Sandi Tabor, Chair
Judge Karen Braaten
Justice Daniel Crothers
Petra Hedvig Mandigo
Chair Tabor called the meeting to order at 10:00 a.m. and drew Committee members' attention to Attachment B(March 17, 2006) - minutes of the September 9, 2005, meeting.
It was moved by Judge Braaten, seconded by Petra Mandigo, and carried that the minutes be approved.
Proposed Rule 10.2, Rules of Court - Small Claims Court Appearances
Chair Tabor drew attention to Attachment C (March 17, 2006) - a proposed rule developed by the Joint Procedure Committee, which had been subsequently revised and which would permit a business association or political subdivision to be represented in small claims court by an officer, manager, partner, or authorized employee or agent. A copy of the revised proposal is attached as an Appendix. She said the proposed rule was submitted by Penny Miller, Clerk of the Supreme Court, to the Committee for review and possible comment. She said following an email distribution of the proposed rule to Committee members, Pat Ward suggested the rule should be discussed by the Committee. She noted that the SBAND Board of Governors has expressed concern with the meaning and scope of "agent" with respect to participation in small claims proceedings on behalf of a business association. She said the question for Committee members is whether the Committee should offer comments on the proposed rule or leave the matter to be addressed by the Board of Governors.
Justice Crothers observed that there appears to be differing practices in small claims courts around the state with respect to who may appear on behalf of a party. In some courts, he said, only the owner of a business is permitted to appear if a business is the plaintiff or defendant, while in other courts a variety of people are permitted to appear on behalf of the business. He agreed there is a question about who would or should be considered an "agent" for purposes of representing the case of a particular entity. There is also, he said, a concern about expanding the possibilities for the unauthorized practice of law by non-lawyers.
Pat Ward said the more specific concern is that "agent" could be interpreted so broadly as to allow virtually anyone, perhaps a collection agency, to be designated an agent of a corporation and appear in court on the corporation's behalf. Elaine Fremling wondered why that would be a particular concern since a business arguably should be able to participate in the manner it chooses if a lawyer is not required for the proceeding.
Pat Ward observed that the ostensible purpose for the establishment of small claims courts was to allow individuals a simple, low-cost, less complicated method of resolving disputes. He said small claims courts were likely not envisioned as a method to be heavily used by businesses for collecting debts. Elaine Fremling emphasized, however, that a business or corporation should have the ability to designate someone, an "agent", to appear on the entity's behalf, without incurring the cost of hiring a lawyer. Clare Carlson agreed and said there should be enough flexibility to provide businesses with a low-cost alternative for pursuing cases. Judge Braaten noted that any changes that appreciably increase the number of cases in small claims court may lead to issues concerning adequate staffing for the courts.
Pat Ward suggested possibly providing some guidance to the Board of Governors about the uncertain, and perhaps unduly broad, meaning of "agent" and the need to define the term.
After further discussion, it was moved by Petra Mandigo and seconded by Clare Carlson that the Committee not submit comments concerning the proposed rule.
Petra Mandigo said the current process seems to go a long way towards protecting the ability of a plaintiff to pursue an action in small claims court, but a defendant business has more limited options. She said it may not be cost-effective for a business to hire an attorney to defend a claim, but there may be no one the business can otherwise send into court. Additionally, she said the option of a defendant business removing a small claims action to district court is also costly.
Judge Braaten said there is still a concern about the potentially broad scope of "agent" and the increased possibility of the unauthorized practice of law when someone is designated to appear on an entity's behalf in small claims court. She agreed the Committee should express some concern about retaining "agent" in the proposed rule without further definition.
The motion carried. (6-yes; 4-no).
Chair Tabor said the Committee's conclusion will be forwarded to Penny Miller.
Temporary Licensure for Attorneys Applying for Admission
Committee members next reviewed the revised draft concerning temporary licensure for out-of-state attorneys applying for admission - Attachment D (March 17, 2006). Staff said the revised draft rule contains revisions discussed when the Committee last reviewed the proposal. He noted previous discussion concerning whether the role of the "associate attorney" under the draft rule would or should be similar to the associate attorney responsibility under the pro hac vice rule (Rule 3, Admission to Practice Rules).
Sandi Tabor noted the revisions to the draft would delete "resident" as a modifier of "associate attorney" in Section B(2). She asked what the purpose was in making the change.
Petra Mandigo said the "resident" reference would be deleted to address situations, for example, in which an attorney is licensed in North Dakota but works in another state. She noted an a question also about the meaning and scope of "resident".
In response to a question from Sandi Tabor concerning the role of the associate attorney, Petra Mandigo said the rule simply provides that a person would agree to serve as the associate attorney. She noted early draft language requiring the associate attorney to affirm that the applicant is of good character and competent legal ability would be deleted in the revised draft. Pat Ward said it appears the attorney would agree to be associated with the particular case, somewhat similar to responsibilities under the pro hac vice rule.
Judge Braaten suggested the draft should clarify the precise responsibility and role of the associate attorney. Sandi Tabor said one possible role for the associate attorney would be akin to someone who reviews the work of the applying attorney. Petra Mandigo suggested that kind of role is not envisioned under the draft; the associate attorney would simply be someone who knows the applicant is admitted in another jurisdiction and agrees to sign on to the request for temporary licensure. Pat Ward reiterated that he views the associate attorney as being similar to an attorney associated with an out-of-state attorney under the pro hac vice rule and as having some level of responsibility regarding the client and the out-of-state attorney's activities. He said the revisions to the draft rule seem acceptable when viewed in that light.
Justice Crothers wondered whether the proposal would allow, for example, a Minnesota attorney, licensed for mere days, to submit an application and practice in North Dakota.
Petra Mandigo suggested the overstruck language in Section C regarding the associate attorney affirming the character and legal ability of the applicant could be retained as a way of enhancing the associate's involvement. She noted the requirement that the associate be admitted and licensed in North Dakota (Section C) was substituted for the requirement that the attorney be "actively engaged" in the practice of law [Section B(3)]. That change, she said, was made in light of the uncertain meaning of "actively engaged" in the practice of law.
Jean Hannig said the ostensible purpose of the proposed rule is to cover the "gap" between when an out-of-state licensed attorney applies for a North Dakota license and is finally granted the license. She said if the attorney is issued a temporary license to practice law there seems to be no point in requiring that there be an "associate attorney". Sandi Tabor asked how the public would be protected during the gap time of temporary licensure. She said it is unclear why an associated attorney would not be required in the same fashion as is required under the pro hac vice rule. Justice Crothers agreed and said not requiring the involvement of an associated attorney would risk leaving the public unprotected.
After further discussion, it was moved by Pat Ward, seconded by Judge Braaten, and failed that the proposed rule, as revised, be approved. (3 yes - 7 no).
Judge Braaten said a rule is needed but there should be clarification of the role of the associated attorney. Pat Ward suggested incorporating a reference to the pro hac vice rule in describing the attorney's responsibilities, e.g., Rule 3A(3), Admission to Practice Rules.
Committee members agreed the draft rule should be further revised in the manner suggested and reviewed at the next meeting.
Petra Mandigo recalled the Committee's previous discussion of the meaning of "nonresident attorney" under Rule 3 of the Admission to Practice Rules, an issue presented to the Committee by Penny Miller. She asked whether the discussion should be continued.
Licensing of Foreign Legal Consultants
Chair Tabor next drew attention to Attachment E (March 17, 2006) - Email from Tim Priebe describing his and Pat Ward's review of the ABA Model Rule and a draft rule based on the Model Rule.
Pat Ward explained that he and Tim Priebe had reviewed the ABA Model Rule and background information concerning its adoption and concluded that the model rule, with some minor revisions, should be adopted in North Dakota. He said the draft rule included in Attachment E has been reformatted to generally reflect North Dakota rule formats.
Staff noted that the Committee has had the ABA Model Rule on its agenda for quite some time and consideration of it had been delayed pending the Committee's completion of its review of the Rules of Professional Conduct. He said there is interest in the adoption of the rule in United States jurisdictions because of international trade issues, issues that were noted when the Committee first considered the rule. As a technical revision, he noted that the reference on page 2 to Rule 11.1, Rules of Court, as the pro hac vice rule should be changed to Rule 3 of the Admission to Practice Rules in light of recent rule amendments relocating the pro hac vice rule components.
Justice Crothers drew attention to Section 6(a)(ii)(B) on page 4 of the draft rule, which requires the applying foreign attorney to provide evidence of professional liability insurance. He said current North Dakota rules do not impose a similar requirement on other out-of-state attorneys seeking admission in North Dakota. He wondered whether there is a supportable justification for imposing a different burden on an attorney licensed in a foreign country. Sandi Tabor said she had also noticed the requirement and questioned its purpose. Pat Ward observed that the provision was included in the ABA Model Rule. Justice Crothers noted that the ABA is a proponent of mandatory insurance, or at least the disclosure of whether an attorney has insurance.
It was moved by Clare Carlson, seconded by Pat Ward, and carried that the draft rule be modified to replace the reference to Rule 11.1, Rules of Court, with a reference to Rule 3, Admission to Practice Rules, and to delete the provision on page 4 regarding an undertaking or proof of professional liability insurance and that the draft rule, as modified, be submitted to the Supreme Court for consideration.
Model Rule on Insurance Disclosure by Lawyers
Chair Tabor drew attention to Attachment F (March 17, 2006) - a report and recommendation of the ABA Standing Committee on Client Protection regarding a proposed rule on insurance disclosure. She explained that the SBAND Board of Governors had formed a group to review the model rule and the Committee would await any conclusions from that review.
There being no further discussion the meeting was adjourned at 11:10 a.m.