03 June 2019

Today in the Colorado and U.S. Supreme Courts

Today In the Colorado Supreme Court

In decisions here and here, the Colorado Supreme Court holds that a criminal defendant who is convicted can always appeal on the ground that the evidence at trial was insufficient to support a conviction beyond a reasonable doubt, without any penalty for not raising this issue in the trial court.

In a water court case (from which there is an appeal to the Colorado Supreme Court, of right), the Colorado Supreme Court determines what a party must show to be a prevailing party under a clause of a settlement agreement awarding attorneys' fees to a prevailing party seeking to enforce the agreement. The official syllabus of the decision explains that:
The fee-shifting clause at issue provided that the prevailing party in an action to enforce, by any means, any of the terms of the settlement agreement shall be awarded all costs of the action, including reasonable attorney fees. Here, the plaintiffs’ claims, in substance, sought relief based on allegations that the defendant had breached the terms of the settlement agreement, and the defendant responded by arguing that it was the plaintiffs’ claims that were inconsistent with that agreement. In these circumstances, the court concludes that the plaintiffs’ claims constituted an effort to enforce the terms of the settlement agreement. Indeed, consistent with this conclusion, the plaintiffs themselves had asserted a claim for fees pursuant to the fee-shifting clause at issue. 
Accordingly, the court holds that the defendant, as the prevailing party on all claims below, is entitled to recover his attorney fees pursuant to the settlement agreement’s fee-shifting clause.
In a case imposing fines on a corporation for failing to have worker's compensation insurance in place the Colorado Supreme Court holds that "the Eighth Amendment’s prohibition on the government imposition of “excessive fines” applies to fines levied on corporations. . . . [and] the proper test to assess the constitutionality of government imposed fines requires an assessment of whether the fine is grossly disproportional to the offense for which it is imposed[.]" The Colorado Supreme Court remands the case to determine if the fine was constitutionally excessive when applying that standard.

The business in question failed to have worker's compensation in force for its four to ten employees at a time with under $50,000 a year of payroll for a total of 1,698 days in three distinct, lengthy gap periods over seven years, or which it was fined $841,200 (fines of $250 to $500 per day), during which no actual claims went unpaid. This amount exceeded the firm's annual gross income and allegedly lapsed because the business thought someone else was taking care of it when they weren't actually doing so. It holds that the trial court must determine if the $250-$500 fine is disproportionate to the harm caused by one day of not having worker's compensation insurance in force, without regard to the aggregate amount of the fine.

The analysis of when constitutional provisions apply only to individuals and when they also protect corporations is interesting as an exposition of legal theory on a hot legal issue. The core test is that a protection should apply to corporations when a guarantee is against certain government overreach, and is a constitutional immunity appropriate to a corporate body[.]" One justice dissents in part, arguing that the total amount of the fine, rather than the amount imposed for each offense, should be considered.

Today In The U.S. Supreme Court

In Azar v. Allina Health Services, the U.S. Supreme Court holds 7-1 (with Kavanaugh not participating) that the federal government improperly adopted a policy in violation of the Administrative Procedures Act, when the statute was unclear regarding whether a formula created before Medicare Part C was adopted needed to include both Medicare Part A recipients and Medicare Part C recipients, or just Medicare Part A recipients, in determining the amount that should be paid to hospitals. Including more recipients causes hospitals to receive less money under the formula. The federal government adopted a rule saying that the formula does include Medicare Part C in 2004, then repealed it and adopted a new rule effective prospectively only in 2013 that included Medicare Part C in the formula. But, then, it included Medicare Part C in the formula for a 2012 calculation when neither regulation was in form. The policy decision to include Medicare Part C in the formula retroactively as well as prospectively was held to be a de facto regulation adopted without the required notice and comment period.

In a unanimous decision, the U.S. Supreme Court holds in Taggart v. Lorenzen, that a "court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct." This is an objective standard. A party’s subjective belief that she was complying with an order ordinarily will not insulate her from civil contempt if that belief was objectively unreasonable. It held that "subjective intent, however, is not always irrelevant. Civil contempt sanctions may be warranted when a party acts in bad faith, and a party’s good faith may help to determine an appropriate sanction. . . . Under the fair ground of doubt standard, civil contempt may be appropriate when the creditor violates a discharge order based on an objectively unreasonable understanding of the discharge order or the statutes that govern its scope." The 9th Circuit decision which was reversed had held that "a 'creditor’s good faith belief' that the discharge order 'does not apply to the creditor’s claim precludes a finding of contempt, even if the creditor’s belief if unreasonable.'” The U.S. Supreme Court also rejected a proposed strict liability standard.

In Fort Bend County v. Davis, the U.S. Supreme Court holds unanimously that the requirement that the EEOC consider a discrimination in employment claim and issue a letter authorizing the victim of the discrimination to sue is not a jurisdictional requirement, so it can be waived the party that allegedly discriminated in litigation by failing to object to the claim on that ground.

In Mont v. United States, the U.S. Supreme Court holds in a 5-4 decision that the deadline to punish a criminal defendant for violating the terms of parole is tolled by time spent incarcerated prior to trial on new charges for crimes allegedly committed while on parole, if the pre-trial incarceration period is ultimately converted to time served credit against a sentence for that crime even if that conversion happens after the deadline for sanctioning the parole violation has expired.

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