MINNESOTA COMING SOON TO A CIVIL CASE NEAR YOU GOVERNMENT LIABILITY IN THE AGE OF SEQUESTER

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1 RY TA EN IM PL M CO MINNESOTA SPRING 2013 COMING SOON TO A CIVIL CASE NEAR YOU GOVERNMENT LIABILITY IN THE AGE OF SEQUESTER ETHICS IN ARBITRATION: THREE PROPOSALS TO PROMOTE EFFICIENCY, FINALITY AND FAIRNESS IN MINNESOTA S NO-FAULT ARBITRATION SYSTEM TYING THE HANDS OF INSURANCE COMPANIES AND THE CONTRACTUAL RIGHT TO EXAMINATIONS UNDER OATH

2 MDLA OFFICERS and DIRECTORS PRESIDENT Lisa R. Griebel 100 North Sixth Street Suite 600A Minneapolis, MN (612) VICE PRESIDENT Mark A. Fredrickson 150 South 5th Street #1700 Minneapolis, MN (612) TREASURER Dyan J. Ebert 400 South First Street #600 St. Cloud, MN (320) SECRETARY Richard C. Scattergood 250 Second Avenue South Minneapolis, MN (612) PRESIDENT EMERITUS Mark A. Solheim 30 East 7th Street Suite 2800 St. Paul, MN (651) DIRECTORS Kathryn R. Downey St. Paul Kafi C. Linville Minneapolis Benjamin D. McAninch Mankato Christy M. Mennen Minneapolis Carolin J. Nearing St. Paul Troy A. Poetz St. Cloud Jessica E. Schwie Lake Elmo Steven M. Sitek Minneapolis Brian D. Stofferahn Eden Prairie Matthew R. Thibodeau Duluth Steven E. Tomsche Minneapolis Michael J. Will Minneapolis PAST PRESIDENTS : Richard R. Quinlivan (deceased) : Paul Q. O Leary : G. Alan Cunningham (deceased) : Richard P. Mahoney : William T. Egan : James D. Cahill (deceased) : Clyde F. Anderson : George S. Roth (deceased) : Tyrone P. Bujold : Martin N. Burke : Richard L. Pemberton : Lynn G. Truesdell : Gene P. Bradt : Phillip A. Cole : Thomas R. Thibodeau : Former Chief Justice Eric J. Magnuson : John M. Degnan : Lawrence R. King : Michael J. Ford : The Honorable Dale B. Lindman : The Honorable Steve J. Cahill : Theodore J. Smetak : Rebecca Egge Moos : Richard J. Thomas : Nicholas Ostapenko : The Honorable John H. Scherer : Michael S. Ryan : The Hon. Kathryn Davis Messerich : Steven J. Pfefferle : Leon R. Erstad : Steven R. Schwegman : Gregory P. Bulinski : Patrick Sauter : Paul A. Rajkowski : Kay Elizabeth Tuveson : Thomas Marshall : Patricia Y. Beety : Mark A. Solheim EXECUTIVE DIRECTOR Paul Hanscom 1000 Westgate Drive, Suite 252 St. Paul, MN (651) director@mdla.org Contents The President s Column by Lisa R. Griebel 3 Articles from Past Issues 4 Join a Committee 4 Coming Soon to a Civil Case Near You: Changes to the Minnesota Rules of Civil Procedure and General Rules of Practice for the District Courts by Jessica J. Theisen, Esq. 5 Ethics in Arbitration: Three Proposals to Promote Efficiency, Finality and Fairness in Minnesota s No-Fault Arbitration System by Sarah R. Jewell 8 MDLA Upcoming Dates 12 Tying the Hands of Insurance Companies and the Contractual Right to Examinations Under Oath: How Western National and Padilla Limit EUOs in the No-Fault Context by Elizabeth Kumagai and Jesse Beier 13 Government Liability in the Age of Sequester: Constitutional Obligations, Access to Justice, and the Bottom Line by Jason M. Hill 17 Welcome New MDLA Members 21 From the Executive Director by Paul Hanscom 22 DRI Corner by Patricia Y. Beety 23 MDLA/MAJ CLE Seminar and Golf Tournament 24 The Editorial Committee welcomes articles for publication in Minnesota Defense. If you are interested in writing an article, please contact one of the Editorial Committee members or call the MDLA office, CHIEF EDITORS Sean J. Mickelson Andrea E. Reisbord VOLUME 34, ISSUE 1 SPRING 2013 EDITORIAL COMMITTEE Rachel E. Bendtsen Jeffrey R. Mulder Kelly A. Putney Jonathan C. Marquet Timothy S. Poeschl Stacey L. Sever Minnesota Defense is a regular publication of the Minnesota Defense Lawyers Association for the purpose of informing lawyers about current issues relating to the defense of civil actions. All inquiries should be directed to MDLA, 1000 Westgate Drive, Suite 252, St. Paul, MN Copyright 2013 MDLA. All rights reserved. 2 MN DEFENSE s SPRING 2013

3 THE PRESIDENT S COLUMN Lisa R. Griebel Terhaar, Archibald, Pfefferle & Griebel, LLP Happy Spring. My thanks to Rich Scattergood, the speakers and sponsors of MDLA s Mid-Winter seminar, which was held at Grand View Lodge in Nisswa, this year. The seminar was well attended, informative and I received many positive comments regarding the change in venue. We have already arranged to go back to Grand View in If you do not regularly attend our mid-winter, I encourage you to do so next year. The mid-winter has been and remains my favorite MDLA event. Embracing our Minnesota winter by getting away to northern Minnesota this time of year is, believe it or not, quite uplifting. In addition, the smaller group of registrants, the participating vendors and sponsors, as well as the winter venue make it an especially beneficial networking event and valuable professional experience. Since my last column, our committees have been continuing their hard work for the benefit of the MDLA membership. Front and center is our Law Improvement Committee (LIC) which, with the help of Sandy Neren (Messerli & Kramer, P.A.), reviews and monitors bills that may jeopardize the level playing field among litigants that the MDLA strives to maintain. The LIC, after review and discussion of the legislation being considered, appears at legislative hearings or submits position papers on the MDLA s behalf. Although the following list is neither exhaustive nor likely to be current by the time this issue goes to press, it gives you an idea of the bills the LIC has been tracking this legislative session on our behalf: Governor s Tax Reform/Sales Tax on Legal Services: In March, the Governor released major changes to his original budget proposal. The revised bill removes the business to business and consumer sales tax changes, including his proposed tax on legal services; Consumer Fraud: The bill presented provides a private cause of action for alleged violations of Minn. Stat. 325F.69 in the public interest. The LIC continues to monitor this bill and will oppose it if it moves forward; Waivers of Liability: The bill prevents waivers of liability for negligent conduct and is aimed at various businesses that seek releases prior to providing services. The LIC continues to monitor this bill and will oppose it if it moves forward; Sex Abuse Statute of Limitations: The bill eliminates the statute of limitations for claims of sex abuse when the sex abuse occurs during a person s minority. In the interest of preventing stale claims that can substantially affect the fairness of a trial, the MDLA suggested certain changes to the legislation that would protect minor plaintiffs as well as prevent stale claims from being brought against entities whose potential liability was based solely upon vicarious liability. Survival of Civil Causes of Action: The bill would institute major changes to Minnesota law by providing that personal injury claims survive the death of the plaintiff, allowing for recovery of pain and suffering damages in wrongful death actions. Believing that our goal of maintaining a level playing field was sufficiently implicated, the MDLA opposed a change in current law. The foregoing is just a handful of the bills that the MDLA, through the LIC, is monitoring this legislative session. Other bills of interest to membership include those impacting workers compensation and no-fault practices. My thanks to LIC chairs Rich Thomas and Tom Marshall, as well as the entire committee, for the fine work it does on behalf of the MDLA. The current legislative session ends May 20. On a related note, as many of you know, the legislature is considering a bill that would change the way we select judges in Minnesota. The MDLA Board of Directors, after reviewing the varying recommendations of both the LIC and Judicial Excellence Committee, decided not to take a position on Judicial Retention Election legislation at this time. We continue to monitor specific legislation related to this issue. If you have questions or comments on the work of the LIC and MDLA at the legislature, please feel free to contact me. MN DEFENSE s SPRING

4 ARTICLES FROM PAST ISSUES JOIN A COMMITTEE Members wishing to receive copies of articles from past issues of Minnesota Defense should forward a check made payable to the Minnesota Defense Lawyers Association in the amount of $5.00 for postage and handling. In addition to the articles listed below, articles dating back to Fall 82 are available. Direct orders and inquiries to the MDLA office, 1000 Westgate Drive, Suite 252, St. Paul, MN Fall 2011 Engineering and Construction Innovations, Inc. v. L.H. Bolduc: New Developments in the Construction Anti-Indemnity Statute Mark A. Bloomquist Don t Disturb the Sleeping Dog: An Overview of the Minnesota Dog Bite Liability Statute and Recent Case Law Dyan Ebert, Garin Strobl and Laura Moehrle Winter 2012 Ex Parte Contacts with Former Employees Michael Goodwin Is Twombly Affecting the Way Minnesota State Courts View Pleadings and Motions to Dismiss for Failure to State a Claim? Paul E.D. Darsow Spring 2012 Collecting Costs and Disbursements After a Defense Verdict Dana L. Gerber, Eric S. Hayes and Mark G. Pryor The Sharp Claws of Cat s Paw Liability Susan M. Tindal Moving Toward Improved Legal Writing Mark R. Bradford Summer 2012 Personal Jurisdiction in the Wake of J. McIntyre Machinery, Ltd. v. Nicastro Russell S. Ponessa Permanent Total Disability Benefits: How Can they Be Permanently Discontinued? Karen R. Swanton and Theresa R. Flack 2012 Legislative Report Sandy Neren Liability and the Sole Defendant: Applying Minnesota Statute Section after Staab v. Diocese of St Cloud Laura A. Moehrle and Matthew M. Johnson Fall 2012 Remodeling Duties: An Insurer s New Duty to Advise the Insured to Request an Allocation of Damages Matthew D. Sloneker and Thomas J. Evenson Your Product Ending Up There Is Not Enough... So What Is? Laura N. Maupin MDLA committees provide great opportunities for learning and participating in discussion of issues and topics of concern with other members in similar practices. Activity in committees can vary from planning CLE programs to working on legislation to informal gatherings that discuss updated practice information or changes in the law. Serving on a committee is one of the best ways to become actively involved in the organization and increase the value of your membership. If you would like to join a committee s listserv, please update your member profile on mdla.org specifying the appropriate committee under the Practice Type section. You will be automatically added to the listserv. To learn more about an MDLA committee you may be interested in, please visit Meeting times and dates for each committee are listed online. Committees available include: Amicus Curiae Commercial Litigation Construction Law Editorial Employment Law Governmental Liability Insurance Law Law Improvement Long Term Care Membership Development Medical Liability and Health Care New Defense Lawyers Motor Vehicle Accident Products Liability Technology Workers Compensation Winter 2013 A Line in the Sand on Sexual Harassment Cases in Minnesota Jessica Ommen The Future Is Now: The Supreme Court s Third and Fourth Trilogies Enforcing the Federal Arbitration Act Create Challenges for Commercial Litigators Stephen P. Laitinen Some More Incredibly Boring Stuff about Medicare and Collateral Source Offsets James S. McAlpine and Laura A. Moehrle 4 MN DEFENSE s SPRING 2013

5 COMING SOON TO A CIVIL CASE NEAR YOU CHANGES TO THE MINNESOTA RULES OF CIVIL PROCEDURE AND GENERAL RULES OF PRACTICE FOR THE DISTRICT COURTS By Jessica J. Theisen, Esq. Cousineau McGuire On February 4, 2013, the Minnesota Supreme Court adopted amendments to the Minnesota Rules of Civil Procedure and the General Rules of Practice for District Courts. Order, ADM , ADM , ADM (Minn. Feb. 4, 2013) ); see Order, ADM , ADM , ADM (Minn. Feb. 12, 2013) (corrective amendments). Effective July 1, 2013, these amendments are intended to facilitate more cost-effective and efficient civil case processing based on recommendations of the Minnesota Supreme Court Civil Justice Reform Task Force (CJRTF). Feb 4, 2013 Order at 1. Established by the Minnesota Supreme Court in November, 2010, the CJRTF was tasked with identifying issues faced by the Minnesota civil courts that affect both administrative efficiency and the accessibility of the civil justice system and to make recommendations for change. In re: Minnesota Supreme Court Civil Justice Reform Task Force, ADM *4 (Minn. Dec. 23, 2011) (hereinafter CJRTF Report ) ; see In re: Minnesota Supreme Court Civil Justice Reform Task Force, ADM (Minn. May. 22, 2011) (Supplemental Report). The CJRTF recommendations were designed to: (1) bring the legal community back to the court system; (2) keep costs down and provide parties with firm trial dates; and (3) bring effective and efficient judicial management to complex cases. CJRTF Report at 5. The discussion that follows is intended to summarize the 2013 amendments and highlight provisions that will likely have the greatest impact on civil cases. I. PROPORTIONALITY One of the most significant changes to the Minnesota Rules of Civil Procedure is the adoption of a proportionality requirement. Discovery in cases pending on or after July 1, 2013, will be limited to matters that would enable a party to prove or disprove a claim or defense or to impeach a witness and comport with the factors of proportionality. Minn. R. Civ. P (b). In determining whether discovery is proportional, the court will consider the burden or expense of the proposed discovery weighed against its likely benefit, considering the needs of the case, the amount in controversy, the parties resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues. Id. Parties bringing motions to compel discovery will now have to establish both good cause and proportionality. Id. While the primary focus of this amendment is discovery, parties must now consider proportionality in all aspects of civil actions. Rule 1. II. ADOPTION OF FEDERAL COURT S AUTOMATIC DISCLOSURE SYSTEM The 2013 amendments adopt the automatic disclosure system in place under the Federal Rules of Civil Procedure. Rule 26.01, as amended, will require initial, expert and pretrial disclosures. These requirements apply to civil cases commenced on or after July 1, Initial disclosures must include: (1) the name and, if known, address and telephone number of persons with discoverable information and the subject(s) of the information; (2) a copy or description of all documents, electronically stored information and tangible things the disclosing party has in its possession, custody or control; (3) a computation of damages by the disclosing party and the documents upon which the calculations are based; and (4) a copy of any insurance agreement which may satisfy all or part of a judgment in the action. Minn. R. Civ. P (a) (1). Coming to a Civil Case Near You continued on page 6 Jessica J. Theisen is an officer with Cousineau McGuire Chartered. Her practice primarily involves work in the areas of construction defect, personal injury and professional malpractice litigation. Ms. Theisen received her bachelor s degree from the University of Minnesota and her J.D. from Hamline University School of Law. MN DEFENSE s SPRING

6 Coming to a Civil Case Near You continued from page 5 Initial disclosures are due within 60 days after the original date to answer, when an answer is required, and within 60 days of the service of the expert affidavit in a medical or professional malpractice case. Minn. R. Civ. P (a)(3). Later joined parties must make their initial disclosures within 30 days after being served or joined. Minn. R. Civ. P (a)(4). Initial disclosure deadlines may be modified by stipulation or court order. Minn. R. Civ. P (a)(3) and (4). Expert disclosures must be accompanied by a written report prepared and signed by the expert and include: (1) the witness opinions and basis; (2) the facts or data considered by the witness; (3) any exhibits that will be used to summarize or support the opinions; (4) the witness qualifications, including a list of publications authored in the previous 10 years; (5) a list of all other cases in which the witness testified during the previous 4 years; and (6) a statement of the witness compensation for the study and testimony on the case. Minn. R. Civ. P (b)(2). If not otherwise set by the court, disclosures will be due at least 90 days before trial. Minn. R. Civ. P (b)(4). If solely to rebut or contradict another party s disclosure, they are due within 30 days after the other party s disclosure. Id. Parties are also required to provide pretrial disclosures that must identify trial witnesses, including those who will testify by deposition, and trial exhibits. Minn. R. Civ. P (c)(1). Pretrial disclosures will be due at least 30 days before trial unless ordered otherwise and objections to the disclosures must be served and filed within 14 days after the disclosures were made or are waived. Minn. R. Civ. P (c)(2). Certain types of cases are excluded from the initial, expert and pretrial disclosure requirements. Minn. R. Civ. P (a)(2). Examples of such cases include actions for review of an administrative record, a proceeding ancillary to a proceeding in another court, an action to enforce an arbitration award, conciliation court appeals, and default judgments. See id. Parties failing to make the required disclosures may be sanctioned. Minn. R. Civ. P (a). These sanctions may include exclusion of the undisclosed witness, payment of reasonable attorney s fees, informing the jury of the failure and/or imposition of other sanctions. Id. III. NEW CASE FILING REQUIREMENTS Minn. R. Civ. P is amended to require that any action not filed with the court within one year of commencement against any party is deemed dismissed with prejudice against all parties unless the parties within that year sign a stipulation to extend the filing period. No case may be dismissed pursuant to this amendment until one year after the effective date of the amendments, July 1, IV. ELIMINATION OF THE INFORMATIONAL STATEMENT AND ADDITION OF DISCOVERY PLAN The amendments eliminate the informational statement and replace it with a civil cover sheet for most non-family civil cases. Gen. R. of Practice 104. Any other party to the action may, within 10 days of service of the filing party s cover sheet, file a supplemental civil cover sheet to provide additional information about the case. Gen. R. of Practice 104(b). Parties are also required to confer to create a discovery plan to be later filed with the court. Minn. R. Civ. P The discovery plan must address deadlines for initial disclosures and discovery, electronically stored information issues, privilege issues and discovery scope. Minn. R. Civ. P (c). Sanctions are available against parties or their attorneys who fail to participate in good faith in developing and submitting a proposed discovery plan. Minn. R. Civ. P V. VOLUNTARY NON-DISPOSITIVE MOTION PROCEDURE Parties will now have the opportunity to utilize an expedited informal non-dispositive motion process. A moving party may invoke this procedure by written notice to the court and all parties and by scheduling a telephone conference. Gen. R. of Practice (d). The parties may submit their respective positions in short letters prior to the conference. The court will read the written submissions of the parties before the phone conference, hear parties arguments at the conference, and issue its decision following the phone conference. Telephone conferences will not be recorded or transcribed. The court may also decide that that the dispute must be presented by formal motion and hearing. VI. ESTABLISHMENT OF A COMPLEX CASE PROGRAM Complex cases will be handled in the new Complex Case Program ( CCP ). Gen. R. of Practice 146. Based on the system in place in California, a complex case is defined as an action that requires exceptional judicial management to avoid placing unnecessary burdens on the court or the litigants and to expedite the case, keep costs reasonable, and promote effective decision making by the court, the parties and counsel. Gen. R. of Practice (a); see CJRTF Report at 27. Such cases include matters with numerous hearings and motions, multiple separately represented parties, a large number of witnesses and/or substantial documentary evidence, multiple expert witnesses, Coming to a Civil Case Near You continued on page 7 6 MN DEFENSE s SPRING 2013

7 Coming to a Civil Case Near You continued from page 6 coordination with other jurisdictions, substantial postjudgment judicial supervision and/or complex legal and technical issues. Gen. R. of Practice (b). Examples of provisionally recognized complex cases include construction defect, products liability and mass tort cases. Gen. R. of Practice (c). Parties may also agree to the CCP designation by filing a CCP Election. Gen. R. of Practice (d). Complex cases will be assigned to a single judge within 30 days of filing. Gen. R. of Practice Within 28 days of assignment the judge shall hold a mandatory case management conference and, thereafter, issue a Case Management Order and Scheduling Order. Gen. R. of Practice and VII. HOW WILL THE AMENDMENTS IMPACT MINNESOTA CIVIL CASES? The effects of the 2013 amendments will be most noticeable during the discovery phase of cases. As recognized by the CJRTF, the adoption of a proportionality requirement creates a presumption of narrower discovery. CJRTF Report at 17. Some have concerns that this new requirement may be used to limit necessary discovery. Others view the amendments as a reasonable method to control the costs of litigation. Whatever one s perspective, the new proportionality requirement will impact both plaintiffs and defendants. Plaintiffs may use the new requirement to limit discovery in cases when a defendant seeks complete medical or other records, especially in a straightforward, small value case. On the other hand, the proportionality requirement may be used by defendants to oppose a plaintiff s request for information about the outcome of every examination ever performed by a Rule 35 examiner or every claim ever denied by an insurer; discovery which may cost several hundreds, if not thousands, of dollars but rarely yields any information which would help a party prove its case. Both parties are likely to benefit from the application of proportionality to electronic discovery which should cut down on seemingly endless fishing expeditions for all s or all electronic documents which often result in significant expense. A well-supported motion to compel which addresses the proportionality factors in Minn. R. Civ. P (b) will now be essential to obtaining discovery. Prompt and detailed pre-suit investigation of claims will also be necessary to comply with the new initial disclosure requirements. Identification of witnesses and the location and scope of relevant documents, electronically stored information and tangible items prior to suit will be of great importance. As the rules now recognize, a party will not be excused from making an expert disclosure because it has not fully investigated the case. Minn. R. Civ. P (a)(5). The new expert disclosure requirements should streamline cases and decrease disputes about timing of disclosures. These changes require plaintiffs to disclose their opinions before defendants, providing defendants opportunity to know the claims and opinions against which they must defend before their experts opinions are due. Disputes based on a party s reading of a scheduling order (i.e. Does it require disclosure of only the identity of the expert? Or the expert s identity and opinions?) should be eliminated with this rule change. However, parties must be prepared to make a disclosure that includes a written report from their experts, which will result in an additional expense in some cases. In addition, an argument can be made that the available sanctions for non-disclosure of witnesses shifts the burden to the non or late disclosing party to establish the failure was substantially justified or harmless, as opposed to the other being required to establish prejudice from the late or non-disclosure. Minn. R. Civ. P ; c.f. Dennie v. Metropolitan Medical Center, 387 N.W.2d 401, 405 (Minn. 1986) (stating that expert testimony should be suppressed for failure to make a timely disclosure of the expert s identity only where counsel s dereliction [in failing to make the disclosure] is inexcusable and results in disadvantage to his opponent. ). VIII. CONCLUSION The aforementioned amendments to the Minnesota Rules of Civil Procedure and General Rules of Practice are the product of the CJRTF recommendations. While it remains to be seen how the rule changes will be interpreted by the courts and utilized by parties, they appear to be a step in the right direction to decrease the costs of litigation and streamline the discovery process in civil litigation. MN DEFENSE s SPRING

8 ETHICS IN ARBITRATION: THREE PROPOSALS TO PROMOTE EFFICIENCY, FINALITY AND FAIRNESS IN MINNESOTA S NO-FAULT ARBITRATION SYSTEM By Sarah R. Jewell Reichert Wenner, P.A. Good Friday, 2006 was not a good day for me because my car was rear-ended by a Ford F350 truck when I stopped for traffic. Just before impact, I looked up in my rearview mirror and watched in disbelief as I saw the truck approaching my car from behind. The impact made dents all the way down to the vehicle frame and littered the road with debris. Before this accident, I had never been involved in any type of arbitration proceeding. My experience in navigating the process of no-fault arbitration as administered by the American Arbitration Association 1 ( AAA ) inspired me to think about how arbitration touches the lives of Minnesotans across the state and the options available to improve the arbitration process. The goal of this article is to propose changes to Minnesota s no-fault arbitration system. The proposed changes are meant to offer a better range of choices in arbitrators for a particular location; to offer knowledge of past decisions by arbitrators through publication of arbitration awards; and to provide a limited opportunity for review of an arbitrator s decision within the administering agency before parties seek vacatur in district court. FOR THE LOVE OF ARBITRATION Some would say that in these economic times, arbitration is a necessary and integral part of our judicial system. District court dockets are increasingly backlogged and litigation is both time consuming and costly. Therefore, it is easy to see why alternative dispute resolution methods 1 The American Arbitration Association is the approved vendor for administering Minnesota s no-fault arbitration services. like arbitration are increasingly desirable. With many reasons to love arbitration, and with increasing numbers of Minnesota s general public being funneled into the arbitration system as a means of settling no-fault insurance disputes, policy makers need to ensure legitimacy in the process now more than ever. See, e.g. Charles N. Bower, The Ethics of Arbitration: Perspectives of a Practicing International Arbitrator, Berkeley Journal of International Law & Publicist, Key Note Address (2010), com/publicist/2010/05/k.html. Since the passage of the Federal Arbitration Act in 1925, 2 the previous use of and negative attitude toward arbitration as a means of resolving disputes has dramatically changed from its traditional use in commercial disputes between repeat player parties, to today where arbitration is now the preferred method of alternative dispute resolution in everything from disputes involving information contained on a website, to disputes with credit card companies, your stock broker, airlines and even hospitals. Carrie Menkel-Meadow, Ethics Issues in Arbitration and Related Dispute Resolution Processes: What s Happening and What s Not, 56 U. Miami L. Rev. 949 (July, 2002). CONFLICT OF INTEREST AND BIAS IN ARBITRATION Arbitration typically saves the parties time and money as compared to pursuing a lawsuit in the courts; however, there are drawbacks. For instance, arbitrators 2 Title 9, US Code, Section 1-14, was first enacted February 12, 1925 (43 Stat. 883), codified July 30, 1947 (61 Stat. 669), and amended September 3, 1954 (68 Stat. 1233). Ethics in Arbitration continued on page 9 Ms. Jewell is an associate at Reichert Wenner, PA in St. Cloud, MN. Ms. Jewell attended Pepperdine University in Malibu, CA, graduating with a B.A. in Communications. Ms. Jewell obtained her J.D. from Hamline University School of Law in Ms. Jewell also earned a Certificate in Advocacy and Problem Solving from Hamline s top-ranked Dispute Resolution Institute, and is a qualified neutral under Minnesota Rule 114. Ms. Jewell practices business law and civil litigation, including employment law, real estate disputes, appeals, and agricultural law. 8 MN DEFENSE s SPRING 2013

9 Ethics in Arbitration continued from page 8 with undisclosed conflicts of interest are a major concern. Most arbitrators are sought after for their expertise and knowledge in a particular area of law and therein lies the problem. In order for an arbitrator to become an expert in a particular area of law, he or she must have practiced in that area for a significant period of time. During that period of time, an expert naturally develops relationships with others who may refer cases to him or her. Before becoming an arbitrator, the now-expert arbitrator likely specialized in representing one side or the other and may still actively represent those clients. But during arbitration, both sides want an impartial and fair arbitrator to review the merits of the case. The arbitrator is the judge and jury; the fact finder who has the power to grant or deny awards. However, unlike a judge, the arbitrator s decision is not made public and is only subject to limited review. See Fed. R. Civ. 60; Minn. R. Civ Once an award is made, it is difficult to get it overturned because arbitration awards are final. EMBEDDED NEUTRALS AND FAIRNESS Whether looking at commercial arbitration players or the Minnesota no-fault arbitration system, there is astounding evidence of the rise of embedded neutrals, particularly in uneven contexts between one-time and repeat players. See Nancy A. Welsh, What Is (Im)Partial Enough in a World of Embedded Neutrals?, 52 Ariz.L.R. 395 (Summer, 2010). Embedded neutral is a term that describes arbitrators, mediators and other dispute resolution neutrals whose involvement arises as a result of their association with one of the parties involved in the dispute. Id. This situation may be particularly worrisome: when the embedded neutral s role has come about due to his or her special relationship with the repeat player; the one-time player is not as sophisticated as the repeat player; and the one-time player has not voluntarily chosen the dispute resolution forum that will be used to resolve their dispute, and is not aware of the special relationship between the embedded neutral and the repeat player or is effectively unable to challenge it. Id. Despite these concerns, the United States Supreme Court has upheld arbitral decisions and settlement agreements produced by alleged embedded neutrals and has repeatedly rejected one-time players claims of structural bias. Id. VACATUR After arbitration, aggrieved parties may not be satisfied with an arbitrator s decision or may suspect undisclosed conflicts of interest created an unfair bias. Those parties may have an arbitrator s award vacated in district court under Federal Rule of Civil Procedure 60 and Minnesota Rule of Civil Procedure Minnesota statutes require vacatur where an arbitration award was procured by corruption, fraud or other undue means; there was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party. Minn. Stat , subd. 1(2)(2010). Although the rules for vacatur are in place, vacatur generally is not favored, and courts typically will only reverse an arbitrator s award where evident unfairness, unconscionability or fraud is clearly shown. Despite a general satisfaction with Minnesota arbitration, even Minnesota arbitrators are not immune to accusations of bias. The Minnesota Court of Appeals, for instance, affirmed a trial court s vacation of an award under the No- Fault Act after finding an appearance of bias sufficient to support the trial court s vacation of the original arbitration award. Balchova v. Bassovski, 1997 WL (Minn. Ct. App. Sept. 9, 1997) (arbitrator found for respondent and made statements to petitioner s attorney appearing to show bias against immigrants). The court based its holding in Balchova in part on Northwest Mechanical Inc. v. Public Utilities Commission of City of Virginia, 283 N.W.2d 522 (Minn. 1979) (holding even those impermissible contacts or dealings that might create an impression of possible bias suffice to show evident partiality); and Produce Refrigerator Co. v. Norwich Union Fire Ins. Soc y, 97 N.W. 875, 877 (Minn. 1904) (noting general rule that person is disqualified to act as arbitrator where he or she has formed opinion or is otherwise prejudiced with respect to subject matter). NO-FAULT ARBITRATION IN MINNESOTA Minnesota Statutes section 65B.525, subdivisions 1-2, requires mandatory submission to binding arbitration of claims brought by an insured against his or her insurance company for resolution of disputes arising under the No-Fault Act. Minnesota s no-fault system initially incorporated a means of alternative dispute resolution arbitration for cases valued at $1,000 or less. Over time, the value of the cases which must be mandatorily decided via no-fault arbitration proceedings has increased. Minn. Stat. 65B.525. The value of cases covered by the statute increased to $5,000, and then again to $10, B.44(2010). The Minnesota Supreme Court authorized and appointed a No-Fault Standing Committee to oversee the administration of the no-fault system of arbitration and to recommend changes to the rules governing nofault proceedings. Minn. No-Fault Rule 43. Although the no-fault system has changed over the years, most would say it works as intended to provide those injured in automobile accidents with fast, fair and final decision on their claims under the No-Fault Act. In fact, since 1975, the American Arbitration Association has presided over tens of thousands of arbitrations under Minnesota s no-fault Ethics in Arbitration continued on page 10 MN DEFENSE s SPRING

10 Ethics in Arbitration continued from page 9 system. See AAA Website. 3 Yet, underneath the exterior of a pretty good system are smoldering conflicts and polarized views regarding the rules governing no-fault arbitration proceedings in Minnesota. Kate Stifter, Vice President of the American Arbitration Association s Minneapolis office (Phone interview Jan. 21, 2011, Minneapolis, Minnesota). The benefits of arbitration are only worthwhile if the parties obtain a fair hearing, absent the spectre of bias and undisclosed conflicts of interest. It is increasingly difficult to strike a proper balance between fairness and efficiency because parties interests in keeping costs down seem to conflict with necessary procedures to ensure fairness and full disclosure. FAIRNESS, PERCEIVED The public needs an arbitration system that is fair, impartial and somewhat open to public scrutiny. This is particularly true because the participants have no choice but to participate in arbitration and they have little recourse if they receive an unfair or biased award. Although finality in arbitration is an important feature, the arguably more important aspect of a no-fault arbitration system is the perceived fairness of the process. One way to achieve perceived fairness is by enhancing the current procedures available to consumers by adding an optional layer of internal review before a party may seek vacation in the courts. This option already exists in New York s no-fault arbitration system and is administered by the same service provider we have here in Minnesota: the AAA. In 2009, Mahavong v. Allstate Property & Casualty Company, Inc., Stearns County District Court File No. 73-CIV (2009) made waves in the Minnesota No-Fault Governing Committee, (a/k/a the Standing Committee ) and prompted changes in the rules for no-fault arbitrators. In Mahavong, a local St. Cloud, Minnesota attorney, Frank Rajkowski, of the Rajkowski Hansmeier Law Firm, was slated to serve as an arbitrator for a no-fault proceeding. Petitioner Mahavong was represented by Attorney Joe Crumley of Bradshaw & Bryant. Id. Before the arbitration was held, Crumley objected to Rajkowski serving as arbitrator due to a perceived conflict of interest with the Respondent, Allstate Insurance. Id. Rajkowski did not agree that he had a conflict of interest and insisted on serving as arbitrator. Crumley moved the district court to disqualify Rajkowski on grounds that even if Rajkowski did not have a direct 3 afrwindowid%3dnull%26_afrloop%3d %26_ afrwindowmode%3d0%26_adf.ctrl-state%3doe3b970uk_166 conflict of interest, he benefitted from his partner s work with Allstate and thus had an indirect pecuniary interest and potential for bias in the outcome of the arbitration. Id. The district court agreed with Crumley and disqualified Rajkowski from serving as the arbitrator. Although Rajkowksi did not have a direct conflict at the time, he was still financially benefitting from his partner s work with Allstate and that was enough for the court to grant disqualification in order to avoid the appearance of bias where Rajkowski was arguably an embedded neutral See Welsh, Supra. Mahavong was one of the cases mentioned as support for recent Amendments to the Rules of Procedure for No-Fault Arbitration which were passed by the Standing Committee May 3, 2010, particularly Rule 10(b). See Petition For Amendments to the Minnesota No-Fault Arbitration Rules. 4 Minnesota No-Fault Rule 10 governs conflicts of interest and required disclosures for arbitrators serving in no-fault proceedings in Minnesota. From 2007 to 2010, the Standing Committee proposed several changes to Rule 10. Supreme Court Petitions. 5 In 2009, the Standing Committee proposed changes to Rule 10(b) that are now the current rule. Current Rule 10 states (in relevant part): a. Every member of the panel shall be a licensed attorney at law of this state or a retired attorney or judge in good standing. Effective January 1, 2004, requirements for an arbitrator shall be: (1) at least 5 years in practice in this state; (2) at least onethird of the attorney s practice is with auto insurance claims or, for an attorney not actively representing clients, at least one-third of an ADR practice is with motor vehicle claims or not-fault [sic] matters; (3) completion of an arbitrator training program approved by the No-Fault Standing Committee prior to appointment to the panel; (4) at least three CLE hours on nofault issues within their reporting period; and (5) arbitrators will be required to re-certify each year, confirming at the time of recertification that they continue to meet the above requirements. b. No person shall serve as an arbitrator in any arbitration in which he or she has a financial or personal conflict of interest. Under procedures established by the Standing Committee and immediately following appointment to a case, every arbitrator shall be required to disclose any circumstances likely to create a presumption or possibility of bias or conflict that may disqualify the person as a potential arbitrator. Every arbitrator shall supplement the disclosures as circumstances require. The fact that an arbitrator or an arbitrator s firm represents automobile accident claimants against insurance companies or self-insured, including the respondent, does not create a presumption of bias. It is a financial conflict of interest if, within the last year, the appointed arbitrator or the arbitrator s firm has been hired by the respondent to represent the respondent or the respondent s 4 for%20amend%20no-fault%20arb%20rls.pdf 5 standing%20committee&zoom_per_page=10&zoom_cat=-1&zoom_and=0&zoom_ sort=0 Ethics in Arbitration continued on page MN DEFENSE s SPRING 2013

11 Ethics in Arbitration continued from page 10 insureds in a dispute for which respondent provides insurance coverage. It is a financial conflict of interest if the appointed arbitrator is aware of having received referrals within the last year from officers, employees or agents of any entity whose bills are in dispute in the arbitration or the arbitrator s firm has received such referrals and the arbitrator is aware of them. The one-year limitation on insurance defense firms having their partners serve as arbitrators if they have done business with the insurance company who is the Respondent in an arbitration proceeding has created an even greater polarization of the Standing Committee between plaintiffs attorneys and insurance defense attorneys. Stifter Interview, Supra. Outside of the metro area, the pool of potential qualified arbitrators necessarily shrinks when many of them are going to be disqualified based on that limitation. Also, it seems rather duplicitous that the rule claims it is not a presumption of bias for a firm to work with claimants against insurance companies, including the Respondent in a given arbitration, but if an arbitrator has worked with a Respondent in the past one year that individual is automatically disqualified from serving as arbitrator in a dispute involving that company. This rule cuts only one way: against insurance defense attorneys. PROPOSED CHANGES I propose three changes to improve no-fault arbitrations in Minnesota. First, alter Rule 10(a) of the no-fault rules to allow attorneys who do not have at least 1/3 of their practice in automobile cases to serve as no-fault arbitrators. Second, publish no-fault arbitration awards. Third, provide for a limited internal review of no-fault arbitration awards by a AAA Special Master. 1. Allow additional attorneys to serve as arbitrators Currently, Rule 10(a) requires that every member of the arbitrator panel be a licensed attorney in the state; have at least 5 years in practice in the state; that at least 1/3 of the attorney s practice is with auto insurance claims or motor vehicle claims or no-fault claims; and that the individual must have all the other training and requirements established by the Standing Committee before appointment to the panel. This Rule should be amended to allow other kinds of law practitioners (such as trust and estate attorneys and not just insurance defense lawyers and personal injury lawyers), to serve as arbitrators for no-fault cases with a potential award value of less than $10, This change would allow for a larger pool of potential arbitrators who are not already conflicted in outstate areas, where the same people practicing in personal injury arising from motor vehicle accidents and insurance defense are going to be disqualified much faster. In addition, we already allow randomly-selected people off the street to serve as jurors and decide civil cases worth much larger dollar values and criminal cases where a defendant s liberty is at stake. Therefore, why not allow an attorney who has dealt with principles and doctrines of law in different areas, and presumably has a basic understanding of what a trier of fact should look for in a case, to serve the quasi-judicial function of deciding no-fault disputes? Critics may ask, how do we create a more ethical practice by opening up practice rather than restricting access to practice? Although trust attorneys may not be experts in no-fault proceedings they, and others like them, are the perfect solution to the problem of bias and conflicts of interest because they are not already embedded in the no-fault system. In other words, rather than having the majority of their practice stemming from insurance companies or personal injury claimants, such attorneys would likely have a mix. Allowing other kinds of attorneys to add no-fault arbitration to the mix of their practices is a practical and efficient answer to avoiding conflicts which are inherent in embedded neutrals. While most regulatory approaches to increasing quality start from the perspective of limiting the players, this would not be a problem because all arbitrators would still have to undergo the basic arbitration training requirements stated in the Minnesota No Fault Standing Committee s rules. 2. Publish Arbitrator Opinions My next proposed change is to publish arbitrators decisions. Because participants are required to resolve their disputes in mandatory, binding arbitration, the parties should have an idea of who their arbitrator is by looking up some of that arbitrator s decisions. Just like judges who may have certain tendencies, arbitrators may have tendencies, too. If their decisions are publicized, then attorneys from both sides can be better informed as to whom they wish to strike from the list of potential arbitrators offered by AAA. In addition, arbitrators opinions should be published because no-fault proceedings serve a quasi-judicial function. Greater transparency is necessary when parties are cut off from their right to appeal to a court of competent jurisdiction and be heard before a judge whose decisions are made public. Parties should have the right to know the judge (arbitrator) who will decide their case. Critics of this proposal may say it would add unnecessary costs to the program, which is meant to resolve disputes efficiently. There may be some additional costs; however, those costs would be no more than scanning an award and posting it online (after redacting personal information, of course). In fact, I venture to guess that Thomson Reuters would publish the data in Ethics in Arbitration continued on page 12 MN DEFENSE s SPRING

12 Ethics in Arbitration continued from page 11 a searchable database if they could get it from the courts. Westlaw already hosts a database with other arbitration decisions, such as NASDAQ arbitrations between investors and their stock brokers as well as some labor law arbitration awards. See www. lawschool.westlaw.com. With technological advances and the ability of even a pro se litigant to access materials online or in a public library, publishing arbitrator decisions is not such a farfetched idea; it is an idea whose time has come. 3. Add Internal Reviews My next proposal is to add an internal review process to No-Fault Arbitrations which would be handled within AAA in Minnesota to allow parties the opportunity to have another set of eyes review the award for any bias, unfairness, or mistake of law. Similar to the New York no-fault arbitration system, also administered by AAA, the Minnesota Legislature should allow the opportunity for an appeals-type proceeding conducted by a Master Arbitrator. These reviews would have similar limitations to those in force in New York, so that costs would be limited and the scope of review narrowly tailored to only address the issues brought forward in the original arbitration. Again, critics may view this added layer of review as eroding, rather than increasing, the virtue of finality. However, a limited review system within the framework of the existing no-fault arbitration system would allow parties to challenge an arbitration outcome without filing for vacatur in district court, which is often difficult to obtain absent a clear violation of ethical rules. It would also lessen the burden on the courts from hearing these types of disputes. By limiting the scope and the time for appeal, parties would still receive finality on arbitration awards much more quickly than they would in the courts. MDLA UPCOMING DATES 2013 Insurance Law Committee Meeting Location: TBD May 14, 2013 Medical Liability and Health Care Law Committee Meeting Location: TBD May 23, 2013 MDLA/MAJ 2013 CLE Seminar and Golf Tournament StoneRidge Golf Club Stillwater, MN June 19, 2013 Insurance Law Committee Meeting Location: TBD July 9, 2013 MDLA Women Lawyers Breakfast Location: TBD July 18, 2013 MDLA 2013 Trial Techniques Seminar Duluth Entertainment & Convention Center Duluth, MN August 22-24, 2013 Insurance Law Committee Meeting Location: TBD September 10, 2013 Medical Liability and Health Care Law Committee Meeting Location: TBD September 26, 2013 CONCLUSION Since 1974, the rules governing Minnesota s no-fault arbitration system have undergone several changes. However, more are needed to bring the reality in line with the parties hopes and expectations for the process: a better range of choices in arbitrators for their locality; knowledge of past decisions by arbitrators; and the opportunity to appeal or challenge an arbitrator s decision within the realm of no-fault proceedings before attempting to vacate an award in district court. With these few changes, we can enhance the efficiency, finality and fairness of Minnesota s nofault arbitration process by learning from other states systems while uniquely tailoring the rules to fit the needs of all constituents involved in the process. WATCH FOR MORE INFORMATION ON THESE AND OTHER EVENTS IN MINNESOTA DEFENSE AND AT 12 MN DEFENSE s SPRING 2013

13 TYING THE HANDS OF INSURANCE COMPANIES AND THE CONTRACTUAL RIGHT TO EXAMINATIONS UNDER OATH HOW WESTERN NATIONAL AND PADILLA LIMIT EUOS IN THE NO-FAULT CONTEXT By Elizabeth Kumagai and Jesse Beier Stich, Angell, Kreidler & Dodge, P.A. I. INTRODUCTION The right to an examination under oath ( EUO ) in the no-fault context has been eroded due to two recent cases, the Minnesota Supreme Court decision Western National Insurance Company v. Thompson, 797 N.W.2d 201 (Minn. 2011) and the unpublished Minnesota Court of Appeals decision State Farm v. Padilla, No. A , 2012 WL (Minn. Ct. App. December 24, 2012) rev. denied (Minn. Feb. 27, 2013). In Western National, the court held that in no-fault arbitrations the arbitrator may make factual determinations on the reasonableness of a request for, or refusal to submit to, an examination under oath. The Minnesota Court of Appeals revisited this issue more recently in State Farm v. Padilla. Although unpublished, Padilla provides insight on how insurance companies can navigate an increasingly hostile EUO environment. II. HISTORY OF EXAMINATIONS UNDER OATH IN MINNESOTA The insured has many responsibilities after a claim is submitted to an insurance company. Among other things, the insured is often required by the policy language to submit to an examination under oath. Examinations under oath provisions have existed in Minnesota for more than 110 years. See, Hamberg v. St. Paul Fire & Marine Ins. Co., 68 Minn. 335, 337, 71 N.W. 388, 388 (1897) (noting insurance policy requirement that the insured submit to examination in presence of notary). The United States Supreme Court has recognized for more than 125 years that examination under oath provisions in contracts of insurance are appropriate and enforceable. See Claflin v. Commonwealth Ins. Co., 110 U.S. 81, (1884). Other jurisdictions have regularly enforced examination under oath provisions. The majority of courts have consistently held that failure to submit to questions under oath is a material breach of the policy terms and a condition precedent to an insured s recovery under the policy. Watson v. Nat l Surety Corp. of Chicago, Illinois, 468 N.W.2d 448, 451 (Iowa 1991) (citing cases). A standard insurance clause requiring examinations under oath provides: any person making a claim must, as soon as possible... submit to examinations under oath as often as we (Metropolitan) reasonably may require. Metropolitan Cas. Ins. Co. v. King, No. C , 2003 WL *2 (Minn. Ct. App. May 6, 2003) (citing Metropolitan s policy language for examinations under oath). The Supreme Court has determined that the purpose of such a provision is to facilitate the expedient investigation of claims. Id. (citing Claflin, 110 U.S , 3 S.Ct. 515). The Supreme Court specifically noted that [t]he object of the provisions... was to enable the company to possess itself of all knowledge, and all information as Tying the Hands of Insurance Companies continued on page 14 Elizabeth Kumagai (Betsy) joined the law firm of Stich, Angell, Kreidler & Dodge, P.A. as an associate attorney in June of She was admitted to practice in Minnesota in October She worked as a judicial clerk for the Honorable Jack S. Nordby in Hennepin County Family Justice Center and Hennepin County District Court from July of 2006 through May She also assists the William Mitchell Client Counseling team as a judge. Her practice primarily involves work in the areas of personal injury, construction defect law and insurance coverage. Jesse Beier began working for the law firm in June of 2008 as a law clerk and joined the firm as an associate attorney upon Admission to the Minnesota State Bar in October, Mr. Beier focuses his practice in the areas of construction defect and personal injury law. MN DEFENSE s SPRING

14 Tying the Hands of Insurance Companies continued from page 13 to other sources and means of knowledge, in regard to the facts, material to their rights, to enable them to decide upon their obligations, and to protect them against false claims. Id. (emphasis added). Before Western National, the most recent case in Minnesota regarding examinations under oath provisions in the no-fault context was Metropolitan Casualty Insurance Company v. King. No. C WL (Minn. App. Ct. May 6, 2003). Among other things, the appellant in King argued that the EUO provision in the policy was ambiguous and tantamount to formal discovery, and therefore inconsistent with the purpose of the No-Fault Act. The court disagreed, holding: [n]o section of the no-fault act prevents insurers from investigating claims or requesting that insureds provide insurers with infonnation. Furthermore, Minnesota law requires that insurance companies institute, implement, and maintain an antifraud plan that is designed, in part, to diminish claims fraud. Minn. Stat. 60A.954, subd. 1 (1) (2002). Examinationunder-oath provisions are designed to diminish claims fraud. King, at *3 (citing Claflin, 110 U.S. at 94-95, 3 S.Ct. at 515) (noting that object of examination-under-oath provision is to protect insurers against false claims). Appellant also argued that the district court erred by granting summary judgment to Metropolitan, noting that once his claim was denied based on noncooperation, he agreed to submit to an examination that was limited in scope. The court specifically evaluated appellant s actions in refusing to attend an EUO, noting that the limitation does not appear in the policy s examination-under-oath provision, upholding the district court s finding of summary judgment for Metropolitan. The court did not exclusively reserve the determination of the reasonableness of the request for an EUO for the arbitrator. III. WESTERN NATIONAL INSURANCE COMPANY V. THOMPSON In Western National, the Minnesota Supreme Court held that in a no-fault arbitration, the arbitrator may make binding factual determinations as to the reasonableness of a request by an insurer or an insured s refusal to submit to an EUO; however, any legal conclusions reached by the arbitrator are subject to de novo review by the courts. Western Nat l Ins. Co. v. Thompson, 797 N.W.2d 201 (Minn. 2011). A. Facts The Thompsons were injured as a result of an automobile accident and incurred expenses for chiropractic treatment. They filed claims with Western National, their auto insurer, for benefits under their no-fault policy. Western National initially paid for the insureds medical care arising from the accident, but thereafter discovered that Mrs. Thompson worked for her treating chiropractor. Id. at 203. Consequently, Western National sent a letter to the Thompsons requesting they attend an EUO in accordance with its policy language stating that, an insured must submit to an examination under oath as often as [Western National] reasonably requires. The Thompsons refused to attend the EUO stating that they would not attend the depositions. Western National concluded that they were in breach of the policy and denied all outstanding claims for medical expense benefits. Id. at 204. The Thompsons filed a petition for no-fault arbitration. Western National initiated a declaratory judgment action in district court. Western National moved to stay the arbitrations with the respective arbitrators on the grounds that whether the Thompsons had breached the policy was a question of law outside the jurisdiction of the arbitrator. Both arbitrators denied the motions to stay the arbitration. The district court concluded that the reasonableness of Thompsons refusal to submit to EUOs was a fact issue to be determined by the arbitrator. The court of appeals reversed, holding: (1) the refusal to submit to examinations under oath was a question of law for the courts, outside the arbitrators jurisdiction; (2) the Thompsons breached their policy by not attending the EUOs without legal excuse; and (3) Western National s motion for summary judgment should have been granted. Id. B. Analysis The court reviewed the relevant provisions of the nofault act and applicable case law to determine whether or not the policy language requiring an EUO was in conflict with this authority. Id. at 205. The court noted that the no-fault act is designed to simplify and ease the burden of litigation, and imposes certain obligations on both the insured-claimant and the insurer in order to meet that goal. Id. (citing Neal v. State Farm Mut. Ins. Co., 529 N.W.2d 330, 333 (Minn. 1995)). The court held that an EUO is permitted under the statute. Western Nat l at 206. The court specifically held that under Minn. Stat. 65B.56, subd. 1, the insurer may require the claimant to attend an EUO, provided it is reasonably necessary for the insurer to obtain medical reports and other needed information to determine the nature and extent of the insured claimant s injuries and loss, and the medical treatment received. Id. The court then reviewed Western National s argument that the reasonableness of the refusal to submit to an EUO was a question of law reserved the court. Id. at The court held that a coverage dispute does not go to the merits of the claim, but to the existence of a claim. The court determined that the reasonableness of a request for an EUO addressed the merits of the claim. Therefore, the dispute was not a coverage dispute to be decided by the courts. Id. at 207. Tying the Hands of Insurance Companies continued on page MN DEFENSE s SPRING 2013

15 Tying the Hands of Insurance Companies continued from page 14 Lastly, the court addressed whether Western National s request for EUOs and the Thompsons refusal to comply is a question of fact or law. Id. The court cited Neal, 529 N.W.2d at 330 noting that the arbitrator s finding that Claimant unreasonably refused to attend an IME was within his fact-finding authority. Id. The court also cited Weaver v. State Farm Ins. Co., 609 N.W.2d 878 (Minn. 2000), noting that the arbitrator has the authority to award, suspend, or deny benefits based on the arbitrator s factual determination of the reasonableness to request an IME or refusal to attend an IME. The court relied on both Weaver and Neal to find that the request for an examination under oath and the refusal of such a request are questions of fact for the arbitrator to determine. The court also found that even though the arbitration awards were silent on the issue of reasonableness, the arbitrator had implicitly held that the plaintiffs refusal was reasonable. Id. at Western National curtails insurance companies rights to obtain examinations under oath in the no-fault context by granting tremendous discretion to the arbitrator. As Justice Barry Anderson noted in his concurrence in Western National: [b]ecause arbitrators factual determinations are final, an unintended result of this case is that arbitrators may be more likely to determine, without explanation, that an insured s refusal to submit to an examination under oath is reasonable. This, in turn, effectively would deprive insurers of a valuable investigatory tool... Id. at 10. As Justice Anderson correctly noted, the lack of guidance concerning what is reasonable and what is not could undermine the goals of consistency and impartiality in the no-fault automobile insurance system. Id. Although common sense dictates that provider fraud and coverage concerns should be investigated through the use of examinations under oath, the current climate has put this valuable tool at the whim of each individual arbitrator. The Western National concurrence correctly addresses this concern when noting inconsistencies in the treatment of requests for examination under oath likely will develop because one arbitrator may adopt the position that one examination under oath is always reasonable while another arbitrator may decide that no examination under oath is ever reasonable. Id. As we are seeing, the identity of the arbitrator is outcome-determinative. The holding in Western National provides no guidance to establish what is a reasonable request for, or refusal of, an EUO, leaving this essential determination in the hands of individual arbitrators. Justice Anderson wisely stated: our opinion today may not be the final word on how requests for examinations under oath are received in the future. Id. The court may come to a different conclusion if the arbitrators explicitly list their reasoning for determinations regarding a request for an EUO. Insurers should request that arbitrators provide their rationale for determinations about findings regarding EUOs. The court will otherwise hold that arbitrators implicitly found the denial reasonable if no rationale is given. IV. STATE FARM INSURANCE COMPANY V. PADILLA In December of 2012, the Minnesota Court of Appeals revisited the issue of requesting examinations under oath in the no-fault context in State Farm Ins. Co. v. Padilla, No. A , 2012 WL (Minn. Ct. App. Dec. 24, 2012) rev. denied (Minn. Feb. 27, 2013). In Padilla, the Court of Appeals, among other things, held that the arbitrator s finding that the material evidence offered by State Farm regarding provider fraud was not relevant to whether it was reasonable to require Claimant to submit to an EUO. The court held that the arbitrator did not exceed his powers in determining that the request for an EUO was unreasonable. A. Facts Appellant Arecely Padilla, age 17, was involved in a motor vehicle accident in which she sustained injuries. She was treated at Metro Injury and submitted bills to her father s no-fault insurer, State Farm. State Farm alleged that Metro Injury had a pattern of overbilling and overtreatment and of creating false or duplicative records. State Farm repeatedly requested Padilla to submit to an EUO due to these concerns. 1 Padilla ultimately refused, and filed a petition for no-fault arbitration for payment of her medical bills. State Farm denied payment of her no-fault benefits based on Padilla s breach of her duty to cooperate as required by the policy. Id. at *1. Padilla requested the arbitrator rule on whether the request for her attendance at an EUO was reasonable, pursuant to Western National and the no-fault act. Before the arbitration, State Farm offered to provide documentation of the alleged billing practice and treatment records that showed Metro Injury s treatment of other patients that looked similar to appellant s treatment plan. The arbitrator did not request this evidence, and therefore the evidence was not submitted. Id. After testimony was taken, the arbitrator determined that it was not reasonable for State Farm to request Padilla to submit to an examination under oath. The arbitrator stated that the purpose of the no-fault act was to encourage the voluntary exchange of information and discourage formal discovery. Id. at *2. The arbitrator noted Padilla s duty to cooperate, but concluded that it was not reasonably necessary to require an EUO from a minor claimant under the guise of conducting an ongoing investigation into the treatment and billing practices of Metro Injury. The arbitrator also relied on State Farm s failure to request an independent 1 Padilla at one point agreed to attend an EUO; however, after the Minnesota Supreme Court ruling in Western National, Padilla refused, relying on the ruling. Tying the Hands of Insurance Companies continued on page 16 MN DEFENSE s SPRING

16 Tying the Hands of Insurance Companies continued from page 15 medical examination, finding that State Farm did not prove a reasonable necessity for requiring Padilla to submit to an examination under oath. The arbitrator awarded almost the entire amount claimed. The district court vacated the arbitration award, stating the arbitrator exceeded his powers by depriving respondent of its right to require an EUO, among other things. Padilla appealed. Id. B. Analysis The court reviewed the district court s finding that the arbitrator exceeded his powers by refusing to hear evidence about Metro Injury s billing practices. Id. The court cited In re Progressive Ins. Co., 720 N.W.2d 865, (Minn. Ct. App. 2006) noting that evidence of fraud attributable to a person not a party to the arbitration hearing is not material, and held the arbitrator correctly found that any alleged fraudulent activity by Metro Injury was not relevant. Padilla at *4. The court also reviewed the district court s finding that the arbitrator exceeded his powers by denying respondent s request for an EUO, among other things. Id. The court cited Western National when noting that the arbitrator is charged with deciding whether a request for an EUO is reasonable, and the district court erroneously reviewed the facts and weighed the evidence, invading the arbitrator s fact-finding duties. Id. The court upheld the arbitrator s finding that the request for an EUO was not reasonable, stating that the finding was within the arbitrator s powers. The court cited the six separate grounds that the arbitrator relied on: (1) appellant was a minor; (2) appellant promptly submitted her claim and supporting medical records, and respondent failed to pay any part of her medical bills; (3) respondent claimed that it questioned the treatment but did not request an IME; (4) respondent requested the EUO under the guise of conducting an ongoing investigation into the treatment and billing practices of Metro Injury ; (5) respondent could test the accuracy of the treatment on cross-examination; (6) respondent s concerns about information from other insureds are irrelevant to this matter and this claim for benefits. Id. at *5. The court held that the arbitrator treated the request for an EUO as a question of fact well within the arbitrator s powers. Id. The court of appeals reversed the district court s order vacating the arbitrator s award and reinstated the arbitration award. Id. at *6. The Minnesota Supreme Court denied review on February 27, Although unpublished, the Padilla decision holds that an arbitrator may ignore evidence of provider fraud and award medical bills, relying largely on the crossexamination of the Claimant. Padilla also misses the boat by finding that evidence of provider fraud is not relevant to the award of medical bills. For example, whether the treatment billed was actually performed is absolutely relevant to the decision of whether the claim should be awarded. Claimants must provide reasonable proof of loss as well as credible medical evidence to support the treatment billed. Case law has established a shifting burden of proof in this regard. Specifically, Claimant bears the initial burden of providing reasonable proof of loss. Wolf v. State Farm Ins. Co., 450 N.W.2d 359, 362 (Minn. Ct. App. 1990). Once Claimant has met that burden, the burden shifts to the insurer to prove lack of entitlement to benefits. If the insurer meets its burden, then it shifts back to Claimant to provide entitlement to benefits. Id. In order to satisfy Claimant s burden of proof, Claimant must produce credible medical evidence to support a finding that the expenses in dispute are reasonable, necessary and accident related. Benson v. Johnson, 392 N.W.2d 890 (Minn. Ct. App. 1986) (emphasis added); Marose v. Hennameyer, 347 N.W.2d 509 (Minn. Ct. App. 1984). In the event that the treatment has any indications of fraud, an insurer must be able to question the Claimant about the treatment they received. More importantly, this questioning must occur as soon as any indication of a potentially fraudulent claim. The EUO request should be made immediately, with payments held pending the outcome. V. CONCLUSION The party that ultimately stands to lose in this changing climate is the plaintiff. When fraudulent bills are submitted and paid, the only parties that benefit are the providers and the plaintiff s attorneys. The insurance company is responsible for protecting their insureds from exhausting their no-fault benefits on fraudulent bills. Western National ties the hands of insurance companies to conduct a reasonable investigation into potentially fraudulent claims because the reasonableness determination is now being determined by a heavily plaintiff-dominated panel of arbitrators with no set guidelines. It can safely be concluded that the purpose of the No-Fault Act to simplify and ease the burden of litigation will not be furthered when innocent parties are being depleted of their no-fault benefits through payments made to potentially fraudulent providers. 16 MN DEFENSE s SPRING 2013

17 GOVERNMENT LIABILITY IN THE AGE OF SEQUESTER: CONSTITUTIONAL OBLIGATIONS, ACCESS TO JUSTICE, AND THE BOTTOM LINE By Jason M. Hill Johnson & Lindberg, P.A. Debt ceiling. Fiscal cliff. Sequester. Government shutdown. As a citizenry, we have been unable to avoid these words and phrases in recent years, whether it is at the federal or state level of government. Budgetary battles affect all branches of government, and in addition to limiting financial resources, these battles consume a significant percentage of the time and energy of public officials. Therefore, it should come as no surprise that budgetary concerns, in a variety of forms, have been a recurring theme in my representation of governmental entities in recent years. I will attempt to address a few of these themes, and although volumes could be written on the subject, I will limit my discussion primarily to Minnesota counties, which constitute the majority of my practice. Another budgetary theme that has been omnipresent in recent years is the access to justice. At the same time that budgets are being squeezed, there is a growing push to address the justice gap involving low-income Minnesotans and to assist in their access to justice. This was most notably demonstrated by a report prepared by the Civil Gideon Task Force of the Minnesota State Bar Association, which addressed the expansion of the right to counsel to various civil matters. Although not constitutionally based, the expansion of the right to counsel to areas such as public housing, government benefits, parental rights and prisoner s rights would almost certainly place an additional demand on already-stretched resources. The establishment of a Civil Gideon clearly is not imminent, but it s an idea that is gaining steam in Minnesota and nationally, and therefore, it should also be taken into consideration when discussing the provision of government services. MEDICAL AND DENTAL CARE FOR INMATES A. Million-Dollar Inmates The issue of governmental resources and potential liability abruptly reappeared on my doorstep on April 1, While out of town visiting family, I received a string of s with regard to a Star Tribune story in that day s paper. The front page s banner headline read Million- Dollar Inmates and the large photograph below the headline was of an incarcerated and downward-looking James Vogel. 1 Mr. Vogel happened to be a plaintiff in a suit I was defending on behalf of a Minnesota county, but my initial shock was eased when I learned that the story did not address the suit I was defending. The story also did not address the obligations Minnesota s governmental entities have to incarcerated individuals, including a duty to provide medical care. However, the story did address Mr. Vogel s incarceration in the Minnesota Department of Corrections system, the expense of the medical treatment he was receiving, and the overall effect of increasing health care costs and an aging prison population. Although the story did not address legal issues, the striking nature of some of the statistics set forth in the article bring those issues into play. Individuals incarcerated in the United States have a constitutional right to medical care under the Eighth 1 Paul McEnroe, Minnesota s Million-Dollar Inmates, Star Tribune, April 1, 2012, at A1. Government Liability in the Age of Sequester continued on page 18 Jason M. Hill is a partner at Johnson & Lindberg, P.A. Jason was admitted to the Minnesota Bar in 1999 and his practice focuses on civil rights litigation, defending primarily Minnesota counties and serving as outside panel counsel for the Ramsey County Attorney s Office. Jason also represents clients in motor vehicle, premises, and sports and recreation litigation. He serves as the co-chair of the MDLA Governmental Liability Committee. Jason is also a member of DRI s Governmental Liability and Retail and Hospitality Committees. MN DEFENSE s SPRING

18 Government Liability in the Age of Sequester continued from page 17 Amendment. Estelle v. Gamble, 429 U.S. 97, 106 (1976). However, in order to establish a violation of the Eighth Amendment s protection against cruel and unusual punishment, an inmate must demonstrate a deliberate indifference to a serious medical need. Id. Ordinary negligence or malpractice is insufficient to state such a claim. Id. at In order to demonstrate that an official was deliberately indifferent, the inmate must prove objective and subjective elements of his claim. Objectively, the inmate must show that he suffered from a serious medical need, and subjectively, the inmate must show that the prison official knew of the serious medical need and deliberately disregarded it. Coleman v. Rahja, 114 F.3d 778, 784 (8th Cir. 1997). In addition to constitutional duties, the State of Minnesota and Minnesota counties are under statutory obligations to provide medical and dental care to jail inmates. Minnesota Statutes , subd. 4, provides that the Minnesota Department of Corrections shall provide professional health care to persons confined in institutions under the control of the commissioner of corrections. Minnesota Statutes states that county boards shall provide... medical aid for prisoners and that the county board shall pay the costs of medical services provided to prisoners pursuant to this section. The case law addressing these statutes has primarily addressed the division of responsibility between a county and the state when an inmate has transferred from a county jail to a state facility. See County of Aitkin v. Department of Corrections, 394 N.W.2d 608 (Minn. Ct. App. 1986); L.P. Medical Specialists, Ltd. v. St. Louis County, 379 N.W.2d 104 (Minn. Ct. App. 1985). However, in Thomsen v. Ross, 368 F.Supp.2d 961, 978 (D.Minn. 2005), the United States District Court addressed the substance of and applied an ordinary negligence standard to a cause of action based on the denial of medical care. Among a number of other allegations, the plaintiff in Thomsen alleged that the defendant officers deliberately disregarded his fractured hand, delayed providing pain medication, and failed to assist in the follow-up care for his cast. Id. at In addition to an Eighth Amendment denial of medical treatment claim, the plaintiff alleged ordinary negligence arising out of the alleged failure to obtain medical treatment for plaintiff s broken hand in less than 48 hours. Id. at 978. The Thomsen court concluded, it is undisputed that defendants have a general duty to provide medical treatment to jail inmates, see Minn. Stat (2004), and to exercise reasonable care to protect inmates from foreseeable harm. Id. 2 The Thomsen court ultimately 2 It must be noted, however, that the case law cited with regard to the duty to use reasonable care to protect from a foreseeable harm dealt with a jail suicide (Sandborg v. Blue Earth County, 601 N.W.2d 192 (Minn. Ct. App. 1999), rev d on other grounds) and a sexual assault by a fellow inmate (Cooney v. Hooks, 535 N.W.2d 609 [Minn. 1995]), as opposed to a denial or delay of medical treatment. granted summary judgment to the defendants on the negligence claim due to the lack of causation evidence. Id. Although there has been no follow-up to the Thomsen decision, the court s interpretation demonstrates the potential for a broad application of the statute. 3 Overall, inmates must meet a high standard to demonstrate that an officer violated their Eighth Amendment rights in the context of medical treatment. However, as the article published by the Star Tribune demonstrates, the serious medical needs of Minnesota inmates are on the rise and given the severity of those conditions, it will likely become less onerous for a plaintiff to at least meet the objective element of a constitutional claim. Although the article specifically addressed inmates in the state s corrections system, those inmates are initially incarcerated in a county jail and their initial jail stay can be lengthy. Some of the health statistics set forth in the article are staggering: 80% of inmates are chemically dependent and nearly 20% are estimated to be hepatitis-c positive. More than 20% of male inmates and 70% of female inmates have been prescribed psychotropic medications. Obesity, hypertension and diabetes are common ailments, and as the author stated, decades of smoking, boozing and drug use have pushed their hearts, livers and kidneys to the edge of failure. The Minnesota Department of Corrections budget for health care was $68 million in In the past five years, the department spent more than $14.4 million in cancer treatment, and it spent nearly $2 million in cardiac care in the past four years. Additionally, developments in treatment for hepatitis-c come with a very high price tag as much as $40,000 per treatment with a recommended nine-session treatment regimen. Rising health care costs, in combination with inmate demographics, have placed a significant strain on county and state budgets. Additionally, the demographics of the jail and prison populations increase the exposure to potential liability. Although there are a variety of ways to tackle the issue, including increasing funding, addressing the increases in the prison population, and reducing the cost of health care, the solutions appear to be long-term in nature, and the risk to state and county governments in the near future could be significant. B. Medical Expense Reimbursement Although Minnesota s counties are obligated to provide and pay for an inmate s medical care, the statutes also provide for potential reimbursement by the inmate for those medical expenses. Minn. Stat , subd. 2, provides as follows: The county is entitled to reimbursement from the prisoner for payment of medical bills to the extent that the prisoner to whom the medical aid was provided has the ability to pay the bills. 3 Additionally, the Thomsen decision does not address immunities available to the defendants with regard to the plaintiffs state law claims. Government Liability in the Age of Sequester continued on page MN DEFENSE s SPRING 2013

19 Government Liability in the Age of Sequester continued from page 18 The prisoner shall, at a minimum, incur co-payment obligations for health care services provided by a county correctional facility... If there is a disagreement between the county and a prisoner concerning the prisoner s ability to pay, the court with jurisdiction over the defendant shall determine the extent, if any, of the prisoner s ability to pay for the medical services. (Emphasis added). The statute goes on to provide subrogation rights to the county in the event the inmate has other health care coverage. Id. Under pressure due to tightening budgets, counties have intensified their collection efforts. However, these efforts have met with two very significant hurdles. Initially, inmates leaving a county jail, whether convicted or otherwise, very typically do not have significant assets. The likelihood of recovery can be limited, and this becomes more and more difficult as the expense of health care continues to rise. Additionally, these collection efforts have met with litigation and claims based on an alleged violation of due process and equal protection. Andrew Tyler Jones was incarcerated in the Olmsted County Jail from March 31, 2004 to January 10, 2005, when he was transferred to the Minnesota Department of Corrections custody. Jones v. Borchardt, 775 N.W.2d 646, 647 (Minn. 2009). The county sent Mr. Jones an invoice for his pay-for-stay expenses (See Minn. Stat ) and subsequently began collection efforts. Id. Mr. Jones alleged that he was indigent and imprisoned and therefore was unable to reimburse the county. Id. He also alleged that the county failed to consider his indigence and improperly declined to waive payment under the applicable statute and that its actions violated his equal protection and due process rights. Id. at 647, n.1. The Minnesota Supreme Court decided the case on alternate grounds, and therefore, did not reach the equal protection and due process issues. Id. In addition to pay-for-stay reimbursement, nearly identical claims have been asserted with regard to a county s efforts to seek reimbursement of medical expenses. The issue with regard to the procedure for determining whether an inmate has the ability to pay remains outstanding, and the pressure on Minnesota s counties to seek reimbursement under both statutes likely will not recede. Therefore, it should be presumed that these claims will continue to surface. JAIL LAW LIBRARIES Although presumably a minor portion of a county s budget, another claim that has been repeatedly levied against counties in recent years is with regard to a jail s law library. As we are all aware, the maintenance of a law library is not an inexpensive proposition, and in light of tight budgets, jails do not typically provide access to Westlaw and they do not maintain a complete set of North Western Reporter or Federal Reporter. Therefore, inmates who are awaiting trial or who seek to challenge the conditions of their confinement routinely claim that they have been denied their constitutional right to access the courts because they do not have access to a particular set of reporters or other sources. Under well-established law, inmates have a constitutional right to reasonably meaningful access to the courts. Lewis v. Casey, 518 U.S. 343, (1996); Bounds v. Smith, 430 U.S. 817, 821 ( 1977). With regard to pro se defendants in criminal matters, this includes access to adequate law libraries or adequate assistance from persons trained in the law. U.S. v. Kind, 194 F.3d 900, 905 (8th Cir. 1999). However, this does not give inmates the right to access any legal materials they desire and does not require the jail or prison to provide legal counsel. In order to pursue a claim of denial of access to the courts, the inmate must demonstrate that his/her inability to access a particular resource caused an actual hindrance to a legitimate defense or claim. As the Eighth Circuit noted, a plaintiff must demonstrate that:... the state has not provided an opportunity to litigate a claim challenging the prisoner s sentence or conditions of confinement in a court of law, which resulted in an actual injury, that is, the hindrance of a nonfrivolous and arguably meritorious underlying legal claim. Hartsfield v. Nichols, 511 F.3d 826, 831 (8th Cir. 2008) (emphasis added). Additionally, government officials are not required to enable the prisoner to discover grievances, and to litigate effectively once in court. Lewis, 518 U.S. at 354 (emphasis in original). As is the case with claims of denied medical treatment, an inmate faces an uphill climb in demonstrating that a particular deficiency in a jail s law library caused an actual injury in which a legitimate claim or defense was hindered. However, the case law provides little guidance with regard to specific materials that should be offered by jails, and given the expense of maintaining law libraries, there will always be something they do not have. As we evolve to a paperless society and technology advances, it may become the case that it becomes easier and much more cost effective to provide increased access to legal materials. Until that time, prisons and jails will continue to face such claims with little access to additional funds. CIVIL GIDEON AND ACCESS TO JUSTICE In recent years, attorneys have routinely been called into service on behalf of Minnesota s justices and judges to assist in obtaining funding for Minnesota s court system. We are all aware of the court s expanding dockets and shrinking personnel. The primary goal has been to ensure that Minnesotans have the access to justice guaranteed to them. In a similar vein, there has been another call to Government Liability in the Age of Sequester continued on page 20 MN DEFENSE s SPRING

20 Government Liability in the Age of Sequester continued from page 19 expand our access to justice, which may ultimately only add to the demand for governmental resources. In response to concerns that low-income Minnesotans did not have access to counsel in certain civil matters, the Minnesota State Bar Association established the Civil Gideon Task Force in December The justice gap was particularly important in areas involving basic human needs, such as health, housing, safety, sustenance and family rights. The phrase Civil Gideon arises out of the 1963 Supreme Court decision in Gideon v. Wainwright, 372 U.S. 335 (1963), in which the Court extended the right to counsel to state court criminal defendants through the Fourteenth Amendment. In an oft-cited portion of that decision, Justice Hugo Black wrote as follows: [R]eason and reflection require us to recognize that in our adversary system of criminal justice, any person haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial unless counsel is provided to him... From the very beginning, our state and national constitutions and laws have laid great emphasis on procedural and substantive safeguards designed to assure fair trials before impartial tribunals in which every defendant stands equal before the law. This noble ideal cannot be realized if the poor man charged with crime has to face his accusers without a lawyer to assist him. Id. at 344. The Civil Gideon movement seeks to apply the rationale expressed by Justice Black to civil matters, many of which may not be criminally based but may have just as much of an impact on an individual s life, liberty and wellbeing. To begin addressing the issue in the State of Minnesota, the task force was given two assignments: (1) determine whether there is a basis for establishing a civil right to counsel in the state, and (2) analyze how a civil right to counsel would affect the legal community. The task force gathered information from a wide variety of sources, beginning with the state s legal aid services that already provide many of these services to low-income Minnesotans. The task force also worked with the judiciary, court administration, attorneys, 5 domestic violence professionals, pro se parties and other legal experts. The task force issued its report in December 2011, and it was initially noted that many civil litigation needs remain unmet in the state. This was most significantly demonstrated by the fact that Minnesota s legal aid service providers turned away almost as many eligible clients as they were able to help. The task force set forth a number of recommendations with regard to the potential scope of a Civil Gideon in Minnesota and with regard to the potential methods of implementing such a policy. With regard to the claims to be considered, the task force proposed expanding the right to counsel to eviction matters (particularly in the context of public housing), matters involving the loss of government benefits, child custody disputes (particularly 4 Minnesota State Bar Association, Civil Gideon Task Force: Access to Justice: Accessing Implementation of Civil Gideon in Minnesota. December 2, The task force sent surveys to 10,000 to Minnesota attorneys but only 547 responded. on behalf of minors), and most interestingly for my area of practice, prisoners rights matters. With regard to the methods of implementing a Civil Gideon, the task force primarily focused on the four existing models for providing legal services to low-income individuals: (1) legal aid services programs, (2) contract attorney panels, (3) pro bono and volunteer lawyer programs, and (4) the public defender model. There are many advantages and disadvantages to each model, but the most common disadvantage was cost. Legal aid services programs are already underfunded and turning away nearly as many people as they accept. As noted in the report, during the period from 2008 to 2010, legal aid services cut their attorney staff by 12.4%. Depending on the funding source, there are also restrictions on individuals those entities can represent. There are limited resources to pay contract attorney panels, and the weaknesses of the public defender model are exhibited by the welldocumented high case loads of public defenders and the lack of administrative support. The task force ultimately recommended using one of, or a combination of, the existing models to implement a Civil Gideon. It also noted, however, that an implementation of a Civil Gideon will likely result in (1) increased expenses secondary to the employment of attorneys, (2) increased costs for the judiciary due to increased demand, and (3) increased expenses associated with litigation and trials. As the task force admitted, the implementation of a Civil Gideon would be difficult, particularly in the current economic environment. Given the limited resources that are already available for state and local governments to carry out their constitutional obligations, the expansion of the right to counsel to civil matters appears to be a lofty, although noble, goal. 6 CONCLUSION Budgets and financial resources change, but federal and state constitutional and statutory commands do not. Economics has been a predominant theme in media and politics in recent years, and there is a growing conflict between budgetary forces and the legal obligations of government officials. The fact that this conflict has been a predominant theme in my relatively narrow area of practice is indicative of a more significant issue. This article certainly is not meant to be an exhaustive treatise on the subject, but I am hopeful that it may generate a larger discussion with regard to the provision of government services and the role that defense counsel may be able to play in preemptively tackling these difficult issues. 6 At the same time, it must be noted that a judicially imposed right to counsel is not entirely out of the realm of possibility. In Turner v. Rogers, 131 S.Ct (20 11 ), the Supreme Court once again denied that a right to counsel existed in a civil contempt matter in which an indigent parent was incarcerated for failing to pay child support. However, the Court did find that the parent s due process rights had been violated because he was not provided other procedural safeguards in lieu of being provided an attorney. 20 MN DEFENSE s SPRING 2013