15(a) provided that a party could amend once as a matter of course before being served with a responsive pleading or, if a responsive pleading was not allowed and the action was not yet on the trial calendar, within twenty days after serving the pleading. 32. Fed. R. Civ. P. 15(a)(2). 33. The defenses “mentioned in Rule 12(h)(1)” are lack of jurisdiction over the person, improper venue, insufficiency of process, insufficiency of service of process, and pendency of another action between the same parties. If not asserted in a preanswer motion, these defenses are waived if omitted from the original responsive pleading and, by virtue of the exception in the first clause of Rule 15(a), cannot be resurrected by amendment. See Southern Transit Co., Inc. v. Collums, 333 Ark. 170, 966 S.W.2d 906 (1998). 34. Stoltz v. Friday, 325 Ark. 399, 409, 926 S.W.2d 438, 444 (1996). 35. Key v. Coryell, 86 Ark. App. 334, 341, 185 S.W.3d 98, 103 (2004).
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36. Apart from stylistic variations, the only difference is the absence of an Arkansas equivalent to Fed. R. Civ. P. 15(c)(1)(A), under which an amended pleading relates back to the date of the original pleading when “the law that provides the applicable statute of limitations allows relation back.” This provision, added in 1991, typically comes into play in diversity cases, where federal courts are required by the Erie doctrine to apply state limitations law. Walker v. Armco Steel Corp., 446 U.S. 740 (1980). But “[w]hatever may be the controlling body of limitations law, if that law affords a more forgiving principle of relation back than the one provided in this rule, it should be available to save the claim.” Advisory Committee Note on Fed. R. Civ. P. 15 (1991 amendment), 134 F.R.D. 635, 637 (1991). 37. Ark. R. Civ. P. 15(c)(2); Fed. R. Civ. P. 15(c) (1)(C). 38. Crowder v. Gordons Transports, Inc., 387 F.2d 413, 418 (8th Cir. 1967). See also Scheufler v. General Host Corp., 126 F.3d 1261 (10th Cir. 1997); Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11 (2d Cir. 1997); 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1555 (2d ed. 1990). 39. Advisory Committee Note to Fed. R. Civ. P. 15 (1966 amendment), quoted in Crowder v. Gordons Transports, Inc., 387 F.2d 413, 418 (8th Cir. 1967). 40. St. Paul Mercury Ins. Co. v. Circuit Court, 348
Ark. 197, 73 S.W.3d 584 (2002); Davenport v. Lee, 348 Ark. 148, 72 S.W.3d 85 (2002). The opinions in these cases were handed down on the same day. 41. St. Paul Mercury Ins. Co. v. Circuit Court, 348 Ark. 197, 205, 73 S.W.3d 584, 588-89 (2002); Davenport v. Lee, 348 Ark. 148, 164, 72 S.W.3d 85, 94 (2002). The Court made the point again three years later in another wrongful death case: “Where the original complaint is a nullity, Rules 15 and 17 are inapplicable because the original complaint never existed; thus, there is no pleading to amend and nothing to relate back.” Brewer v. Poole, 362 Ark. 1, 15, 207 S.W.3d 458, 466 (2005). 42. St. Paul Mercury Ins. Co. v. Circuit Court, 348 Ark. 197, 207, 73 S.W.3d 584, 590 (2002) (Imber, J., concurring). See also Davenport v. Lee, 348 Ark. 148, 166, 72 S.W.3d 85, 95 (2002) (Imber, J., concurring) (referring to her opinion in St. Paul). She also raised the issue in Brewer v. Poole, 362 Ark. 1, 16, 207 S.W.3d 458, 467 (2005) (Imber, J., concurring). 43. 375 Ark. 200, 289 S.W.3d 402 (2008). 44. Id. at 206, 289 S.W.3d at 406. 45. For the proposition that Arkansas law concerning substitution of plaintiffs “has been well settled for decades,” id. at 205, 289 S.W.3d at 406, the Court cited the following cases: ArkHoma Foods, Inc. v. Ward, 251 Ark. 662, 473 S.W.2d 910 (1971); Floyd Plant Food Co. v. Moore, 197 Ark. 259, 122 S.W.2d 463 (1938);
and American Railway Express Co. v. Reeves, 173 Ark. 273, 292 S.W. 109 (1927). 46. 375 Ark. 150, 289 S.W.3d 393 (2008). 47. Id. at 157-58, 289 S.W.3d at 398. 48. Id. at 158-59, 289 S.W.3d at 399 (citing Crowder v. Gordons Transports, Inc., 387 F.2d 413 (8th Cir. 1967); Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11 (2d Cir. 1997)). The Court also quoted from the Advisory Committee Note accompanying Fed. R. Civ. P. 17(a), having observed that “[b]ecause the Arkansas Rule of Civil Procedure 17(a) mirrors Federal Rule 17(a), we turn to the Federal Advisory Committee’s notes for guidance.” 375 Ark. at 158, 289 S.W.3d at 398-99. 49. Id. at 159, 289 S.W.3d at 399. 50. Id. (citing Rhuland v. Fahr, 356 Ark. 382, 155 S.W.3d 2 (2004)). 51. Rhuland v. Fahr, 356 Ark. at 392, 155 S.W.2d at 9. 52. See Alistair B. Dawson & Geoff A. Gannaway, In Memoriam: Texas Class Actions, 72 Tex. Bar J. 366 (May 2009). 53. As amended in 2006, the Arkansas version of the “adequate representation” requirement refers to counsel in addition to the representative parties. The addition of counsel conforms the rule to case law. E.g., Mega Life & Health Insurance Co. v. Jacola, 330 Ark. 261, 275, 975 S.W.2d 898, 904 (1997). The federal rule addresses adequacy of counsel in subdivision (g), which requires courts
to designate counsel for the class unless a statute provides otherwise. Class counsel “must fairly and adequately represent the interests of the class.” Fed. R. Civ. P. 23(g)(4). 54. See 7AA Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1777 (3d ed. 2005). 55. F. Ehren Hartz, Comment, Certify Now, Worry Later: Arkansas’s Flawed Approach to Class Certification, 61 Ark. L. Rev. 707 (2009). 56. General Motors Corp. v. Bryant, 374 Ark. 38, 47, 285 S.W.3d 634, 641 (2008), cert. denied, 129 S. Ct. 901 (2009). 57. Philip Morris Inc. v. Angeletti, 358 Md. 689, 721, 752 A.2d 200, 217 (2000). See also Coopers & Lybrand v. Livesay, 437 U.S. 463, 476 (1978) (certification of large class “may so increase the defendant’s potential damages liability and litigation costs that he may find it economically prudent to settle and abandon a meritorious defense”); Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 164 (3d Cir. 2001) (class certification can place “hydraulic pressure on defendants to settle, avoiding the risk, however small, of potentially ruinous liability”); Castano v. American Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996) (class certification “creates insurmountable pressure on defendants to settle”); In re RhonePoulenc Rorer Inc., 51 F.3d 1293, 1299 (7th Cir. 1995) (in many cases, certification gives defendants a Hobson’s choice: “to stake their
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companies on the outcome of a single jury trial, or be forced by fear of the risk of bankruptcy to settle even if they have no legal liability”). 58. Robert G. Bone & David S. Evans, Class Certification and the Substantive Merits, 51 Duke L.J. 1251, 1285 & n.129 (2002) (citing sources). See also Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 618 (1997) (observing that the use of the settlement-only class has become a “stock device”).
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59. General. Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982). 60. See General Motors Corp. v. Bryant, 374 Ark. 38, 285 S.W.3d 634 (2008), cert. denied, 129 S. Ct. 901 (2009); Beverly Enters.-Arkansas, Inc. v. Thomas, 370 Ark. 310, 259 S.W.3d 445 (2007); Tay-Tay, Inc. v. Young, 349 Ark. 675, 80 S.W.3d 365 (2002); The Money Place, LLC v. Barnes, 349 Ark. 518, 78 S.W.3d 730 (2002); Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997). For criticism of the Arkansas approach, see Hartz, supra note 55. 61. Lenders Title Co. v. Chandler, 353 Ark. 339, 349, 107 S.W.3d 157, 162 (2003). 62. General Motors Corp. v. Bryant, 374 Ark. 38, 44-47, 285 S.W.3d 634, 639-41 (2008), cert. denied, 129 S. Ct. 901 (2009). 63. See Castano v. American Tobacco Co., 84 F.3d 734, 742 n.15 (5th Cir. 1996) (“We find it difficult to fathom how common issues could predominate in this case when variations in state law are thoroughly considered”); Georgine v. Amchem Prods., 83 F.3d 610, 618 (3d Cir. 1996), aff’d sub nom., Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) (“the proliferation of disparate factual and legal issues is compounded exponentially” when law of multiple jurisdictions apply); Walsh v. Ford Motor Co., 807 F.2d 1000, 1017 (D.C.Cir. 1986) (Ruth Bader Ginsburg, J.), cert. denied, 482 U.S. 915 (1987) (plaintiffs in nationwide class action “must creditably demonstrate, through an ‘extensive analysis’ of
state law variances, “that class certification does not present insuperable obstacles’”). 64. E.g., Stirman v. Exxon Corp., 280 F.3d 554 (5th Cir. 2002); Spence v. Glock, Ges.m.b.H., 227 F.3d 308 (5th Cir. 2000); Hammett v. American Bankers Ins. Co., 203 F.R.D. 690 (S.D. Fla. 2001); Compaq Computer Corp. v. Lapray, 135 S.W.3d 657 (Tex. 2004); Fink v. Ricoh Corp., 365 N.J. Super. 520, 839 A.2d 942 (2003); Washington Mut. Bank, F.A. v. Superior Court, 24 Cal. 4th 906, 15 P.3d 1071, 103 Cal. Rptr. 2d 320 (2001); KMC Leasing, Inc. v. RockwellStandard Corp., 9 P.3d 683 (Okla. 2000). 65. E.g., In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 288 F.3d 1012 (7th Cir. 2002), cert. denied, 537 U.S. 1105 (2003); Andrews v. American Tel. & Tel. Co., 95 F.3d 1014 (11th Cir. 1996); In re Prempro Prods. Liab. Litig., 230 F.R.D. 555 (E.D. Ark. 2005); In re Paxil Litigation, 212 F.R.D. 539 (C.D. Cal. 2003); Beegal v. Park West Gallery, 394 N.J. Super. 98, 925 A.2d 684 (2007); Ysbrand v. DaimlerChrysler Corp., 81 P.3d 618 (Okla. 2003). Unlike its federal counterpart, Ark. R. Civ. P. 23(b) is silent on manageability. Case law makes clear, however, that the trial court considers this issue in determining whether a class action is “superior” to other available methods for fairly and efficiently trying the case. E.g., Williamson v. Sanofi Winthrop Pharm., Inc., 347 Ark. 89, 101, 60 S.W.3d 428, 436 (2001); BNL Equity Corp. v. Pearson, 340 Ark. 351, 362, 10 S.W.3d 838, 845 (2000).
66. General Motors Corp. v. Bryant, 374 Ark. at 47, 285 S.W.3d at 641 (“were we to require the circuit court to conclude at this time precisely which law should be applied, such a decision could potentially stray into the merits of the action itself, which we have clearly stated shall not occur during the certification process”). Earlier in the opinion, the Court set out this rule in language that appears in a number of opinions: “neither the trial court nor the appellate court may delve into the merits of the underlying claim in determining whether the elements of Rule 23 have been satisfied.” Id. at 42, 285 S.W.3d at 638 (quoting Carquest of Hot Springs, Inc. v. General Parts, Inc., 367 Ark. 218, 223, 238 S.W.3d 916, 919-20 (2006)). 67. Farm Bureau Mutual Ins. Co. v. Farm Bureau Policy Holders, 323 Ark. 706, 709, 918 S.W.2d 129, 130 (1996) (internal quotation omitted). 68. 417 U.S. 156, 178 (1974). 69. E.g., Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 677-78 (7th Cir.), cert. denied, 534 U.S. 951 (2001). 70. E.g., Blades v. Monsanto Co., 400 F.3d 563, 566 (8th Cir. 2005) (to determine whether common questions predominate, “a court must conduct a limited preliminary inquiry, looking behind the pleadings”); Love v. Turlington, 733 F.2d 1562, 1564 (11th Cir. 1984) (Eisen “should not be talismanically invoked” to limit a trial court in deciding “whether a plaintiff has met her burden of establishing each of the Rule 23 class action
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requirements”). The court’s findings with respect to the Rule 23 requirement are made only for purposes of class certification and are not binding on the trier of fact. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004). 71. Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, 7AA Federal Practice & Procedure § 1785 (3d ed. 2005). See also Joseph M. McLaughlin, 1 McLaughlin on Class Actions § 3:11 (5th ed. 2008) (“Eisen in no way prohibits consideration of the factual and legal theories of plaintiffs’ complaint in order to determine whether in fact the requirements of Rule 23 are met”); Geoffrey P. Miller, Review of the Merits in Class Action Certification, 33 Hofstra L. Rev. 51, 84-86 (2004) (summarizing reasons why courts should make a reasonable inquiry into the merits to determine whether class certification requirements have been met); Hartz, supra note 55, 61 Ark. L. Rev. at 726-28 (discussing federal cases and arguing that Arkansas Supreme Court has misinterpreted Eisen). 72. The circuit court’s certification order discussed a trial plan proposed by the plaintiff, who sought to represent a nationwide class of about four million owners of General Motors sport utility vehicles with allegedly defective parking brakes. The plaintiff’s plan called for a bifurcated trial in which core liability issues – breach of warranty, fraudulent concealment, and unjust enrichment – would be tried in “phase I” and individualized issues such as reliance and damages in “phase II.” After first pointing out that the plan was “not necessary at this stage,” the circuit court said it was “appropriate” and that it “adequately account[ed] for potential application of multiple states’ laws.” Bryant v. General Motors Corp., Findings of Fact and Conclusions of Law Regarding Class Certification, and Order Certifying Class ¶¶ 34-38, 2007 WL 5312701 (Miller County Cir. Ct., Jan. 11, 2007) (No. CV-2005-051-2). 73. E.g., Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1278-79 (11th Cir. 2009) (district court must consider how a case will be tried as part of the superiority assessment, but here the court did not appear to have given the matter “any meaningful consideration”); Robinson v. Texas Automobile Dealers Ass’n, 387 F.3d 416, 425 (5th Cir. 2004) (district court “must consider how a trial on the alleged causes of action would be tried”); Southwestern Refining Co., Inc. v. Bernal, 22 S.W.3d 425, 435 (Tex. 2000) (“it is improper to certify a class without knowing how the claims can and will likely be tried”). A trial plan is unnecessary when a case is not complex. E.g., Feder v. Electronic Data Systems Corp., 429 F.3d 125. 139-40 (5th Cir. 2005); Andrews v. Trans Union Corp., 917 So. 2d 463, 469 (La. App. 2005). 74. General Motors Corp. v. Bryant, 374 Ark. at 51, 285 S.W.3d at 644 (citing Tay-Tay, Inc. v. Young, 349 Ark. 675, 80 S.W.3d 365 (2002)). 75. BNL Equity Corp. v. Pearson, 340 Ark. 351, 363, 10 S.W.3d 838, 845 (2000). Citing BNL Equity, the circuit court in Bryant said that trial
judges are not required “to justify certification decisions by creating detailed ‘management plans’ addressing how a case may be managed and tried.” Bryant v. General Motors Corp., Findings of Fact and Conclusions of Law Regarding Class Certification, and Order Certifying Class ¶ 28, 2007 WL 5312701 (Miller County Cir. Ct., Jan. 11, 2007) (No. CV-2005-051-2). 76. Fed. R. Civ. P. 26(b)(2)(C). 77. Fed. R. Civ. P. 30(a)(2)(A)(i) & (ii) (absent a stipulation, a party must obtain leave of court to take more than 10 depositions or to depose a person more than once). 78. Fed. R. Civ. P. 33(a)(1) (no more than 25 written interrogatories, “including all discrete subparts,” without a stipulation or leave of court). 79. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). 80. As one court has put it, “the fact must be germane to a claim or defense alleged in the pleading for information concerning it to be a proper subject of discovery.” Klein v. AIG Trading Group Inc., 228 F.R.D. 418, 424 (D. Conn. 2005). But while “the scope of discovery has narrowed somewhat under the revised rule,” the change is “not dramatic, and broad discovery remains the norm.” Sanyo Laser Products Inc. v. Arista Records, Inc., 214 F.R.D. 496, 500 (S.D. Ind. 2003). 81. 2009 Ark. 448 (per curiam). 82. E.g., Fed. R. Civ. P. 26(a)(1)(A)(ii) (subjecting electronically stored information to the required initial-disclosure provisions). 83. Ark. R. Civ. P. 26.1(b). 84. Compare Ark. R. Civ. P. 26.1(g), with Fed. R. Civ. P. 34(a)(1)(A) & (b)(1)(C). 85. Ark. R. Civ. P. 26.1(c) & (d). 86. The right of voluntary dismissal extends to parties asserting counterclaims, cross-claims, or third-party claims. Ark. R. Civ. P. 41(c). Even a compulsory counterclaim may be voluntarily dismissed as a matter of right. Linn v. NationsBank, 341 Ark. 57, 14 S.W.3d 500 (2000). 87. Fed. R. Civ. P. 41(a)(1) & (2). See 9 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure §§ 2363-2368 (3d ed. 1995). 88. See Wright v. Eddinger, 320 Ark. 151, 894 S.W.2d 937 (1995) (holding that case had been finally submitted at close of hearing on defense motions for summary judgment). 89. See Hall v. Chess & Wymond Co., 131 Ark. 36, 198 S.W. 523, 524 (1917) (there is no final submission until the jury is “authorized, without further interposition or control of the court, to [decide] the issue of fact submitted to them”). 90. A nonsuited claim may be refiled within one year of the court’s order of dismissal or within the applicable statute of limitations, whichever is longer. Blaylock v. Shearson Lehman Bros., Inc., 330 Ark. 620, 954 S.W.2d 939 (1997); Ark. Code Ann. § 16-56-126. Although a party may take a nonsuit as a matter of right, it is effective only upon the court’s entry of an order of
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Available as a Book or a CD Order online www.arkbar.com or call 501-375-4606 dismissal. Ark. R. Civ. P. 41(a). 91. By contrast, the federal rule “limits the right of dismissal at the behest of the plaintiff to the early stages of the proceedings, thus curbing the abuses of this right that commonly had occurred under state procedures.” 9 Charles Alan Wright & Arthur R. Miller, Federal
Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
MEDICARE SET-ASIDE SERVICES In many liability and workers’ compensation claims, Medicare Set-Aside (MSA) projections and settlement funding are now mandatory, with severe penalties and fines for omission. It is essential for Arkansas attorneys to comply with the current Centers for Medicare and Medicaid Services (CMS) guidelines. Arkansas-based Systemedic Corporation, with over 20 years experience in comp, liability and medical cost projections, is available to assist with CMS compliance and accurate medical cost projections. FREE PHONE CONSULTATION ON INDIVIDUAL CASES. For more information, ask for Systemedic MSA Services at 501-227-5553, or click on the MSA Services link at Systemedic.com. Practice & Procedure § 2363 (3d ed. 1995). 92. Smith v. Washington, 340 Ark. 460, 464, 10 S.W.3d 877, 880 (2000) (holding two-dismissal rule inapplicable where first dismissal occurred in federal court by parties’ joint stipulation rather than plaintiff’s unilateral action). 93. One difference is the timing of motions for summary judgment, responses to those motions, and replies. Compare Fed. R. Civ. P. 56(c)(1) (as amended in 2009) with Ark. R. Civ. P. 56(a)-(c)(1) (as amended in 2001 & 2006). In the federal courts, for example, any party may move for summary judgment at any time until 30 days after the close of all discovery. Under the Arkansas rule, a defending party may move for summary judgment at any time, while a claimant must wait at least 20 days after commencement of the action or until his or her adversary has made a summary judgment motion. However, a motion
for summary judgment by any party must be filed no later than 45 days before any scheduled trial date, absent leave of court for good cause shown. 94. Ark. R. Civ. P. 56(c)(2). The wording of Fed. R. Civ. P. 56(c)(2) is slightly different, as it uses “movant” rather than “moving party” and omits the article “a” before the word “judgment.” 95. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1). 96. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). See also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (party resisting summary judgment must do more than “simply show that there is some metaphysical doubt” as to the material facts). 97. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). 98. Id. at 254. 99. Id. at 250.
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100. Wallace v. Broyles, 332 Ark. 189, 195, 961 S.W.2d 712, 723 (1998). In a case illustrative of its previous view, the Court described summary judgment as an “extreme remedy” that should be denied if there were “any doubt whatever.” Baggett v. Bradley County Farmers Coop., 302 Ark. 401, 403, 789 S.W.2d 733, 735 (1990). There are other decisions to the same effect. See, e.g., Wolner v. Bogaev, 290 Ark. 299, 718 S.W.2d 942 (1986); Trace X Chemical, Inc. v. Highland Resources, Inc., 265 Ark. 468, 579 S.W.2d 89 (1979). 101. Thomas v. Sessions, 307 Ark. 203, 818 S.W.2d 940 (1991). The Court noted that “[s]ome courts apply the ‘scintilla of evidence’ rule” and said the Arkansas rule is “similar.” Id. at 207, 818 S.W.2d 942. 102. Wilson v. Liberty Nat’l Life Ins. Co., 331 So. 2d 617, 620 (Ala. 1976) (“Our scintilla rule requires only that the evidence, or reasonable inferences therefrom, furnish a mere gleam, glimmer, spark, the least bit, the smallest trace, in support of the plaintiff’s complaint.”). 103. John J. Coleman III, Summary Judgment in Alabama: The Nuances of Practice under Rule 56, 20 Cumb. L. Rev. 1, 9 (1989) (commenting on experience in Alabama before that state’s supreme court abandoned the scintilla rule). 104. Baggett v. Bradley County Farmers Co-op., 302 Ark. 401, 404, 789 S.W.2d 733, 735 (1990). See also Jones v. Abraham, 58 Ark. App. 17, 22, 946 S.W.2d 711, 713 (1997) (in ruling on motion for summary judgment, chancery court erred in employing “clear, cogent and convincing” standard of proof that would be applicable at trial). 105. Wallace v. Broyles, 332 Ark. 189, 192-95, 961 S.W.2d 712, 722-24 (1998). The Court ended its discussion with something of an understatement: “We regard [the] directed-verdict standard, used in ruling on motions made pursuant to Ark. R. Civ. P. 50, as being somewhat different from the summaryjudgment standard.” Id. at 195, 961 S.W.2d at 723. 106. The Court that Came in from the Code, 33 Ark. L. Rev. at 65-66. 107. Fed. R. Civ. P. 51(a)(2). 108. Fed. R. Civ. P. 51(b)(3). The version of Fed. R. Civ. P. 51 in effect from 1987-2003 gave the court discretion to instruct the jury before or after closing arguments. Prior to 1987, the rule required that instructions follow arguments, although some courts allowed counsel to stipulate that the sequence be reversed. See 9C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2555 (3d ed. 2008). 109. Although Ark. R. Civ. P. 51 does not demand that a correct instruction accompany the objection, the Supreme Court has held in at least one case that the objection is waived absent such a proffer. United Ins. Co. v. Murphy, 331 Ark. 364, 961 S.W.2d 752 (1998). In a more recent case, the Court pointed out that an appellant had “failed to object or make a proffer” when only an objection was necessary to preserve the error. Travis Lumber Co. v. Deichman, 2009 Ark. 299, at 19-20, 2009 WL 1423542. 110. Hill Constr. Co. v. Bragg, 291 Ark. 382, 387,
725 S.W.2d 538, 541 (1987). 111. See Advisory Committee Notes to Fed. R. Civ. P. 51 (2003 Amendment), 215 F.R.D. 158, 306-08 (2003); 9C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2551 (3d ed. 2008). 112. Fed. R. Civ. P. 51(b)(2). 113. Fed. R. Civ. P. 51(c)(2). 114. Fed. R. Civ. P. 51(d)(1)(B). 115. E.g., Westcott v. Crinklaw, 133 F.3d 658 (8th Cir. 1998) (holding that nominal damages instruction was plain error when there was proof of actual injury – in this case, death – resulting from police officer’s use of excessive force); Morris v. Getscher, 708 F.2d 1306 (8th Cir. 1983) (finding plain error where instructions on damages provided jury with virtually no guidance as to rules it was to apply in determining amount of plaintiff’s loss). The Seventh and Ninth Circuits “stood alone in reading Civil Rule 51 literally and denying that there was any power to reverse for plain error in an unobjected to instruction to the jury in a civil case.” 9C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2558 (3d ed. 2008). 116. Fed. R. Civ. P. 51(d)(2). 117. Peoples Bank and Trust Co. v. Wallace, 290 Ark. 589, 591, 721 S.W.2d 659, 661 (1986). 118. Lynch v. Blagg, 312 Ark. 80, 82, 847 S.W.2d 32, 33 (1993). The Court has recognized four narrow exceptions to its no-plain-error rule, all of which are to be rarely applied: (1) when the trial court
fails to bring to a jury’s attention a matter essential to the consideration of the death penalty; (2) when an error is made by the trial judge himself or herself at a time when defense counsel has no knowledge of the error and thus no opportunity to object; (3) when the serious nature of an error obligates the trial judge to intervene, without objection, either by admonition to the jury or the declaration of a mistrial; and (4) when an evidentiary ruling affects substantial rights. Marks v. State, 375 Ark. 265, 289 S.W.3d 923 (2008). 119. Ark. Sup. Ct. R. 4-2(a)(5)(B). 120. Ark. Sup. Ct. R. 4-2(a)(5) (opening paragraph). 121. Ark. Sup. Ct. R. 4-2(a)(5)(A). Spurred by deficient briefs, the Supreme Court amended the rule last fall to clarify the transcripts that must be abstracted, as well as the materials that must be included in the addendum. The amendments became effective January 1. See 2009 Ark. 534 (per curiam). 122. John J. Watkins & D.P. Marshall Jr., A Modest Proposal: Simplify Arkansas Appellate Practice by Abolishing the Abstracting Requirement, 53 Ark. L. Rev. 1, 38-39 (2000). 123. Fed. R. App. P. 28(a)(7). 124. Compare Ark. Sup. Ct. R. 4-2(b)(1), with Fed. R. App. P. 28(b)(4). 125. Ark. Sup. Ct. R. 4-2(a)(8)(A). As amended effective January 1, 2010, this provision is more specific than its predecessor and mandates inclusion of more documents. 126. Fed. R. App. P. 30(a).
127. Ark. Sup. Ct. R. 4-2(a)(8); Lackey v. Mayes, 100 Ark. App. 386, 388 n. 1, 269 S.W.3d at 397, 398 n. 1 (2007). 128. Fed. R. App. P. 30(a)(3). 129. Compare Fed. R. App. P. 30(a)(1)(D) with Ark. Sup. Ct. R. 4-2(a)(5)(A). 130. Fed. R. App. P. 30(b)(1); 8th Cir. R. 30A(b). 131. 8th Cir. R. 30A(b)(4). 132. Ark. Sup. Ct. R. 4-2(b)(2). 133. 8th Cir. R. 28A(b). 134. 8th Cir. R. 28A(b)(1) & (2). 135. Compare 8th Cir. R. 28A(b)(3) with Ark. Sup. Ct. R. 4-2(b)(1). 136. Ark. Sup. Ct. R. 5-2(c). See 2009 Ark. 330 (per curiam). 137. Ark. Sup. Ct. R. 5-2(b)(1). 138. 2009 Ark. 330, at 3. 139. 223 F.3d 898 (8th Cir.), vacated, 235 F.3d 1054 (8th Cir. 2000) (en banc). 140. See generally David R. Cleveland, Overturning the Last Stone: The Final Step in Returning Precedential Status to All Opinions, 10 J. App. Prac. & Process 61 (2009). 141. Fed. R. App. P. 32.1(a). 142. 8th Cir. R. 32.1A. 143. Id. 144. Cf. Hart v. Massanari, 265 F.3d 1155 (9th Cir. 2001). n
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ments “shall be subject to a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information under such subparagraph should have been submitted.”12 A fine of $1,000 per day per claimant would obviously add up rather quickly to a substantial penalty, particularly where an entity subject to the reporting requirements is responsible for reporting with regard to many different plaintiffs, which is likely the case in some types of litigation involving multiple plaintiffs.
Conclusion Though the advent of the MMSEA Section 111 reporting requirements has been met with some trepidation, the brunt of the regulatory complexity seems to arise in the submission process, which will likely be handled by the RREs themselves through the CMS system. Nevertheless, attorneys must assist their RRE clients in making the determination as to what must be reported and thus must always be aware of the possibility that a claimant is a Medicare beneficiary for whom Medicare has a right to recover medical expense payments.
Ramifications for Attorneys’ Cases for RREs While attorneys are not RREs and thus have no direct responsibility for reporting, attorneys representing RREs are responsible for obtaining information needed for reporting settlements, judgments, and other payments that are subject to the new requirements and conveying that information to their RRE clients.13 While attorneys will certainly have to provide information to their RRE clients to enable reporting, an attorney’s most important role might be in obtaining information as to the claimant’s Medicare status. As noted above, the RRE must make a determination as to whether a claimant is a Medicare beneficiary. While RREs may make an inquiry with CMS to assist in the determination, making a query requires that the RRE have the claimant’s Social Security number or her Medicare health claim insurance number and other information. Accordingly, counsel should request needed information in discovery to assist in making an inquiry. Counsel should also keep in mind that the inquiry system is not the only method of obtaining information about a claimant’s status. Given the severe penalties involved with non-compliance and the concomitant importance of determining which plaintiffs are Medicare beneficiaries, obtaining information on their status through the use of releases is the most prudent course.14 Such information should be obtained as early in the litigation process as possible. Additionally, practitioners should ensure that the status of a claimant has not changed between the inception of the case and the point when payment is made because the reporting requirement attaches upon payment, not upon the occurrence of the accident.
Endnotes 1. July 1, 2010, is the date by which the new requirements should be completely in effect. Parts of the implementation timeline, such as registration for reporting, have already begun. A copy of the current implementation timeline is available at Centers for Medicare and Medicaid Services, Revised Implementation Timeline (May 12, 2009), at http://www. cms.hhs.gov/MandatoryInsRep/Downloads/ RevisedImplementationTimeline050909.pdf. As indicated by the “revised” nature of CMS’s timeline, implementation of the reporting guidelines has been delayed, with CMS seemingly unable to put the reporting infrastructure in place in time for an earlier implementation date of July 1, 2009. 2. CMS is the federal agency that administers Medicare, Medicaid, and the Children’s Health Insurance Program. CMS is a division of the United States Department of Health and Human Services. 3. 42 U.S.C. § 1395y(b). 4. 42 U.S.C. § 1395y(b)(2)(B)(ii). 5. See, e.g., Thompson v. Goetzmann, 337 F.3d 489 (5th Cir. 2002); Mason v. American Tobacco Co., 212 F. Supp. 2d 88 (E.D.N.Y. 2002); In re Silicone Gel Breast Implants Prods. Liab. Litig., 174 F. Supp. 2d 1242 (N.D. Ala. 2001); United States v. Philip Morris, Inc., 156 F. Supp. 2d 1 (D. D.C. 2001); In re Orthopedic Bone Screw Prods. Liab. Litig., 202 F.R.D. 154 (E.D. Pa. 2001); In re Diet Drugs, 2001 WL 283163 (E.D. Pa. 2001); United States v. Philip Morris, Inc., 116 F. Supp. 2d 131 (D. D.C.2000); In re Dow Corning Corp., 250 B.R. 298 (Bankr. E.D. Mich. 2000). 6. Thompson, 337 F.3d at 494. 7. 42 U.S.C. 1395y(b)(2)(A). 8. Centers for Medicare and Medicaid Services, MMSEA Section 111 Liability Insurance
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(Including Self-Insurance), No-Fault Insurance, and Worker’s Compensation User Guide 13 (July 31, 2009), available at http://www. cms.hhs.gov/MandatoryInsRep/Downloads/ NGHPUserGuide2ndRev082009.pdf (hereinafter “User Guide”). 9. User Guide, supra note 8, at 19. 10. 42 U.S.C. §1395y(b)(8)(A). 11. The summary of the reporting requirements in this section of this article derives primarily from the User Guide cited supra. Rather than making repeated citations to the User Guide, I make this general attribution to the User Guide, which provides a much more in-depth treatment of the Section 111 requirements that is possible in this article. 12. 42 U.S.C. § 1395y(b)(7)(B)(i). 13. Though practitioners would do well to consider the handling of Medicare’s interest in settlement proceeds when the plaintiff in a case is a Medicare beneficiary, that process is independent of the new reporting requirements and thus beyond the scope of this article. Nothing in the MMSEA reporting requirements affects existing obligations with regard to Medicare’s interest in the proceeds of settlements or other such payments. 14. Social Security Form SSA-3288, which is available at http://www.ssa.gov/online/ssa3288.pdf, provides a space specifically dedicated to information about Medicare. n
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In Memoriam Medical Sciences Foundation Fund Board, the Arkansas Prostate Cancer Foundation, and the Little Rock Visitor Foundation. Mr. Hoover was a member of Little Rock’s Fifty for the Future. He is survived by his wife, Barbara, and daughter, Josephine Lasley Hoover Felton, who also is a lawyer. Memorial attributed to the Williams & Anderson Web site.
Paul Williams Hoover, Jr. Paul Williams “Pete” Hoover, Jr. of Little Rock died December 19, 2009, at the age of 67. Mr. Hoover attended Vanderbilt University and graduated from Little Rock University with his Bachelor of Science degree in 1965. Mr. Hoover graduated from the University of Arkansas School of Law in 1969, where he served on the editorial board of the Arkansas Law Review. He received his LL.M. in Taxation from New York University in 1970. Before joining Williams & Anderson in 2000, Mr. Hoover practiced law in Little Rock for 30 years, primarily with the firms of Hoover, Jacobs & Story and Giroir, Gregory, Holmes & Hoover. Mr. Hoover had extensive experience in tax and banking law, having served as regular outside counsel to Savers Federal Savings & Loan Association for a number of years. Mr. Hoover was general counsel to Metropolitan National Bank, the largest independently owned bank in Arkansas. In the area of real estate development, Mr. Hoover was the lead lawyer in the development and construction of the Little Rock Convention Center and Arkansas’s Excelsior Hotel, now Little Rock’s Peabody Hotel. He at one time or another represented the lender or the developer for most of the larger real estate projects in the city and state. He was a Sustaining Member of the Arkansas Bar Association where he served on numerous committees and sections, including the Investment Committee. He was a member of the Pulaski County and American Bar Associations. He was listed in Best Lawyers in America under Corporate Law and Real Estate Law; and in Chambers USA as a “Leader” in the fields of Corporate/Commercial and Real Estate Law. He served on the Boards of Directors of the University of Arkansas for
Robert Hays Williams Robert Hays Williams of Russellville died October 19, 2009, at the age of 96. He earned a Bachelor of Arts and a Juris Doctorate from The George Washington University in Washington, D.C. Mr. Williams began his law practice in Russellville with the firm of Hays, Wait and Williams and then, with his longtime partner, Charles Gardner, formed the firm of Williams and Gardner. He represented the 5th Judicial District as prosecuting attorney for four years and served as circuit judge for four years. He also represented the 10th Senatorial District as state senator for eight years. Shortly after the bombing of Pearl Harbor in 1941, Williams enlisted in the U.S. Army where he received training for work with the Counter Intelligence Corps. He made the D-Day landing at Utah Beach with the 4th Infantry Division and served until the war ended. He received the Bronze Star Medal and European-AfricanMiddle Eastern Theatre Ribbon with five bronze stars for five European Theatre campaigns. He was a Sustaining Member of the Arkansas Bar Association and a Sustaining Fellow of the Arkansas Bar Foundation. He is survived by his wife of 68 years, Martha Frances Williams; and two daughters, Anne Rye and Jane Williams. Memorial attributed to the obituary that appeared in the PostDispatch.
Toney Daniel McMillan Toney Daniel McMillan died November 22, 2009, at the age of 67. He graduated from Davidson College in 1963 and then attended Austin Presbyterian Theological Seminary. He earned a Juris Doctorate from the University of Arkansas before joining the firm founded in 1859 by his great-grandfather. He was a partner in McMillan, McCorkle, Curry, and Bennington law firm in Arkadelphia where he has practiced for the past 35 years. He was a Sustaining Member of the Arkansas Bar Association and a Fellow of the Arkansas Bar Foundation. He was a member of the American Bar Association and the American College of Trial Lawyers. Prior to the practice of law and in what he termed his “other life,” Toney was a Presbyterian minister, serving churches in EI Dorado and Kingsville, Texas, from 1967-1972. Besides maintaining a thriving law practice, he proudly served as a trustee of the Ross Foundation of Arkadelphia and the Harper Family Foundation of Wimberly, Texas. He is survived by his wife, Jill Jordan McMillan; two sons, Daniel Kevin McMillan and Carter Jordan McMillan; and two daughters, Sarah and Caroline. Memorial attributed to the obituary that appeared in the Arkansas Democrat-Gazette. Dale L. Casto Dale L. Casto of Springdale died December 16, 2009, at the age of 50. He was a member of the Arkansas Bar Association where he served on the Juvenile Justice and Child Welfare Section and Mock Trial Committee. He was affiliated with Bright Beginnings Preschool in Bentonville. He is survived by his wife, Cathy, and a son Kyle Casto. Memorial attributed to the obituary that appeared in the Benton County Daily Record.
Vol. 44 No. 4/Winter 2010 The Arkansas Lawyer
In Memoriam William Bruce Blevins William Bruce Blevins of Little Rock died October 25, 2009, at the age of 70. He graduated from Henderson State University and earned a Juris Doctorate from the University of Arkansas School of Law. He was a U.S. Navy veteran and was awarded the Bronze Star for his service in the Taiwan Straits. He was a member of the Arkansas Bar Association, American Bar Association and the American Trial Lawyers Association. He is survived by a daughter, Beth Carpenter and a son, Will Blevins. Memorial attributed to the obituary that appeared in the Sherwood Voice. Joseph Kirby Mahony, II Joseph Kirby Mahony, II, of El Dorado died December 5, 2009, at the age of 70. He attended Washington and Lee University, the University of Arkansas and Southern State. He received his juris doctorate degree from the University of Arkansas. He was in the United States Marine Corps. He joined the Mahony and Yocum Law Firm after law school. Members of his family practiced law continuously in El Dorado for more than 100 years. His grandfather, father, mother and both Mahony brothers were lawyers. Mr. Mahony was elected to the Arkansas House of Representatives in 1970 and took office in 1971; he spent his first 24 years of public service in the House, his next eight in the Senate and his final four back in the House before retiring. After retirement, he continued to work on education legislation for the Speaker of the House. During his time in the Legislature, he introduced more than 1,400 bills and reso-
lutions, served on major state and national legislative committees and regional boards, and won both state and national awards for legislation. His focus was on improving public education, strengthening child support enforcement, improving services for the developmentally disabled, conserving natural resources, particularly water, revising election laws, and making state government more efficient. He was a member of the Arkansas Bar Association where he served on numerous committees and sections, including the Family Law and Natural Resource Law Section. He was cochair of the Administrative Procedures Act Study Committee. He is survived by his wife of 40 years, Bettie Anne Humphreys Mahony; and sons, Joseph K. Mahony III and Michael Emon Mahony. Memorial attributed to the obituary that appeared in the Times Record. Charles Barnett Ivy Charles Barnett Ivy of Jackson, Mississippi, died November 5, 2009, at the age of 90. He attended West Point Military Academy in New York, The George Washington University in Washington, D.C., and the University of Arkansas, from which he received both his undergraduate and law degrees. He served our country as a Lieutenant, J.G. in the U.S. Navy during World War II in the Pacific Theater. After his military service, Mr. Ivy practiced law in Northwest Arkansas from 1946 to 1950 and ran as the Democratic candidate for office in the U.S. 3rd Congressional District. After 1950, Charles Ivy began his lifelong career as a petroleum leasing agent and later settled
in Jackson, Miss. He is survived by his wife, Ada Fields Ivy; and daughters Darlene Pearson and Dale Mobarak. Memorial attributed to the obituary that appeared in the Benton County Daily Record. Patricia Ann Patsy Robinson Patricia Ann Patsy Robinson of Lewisville,died October 11, 2009, at the age of 80. She attended Henderson State Teachers College at age 16. She graduated from the University of Arkansas School of Law at Fayetteville, and was licensed to practice law in Arkansas in 1952. She was also a member of the bar of the U.S. Supreme Court. She practiced law with her father in the firm of Robinson & Robinson until his death in 1985. She did extensive pro bono work on behalf of children and families throughout most of her career. She was a delegate to the 1969 Arkansas Constitutional Convention. She succeeded her father as Lafayette County Municipal Judge in 1979, and served in that office through 1998. She also once served as a City Court Judge for the cities of Stamps and Bradley. Judge Robinson is survived by many friends and family members, including a cousin, Edwena Wilson; and a childhood friend, Floy Faye McClain. Memorial attributed to the obituary that appeared in the Arkansas Democrat-Gazette. Correction: The memorial for Isaac Alexander Scott, Jr., in the Fall 2009 issue of The Arkansas Lawyer incorrectly noted that Mr. Scott graduated from Hall High School. He graduated from Central High School.
Memorial Gifts Please remember the Arkansas Bar Foundation when you choose to make a memorial gift honoring a family member, a colleague or a friend of the profession. Acknowledgements are sent by the Foundation to the family advising them of the contribution. The Foundation also receives and acknowledges gifts honoring individuals for a special event in their lives. Gifts to the Foundation are tax deductible for federal income tax purposes and support the Foundationâ€™s work in making scholarship funds available for law students, aiding in education of the public about legal matters, supporting projects that assist in improving and facilitating the administration of justice and funding other law-related charitable efforts. Contributions may be sent directly to the Arkansas Bar Foundation. The staff appreciates having the name of the family member to whom acknowledgments should be sent. Please feel free to call the Arkansas Bar Foundation at 501.375.4606 or 800.609.5668 for further information. 50
The Arkansas Lawyer
Arkansas Bar Foundation Memorials and Honoraria The Arkansas Bar Foundation acknowledges with grateful appreciation the receipt of the following memorial, honorarium and scholarship contributions received during the period October 1, 2009 through December 31, 2009: In Memory of Robert S. Blatt James Rodney Mills In Memory of Bill Blevens Mrs. Charles L. Carpenter John C. Calhoun, Jr. B. Jeffery Pence In Memory of Judge Tom F. Digby Mr. and Mrs. Frank S. Hamlin In Memory of Winslow Drummond Katherine Pace Drummond In Memory of Judith Ryan Gray Designated to the Judith Ryan Gray Annual Meeting Endowment Katherine Pace Drummond Charles B. Roscopf
In Memory of Sarah Ann Presson Runnells Sherry P. Bartley Mr. and Mrs. Frank S. Hamlin Donald C. Pullen In Memory of Isaac A. “Ike” Scott, Jr. Charles and Patti Coleman James F. Dowden Katherine Pace Drummond Judge and Mrs. Robert H. Dudley John and Marjem Gill In Memory of Robert Hays Williams Barry E. Coplin Judge Robert and Ann Dawson In Memory of Judge Ernie E. Wright H. David Blair Judge and Mrs. Robert H. Dudley
In Memory of Paul W. “Pete” Hoover W. Christopher Barrier Judge Robert and Charlotte Brown Gordon and Hayden Rather Fred and Sharon Ursery Mike Wilson
Honorarium and Scholarship Contributions
In Memory of Joseph K. “Jodie” Mahony II Judge Robert and Charlotte Brown Judge John F. Stroud, Jr. Fred and Sharon Ursery Mike Wilson
In honor of Peggy Eichenbaum Jalenak Designated to the E. Charles Eichenbaum Scholarship Fund Jacques L. Wiener, Jr.
In honor of the Arkansas Bar Foundation Regions Insurance
In Memory of William C. “Bill” McArthur W. Frank Morledge B. Jeffery Pence Mike Wilson Judge William R. Wilson, Jr. and Cathi Compton
Horace and James McKenzie Scholarship Fund Judge James M. Moody
In Memory of Toney D. McMillan W. Christopher Barrier James F. Dowden
Sebastian County Bar Association Scholarship Sebastian County Bar Association
William R. Overton Scholarship Fund Judge James M. Moody
In Memory of Ray Price Don A. Eilbott
David Solomon Scholarship Fund Helena Bridge Terminal, Inc. Helena Marine Services, Inc.
In Memory of Katherine Rather Watts, Donovan, & Tilley, P.A.
Roxanne Tomhave Wilson Scholarship Fund Judge James M. Moody
In Memory of Judge Andree Layton Roaf Judge and Mrs. Robert H. Dudley
Judge Henry Woods Scholarship Fund Judge James M. Moody
In Memory of H. Clay Robinson Judge and Mrs. Robert H. Dudley
Wright, Lindsey & Jennings Scholarship Wright, Lindsey & Jennings LLP Vol. 45 No. 1/Winter 2010 The Arkansas Lawyer
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Published on Jan 1, 2010
The Arkansas Lawyer magazine is the flagship publication of the Arkansas Bar Association. The quarterly publication communicates the news o...