STATE BAR OF MICHIGAN UPDATE: State Bar of Michigan’s role is focus of new Supreme Court task force

Should the State Bar of Michigan continue as a mandatory bar, which attorneys must join in order to practice law in Michigan? That is among the issues a newly created task force will consider, taking into account attorneys’ First Amendment rights and the need to regulate the legal profession.

The Michigan Supreme Court announced the task force’s creation today in an order, noting that the State Bar “requested that the Michigan Supreme Court facilitate this important discussion.”  Under article 6, section 5 of the Michigan Constitution, the Court has the constitutional responsibility for setting legal “practice and procedure” in Michigan courts.

The Supreme Court announcement comes in the wake of Sen. Arlan Meekof (R-West Olive) introduction of SB 743, which would allow attorneys to practice law in Michigan without joining the State Bar.

Falk v State Bar of Michigan, 411 Mich 63 (1981) and the U.S. Supreme Court’s decision in Keller v State Bar of California, 496 US 1 (1990). Keller upheld mandatory bar membership in the interests of regulating the practice of law and protecting the public, but added that mandatory bars may not use members’ dues to fund ideological activities that fall outside those interests. In Falk, a plurality opinion written by then-Justice James L. Ryan stated that, to comply with the First Amendment, the State Bar would have to show that mandatory membership and dues served a “paramount” interest to the state, and that there was no less restrictive means to advance that compelling state interest.

The new task force’s assignment: Determine whether the State Bar’s duties and functions can “be accomplished by means less intrusive upon the First Amendment rights of objecting individual attorneys,” consistent with  Keller and Falk, the Supreme Court’s order instructs. “At the same time, the Task Force should keep in mind the importance of protecting the public through regulating the legal profession, and how this goal can be balanced with attorneys’ First Amendment rights.”

 Justice Bridget McCormack will serve as the Court’s liaison to the task force and Supreme Court Commissioner Nelson Leavitt will serve as the task force’s reporter. Hon. Alfred Butzbaugh, trustee of the Michigan State Bar Foundation, a past president of the State Bar, and former chief judge of the Berrien County Trial Court, will chair the task force. A report is expected in June 2014.  

State Bar Commissioner Tim Burns had a mixed reaction when hearing of this announcement. “I am pleased the Supreme Court is evaluating the validity of the Legislature tinkering with the State Bar of Michigan, but am concerned that this task force may still ultimately hush a reputable non-partisan organization from being able to publicly speak out against political corruption of our judicial system and legal profession,” noted Burns.  “I haven’t received one single complaint from an attorney about the State Bar speaking out against setting standards for judicial elections or expressing concern about the Legislature’s fast tracked alterations to the Court of Claims.  The only people who I’ve heard complaints from are a politician, who is not an attorney, and a Republican Party political action committee, both of whom have stated that their actions to eliminate a mandatory Bar are  in retaliation for the SBM taking public positions contrary to actions supported by them.”

The assault on the State Bar as a mandatory association for the legal profession in Michigan began after a special interest group called The Michigan Freedom Fund was angered by SBM’s taking a position against undisclosed campaign contributions in judicial elections.  The SBM’s Board of Commissioners & Representative Assembly, who are attorneys elected by the licensed members of the State’s legal profession to direct the SBM, voted to take a position to address this topic out of concern that excessive money in these elections could create biases for the judges the money is provided to and diminish public respect for the judicial system who may believe those elected are beholden to undisclosed donors who helped them win their seats on the bench.  The State Bar to address this concern requested the Michigan Secretary of State require the disclosure of donors to special interest groups that get involved in judicial elections.  Secretary of State Ruth Johnson responded by taking an administrative action to require all donors to special interest groups be disclosed in all issue ads that run during an election.  Sen. Meekof quickly moved to stop that action by sponsoring and passing legislation that took away the Secretary of State’s authority to enact her administrative order.  The Senator than took aim at the State Bar with his current legislation at the urging of the special interest group The Michigan Freedom Fund.

“I don’t believe the State Bar of Michigan should be engaging in partisan political behavior and I don’t believe it has,” added Burns.  “On the other hand, the State Bar shouldn’t be prohibited from taking action to speak out and oppose partisan political acts that corrupt the integrity of our Courts, negatively impact the legal profession, and hurt our State’s residents ability to have access to a fair and impartial judiciary.  The State Bar of Michigan’s Representative Assembly and Board of Commissioners are made up of a mix of Republican, Democratic, and Independent minded attorneys elected by their peers and I haven’t witnessed any behavior that places political interests before good public policy.”

“My comments on this issue are my own opinion and aren’t to be represented as statements or communications from the State Bar of Michigan,” Burns added in concluding his remarks.  “For official commentary or positions on this issue from the State Bar of Michigan please contact the SBM’s Executive Director Janet Welch.”

STATE BAR OF MICHIGAN Opposes Voluntary Bar Legislation; Asks for Michigan Supreme Court Review

The State Bar of Michigan (SBM) Board of Commissioners voted unanimously to oppose Senate Bill 743 (SB 743) in a teleconference meeting on February 6. Senate Bill 743, calling for voluntary membership in the State Bar of Michigan, was introduced on January 23 by state Senator Arlan Meekhof.

President Brian Einhorn and Executive Director Janet Welch informed Michigan Supreme Court Chief Justice Robert P. Young Jr. and his fellow justices of this decision in a letter sent to the court on February 6. In this letter, SBM leaders state that SB 743 raises questions about the operation of the State Bar as a mandatory organization that are most appropriately addressed within the judicial branch of government, pursuant to the Supreme Court’s exclusive constitutional authority to establish practice and procedure for the state’s legal system under Michigan Constitution Article VI, Section 5. SBM leaders ask the Michigan Supreme Court to initiate a review of how the State Bar of Michigan operates within the framework of the Supreme Court of the United States’ ruling in Keller v State Bar of California.

Frequently Asked Questions About Mandatory Versus Voluntary Bar Status

• Do lawyers in voluntary bar states pay anything to practice law? YES
• Does a mandatory bar deliver value to its members that a voluntary bar can’t? YES
• Are the State Bar of Michigan’s public service and access to justice programs better than what voluntary bar states can provide? YES

Supreme Court Oversight of the State Bar of Michigan

The Rules of the Michigan Supreme Court direct the State Bar of Michigan to aid in promoting improvements in the administration of justice and advancements in jurisprudence, in improving relations between the legal profession and the public, and in promoting the interests of the legal profession in Michigan.

“We value the reputation the State Bar has established as a national leader in pursuing these purposes for nearly eight decades,” said SBM President Brian Einhorn and Executive Director Janet Welch in the letter. “We know that our continued effectiveness depends on the confidence of this Court and our membership in our adherence to our core mission and to the constitutional boundaries defined by the Keller decision and the Michigan Supreme Court. Our decision-making in carrying out our duties to our members and the public is grounded in such adherence, and we believe that a structured conversation on this subject undertaken under the auspices of the Supreme Court will fully address the questions raised by SB 743.”

Tim Burns serves on the Board of Commissioners, which directs the operations and policies of the State Bar of Michigan.  “The SBM has a proud tradition of being a non-partisan body that promotes efficiency and integrity for the State’s legal profession,” noted Burns regarding the Board of Commissioner’s February 6th vote.  “It is a sad day when a politician tries to dismantle a reputable organization because it provides a critique contrary to his political agenda.  I hope lawyers, the public, the state’s judiciary, and elected officials in our government will stand with the SBM in opposing Mr. Meekof’s legislation.”

Meekof has acknowledged in news reports about his legislation that he introduced his Bill is in retaliation for the State Bar of Michigan criticizing the impact of spending by special interest groups in  judicial elections and the SBM’s  publicly expressed concerns on recent legislation that altered  Michigan’s Court of Claims.

Voluntary State Bar Legislation

As a member of the State Bar of Michigan’s Board of Commissioners I’m providing this update on pending legislation impacting the legal profession in Michigan:

Senate Bill 743 (SB 743), calling for voluntary membership in the State Bar of Michigan, was introduced on January 23 by state Senator Arlan Meekhof. Read the full text of the bill on the Michigan Legislature website.

Some key elements of SB 743:

• Change the membership of the State Bar of Michigan from mandatory to voluntary
• No longer require that individuals pay a periodic fee for continued membership in the State Bar
• Require that individuals who designate themselves “attorneys or counselors” be licensed to practice law in Michigan
• Require that all individuals who practice law in the state do so in compliance with the requirements of the Michigan Supreme Court

Where is the State Bar on this issue?
The State Bar must wait 14 days until advocating a position before the Legislature under the provisions of Michigan Supreme Court Administrative Order 2004-01, which restricts formal action on legislation until 14 days after notice has been posted on the State Bar website. This notice was posted on January 23 and states that the State Bar of Michigan Board of Commissioners will meet at 8 a.m. on February 6 by teleconference to consider a position on SB 743.

“The State Bar of Michigan has demonstrated in its 79-year history that a mandatory bar association is a great, no-cost benefit to Michigan’s taxpayers and the most cost-effective way to regulate the legal profession and protect the public,” said SBM Executive Director Janet Welch. “Since the general topic of deregulating the practice of law in Michigan was raised last year, the overwhelming sentiment we have heard from our members, judges, many policymakers, and the public is pride in a state bar that has earned a national reputation for excellence in providing services to the legal profession and working to improve the justice system.”

All members are encouraged to express their opinions to the State Bar of Michigan through the Member Comment form of the Public Policy Resource Center.

Look for further developments in the SBM Blog or the Public Policy Resource Center. As a reminder, the State Bar’s NewsLinks provides a daily round-up of news of interest to lawyers, and our weekly Public Policy Newsletter (subscribe) describes ongoing public policy developments.

LEGAL TIPS FOR YOUR HOLIDAY SHOPPING

It’s the beginning of November and for many people that ushers in the start of the Holiday shopping season. As you are hitting the stores and shopping on the Internet it’s important to be proactive in knowing your legal rights so that your gift giving experiences are filled with merriment versus heartache. It is so much easier to avoid problems by looking out to avoid problems rather than losing money and time trying to resolve a complaint or dispute later on. Here are a few tips to keep in mind:

RETURN & EXCHANGE POLICIES:
If a store has a posted return and exchange policy it is legally bound to adhere to those publicized terms and conditions. Ask about a store’s policies before you buy because otherwise stores are NOT required to make refunds, take returns, or offer exchanges even if you have a receipt. There are two exceptions when a store is REQUIRED to allow a customer to make a return and that is if the seller (1) misrepresented the item or (2) the item was defective at the time of purchase. For example if a store represented it was selling you a toy car and when you opened the box at home it had a toy boat in it instead that is a misrepresentation. Another example is buying a remote control car for your child that’s missing the remote control – obviously that is defective.

Store return and exchange policies can often be a thorny issue with consumers so make sure to give “gift” receipts to help your friends and family who may consider returning your present, with or without your knowledge, to help facilitate the process for both them and the store. Receipts are also important to have and keep for warranty service on items.

GIFT CARDS:
The gift cards you purchase this holiday season cannot expire within five years of purchase. Under the law, a retailer or financial institution that issues a gift card cannot refuse to accept it “for personal, family, or household use” if you present the card within five years of purchase or after adding value to the card. An example of adding value is being given a $5 Starbuck Card and after spending $3.99 of it you add another $5 to bring the total on the gift card to $6.01.

The gift card expiration laws are relatively new, 2009 for merchants and 2010 for financial institutions, so pay attention to expiration dates for gift cards you may already have from past years. Of course most people have some friend or family member that likes to re-gift presents so just because you receive a gift card this year doesn’t mean you shouldn’t necessarily pay attention to the expiration date on it either. Expiration dates can be longer than 5 years they just can’t be shorter.

Merchants cannot charge inactivity fees or other service fees that are deducted from the value of a gift card, but it is important to note that rule only applies for the first year after purchase when it comes to gift cards issued by financial institutions like banks and credit card companies. Merchants and financial institutions cannot deduct from the value of a gift card to sell it to you but they can charge a purchase fee for selling it. So your local bank can’t charge you $5 by selling a $25 American Express gift card worth only $20, but they can charge you $30 for one worth $25. So if you buy a $25 gift card the value on it when you receive it should be $25.

ITEM PRICING LAW:
The State Legislature changed Michigan’s Item Pricing Law in 2011 so individual items at stores no longer are required to have a price tag on them. Under the new law, rather than being placed on specific items a price may now be displayed by signage, electronic reader, or any other method that clearly conveys the price to a consumer when in the store at the place where the item is located. So buyers beware and check your receipts.

Under Michigan law if you are overcharged by a retailer for misrepresenting the price of an item through placing it next to the wrong display sign or through a scanner error at the register than there are penalties that benefit consumers. If you have been overcharges, notify the merchant within 30 days of the transaction, either in person or in by writing to them. Within 2 days of receiving your notice the seller may refund you the difference between the amount charged and price advertised plus a “bonus” of ten times the difference, with a minimum of $1 and a maximum of $5. If the seller doesn’t pay up with both a refund for the difference and the bonus, the buyer can bring a lawsuit to recover actual damages or $250, whichever is greater, plus reasonable attorney fees up to $300. For these protections to apply, a transaction has to be completed so if a cashier catches the error or problem and fixes it before you pay and leave the register than you don’t have a claim. Also you need to have a receipt showing the item purchased and the identifying the price you paid.

HOLIDAY SHIPPING:
What protections do you have if shopping online or by catalog to know that your gift will be delivered in time? Under the Federal Trade Commission’s “Prompt Delivery Rule”, a business must either state or delivery timeline or complete shipping within 30 days of a purchase. If a merchant can’t deliver either within the promised time or 30 days, it must provide a revised shipping date and explain the customer has a right to cancel the order and get a prompt full refund. Note though that a customer’s silence is considered an agreement to these delays. If though the shipper needs more than 30 days or the delay will be indefinite, they need to get the customer’s written or verbal consent to the delay or must issue a prompt refund. Also if the shipper notifies a costumer of a second delay, and for any additional delays after the second one, the customer must give verbal on written consent on each subsequent delay or have the order cancelled and be provided a refund.

I hope everyone has an enjoyable Holiday Season and encourage everyone to be smart and safe when shopping to help ensure that these times are memorable for you and your family for the right reasons and not impaired by negative situations that could have been avoided with a little advance preparation or insight.

Tim Burns is a private practice attorney who focuses on probate law, estate planning, consumer issues, small business representation, and criminal defense (www.attorneytimburns.com). Prior to starting his own law firm, Tim spent a decade as a consumer advocate with the Better Business Bureau. He is a graduate of the University of Detroit/Mercy School of Law.

Michigan to implement Medicaid Estate Recovery as of July 1

Governor Rick Snyder has authorized the state’s Department of Community Health as of July 1, 2011 to begin enforcing Michigan’s Medicaid Asset Recovery Act (MCL 400.112g).  Individuals who received Medicaid long-term care services and have reached the age of 55 as of or after September 30 2007 may be subject to a probate action against their estate by the State of Michigan for reimbursement of the expense of these health care services upon their death or the subsequent death of a qualified spouse.   The State has contracted with a company called Health Management Services, Inc. (HMS) to pursue estate recovery claims for Medicaid expenses.

Medicaid is a health insurance program funded by the State and Federal governments for people who meet certain income and asset rules (CLICK HERE for more information on Medicaid). Funds to reimburse the State for its Medicaid expenses will be recovered from the beneficiary’s estate, which is defined by the Act as all property and assets which are subject to probate court administration.  It is most likely though that the State will primarily be looking to capture assets such as residential properties or business assets that were exempt from Medicaid divestiture requirements in its enforcement of the Act. The law does provide some exceptions and hardship waivers to avoid state recovery of assets in some circumstances.

A home can be excluded from estate recovery under a number of exemptions:

• A spouse, child under 21, or a child of any age who is blind or permanently disabled resides in the home;
• A survivor who was residing in the home and providing care for a period of at least 2 years immediately before the date of the beneficiaries admission to a Medicaid funded medical institution, and that care allowed the recipient to live at home rather than in a medical facility;
• A sibling who has an equity interest in the home who was residing in the home for a period of at least 1 year immediately before the recipient’s admission.

The Department of Community Health under the Act may grant a hardship waiver in the following circumstances:

• The cost or recovery efforts would exceed the amount expected to be recovered by the State;
• The estate property is the sole-income producing asset of the beneficiaries, such as a family business or farm, and the income produced by the asset is limited;
• The estate property is a home of modest value. “Home of modest value” means a home that is worth less than 50% of the average price of a home in the County where it is located on the date the Medicaid benficiary died; or
• Recovery from a recipient’s estate would cause a survivor to become or remain eligible for Medicaid.

When a Medicaid beneficiary 55 or older dies, the State will send an estate recovery notice to the personal representative or heirs.  The notice will inform them that the State of Michigan plans to file a claim in probate court against the estate, how much is being claimed, and how to apply for a hardship waiver or exemption.  Under the State’s enforcement policy for the law, an application for a waiver must be received by HMS, Inc. within 60 days of a claim notice being issued to avoid a probate court action against the estate.  Additionally, the notice will also include a questionnaire that must voluntarily be returned within two weeks of receipt to request an administrative review concerning possible statutory exemptions against a State recovery action. (CLICK HERE to download a copy of the questionnaire) 

The State has created an informational brochure “Your Guide to ESTATE RECOVERY in Michigan“ (CLICK HERE to download) and has created a Web site www.michigan.gov/estaterecovery.  HMS, Inc. can also be contacted for more information toll-free at 877-791-0435 or miestaterecovery@hms.com

It is advisable to obtain legal advice before transferring any assets owned by someone who is either receiving or considering obtaining Medicaid services.  The law allows for assets that may have otherwise been ineligible for State recovery to become eligible if ownership is transferred in an effort to avoid estate recovery.  It is important to evaluate the consequences of transferring any property that could be applicable to Michigan’s Medicaid Asset Recovery Act before taking any action.

Tim Burns is a Michigan-licensed attorney with an ICLE Estate Planning & Probate Law Certificate. He can be reached at 248-275-1826 or www.attorneytimburns.com . He is also on twitter @Timothy_J_Burns & at www.facebook.com/attorneytimburns .

Adults who supplied liquor to minors killed in car crash sentenced to jail time

When enjoying the summer season please remember that providing alchohol to minors is against the law and could put YOU in jail. The LANSING STATE JOURNAL reports on the case of three college students who allowed some underage high school students to get drunk at a party and drive home.  The high school students were killed when their drunk driver crashed into a tree at 83 mph and these three adults who provided the keg for the party pled guilty to conspiracy to contribute to the delinquency of minors:

One by one, three college students who hosted a keg party earlier this year were led out of Judge Donald Allen’s courtroom in handcuffs, ordered to spend at least 90 days in jail …What happened that night, Allen said during a hearing in 55th District Court, has “ripped the very social fabric of our community. We have parents who (have buried) their children, and that’s not supposed to happen.”

Each of the three pleaded guilty in April to a misdemeanor charge of conspiracy to contribute to the delinquency of minors for hosting the party and inviting underage people. Prosecutors initially charged each with felony counts of furnishing alcohol to a minor causing death, as well as two misdemeanors related to the sale of alcohol without a license.

Lansing State Journal (June 23,2011) “3 who supplied liquor in fatal crash tha killed Holt students sent to jail”

Jurors granted more autonomy in Michigan Courts

Starting in September 2011, major changes by the Michigan Supreme Court to the state’s Court Rules will allow juries to takes notes during a trial’s testimony, submit questions for judges to ask witnesses in addition to direct and cross-direct from attorneys, and permits jurors to discuss the case between themselves during the trial before they go into deliberations. This has the potential to greatly alter the dynamics of a trial.

According to the Detroit News:

Jurors can take notes and pose questions for witnesses under new rules that have been released by the Michigan Supreme Court.

The changes announced today have been in the making since 2005 and follow a two-year test in 12 Michigan courts. They take effect in September.

Chief Justice Robert Young Jr. says Michigan juries have much responsibility yet they’ve faced too many restrictions. He says the new rules allow jurors to be “truly involved” in trials.

The ability to ask questions has been available in criminal trials, but the new rules include civil trials. Jurors also will be allowed to discuss evidence before a trial is over.

Do you think allowing jurors more autonomy during trials is good or bad for the legal process? 

ICLE PROBATE LAW & ESTATE PLANNING CERTIFICATION

I just wrapped up attending several days of intensive training that allowed me to renew my ICLE Probate & Estate Planning Certificate for another three years.  I originally earned this recognition in 2005 which designates an attorney as an authority in this field of law. The certificate program is sponsored by the Probate and Estate Planning Section of the State Bar of Michigan and the Institute for Continuing Legal Education. 

New Law Protects Consumer Confidence When Shopping Online

Have you ever been offered a free product or special discount just as you are about to provide your credit card information to make an online purchase?  Did you later notice recurring charges popping up on your monthly credit card statements from an unknown company? As shopping over the Internet has become more popular, millions of unwary consumers over the last few years have been tricked by an online marketing tactic that brought in more than a billion dollars in recurring credit card charges.

Disclosures hidden in small print often kept people from realizing that by clicking  “yes” for a special deal, they had agreed to allow the company they were shopping with to “data pass” credit card information and enroll them in billable services provided by “post-transaction third party sellers” (a term for companies that sell goods or services online through another merchant after a consumer has initiated a transaction with the other merchant). In other cases, online retailers engaged in a practice called “negative option” sales, which automatically enrolled customers in these third-party programs unless the shopper “opted out”. 

 Congress passed a new law as it busily concluded its 111th Session meant to protect consumers from these online marketing abuses that was signed into effect by President Obama on December 29, 2010.  While this new law’s enactment received little fanfare, it is important for both consumers and businesses to be aware of The Restore Online Shoppers Confidence Act [ROSCA],  which now establishes legal rules that businesses and non-profits conducting financial transactions online must abide by.          

ROSCA makes it unlawful for these post-transaction third party sellers to charge, or attempting to charge, a consumer for any good or service sold in an online transaction unless it accomplishes the following:

(1) Clearly discloses all of the material terms of the offer, including an accurate description of what is being sold, the cost, and provides notice they are not affiliated with the merchant the consumer initiated the transaction with;

(2) Receives express consent and billing information for the specific charge directly from the consumer. 

 ROSCA also regulates “negative option” online sales by requiring:

(1) Clear and conspicuous disclosures to consumers of all the terms of a transaction before obtaining their billing information;

(2) An informed and express consent before charging a consumer;

(3) A simple method for a consumer to cancel.

 ROSCA authorizes the Federal Trade Commission and state Attorney Generals to bring enforcement actions against violations of the Act.  ROSCA does not allow for private civil lawsuits against violators though, so consumer complaints must be directed to these law enforcement agencies.  Complaints can be filed at http://www.ftccomplaintassistant.gov or http://www.michigan.gov/ag.  

There may be Web sites that are operating in a previously legal manner that is now illegal. Now would be a good time for businesses that engage in online sales transactions and non-profit organizations that solicit donations or memberships through the Internet to take some time to review their operations, advertising, and marketing practices to ensure compliance and avoid any future liabilities.

Tim Burns is a Michigan licensed attorney whose law practice focuses on consumer protection advocacy, small business representation, contract law, probate matters, and criminal defense.