MSC hearing on referral fee, pro bono rules

A proposed rule aimed at capping attorney referral fees in contingent fee cases is on the agenda of the Michigan Supreme Court’s September 28 public hearing.

The rule would apply to cases where the attorney’s compensation is an agreed-upon share of the case award or settlement.

Under the proposed amendment of Michigan Rule of Professional Conduct 1.5 (ADM File No. 2010-07), an attorney who refers a contingent fee case to another attorney could receive a referral fee, but the fee would be capped at “25 percent of the amount recovered.”

The rule change is aimed at discouraging attorneys from operating as brokering services and directing clients to lawyers who pay the highest referral fees.

A referring attorney who also contributes a “substantial input of time or cost, or assumption of risk” could receive a larger fee if the other attorney agrees and if the court approves.

The Court will also discuss whether to adopt one of two alternative proposals regarding an attorney’s ethical obligation to provide pro bono services (ADM File No. 2010-18; proposed amendments to of MRPC 6.1).

Alternative A would clarify that attorneys are not subject to disciplinary proceedings to enforce the pro bono rule. Alternative B would require Michigan attorneys to donate 30 hours of professional time or handle three pro bono cases per year, and/or contribute $300 or $500 per year to programs that provide legal services to the poor.

The Michigan Supreme Court periodically holds administrative hearings to allow interested persons to comment on proposed court rule changes and other administrative matters on the Court’s agenda.

Speakers will be allotted three minutes each to present their views, after which they may be questioned by the Justices.

To reserve a place on the agenda, please contact the Office of the Clerk of the Court in writing at P.O. Box 30052, Lansing, Michigan 48909, or by e-mail at MSC_clerk@courts.mi.gov, no later than Monday, September 26, 2011. Requests to speak should include the ADM file numbers for the agenda items the speaker wishes to discuss.

– Information provided by the Michigan Supreme Court.

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Absolute immunity for prosecutor in witness-jailing case

A Genesee County prosecutor was correctly granted summary judgment of a civil-rights suit filed by a witness who claimed she was jailed for 12 days at the prosecutor’s behest after she balked at testifying at a preliminary exam.

The prosecutor has absolute immunity, the 6th U.S. Circuit Court of Appeals ruled, even if she was less-than-forthcoming with the judge who sent the witness to jail.

Karen Hanson, the assistant prosecutor, was trying to press gang-related racketeering charges against Marquan Cager.

Part of the case hinged on statements LaTasha Adams made about Cager a few years back in a domestic-violence complaint.

On the morning of Cager’s preliminary exam, Adams was served with a subpoena. She showed up at the courthouse. Hanson showed Adams a report documenting her statements about Cager and told her to prepare to testify.

Adams balked. She said she was six months pregnant, the pregnancy was high-risk and she was under a doctor’s care. And here’s another reason, she told Hanson. She didn’t make the statements and besides, none of them were true.

From this point forward, like the judges who ruled and reviewed the grant of summary judgment, we’ll accept Adams’ version of things as the truth.

According to Adams, Hanson went to the judge hearing the case and told him off-the-record that Adams would not testify in accordance with the report. Hanson suggested that the judge hold Adams in contempt. Hanson didn’t tell the judge that Adams had been subpoenaed only that morning, or that she voluntarily came to the courthouse.

What resulted was a mittimus order, signed by the judge, directing that Adams be jailed as a material witness until the court said otherwise. Adams said all this was done to coerce her testimony against Cager.

Adams was jailed for 12 days without the judge ever asking her if she would testify, without being offered counsel or an opportunity to post bond, and without any explanation of the basis of the detention.

Once jailed, Adams indicated she would testify. When the preliminary exam resumed 12 days later, she took the stand, testified, went home and celebrated the conclusion of her ordeal by hitting Hanson with a civil-rights suit.

The federal district court granted Hanson summary judgment on the basis of absolute prosecutorial immunity. The Sixth Circuit affirmed.

Said the Sixth Circuit:

The case thus presents an issue of first impression in this circuit: whether a prosecutor is entitled to absolute immunity for her false and misleading statements to a trial court in the course of criminal proceedings about the availability of a witness. …

We conclude that Hanson’s statements before the trial court at the preliminary examination regarding Adams’ availability as a witness fell within her role as an advocate for the State of Michigan and are therefore absolutely protected. The prosecutorial function includes initiating criminal proceedings, appearing before the court at a probable cause hearing or before a grand jury, seeking an arrest warrant, and preparing witnesses. …

Hanson’s challenged conduct involved the analogous acts of appearing at a preliminary examination and making statements about her discussions with a potential witness – activities “closely related … to h[er] role as an advocate” before the court in criminal proceedings. …

Furthermore, because the issuance of either a material-witness warrant or an order of contempt “is unquestionably a judicial act,” a prosecutor’s statements to the court regarding the availability of a witness are “‘intimately associated with the judicial phase of the criminal process’ … [and are] connected with the initiation and conduct of a prosecution, particularly where,” as here, “the hearing occurs after arrest [of the defendant]” in the criminal proceedings.

It doesn’t matter, said the Sixth Circuit, that Hanson, with an allegedly improper motive, approached the judge outside of a formal proceeding, talked to him off-the-record, and, according to Adams, lied to him about what was going on.

As this court has recently emphasized, “prosecutors do not forfeit their absolute immunity when they knowingly make false statements while advocating before the court,” Pittman v.Cuyahoga Cnty. Dep’t of Children & Family Servs., 640 F.3d 716, 725 (6th Cir. 2011), “‘so long as the statements were related to the proceeding[s]'” in which they were made … .

It’s good to be the prosecutor.

The case is Adams v. Hanson.

Asleep at trial: nonprejudicial nap

As prosecutions go, the one against Arthur Muniz was a slam dunk for the Wayne County prosecutor’s office.

Muniz was charged with shooting Gutierrez, his old girlfriend’s new boyfriend, once in the arm and once in the head.

Muniz admitted he was at the crime scene with a gun but said that someone else — Muniz didn’t know who — fired the shots that injured Gutierrez.

Gutierrez fingered Muniz as the shooter. So did another witness who was in the car with Gutierrez. A Detroit cop said Gutierrez, while bleeding from his wounds, identified Muniz as the shooter.

Muniz’s own mother took the stand and said her son called her after the shooting and confessed.

The jury found Muniz guilty of assault with intent to murder, felon in possession of a firearm and felony firearm.

The jury apparently placed no credence in his claim, elicited by the prosecutor on cross-examination, that everyone but him was lying under oath.

Huh? Wait a minute. Under People v. Buckey, 424 Mich. 1 (1985), prosecutors can’t ask defendants to comment on the credibility of the prosecution’s witnesses.

Defense counsel should have objected.

And maybe he would have had he been awake.

According to a juror’s post-trial affidavit, defense counsel was sound asleep during the prosecutor’s cross-examination. The juror averred:

While the prosecutor was cross-examining Mr. Muniz, I glanced at defense table and was surprised to see that Mr. Muniz’[s] defense attorney [was] sleeping[.] … It was apparent to me that Mr. Muniz’[s] attorney was actually sleeping through a portion of his client’s testimony.

Muniz said his convictions should be overturned because counsel slept during some of the trial.

And then there’s that matter of defense counsel’s arrest for possession of cocaine three weeks before Muniz signed on as a client.

Muniz also claimed counsel was using cocaine during the trial. Muniz argued that drug use would explain counsel’s allegedly crummy direct examination of the defense’s private investigator, and would also explain the many alleged defense errors that ticked-off the trial judge.

Muniz offered no evidence that counsel was actually using drugs during trial. Moreover, counsel was licensed to practice trial although his license was later suspended.

The Michigan appellate courts turned down Muniz’s motion for new trial based on ineffective assistance of counsel.

He fared no better with his habeas petition in the U.S. District Court.

At the 6th U.S. Circuit Court of Appeals, Muniz argued that when counsel sleeps during a client’s trial, prejudice should be presumed under United States v. Cronic, 466 U.S. 648 (1984).

But Judge Eugene Siler said sleeping counsel cases decided under Cronic focus on how long counsel was asleep. The cases that bring habeas relief are those in which the attorney sleeps for substantial portions of the trial.

In denying relief, Siler told Muniz, in effect, that his attorney just took a short nap.

Nothing presumptively prejudicial about that.

Siler reviewed the juror’s affidavit and concluded that:

Muniz’s attorney was asleep for an undetermined portion of a single cross-examination. The record shows that Muniz’s attorney was not asleep for the entire cross since he objected near the end of the questioning. This is especially significant, given that the total cross-examination was fairly short, spanning only 26 pages of trial transcript.

Muniz’s lawyer therefore must have only been asleep for a brief period. This is in contrast to Tippins [Tippins v. Walker, 77 F.3d 682, 687 (2d Cir. 1996)], in which the trial judge himself “testified that [defense counsel] ‘slept every day of the trial.'”

Muniz did no better under Strickland v. Washington, 466 U.S. 668 (1984).

Under Strickland, wrote Siler, a habeas petitioner must show that counsel’s performance was deficient, and the deficiency prejudiced the petitioner’s case.

[B]y putting forward the affidavit of a juror who witnessed Muniz’s attorney sleeping Muniz has made a sufficient showing that the standard of conduct by his attorney fell below the objective standard of reasonableness.

There is no suggestion in the government’s brief, nor could there be, that Muniz’s attorney fell asleep at trial because in his “reasonable professional judgment” it was the best course of action.

But showing prejudice is quite another matter.

There was a mountain of evidence against Muniz. There was only Muniz’s conjecture, but no evidence, that counsel used drugs during trial and screwed up as a result.

And besides, defense counsel didn’t sleep away most of the trial, he just took a short cat nap.

The case is Muniz v. Smith.

Another swing at revamping client solicitation rules

There was considerable uproar in May when the Michigan Supreme Court amended MRPC 7.3 and published for comment further revisions of when, how and under what circumstances attorneys could solicit potential clients.

See Michigan Lawyers Weekly, “Does new advertising rule give big firms, insurance companies a head start?” (May 30, 2011).

When the proposal was first floated in July 2010, it was almost universally panned by those submitting comments on the Court’s web site. Follow the link and search “2002-24” when you get there.

Yesterday, the Court backtracked:

On order of the Court, and in light of concern expressed regarding the amendments adopted in this file [ADM File No. 2002-24] by order of the Court dated May 19, 2011, the order that entered on that date is rescinded, effective immediately … .

In yesterday’s order, the Court published for comment its latest proposal for regulating client solicitation. As explained by the staff comment accompanying the proposal:

Under the proposed amendments, MRPC 7.3 would be reformatted and would describe the general prohibition regarding a lawyer’s solicitation, and also would describe the types of communication that are allowed, including a lawyer’s general advertising, and a lawyer’s targeted communications to potential clients who are facing legal problems (as protected by Shapero v Kentucky Bar Ass’n, 486 US 466 [1988]).

The proposed amendments of MRPC 7.3 would require that inclusion of the designation “Advertising Material” on general advertising and targeted communications applies only to written materials, including e-mailed communications, but not to television or radio advertisements.

The amendment also requires a 30-day period to pass before an attorney may contact a potential client after a death, injury, or accident.

Comments are welcome, says the Court:

Comments on the proposal may be sent to the Supreme Court Clerk in writing or electronically by November 1, 2011, at P.O. Box 30052, Lansing, MI 48909, or MSC_clerk@courts.mi.gov.

When filing a comment, please refer to ADM File No. 2002-24. Your comments and the comments of others will be posted at http://www.courts.mi.gov/supremecourt/resources/administrative/index.htm.

We’ll keep you posted.

MSC amends lawyer advertising rule

The Michigan Supreme Court has amended Michigan Rule of Professional Conduct 7.3 — Direct Contact With Prospective Clients — to require lawyers who engage in certain types of client solicitation to include the words “Advertising Material” as part of the pitch.

According to the staff comment accompanying today’s amendment:

MRPC 7.3 has been reformatted and describes the general prohibition regarding a lawyer’s solicitation, and also describes the types of communication that are allowed, including a lawyer’s general advertising, and a lawyer’s targeted communications to possible clients who are facing legal problems (as protected by Shapero v Kentucky Bar Ass’n, 486 US 466 [1988]). The amendment of MRPC 7.3 requires that inclusion of the term “Advertising Material” applies only to written materials, including e-mailed communications, but not to television or radio advertisements. The amendment also requires a 30-day period to pass before an attorney may contact a potential client after a death, injury, or accident.

The staff comment is not an authoritative construction by the Court.

The amendment takes effect Sept. 1, 2011.

The Court adopted the amendment on a 4-3 vote. Justice Diane Marie Hathaway dissented, stating that she would “decline to adopt.”

Justice Marilyn Kelly dissented, opting instead for ABA Model Rule of Professional Conduct 7.3.

Justice Stephen J. Markman dissented as well. Markman said he didn’t think the amended rule significantly addresses the problems of lawyer advertising. He also stated that the the amended rule places small firms at a distinct economic disadvantage:

Essentially, as in other states, the floodgates have been opened in Michigan concerning lawyer advertising, with fortunes now spent in this regard on television, radio, billboards, and 1-800-LAWSUIT telephone numbers.

In the face of this transformation of the advertising environment, this Court now issues a new rule focused upon which of the four corners of a postcard soliciting clients the words “advertising material” must appear.

The upshot is that those lawyers, and law firms, which engage in client solicitation by the hundreds of thousands will continue to engage in business as usual, while those lawyers, and law firms, which engage in client solicitation one person at a time will become more heavily regulated.

Further, the latter group will be prohibited during a 30-day period from soliciting business from certain categories of potential clients, while the former group will be allowed to continue soliciting such business during the same period.

For better or for worse, the United States Supreme Court has redefined the rules of the game for lawyer advertising, and I would not indulge in the illusion that by the measure this Court adopts today, we are doing anything of consequence to improve upon these rules.

Instead, all that we are doing is placing the small law firm at an increasing economic disadvantage to the large law firm in terms of client solicitation. I see little point to the new rule, and would not adopt it.

MSC proposes referral fee, juror challenge changes; names chief judge in Barry County

Referral fees would be limited to 25 percent under a proposed amendment of Rule 1.5 of the Michigan Rules of Professional Conduct.

The Michigan Supreme Court’s proposed 25 percent cap would be lifted

if the referring attorney participates in the case to an extent that a greater percentage of the amount recovered should be allowed as a reflection of the referring attorney’s substantial input of time or cost, or assumption of risk, the referring attorney’s share of fees may exceed the maximum referral fee as agreed by the receiving attorney and as approved by the court in which the proceeding takes place.

The proposal would also require that contigent-fee agreements disclose “the amount or percentage of fees to be divided or shared among or between lawyers who are not in the same firm.”

Under the proposed amendment, clients would have to approve “the amount or percentage of fees to be divided or shared among or between lawyers who are not in the same firm.” ADM File No. 2010-07.

Under a proposed amendment of MCR 2.511, courts would be required to excuse to discharge a juror upon learning that the juror is unqualified, rather than waiting for a party to challenge the juror for cause. The staff comment to the proposal explains that

[b]ecause MCL 600.1337 requires a court to discharge an unqualified juror regardless whether a party challenges the juror for cause, the proposed amendment of MCR 2.511 would eliminate the provision from the list of challenges that may be made for cause, and instead would clarify that the discharge must be made when the court learns that the juror is not qualified to serve.

This clarification would foreclose the possibility that an unqualified juror could be allowed to sit because no one challenged his or her qualification.

ADM File No. 2011-10.

The Michigan Supreme Court issued the proposed amendments in orders released yesterday. The comment period for both proposals is open until Sept. 1, 2011.

In another order released yesterday, the MSC appointed Judge William M. Doherty as chief judge of the Barry County Trial Court for a term ending Dec. 31, 2011.

Western District proposes attorney admission, discipline rule changes

The U.S. District Court for the Western District of Michigan is thinking about beefing-up its local rules governing admission to the court’s bar, attorney discipline and reinstatement proceedings.

In Administrative Order 11-041, the court tentatively approved amendments to its local court rules.

Key changes:

  • Admission applications could be granted or denied by the chief judge.
  • The chief judge could refer applications to a three-judge panel. The proposed change provides for broader participation of the court’s senior judges and further provides that bankruptcy judges could sit on the panels.
  • The proposal also conforms the local rules to the disciplinary and contempt power granted to magistrate judges by statute. 28 U.S.C. sec. 636(e).

The court is seeking comments by May 23 before promulgating a final version of the proposed changes.