Judge Michael Sturdevant, Chair George Ackre Dann Greenwood Kara Johnson Petra Mandigo Hulm Sandra Keller Dianna Kindseth Michael McGinniss Ryn Pitts Justice Dale Sandstrom Dan Ulmer Jason Vendsel Pat Ward
Fritz Fremgen, Stutsman County State’s
Attorney Ladd Erickson, McLean County State’s
Attorney Paul Myerchin, ND Association of Criminal
Defense Lawyers Nick Thornton, ND Association of Criminal
Defense Lawyers Kelly Armstrong, Attorney, Dickinson Paul Jacobson, Disciplinary Counsel Brent Edison, Ass’t Disciplinary Counsel Penny Miller, Secretary-Treasurer, Board of
Chair Sturdevant called the meeting to order at 10:00 a.m. and drew Committee members’
attention to Attachment A (September 11, 2012) - minutes of the June 13, 2012, meeting. A
typographical error was noted in the paragraph following the second motion on p.4
It was moved by Pat Ward, seconded by Mike McGinniss, and carried that the minutes,
as corrected, be approved.
Rule 3.8, Rules of Professional Conduct (Special Responsibilities of a Prosecutor)
Chair Sturdevant drew attention to Attachment B(September 7, 2012) - revised amendments
to Rule 3.8 resulting from discussion at the Committee’s June 13 meeting, which was in response
to a referral back to the Committee of recommended amendments submitted to the Supreme Court.
At the request of Chair Sturdevant, staff reviewed the revised amendments.
Chair Sturdevant then invited comments on the revisions.
Fritz Fremgen, Stutsman County State’s Attorney, explained that when the amendments were
initially distributed there were concerns by some state’s attorneys about the requirement that
settlement agreements inform the defendant of significant consequences that may follow from a
guilty plea. He said the concern was that state’s attorneys would be expected to provide to the
defendant an exhaustive litany of possible consequences. He said he had explained that such was not
the intention and that the draft language contemplated basically a general warning or notice to the
defendant that there may be adverse consequences, other than those the court might impose, to the
plea. He suggested that the matter might be made clear in comment language. He noted the language
in paragraph ( c)(2) which relates to the defendant having waived on the record the right to counsel.
He said that suggests a court hearing, but noted that a form indicating waiver, signed by the
defendant, might be considered part of the record. He said if a prosecutor is expected to send such
a form to the defendant, perhaps the manner of providing the form could be addressed in comment
Mr. Fremgen drew attention to the Supreme Court’s recent opinion in Disciplinary Boardv.
Feland, which addressed a prosecutor’s duty to disclose under paragraph (d) of the rule. In light of
the Supreme Court’s resolution of the issue, he said the State’s Attorneys’ Association will likely
suggest amendments to the rule. He said there has been some discussion of asking that paragraph (c)
amendments be tabled pending submission of amendments related to paragraph (d). He suggested
that consideration of the paragraph ( c) amendments not be tabled.
Ladd Erickson, McLean County State’s Attorney, suggested that the Committee table further
consideration of any amendments to paragraph ( c) of the rule. He noted that he opposed the
amendments when the hearing was conducted on the proposed amendments submitted to the
Supreme Court. Initially, he suggested that provisions contemplated in the revised amendments
should likely be reviewed by the Joint Procedure Committee as they arguably implicate procedural
elements set out in Rules 11(Pleas) and 43 (Defendant’s Presence) of the Rules of Criminal
Procedure. Specifically, he said, the revised amendments may render unethical actions that
prosecutors are allowed to do under the procedural rules. He noted that the written settlement offer
and notice of consequences required by revised paragraph ( c)(3) are not required under Rule 11.
One consequence, he said, is that if a defendant talks to a judge, rather than to the prosecutor, the
judge will not be required to adhere to the requirements in paragraph ( c)(3) as those requirements
are not set out in Rule 11, which governs how pleas are handled, and paragraph ( c)(3) does not apply
to judicial actions. He said a better approach may be to simply direct that prosecutors must follow
Rules 11 and 43 when dealing with pro se defendants and do so fairly. He suggested the following
alternative amending language: A prosecutor may offer an accused a different charge or sentence,
should the accused choose to plead guilty or cooperate in an
investigation, by following the procedures in Rules 11 and 43 of the
Rules of Criminal Procedure, but not use threats, intimidation, or
coercion in communicating with the accused.
Mr. Erickson cautioned against mixing substantive procedural elements with rules governing
the ethical conduct of prosecutors. He suggested that a clarification could be added to Rule 11.
Additionally, he agreed that state’s attorneys would likely be seeking amendments to paragraph (d)
in response to the Supreme Court’s recent disciplinary opinion and suggested that the Committee
might defer action on the paragraph ( c) amendments in light of that future possibility.
Mike McGinnis observed that an ethical duty imposed under Rule 3.8 can be higher than
whatever might be required under a procedural rule.
Justice Sandstrom recalled comments at earlier meetings about contacts between prosecutors
and defendants and wondered how, under the present rule, an ethical violation is not occurring when
those contacts are made.
Pat Ward said he would see no harm in tabling consideration of rule amendments until the
state’s attorneys could come forward with additional amendments. He agreed that it may be better
for requirements regarding written settlement offers and notices of consequences to be addressed in
Rule 11 of the Rules of Criminal Procedure.
Petra Hulm noted that the Committee has worked on Rule 3.8 for a considerable time and
has repeatedly requested comments on draft amendments. She said a final recommendation would
be preferable to continuing to review the same or similar issues.
Dann Greenwood observed that there does not seem to be a conflict among the rules and it
is not unusual that ethical rules set out requirements that exceed those imposed under procedural
rules. He said the Committee’s earlier discussions of amendments to Rule 3.8 considered at some
length how to ensure that the defendant’s rights were protected while not imposing requirements that
were too onerous for prosecutors. He said while he recognizes the difficulties for those such as part-time state’s attorneys in complying with certain rule requirements, ethical rules should not be
adjusted simply because they are considered “hard”. He said the Committee has considered
amendments to Rule 3.8 for quite a long time and it is not clear that waiting while another rule might
be fixed will accomplish much.
In response to a question from Jason Vendsel, Fritz Fremgen said the State’s Attorneys’
Association position is that substantial work has been done with respect to paragraph ( c) and that
work should be completed. He said proposed amendments to paragraph (d) will likely be submitted
in the future.
Following further discussion, it was moved by Pat Ward and seconded by Dan Ulmer
that the Committee defer consideration of the revised amendments to Rule 3.8 until the next
Dann Greenwood wondered whether there would be anything substantial to consider by the
The motion failed (6 - yes, 7 - no).
It was moved by Justice Sandstrom and seconded by Mike McGinniss that the revised
amendments to Rule 3.8 as set out in Attachment B (September 7, 2012) be submitted to the
Supreme Court for consideration.
Petra Hulm noted the earlier concern about the kind of notice of consequences that
prosecutors would be required to provide under revised paragraph ( c)(3). She suggested that the
language might be revised to refer to providing a “general” notice. Fritz Fremgen suggested “at least
a general notice”, which would establish a minimum requirement.
It was moved by Mike McGinniss, seconded by Justice Sandstrom, and carried that the
motion be amended to include replacing “notice” on page 2, line 11, of Attachment B with “at
least a general notice”.
The motion, as amended, carried.
Fee Agreements - Criminal Cases
Chair Sturdevant next drew attention to Attachment C (September 7, 2012) - a memorandum
summarizing rules in other jurisdictions governing nonrefundable retainers and special fee
agreements in criminal cases. He said the memorandum was prepared following the Committee’s
initial discussion at the June meeting of the study referred to it regarding minimum and flat fee
agreements, nonrefundable retainers, and fees earned upon receipt in criminal cases. He said that
following the June meeting he had submitted a letter to the Association of Criminal Defense
Lawyers, which had requested the study, posing two general questions based on the June discussion:
1) whether the Association was seeking acceptance of fee agreements that would treat nonrefundable
advanced fees as earned upon receipt with no provision for refund, and 2) whether there are any state
rules addressing the subject matter that the Association would support.
At the request of Chair Sturdevant, staff briefly reviewed the fee memorandum included as
Chair Sturdevant then requested comments concerning fee agreements in criminal cases.
Nick Thornton, Past President, ND Association of Criminal Defense Lawyers, provided and
summarized a letter responding to Chair Sturdevant’s questions. The letter is attached as an
Appendix. With respect to the first question, he said the request is that the Committee consider a rule
providing that advance fees, however named, are acceptable forms of fee agreements and can be
deposited in the lawyer’s operating account when received. He said the Association is not suggesting
that disputed fees cannot be subject to refund. With respect to the second question, he said the
Association is simply requesting clarification with respect to the kinds of fee agreements that are
acceptable and that fees can be placed in the operating account. Additionally, he suggested that the
comment provision in Rule 1.5 related to disputes over fees should be elevated to the black-letter
rule. With respect to dispute resolution, he said Louisiana Rule 1.5(f) included in Attachment C most
closely resembles the suggested approach.
Judge Sturdevant noted that most of the rules set out in Attachment C require that a fee
agreement be in writing. He asked whether a writing requirement should be included. Nick Thornton
responded that the question is whether the agreement must be signed by the client or whether the
client’s agreement to the arrangement can be evidenced by a contemporaneous writing accompanying
the agreement, such as a confirmation letter.
Pat Ward observed that current Rule 1.5 (b) provides that the basis for the lawyer’s fees must
be communicated to the client “preferably in writing”. Nick Thornton noted that in other
jurisdictions certain kinds of fee agreements must be in writing.
Dann Greenwood drew attention to the Gavel article on nonrefundable retainers authored by
Brent Edison and included as an Appendix to the June meeting minutes. He noted also the Supreme
Court’s recent opinion in Disciplinary Board v. Hann which discussed retainer agreements. In light
of both, he suggested there seems to be little difference between a nonrefundable retainer and a flat
fee agreement in that both must take into account the right of the client to terminate representation
and the right to a refund of unearned fees.
Mike McGinniss said the main concern regarding naming a fee arrangement as a
“nonrefundable retainer” is that doing so is fundamentally misleading since the fee is, by rule,
refundable. He said an additional concern is that employing such a fee arrangement causes the client
to limit decisions regarding whether to continue with the lawyer. He emphasized the importance of
protecting the client’s prerogatives.
Paul Myerchin, President, ND Association of Criminal Defense Lawyers, reiterated that the
Association is seeking guidance regarding the contours of permissible fee agreements. He noted that
current Rule 1.5 seems to contemplate the traditional, hourly billing arrangement, with fees placed
in the lawyer’s trust account. He said the rule should recognize the direction in which the practice
of law is moving. Clients, he said, are becoming true consumers and want to know with certainty
how lawyer fees for their case are handled. He said most members of the Association give clients
the option of hourly billing or a flat fee and clients more often than not select a flat fee arrangement.
In response to a question from Pat Ward regarding favored rule language, Mr. Myerchin
agreed the Louisiana rule included in Attachment C closely resembles what the Association is
seeking. He suggested some kind of writing requirement should be added.
Justice Sandstrom asked whether all fees received by the lawyer should be placed in the
lawyer’s operating account and none deposited in the trust account regardless of the fee amount.
Nick Thornton said the original fee amount is subject to a reasonableness determination under the
rule even if deposited in the operating account. He said if there is a dispute about the earned fee, then
the amount deemed unreasonable should be refunded as the Louisiana rule, for example, provides.
Justice Sandstrom noted circumstances in which a lawyer has died or been suspended or
disbarred and the fees in the operating account are gone. He asked what recourse the client might
Mike McGinniss observed that fees received as part of a flat fee agreement are often deemed
“earned” but the fee has, in fact, not been earned as the work has not yet been performed. From the
standpoint of client protection, he said, one option is to use the trust account and then specify how
the fee amount will be drawn against as the fee is earned. He said certain trigger events could be
identified which would enable fees to be drawn from the trust account.
Pat Ward said a true flat fee has been regarded as the lawyer’s property when received,
subject to a reasonableness determination. He noted the example of a $5,000 fee to handle a DUI
case. He said the case may go to trial or may result in an early guilty plea. At what point, he
wondered, would the lawyer be able to withdraw funds from the trust account. He said clients will
retain a certain lawyer because of the lawyer’s expertise and the value of lawyer’s availability. He
said while the client may pay a set fee, the client is receiving the value of the lawyer’s expertise and
reputation, which may result in an early, perhaps favorable, disposition of the case. He said whether
the fee was “reasonable” can be determined at a later point, but identifying trigger events that would
permit the lawyer to withdraw fee amounts from a trust account deposit seems problematic. He said
the issue is beginning to appear in civil practice with, for example, insurance companies that do not
want hourly fee arrangements and prefer a flat fee for particular cases, without regard to time spent
on the case.
Kelly Armstrong, a Dickinson criminal defense lawyer, said he uses a flat fee agreement but
it is not described as nonrefundable simply because it is not accurate to describe the fee as
“nonrefundable”. He observed that trigger events allowing withdrawal from the trust account would
be inherently arbitrary and will not account for how a case actually proceeds. With respect to a
writing requirement, he said he uses a letter that contains all relevant information regarding the fee
agreement which he provides along with the actual agreement. He said the letter and fee agreement
are provided to the client, but clients often do not return the agreement.
Justice Sandstrom asked whether the classic, availability retainer is still much in use as a kind
of fee agreement. Paul Jacobson observed that evidence submitted in a recent disciplinary case
suggested that availability retainers are still used but the extent to which they are used is uncertain.
Justice Sandstrom observed that there are opportunity costs for a lawyer who accepts a potentially
difficult case and that is a legitimate factor to be considered in how fee agreements are handled.
Nevertheless, he expressed concern about large fees not being deposited in trust accounts.
Nick Thornton noted that the fee memorandum (Attachment C) indicates there are only about
three of the jurisdictions that require deposit in the lawyer’s trust account; most others provide for
deposit in the operating account. He agreed that the use of trigger events to permit withdrawal from
the trust account would be arbitrary and may have the unintended consequence of encouraging a
lawyer to not work as hard to resolve a matter quickly.
Pat Ward said the Louisiana rule in Attachment C does clarify how fees are handled, with
the flat fee deposited in the operating account and if there is a fee dispute the disputed amount is
placed in the trust account until the dispute is resolved.
In response to a question from Judge Sturdevant, Bill Neumann said the Association’s Client
Protection Fund is in fairly good shape, but there are limits regarding what can be paid out of the
fund to a client. He said the fund is limited to paying out funds in situations in which there has been
embezzlement by the lawyer. The difficult question, he said, is when or how embezzlement might
have occurred in situations in which a flat, “nonrefundable” fee was involved and there is no money
left in the lawyer’s account.
In response to a question from Dianna Kindseth, Bill Neumann said payments from the Client
Protection Fund usually come as the result of an ethical complaint having been filed against a lawyer.
Mike McGinniss said one option to the operating account versus trust account issue may be
to identify a certain fee amount that would be considered earned, with larger fees handled differently.
Chair Sturdevant asked how the Committee might proceed in addressing the issue further.
Pat Ward suggested rule language that would essentially be a hybrid of the Louisiana and
Colorado rules in Attachment C to provide that a flat fee is permissible, that nonrefundable retainers
are not permissible, and if there is a fee dispute the disputed amount would be placed in the trust
account until the dispute is resolved.
Justice Sandstrom suggested there should be some provision for the deposit of large fees in
the trust account. Pat Ward suggested one option could be to require that the part of the fee in excess
of a certain amount be deposited in the trust account. There could be language to the general effect
that funds could be withdrawn when the lawyer has substantially earned all or a part of the fee.
Chair Sturdevant asked that staff prepare for review at the next meeting draft amendments
based on the proposals described. He thanked guests in attendance for their participation and
comments on the issue.
Jason Vendsel then left the meeting due to a prior commitment.
Admission to Practice Rules - Revised Amendments
Chair Sturdevant next drew attention to Attachment D (September 7, 2012) - revised
proposed amendments to the Admission to Practice Rules initially submitted by the Board of Law
Examiners and referred to the Committee for review. The proposed amendments were reviewed at
the Committee’s June 13 meeting.
At the request of Chair Sturdevant, Penny Miller, Secretary-Treasurer, Board of Law
Examiners, generally reviewed revisions to the proposed amendments resulting from the
Committee’s June meeting discussions. She noted that she made the revisions after the last meeting
discussion, but the Board of Law Examiners had not yet reviewed the changes. She said some
revisions were simply drawing back from the initial proposed language, specifically those
amendments in which a Board action or recommendation was “deemed” to have been accepted by
the Supreme Court.
Justice Sandstrom noted the revision on p. 49 which would permit the Board to use the names
of bar examination applicants when releasing test scores to the law school from which the applicant
received a law degree. He asked whether the applicant must agree to the release of the name. Ms.
Miller said consent is not required. She explained that law schools are much more interested in why
applicants succeed on examination and are tracking performance back to LSAT results and other
indicators. Consequently, she said there is a need for personal identifying information.
Following further discussion, it was moved by Mike McGinniss, seconded by Pat Ward,
and carriedthat the proposed amendments to the Admission to Practice Rules be approved
for submission to the Board of Governors for review and, in the absence of any Board
comment requiring Committee action, be approved for submission to the Supreme Court for
Professional Trustees - Compensation
Chair Sturdevant next drew attention to Attachment E (September 7, 2012) - referral by the
Supreme Court of a question regarding compensation for trustees appointed under Rule 6.4 of the
Rules for Lawyer Discipline in relation to Arizona Rule 68(d) governing compensation of
conservators. The Arizona rule provides that compensation for a conservator is paid by the state bar
association. Staff noted that Rule 6.4F provides that reimbursement of expenses and compensation
for a trustee are paid out of assets, if any, of the law practice of the lawyer for whom the trustee is
appointed. If there are insufficient assets to pay the approved trustee fees and costs, then the
Disciplinary Board will provide payment if funds are available to the Board.
Paul Jacobson explained that the trustee submits an application for approval of costs and fees
to the presiding judge in the judicial district who issued the order appointing the trustee.
Additionally, he said the trustee has priority for payment of compensation and expenses out of the
lawyer’s trust account or estate. He said the Disciplinary Board builds funds into its budget for
payments to trustees if that becomes necessary. He said there have been relatively few occasions
when the Board has made payments. He said the current rule and process seem to be adequate at this
In response to a question from Chair Sturdevant, Committee members agreed the current rule
is adequate to address compensation issues related to trustees and the Disciplinary Board appears
prepared to address compensation issues should they arise. The Chair will report the Committee’s
conclusions to the Supreme Court.
ABA Model Rules for Fee Arbitration
Chair Sturdevant then drew attention to Attachment F (September 7, 2012) - the ABA Model
Rules for Fee Arbitration with recent ABA amendments, which were referred to the Committee by
the Supreme Court and initially discussed at the June meeting. He drew attention also to
AttachmentB (September 11, 2012) - the State Bar Association’s Rules on Arbitration of Fee
Bill Neumann explained that the Association does have a process in place for arbitration of
fee disputes although there may be some question regarding the effectiveness of the process. He said
he is not aware of any complaints regarding the process but it is a process that is only infrequently
used. He said reluctance to use the process may be attributable to the requirement that the parties to
the dispute enter into binding arbitration.
Judge Sturdevant noted that, aside from the elaborate process, the principal difference
between the ABA model rules and the SBAND rules is that participation by lawyers under the ABA
model rules would be mandatory. Bill Neumann said he has not heard any concerns expressed that
would suggest the need for mandatory participation in North Dakota. He said the SBAND Board of
Governors would likely reject any recommendation to make lawyer participation in fee arbitration
In response to a question from Justice Sandstrom, Bill Neumann said if a dissatisfied client
wishes to pursue arbitration the client would contact the Association and then would be provided
with information and a form to complete. The lawyer must agree to participate in the arbitration
Dianna Kindseth suggested that the Association could contact the client after information is
provided to determine why the client may have elected not to proceed. Bill Neumann agreed that may
be a useful method for determining whether there are any obstacles that could be addressed.
Chair Sturdevant noted that in the past, when the Committee has considered a potentially
difficult issue requiring Association participation, the Committee has sought an early assessment
from the Board of Governors on the issue. He suggested he could contact the Board of Governors
regarding the viability of requiring mandatory lawyer participation in a fee arbitration process.
Committee members agreed with the suggestion.
There being no further discussion, the meeting was adjourned at 1:10 p.m.