The 2016 Massachusetts Code of Judicial Conduct: Judicial Engagement with the Organized Bar

cohen_cynthiaberenson_barbaraby Hon. Cynthia Cohen and Barbara F. Berenson

Heads Up

In October 2015, the Justices of the Supreme Judicial Court (“SJC”) adopted a new Massachusetts Code of Judicial Conduct, effective January 1, 2016 (“new Code” or “2016 Code”).  The new Code is the culmination of three years of study by a committee of judges, lawyers, and academics, who were appointed by the SJC to study the previous, 2003 Massachusetts Code of Judicial Conduct (“predecessor Code” or “2003 Code”) and to recommend changes in light of the American Bar Association’s 2007 Model Code (“2007 ABA Model Code”).  The committee was fortunate to have among its members three prominent bar leaders:  Attorney Lisa Goodheart and Professor Renee Landers, both past Presidents of the BBA, and Attorney Michael Greco, a past President of both the MBA and the ABA.  Bar associations and individual members of the bar also provided invaluable feedback and suggestions during the public comment period.

The 2016 Code differs substantially from the predecessor Code in both form and substance.  It closely resembles the 2007 ABA Model Code in structure and overall philosophy, but it also contains a significant number of nonconforming provisions, often because the departure is more suitable for a state that does not elect its judges.  A summary of key new and revised provisions is available for review on the website of the Massachusetts Judicial Branch, as is the committee’s Report.

An important difference between the 2016 Code and the predecessor Code pertains to judicial participation in outside activities.  To a large extent, the 2003 Code shielded judges from interactions with the public, in the belief that judicial isolation would best ensure the independence, integrity, and impartiality of the judiciary.  In contrast, the 2016 Code recognizes the value and importance of judicial outreach and affirmatively encourages judges to participate in community activities, so long as they are consistent with a judge’s fundamental obligation to act at all times in a manner that promotes public confidence in the independence, integrity, and impartiality of the judiciary, and that avoids impropriety and the appearance of impropriety.

This new philosophy is particularly evident in rules bearing on judicial engagement with the organized bar.  Early on, in Canon 1, the new Code makes clear that judges are affirmatively encouraged to “participate in activities that promote ethical conduct among judges and lawyers, support professionalism within the judiciary and the legal profession, and promote access to justice for all.”  Rule 1.2, Comment [4]. Later, in Canon 3, Rules 3.1 and 3.7 offer specific guidance concerning a judge’s participation in extrajudicial activities, including those of bar associations.  Rule 3.1 permits a judge to “engage in extrajudicial activities, except as prohibited by law or this Code,” albeit with some general cautions.  For example, the activities must not interfere with the proper performance of the judge’s judicial duties or lead to recurrent disqualification.  That said, as long as the concerns of Rule 3.1 are satisfied, Rule 3.7 encourages judges to participate in activities that “foster collegiality among the bar and communication and cooperation between the judiciary and the bar.”

This encouragement specifically extends to speaking about the administration of justice at bar association events.  Rule 3.7, Comment 1[B].  In a departure from the predecessor Code, a judge ordinarily may do so even when the event is held in space provided by a law firm or is financially supported by one or more for-profit entities, such as law firms or legal vendors, that do substantial business in the court on which the judge sits.  Ibid.  The rationale for this liberalization is that some bar associations, particularly affinity bar associations with smaller memberships, may not be in a financial position to hold events without the support of private sponsors or the use of law-firm space.  The Code cautions, however, that the judge must avoid giving the impression that the sponsors of an event are in a special position to influence the judge.  Rule 3.7, Comment [1A].

The 2016 Code also relaxes what had been an outright  prohibition on a judge serving as a featured speaker or receiving an award or other comparable recognition at a fundraising event of a law-related organization.  A judge is now permitted to speak or be honored if the event is sponsored by a law-related organization that promotes the general interests of the judicial branch of government or the legal profession, including enhancing the diversity and professionalism of the bar.  Rule 3.7(A)(6A).  As explained in Comment [4], general interest organizations include, for example, state bar associations, city or county bar associations, affinity bar associations, and bar associations that specialize in particular practice areas but whose members take positions on both sides of disputed issues.

The 2016 Code continues to prohibit a judge from serving as a featured speaker or receiving an award at other fundraising events, but more narrowly defines that term.  Under the new Code, a fundraising event is one where the organizers’ chief objectives include raising money to support the organization’s activities beyond the event itself; unless that definition is met, an event is not considered to be a fundraising event, even if the revenues from the event ultimately exceed the costs.  Rule 3.7, Comment [3].

The 2016 Code also modifies the rules governing a judge’s acceptance of invitations to attend without charge a luncheon, dinner, reception, award ceremony, or similar event held by a law-related organization in Massachusetts.  A judge may now accept such invitations without having to obtain a written determination from the Chief Justice of the court on which the judge sits that acceptance will serve a legitimate public purpose; instead, the Code presumes that a judge’s attendance at such events will serve a public purpose.  The intent of this provision is to make it less burdensome for judges and their Chief Justices to facilitate judicial attendance at local bar events.  In other instances, judges remain required to obtain determinations from their Chiefs before accepting complimentary invitations.  See Rule 3.14.

At the same time that the SJC adopted the new Code, it also revised SJC Rule 3:11, which governs the Committee on Judicial Ethics.  Among other things, the revised rule provides that the Justices may from time to time issue an Ethics Advisory to elucidate the meaning or application of a provision of the Code and to expound upon provisions that are of broad interest and application. SJC Rule 3:11(4).  Groups of judges and lawyers, including bar associations, may request an Ethics Advisory, but the court may decline to render one for any reasons it deems sufficient.  Ibid.  Although the Committee on Judicial Ethics will continue to render Informal Opinions and Letter Opinions (formerly known as Advisory Opinions) only to judges, by offering bar associations the opportunity to seek clarification of Code provisions, the new rule recognizes that issues of judicial ethics are of great interest and importance to the bar as well as the judiciary.

Hon. Cynthia J. Cohen is an Associate Justice of the Appeals Court.  She chaired the committee that drafted and recommended the adoption of the 2016 Massachusetts Code of Judicial Conduct, and currently chairs the Committee on Judicial Ethics.

Barbara F. Berenson is a senior attorney at the Supreme Judicial Court. She staffed the committee that drafted and recommended the adoption of the 2016 Massachusetts Code of Judicial Conduct, and is currently staff counsel to the Committee on Judicial Ethics.

 

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The Impact of Recent Revisions to Fed. R. Civ. P. 37(e) — Electronic Spoliation

bresnahan_elizabethby Elizabeth Bresnahan

Heads Up

The amendments to the Federal Rules of Civil Procedure, effective December 1, 2015, include significant changes to Rule 37(e) concerning spoliation of electronic evidence.  See Fed. R. Civ. P. 37(e).  With electronically stored information (“ESI”) becoming increasingly prevalent, the amendments are designed to clarify and streamline litigants’ preservation obligations, imposing a high bar on parties who seek to have sanctions imposed on their opponents.  Litigants can now expect uniform standards for curative measures where the circuits had previously been split and sanctions inconsistently applied.  For example, the amended Rule 37(e) represents a departure from the negligence standard which precipitated sanctions in a variety of circuits under the former Rule, and “forecloses reliance on inherent authority or state law to determine when” sanctions and remedial measures should be used.  Fed. R. Civ. P. 37(e) advisory committee’s note to 2015 amendment, available at https://www.law.cornell.edu/rules/frcp/rule_37.  (“Advisory Committee Notes”).  Instead, under the current Rule 37(e), courts are instructed not to impose an adverse inference, or other harsh sanctions, absent a party’s intent to deprive the other party of the at-issue evidence, resulting in prejudice.   Moreover, under the amended Rule, such corrective measures can only be imposed where electronic information that should have been preserved in anticipation of litigation is lost.  The amended Rule offers some additional protection to litigants by permitting additional discovery to repair or replace such presumed “missing” evidence.  And, even if the court eventually finds that sanctions are appropriate, they are limited to “measures no greater than necessary to cure the prejudice.”  Fed. R. Civ. P. 37(e)(1).  Thus, the result may be that, as litigants find additional protections under the amended Rule, and higher hurdles to imposing sanctions on their opponents, we may see a decrease in litigation concerning failure to preserve.

Fed. R. Civ. P. 37(e), as amended.

The text of the amended Rule, marked to show changes from the prior version, follows:

(e)  Failure to Provide[Preserve] Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.[If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

Evidentiary Sanctions Under the Amended Rule.

Failure to take reasonable measures to preserve.  Rule 37(e) does not create a new duty to preserve, and as such, does not apply if the ESI is lost before the duty to preserve arises.  See Advisory Committee Notes.  Indeed, a party’s preservation obligations remain triggered when litigation is pending or reasonably foreseeable, or where the party has independent preservation obligations, e.g., under a specific statute or internal company policy.

In determining whether a party has taken reasonable steps to preserve, the Rule allows courts to consider “routine, good-faith operation of an electronic information system,” as well as the “proportionality” of the efforts to the case and to a party’s resources.  Id.  The Advisory Committee directs that courts be “sensitive to the party’s sophistication with regard to litigation in evaluating preservation efforts…” Id.  And, a party’s efforts need not be perfect.  Id.

No sanctions or other remedial measures unless information is lost.  Critical to whether remedial measures are permitted under the amended Rule is that the information at issue be lost; if it can be “restored or replaced through additional discovery,” Rule 37(e) does not permit remedial action.  Fed. R. Civ. P. 37(e).  The Advisory Committee reasons that “[b]ecause electronically stored information often exists in multiple locations, loss from one source may often be harmless when substitute information can be found elsewhere.”  Advisory Committee Notes.  Moreover, “efforts to restore or replace lost information through discovery should be proportional to the apparent importance of the lost information…. [S]ubstantial measures should not be employed to restore or replace information that is marginally relevant or duplicative.”  Id.

Measures “no greater than necessary” on finding of prejudice.  Assuming the above prerequisites are met, a court may order certain proportional remedial measures under subsection (e)(1) of the amended Rule only “upon finding prejudice to another party from loss of information.”  Fed. R. Civ. P. 37(e)(1).  The measures must also be “no greater than necessary to cure the prejudice.” Id. How to assess prejudice is left to the discretion of the courts; the Rule does not address which party has the burden.  Advisory Committee Notes.

Upon finding prejudice, courts may impose remedial measures that are proportional to the prejudice.  Id.  The Advisory Committee identifies these less severe, but serious measures, as “forbidding the party that failed to preserve information from putting on certain evidence, permitting the parties to present evidence and argument to the jury regarding the loss of information, or giving the jury instructions to assist in its evaluation of such evidence or argument, other than instructions to which subdivision (e)(2) applies.”  Id.

Specified and severe measures only upon finding “intent to deprive.”  Under the amended Rule, the most severe sanctions, such as adverse inference jury instructions, dismissal of claims, and entry of a default judgment, are now reserved for a “finding that the party acted with the intent to deprive another party of the information’s use in the litigation.”  Fed. R. Civ. P. 37(e)(2).  The Advisory Committee counsels the importance of a finding an “intent to deprive” in order to address and deter such failures.  Advisory Committee Notes.  Mere negligence — or even gross negligence — is no longer sufficient.

While the Rule sets forth four severe sanctions that may be imposed under the Rule upon a finding of intent, proportionality again directs the analysis.  Likewise, the Advisory Committee cautions that “[t]he remedy should fit the wrong, and the severe measures authorized … should not be used when the information lost was relatively unimportant or lesser measures such as those specified in subdivision (e)(1) would be sufficient to redress the loss.” Id.

Elizabeth Bresnahan is a litigation associate in the Boston office of Morgan, Lewis & Bockius LLP.


Proportionality Emphasized In Amendments To The Federal Rules Of Civil Procedure

foster_mannyby Immanuel R. Foster

Heads Up

Significant amendments to the Federal Rules of Civil Procedure became effective on December 1, 2015.  The amendments modify Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, 55, and 84.  The amendments seek to increase the efficiency and speediness of litigation while slowing the rising costs of discovery.  Toward the latter goal, certain of the revisions establish an express guiding principle to limit the scope of discovery:  proportionality.

The application of the proportionality requirement likely will have an immediate and lasting influence on how parties conduct discovery in federal courts and how the courts referee discovery disputes.  Specifically, amended Rule 26(b)(1), which governs the scope of discovery, permits discovery into relevant, non-privileged information “proportional to the needs of the case.”  (Emphasis added.)  Old Rule 26(b)(1) permitted discovery into relevant, non-privileged information “reasonably calculated to lead to the discovery of admissible evidence,” a phrase that was often misconstrued and which is now removed.  Old Rule 26(b)(1) also permitted such discovery into sources of additional discovery, “including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.”  Thus, the new rule:  (i) establishes “proportionality” as a limiting principle (ii) potentially limits “discovery about discovery” and, consequently, (iii) will, it is hoped, add a needed control to the rising costs of discovery.

Proportionality Is The New Standard

The amended rule removes “reasonably calculated” – an ambiguous phrase that sometimes allowed for expansive discovery – and focuses on “proportional.”  And the amended rule specifies the considerations for determining whether discovery is proportional, including “the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”  Parties now must consider these factors when making or responding to discovery requests.

To be sure, proportionality is not a wholly new concept in federal practice.  For example, before the 2015 amendments, proportionality was implied by Rule 26(b)(2)(C)(iii), which required courts to limit discovery where “the burden or expense of the proposed discovery” would “outweigh[] its likely benefit,” and Rule 26(g) required a party seeking discovery to certify that the discovery was “not . . . unduly burdensome or expensive,” in light of the circumstances of the litigation.  But while parties seeking protective orders pursuant to Rule 26(c) would frequently call the court’s attention to these proportionality considerations, opposing parties would often invoke “reasonably calculated,” which the Advisory Committee Notes on the new rule state “were used by some, incorrectly, to define the scope of discovery.”  The amendments change that.  The Committee Notes also state that “[t]he present amendment restores the proportionality factors to their original place in defining the scope of discovery,” empowering courts to enforce tighter limits on disproportionate discovery.

Proportionality May Restrict Discovery About Discovery

The amendment to Rule 26 deletes language that permitted discovery into information about “the existence, description, nature, custody, condition, and location of any documents . . . and location of persons who know of any discoverable matter.”  However, the Committee Notes suggest that this change is more style than substance.  It states that the long list of examples is so “deeply entrenched” that to include it would only maintain unnecessary “clutter” in an already lengthy rule, and that “[t]he discovery identified in these examples should still be permitted under the revised rule when relevant and proportional to the needs of the case.”

Still, the revision suggests limitations to the scope of this discovery to the extent that it would be at cross purposes with proportionality.  For example, in a recent case, a magistrate judge ruling on a motion for a protective order applied Rule 26(b)(1) and limited a proposed Rule 30(b)(6) deposition topic, noting that “[w]hile Plaintiffs have articulated credible reasons for seeking this information nationwide, its production is not proportional to the needs of the case.”  Cooper v. Charter Commc’ns, Inc., No. 3:12-cv-10530-MGM, 2016 WL 128099, at *2 (D. Mass. Jan. 12, 2016).  One of the credible reasons that Plaintiffs had advanced was that they were entitled to test Defendant’s assertion that they lacked certain relevant records for Massachusetts by inquiring about “how [Defendant] is able to track service losses in other states.”  Pl.’s Opp’n To Charter’s Mot. at 7, Cooper, ECF No. 187.  Thus, although the discovery request might have been permitted under the old rule, it was deemed not proportional under the new rule, and therefore exceeded the scope of discovery now permitted.

Proportionality Considerations Will Likely Contain The Costs Of Discovery

Proportionality figures to slow the ballooning costs of litigation caused by technological advances.  Specifically, widespread use and adoption of electronically stored information (ESI), often over many platforms, has made once-mundane discovery requests exponentially more burdensome.  In the past, responding to a discovery request might have meant collecting the data from a few computers from a few custodians, and each of those computers might have stored only a few gigabytes of data.  Now, discovery sometimes requires searching and reviewing terabytes of data harvested from local computers, from networks, and from the cloud – all of which must be reviewed for relevance and privilege.  This discovery can be similarly onerous for discovery recipients who must review and analyze large productions to determine how the information fits into or modifies their theory of the case or how the information might necessitate additional discovery.

The Committee Notes express the hope that parties and the courts will continue to embrace sophisticated ways to reduce the costs of producing ESI.  For example, to the extent that a discovery request could call for a click-by-click review through thousands or millions of documents, courts should permit parties to use reasonably-tailored search terms to narrow the scope of review.  Proportionality may now require it.  Limiting the scope of e-discovery would certainly make discovery less expensive.  Moreover, as discussed above, if courts become more reluctant to permit discovery into potential sources of additional discovery, that would further contain costs.

Conclusion

At the very least, the amended Rule 26(b)(1) will require parties and federal courts to weigh the proportionality factors and determine, for example, whether the importance of certain discovery in resolving an issue is proportional to the burden or expense of providing that discovery.  The Committee Notes suggest that parties should use Rule 26(f) and other scheduling and pretrial conferences to gain a “full appreciation of the factors that bear on proportionality” to inform their discovery requests and responses.  In discovery motion practice, parties will no longer prevail by arguing that a discovery request is reasonably calculated to lead to admissible evidence; now they must demonstrate that the request is proportional.

Immanuel R. Foster is a litigation associate at Skadden, Arps, Slate, Meagher and Flom LLP, and a member of the Boston Bar Association.


Zoning for Medical Marijuana: Approaches & Considerations

mchugh_jamesstempeck_justinby Lisa L. Mead and Adam J. Costa

Heads Up 

On November 6, 2012, Massachusetts voters overwhelmingly approved a ballot initiative legalizing the use of marijuana by qualifying patients who have been diagnosed with a debilitating medical condition.  Effective January 1, 2013, the “Act for the Humanitarian Medical Use of Marijuana” presents a number of issues for cities and towns concerning the exercise of their zoning powers.  The Act established a process whereby medical marijuana treatment centers, defined as not-for-profit entities that acquire, cultivate, possess, process, transfer, transport, sell, distribute, dispense, or administer marijuana or products containing marijuana for medical use, may apply to the Department of Public Health (DPH) for registration.  The Act provides for the registration of up to 35 medical marijuana treatment centers initially, with at least one but not more than five centers per county.

Although no reference is made in the Act to municipal zoning control or its applicability to medical marijuana treatment facilities, the DPH regulations promulgated thereunder in mid-2013, see 105 CMR 725.000, address zoning for these facilities, referred to as registered marijuana dispensaries (RMDs):  “The Department does not mandate any involvement by municipalities or local boards of health in the regulation of RMDs, qualifying patients with hardship cultivation requirements or any other aspects of marijuana for medical use.  However, nothing in 105 CMR 725.000 shall be construed so as to prohibit lawful local oversight and regulation. . . that does not conflict or interfere with the operation of 105 CMR 725.000.”  105 CMR 725.600.  Accordingly, per the Home Rule Amendment, Mass. Const., amend. LXXXIX, Massachusetts cities and towns may in their discretion adopt zoning ordinances and bylaws relative to the siting, development, and operation of medical marijuana treatment centers, as long as their provisions are not at odds with the Act or the DPH regulations.

To Zone or Not to Zone

A municipality is under no obligation to zone for RMDs, and many cities and towns either have yet to adopt such zoning or have elected not to do so.  The DPH regulations mandate a buffer zone around certain facilities for children.  Absent a more stringent local requirement, “a RMD shall not be sited within a radius of five hundred feet of a school, daycare center, or any facility in which children commonly congregate.  The 500 foot distance. . . is measured in a straight line from the nearest point of the facility in question to the nearest point of the proposed RMD.”  Municipalities may establish their own buffer zones from these or other facilities, provided they are mindful that, collectively, these zones may not effectively prohibit RMDs city- or town-wide.

The Office of the Attorney General has opined that an outright ban on medical marijuana treatment centers in a municipality frustrates the purposes of the Act and, consequently, is invalid.  “The Act’s legislative purpose could not be served if a municipality could prohibit treatment centers within its borders, for if one municipality could do so, presumably all could do so.”  Letter from the Att’y Gen. to the Town of Wakefield, Mar. 13, 2013, available at http://www.mlu.ago.state.ma.us/.

The Attorney General’s Office has also rejected bylaws prohibiting home cultivation as an accessory use, restricting home cultivation to a particular area of the community, imposing buffer zones around home cultivation sites, and requiring a special permit for home cultivation.  Home cultivation of medical marijuana is authorized by the Act and the DPH regulations for qualifying patients whose access to a RMD is limited by verified financial hardship, a physical incapacity to access reasonable transportation, or the lack of a medical marijuana treatment center within a reasonable distance from the patient’s residence.

For municipalities that choose to zone for medical marijuana by adopting reasonable regulations, the choice is between incorporating RMDs into the zoning already in effect and establishing an overlay district within which RMDs may be sited.

Incorporation into Existing Zoning

Using a more traditional approach to zoning, a municipality may amend its existing zoning ordinance or bylaw to identify and define RMDs and to specify the zoning district or districts where they are permitted.  In doing so, it subjects a RMD to the same dimensional and density requirements and performance standards applicable to other uses in the same district.  Dimensional and density requirements might include area, frontage, and setback constraints, among others. Performance standards might regulate noise, traffic, or other aspects of a use for compatibility with its surroundings.  If a city or town so chooses, it may zone cultivation and processing operations separately from retail facilities.  Although both qualify as RMDs per the DPH regulations, these uses need not be co-located.

A city or town may elect to allow RMDs only by special permit, in some or all of the zoning districts in which they are an available use.  The Attorney General has cautioned municipalities, however, that an ordinance or bylaw must provide adequate standards to guide a board in deciding whether to grant or deny the special permit.  It may not be enough for a municipality to rely on the general requirement of the Zoning Act, at G.L. c. 40A, § 9, that the use be “in harmony with the general purpose and intent of the ordinance or by-law,” nor are a municipality’s special permit criteria for other uses always appropriate for application to RMDs.  Municipalities have been advised “to list specific criteria for. . . consider[ation] when reviewing [an] application.”  Letter from the Att’y Gen. to the Town of Westborough, July 11, 2013, available at http://www.mlu.ago.state.ma.us/.

In its regulation of medical marijuana treatment centers, a municipality must also be cautious not to run afoul of the zoning exemption available to agricultural uses, under G.L. c. 40A, § 3.  To the extent that an RMD’s operations qualify as commercial agriculture thereunder, a municipality cannot require a special permit for, or unreasonably regulate or prohibit, the use.

Creation of an Overlay District

An alternative to incorporating RMDs into an existing zoning ordinance or bylaw is to create an overlay district for medical marijuana treatment centers.  An overlay zone is a district superimposed on one or more established zoning districts which may apply supplemental restrictions on uses in these districts or permit uses otherwise disallowed.  By adopting an overlay district, a municipality gains greater control over where RMDs may be sited.  The limits of acceptable locations need not coincide with the boundaries of the municipality’s existing zoning districts, but may be determined by the city or town in its discretion upon consideration of existing and anticipated land uses and the compatibility of RMDs with these uses.  A municipality may incorporate dimensional requirements and performance standards specific to the overlay district, and may even pair these regulations with buffer zones surrounding schools, daycare centers, or other uses potentially impacted by a RMD.  A special permit may be required for the development and operation of a RMD within the overlay district; or the municipality may choose to permit these facilities as-of-right or subject only to site plan review.

Host Community Agreements

Several Massachusetts municipalities have opted to negotiate host community agreements with potential RMDs to eliminate or mitigate any possible adverse effects of RMDs.  Neither the Act nor the DPH regulations prohibit these agreements.  And while a municipality may not require a RMD to enter into a host community agreement, such an agreement may expedite a RMD’s receipt of a letter of support or non-opposition from the municipality, now a requirement of the DPH licensing process as updated in mid-2015.  A municipality might otherwise choose to issue its letter of support or non-opposition only upon a RMD’s completion of the permitting process, once the city or town is satisfied that the project has been adequately vetted.

Among the most common subjects of host community agreements are financial compensation due the municipality, taxes, and charitable contributions.  Financial assistance to a city or town may help offset community impacts, fund public health and safety initiatives, or otherwise aid the municipality.  The payment of real estate taxes or the making of payments in-lieu-of taxes is also worthy of negotiation; otherwise, because RMDs are required by the Act to be not-for-profit entities, they may qualify as tax-exempt.  Entering into a tax agreement helps to alleviate any questions about the payment of taxes to the municipality.  Finally, a number of Massachusetts municipalities have negotiated charitable contributions by RMDs in exchange for the community’s support of, or non-opposition to, the development of a medical marijuana treatment center.

In summary, Massachusetts cities and towns have a choice about whether to zone for medical marijuana treatment centers and, if they do, of how to approach the rezoning process.  Some municipalities have utilized traditional zoning practices, allowing RMDs in one or more existing zoning districts and often requiring a special permit.  Other municipalities have developed overlay districts, within which RMDs may be sited subject to dimensional requirements, performance standards, and other regulations specific to the use.  Regardless of which approach is chosen, a municipality would be wise to explore negotiation of a host community agreement with a potential RMD and avail itself of the financial incentives that may be offered in exchange for the municipality’s cooperation with the application process.

Lisa L. Mead and Adam J. Costa are partners at Blatman, Bobrowski, Mead & Talerman, LLC. They concentrate their practice in the areas of general municipal, land use and environmental law, representing both municipal and private clients throughout Massachusetts.


The Impact of Recent Revisions of the Massachusetts Rules of Professional Conduct on Confidentiality

Newhouse_MartinWoolf_Jeffreyby Martin J. Newhouse and Jeffrey D. Woolf

Heads Up 

The recent revisions by the Massachusetts Supreme Judicial Court (SJC) to the Massachusetts Rules of Professional Conduct effective July 1, 2015 included numerous changes to the rules governing confidentiality of client information, including substantial revisions of rule 1.6 (“Confidentiality of Information”).  The changes, as addressed herein, generally clarify a lawyer’s obligations under the Rules and also offer more helpful guidance on several points than was previously provided.

Rule 1.6:

  • The scope of information covered remains unchanged.  The SJC maintained a major difference between the Massachusetts and the ABA Model Rules, namely by continuing to limit the information covered by rule 1.6 only to “confidential information relating to the representation.”  (The ABA Model Rule covers all “information relating to the representation.”)
  • A clearer definition provided for “confidential information.”  In a very helpful step, the SJC also provided new comments, [3A] and [3B], clarifying what constitutes “confidential information.”  Comment [3A] defines confidential information as information relating to the representation of a client, whatever its source, that is (a) privileged; (b) likely to be embarrassing or detrimental to the client if disclosed; or (c) is information the lawyer has agreed to keep confidential.  Comment [3A] also provides a road map of what types of information would not be “confidential” under the rule.  Comment [3B] further explains the limitation of the rule to “confidential information” and explains how this change has been carried out throughout the Massachusetts Rules of Professional Conduct.
  • Expanding protection of non-confidential information.  In an interesting addition, the SJC warns in comment [4] that the prohibition against disclosing confidential information also prohibits any disclosure of information, while not itself protected under rule 1.6, that “could reasonably lead to the discovery of [protected] information by a third person.”  Included in this are hypotheticals that may lead others to “ascertain the identity of the client or the situation involved.”
  • Enlarging the scope of permissible disclosures. Most notably, the SJC has added two new exceptions to rule 1.6(b).  Rule 1.6(b)(4) expressly permits disclosure “to secure legal advice about the lawyer’s compliance with these Rules.”  Rule 1.8(b)(7) permits limited disclosure “to detect and resolve conflicts” when lawyers change employment or firm ownership changes.  In addition, the new rule 1.6(b)(3), along with revisions to rule 1.6(b)(1) and (2), clarify prior existing exceptions.  Significantly, rule 1.6(b)(1) continues to contain a provision, absent from the Model Rules, which authorizes the disclosure of confidential information “to prevent the wrongful execution or incarceration of another.”  Rule 1.6(b)(2) also continues the prior Massachusetts provision that permits disclosure to “prevent the commission of a criminal or fraudulent act,” without limiting this exception to conduct committed by “the client,” as exists under Model Rule 1.6(b)(2).  Thus the Massachusetts rule permits disclosure to prevent the commission of a crime or fraudulent conduct by a third person.  Also unlike Model Rule 1.6(b)(2), the Massachusetts rule does not require that the lawyer’s services must have been used in furtherance of the crime or fraud in order for disclosure to be permitted.  Permissive disclosure under rule 1.6(b)(2) is also not limited, as previously and under the Model Rules, to preventing conduct likely to cause substantial damage to property and financial interests of another; new rule 1.6(b)(2) additionally permits disclosure where substantial damage is likely to “other significant interests” of another.
  • Enhanced guidance with regard to disclosure exceptions. Comments [5] et seq. have been revised or wholly rewritten to provide more detailed and much needed guidance for lawyers seeking to understand whether disclosure is permitted or required.  For example, comment [12] discusses disclosure that may be required by other law; comment [15] provides guidance on dealing with a court order requiring disclosure; comments [13] and [14] deal in detail with the disclosures when lawyers change employment or firms change ownership.  Finally, comment [17] provides important guidance on how lawyers should exercise their discretion when an exception under rule 1.6(b) authorizes discretionary disclosure.
  • Addition of Rule 1.6(c). This new subsection requires lawyers to make reasonable efforts to prevent inadvertent or unauthorized disclosure of, or access to, confidential information protected under the rule.  New comments [18] and [19] provide, inter alia, that unauthorized access to or disclosure of confidential information “does not constitute a violation of paragraph [1.6](c) if the lawyer has made reasonable efforts to prevent the access or disclosure.” The comments discuss the factors to be considered as to whether reasonable efforts have been made.  Comment [18] cross-references comments [3] and [4] to rule 5.3 with regard to the sharing of information with non-lawyers outside the lawyer’s firm (e.g., an outside document management company).  Comments [18] and [19] confirm an attorney’s obligation to comply with all applicable state and federal privacy laws.  (Practice tip: be aware of your obligations under Mass. G.L. c. 93H (the Massachusetts security breach notification law) and the corresponding regulations, 201 CMR § 17.00 et seq.).

Rule 1.8(b) and 1.9(c)(1):

Although in a number of respects, the SJC’s revisions to the Massachusetts Rules of Professional Conduct have brought our rules into closer conformity with the ABA Model Rules, they have also preserved important distinctions.  As discussed above, the SJC retained our narrower definition of the scope of information covered by rule 1.6.

Similarly, while both rules 1.8(b) and 1.9(c)(1) parallel the ABA Model Rules in prohibiting the use of confidential information relating to the representation to the disadvantage of the client or, in the case of rule 1.9(c)(1), the former client, the SJC has retained in each rule the prohibition against using such information for the benefit of a third party or for the lawyer’s own benefit.  Under rule 1.8(b) such information may be so used if the client gives informed consent or such use is permitted or required by the rules.  Under rule 1.9(c)(1), such use is only allowed if permitted or required under rules 1.6, 3.3, or 4.1 with respect to the former client.  Rule 1.9(c) applies not only to a lawyer who has formerly represented a client in a matter but also if the lawyer’s present or former firm has formerly represented the client in a matter.

New Rule 1.18:

On the other hand, the SJC has not hesitated to adopt aspects of the ABA Model Rules that fill gaps in or represent improvements to the Massachusetts ethics rules.  One such example is the SJC’s adoption of Model Rule 1.18, which defines the duties owed to prospective clients.  The new rule makes it an ethical violation for a lawyer to engage in conduct for which the lawyer  would previously have been liable in tort for violating confidentiality obligations to a prospective client:

  • Under rule 1.18(b), even when no client-lawyer relationship is formed with the prospective client, a lawyer may not use or disclose confidential information learned from the prospective client, except as rule 1.9 would permit in the case of a former client.
  • Under rule 1.18(c), a lawyer who has received confidential information from a prospective client may not take on a representation materially adverse to the prospective client in the same or substantially related matter if the confidential information received could be significantly harmful to the prospective client.  If a lawyer is disqualified under this sub-section, no lawyer in the lawyer’s firm may knowingly undertake or continue the representation adverse to the prospective client.
  • However, rule 1.18(d) provides that, even when the lawyer has received disqualifying information from the prospective client, representation in the adverse matter is permitted if (1) both the affected and the prospective client give written informed consent or the lawyer who received the information took reasonable precautions to limit the information from the prospective client and is timely screened, as defined in rule 1.10(e), and the prospective client is promptly given written notice.

 Rule 1.0 (former Rule 9.1):

“Definitions” in the Massachusetts Rules of Professional Conduct used to be found in rule 9.1.  Consistent with the ABA Model Rules, this has been renamed as “Terminology” and renumbered as rule 1.0.  Three new definitions (and corresponding commentary) have been added:  “informed consent”; “confirmed in writing”; and “writing” (or “written”).  The new Massachusetts definitions are largely consistent with the ABA Model Rules.

New Rule 4.4(b):

The SJC also has added rule 4.4(b), which is identical to the corresponding ABA Model Rule, and for the first time addresses a lawyer’s obligation upon receipt of documents or electronic information that was inadvertently sent by opposing lawyers or parties.  Rule 4.4(b) requires a lawyer receiving such documents or information to notify the sender promptly, in order that (as stated in comment [2]) the sender may take protective measures.  Comments [2] and [3] provide a good discussion of the problem the rule addresses.  Importantly, comment [2] brings metadata in electronic documents within the purview of rule 4.4(b) “only if the receiving lawyer knows or reasonably should know that the metadata was inadvertently sent to the receiving lawyer.”   Comment [3] recognizes a lawyer’s professional discretion to return or delete such documents unread where the law does not require other action.

In conclusion, the reader is directed to the “Report of the Standing Advisory Committee on the Adoption of Revised Rules of Professional Conduct Effective July 1, 2015,” for a further discussion of these and other changes.

Martin J. Newhouse, President of the New England Legal Foundation, is a member of the SJC Clients’ Security Board and BBA Ethics Committee.

Jeffrey D. Woolf is an Assistant General Counsel to the Board of Bar Overseers and is a member of the BBA Ethics Committee.


The Rise of the On Demand Economy: The Tension between Current Employment Laws and Modern Workforce Realities

cremins_nancy by Nancy Cremins

Heads Up

Over the last several years, startups brought convenience to the masses by providing virtually anything on demand.  Rides, groceries, takeout service, house cleaning, and more are all accessible with a few taps on your smartphone.  The sheer volume of human capital needed to make these on demand businesses function, along with the unpredictable demands of consumers, caused companies such as Uber, Lyft, Postmates, and Instacart (to name a few) to make the business decision to classify these service workers as independent contractors.

Building the infrastructure for an on demand business that serves many customers in multiple cities, or even multiple countries, is an incredibly expensive endeavor.  For example, Uber has gone through 13 rounds of funding and raised over $6.6 billion to support its large-scale operation.  By necessity, these startups must be cost conscious with their capital or risk failure.  Classifying their workers as independent contractors saves them substantial sums of money on employment taxes and benefits.  These businesses claim that independent contractor status is also beneficial for the workers who are permitted to retain flexibility to work on their own terms as often as they want.  For valid reasons, some (though not all) on demand workers do not agree.

Workers classified as independent contractors do not have access to company-provided benefits and protections such as paid time off.  They are not given the payment protections of minimum wage, and overtime pay.  Nor do they have the safeguards of worker’s compensation and unemployment insurance.  These workers also shoulder the cost of the business expenses incurred in performing their jobs, such as their tools, supplies, or the cost of vehicle operation (though those are deductible business expenses).  In addition, workers are responsible for paying all taxes on pay, which means the company is not contributing to employment taxes, Social Security, or Medicare.  Opponents to the present on demand economy practice of classifying workers as independent contractors argue that tight standards on employee classification provide better protections and more financial security for workers.

Around the country, workers, businesses, and localities are approaching the shift to the independent contractor model in a variety of ways.  A host of lawsuits were filed by workers against a number of on demand businesses asserting claims for worker misclassification. These lawsuits are costly and place tremendous pressure on the companies, often resulting in stagnating growth or even closure of the business.  For example, in July 2015, on demand home services business, Homejoy, shut down because it ran out of money defending worker lawsuits and could not raise an additional round of investment due to pending litigation.

Some on demand businesses are attempting to avoid or prevent additional misclassification lawsuits by preemptively classifying their workers as employees.  Instacart (which is defending its own misclassification lawsuit) announced, in June 2015, that it would be commence classifying its workers as employees.  Other companies are maintaining their practice of classifying workers as independent contractors while they wait for the outcome in the bellwether case on the issue, O’Connor v. Uber Technologies et al, C13-3826 EMC, pending in the Northern District of California.

In general, things have not gone Uber’s way in the litigation.  On March 11, 2015, the Court denied Uber’s motion for summary judgment.  On September 2, 2015, the Court certified the case as a class action.  What’s more, during the pendency of the lawsuit, the California Labor Commission ruled that a specific Uber driver was an employee, and not an independent contractor.  While the ruling was non-binding and impacted only one driver, it received  considerable attention.  The trial is set to commence on June 20, 2016 and the outcome will have a substantial impact on the freelance economy.

In another approach, the Seattle City Council voted in December 2015 to approve a bill that would permit drivers for Uber, Lyft, and other ride-hailing apps to form unions and negotiate wages.  Such a city ordinance is unprecedented as it would be the first to allow independent contractors to engage in collective bargaining.  Still, the ordinance may face legal challenges based on the contention that it is preempted by federal law and, if not preempted, that collective bargaining by independent contractors could constitute illegal price-fixing under antitrust law.

Here in Massachusetts, there is a presumption that a worker who provides services to a business is an employee unless all of the following are met:

  • The worker is free from the company’s control and direction;
  • The services provided are outside the company’s usual course of business; and
  • The worker is customarily engaged in an independently established trade, occupation, or business of the same nature that is involved in the services performed for the company. M.G.L. c. 149, § 148B.

Given such stringent guidelines, the safe default position is that a company should classify its workers as employees, not independent contractors.  However, in April 2015 the Supreme Judicial Court took a narrower approach than some anticipated in Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321 (2015).

In Boston Cab, the Court found: (i) taxi drivers did not provide services to the cab companies or garages; (ii) drivers were free from the direction and control of the cab companies; (iii) services provided by drivers were not in the ordinary course of business of cab companies; and (iv) drivers were engaged in an independently established trade, occupation or business.  As a result, the Court found that the drivers were properly classified as independent contractors.  In reaching this decision, the Court determined that the cab companies “are not concerned with the results of plaintiffs’ operations, as drivers are not required to remit a percentage of their revenues, which includes both fares and tips.”  Id. at 334.

What sets the Boston Cab case apart from the Uber case is the existence of a regulatory framework that applies to cab companies and drivers that does not (at least not presently) apply to Uber drivers.  The Court specifically stated that its conclusion rested in large part on the existence of the regulatory framework of Boston Police Department Rule 403, Hackney Carriage Rules and Flat Rate Handbook (2008) (Rule 403), which creates a system whereby drivers can “operate as either employees or entrepreneurs with their own separately defined and separately regulated business.”  Boston Cab, 471 Mass. at 338.  In holding that drivers were properly classified as independent contractors, the Court found that the “harmonious reading” of Rule 403 and the independent contractor statute as set out in M.G.L. c. 149, §148B led to the outcome that the Legislature intended to preserve the ability of cab drivers to operate either as employees or independent contractors.  Id.

There is no denying that regardless of the still-unresolved employment classification issue, there  has been a cultural shift to more independent contractors as more people want to be their own bosses.  In fact, the number of freelance workers in the U.S. grew from 20 million in 2001 to 32 million in 2014.  A recent poll conducted by Time Magazine finds that now 22% of American adults—45 million people—have picked up some form of “gig” work for these on demand companies.

Some are advancing the position that perhaps there needs to be a new path forward to balance the realities of the rise of freelancing and the on demand economy.  On November 10, 2015, a number of stakeholders, including startups, more established companies, labor activists, and academics, published on open letter advocating that “we must find a path forward that encourages innovation, embraces new models, creates certainty for workers, business, and government and ensures that workers and their families can lead sustainable lives and realize their dreams.”

To that end, these stakeholders advocate for the creation of a universal set of benefits accessible to all workers, whether independent contractor or employee, that would be portable and flexible.  Following that open letter, many of the letter’s signatories participated in a policy discussion that included the Secretary of Labor, Tom Perez to discuss possible solutions.

Given the volume of worker misclassification lawsuits, the rise of freelancing as an increasingly popular choice for U.S. workers in lieu of more “traditional employment,” and the public interest in ensuring that the large number of independent contractors are provided certain basic protections, an innovative approach that provides more safeguards for independent contractors and more certainty to businesses regarding proper classification may be the right path to protect both workers and businesses.

Nancy Cremins is a partner at Gesmer Updegrove, LLP, assisting entrepreneurs with a range of issues, including employment matters and dispute resolution. She is the co-founder of SheStarts, which helps women entrepreneurs start and grow their businesses.


Recent Amendments to the Superior Court Rules and Standing Orders

Baer_Heather by Heather V. Baer

Heads Up

On January 1, 2016, a number of amendments to the Superior Court Rules went into effect. These amendments, which were approved by the Supreme Judicial Court, adopted new Rules 19, 30A, 31 and 33; amended Rules 7, 9A, 9C, 13, 17, 22, 29 and 30A; incorporated Standing Orders 1-06, 1-07 and 1-09 into new Rules; and deferred action on proposed new Rule 17A. This article highlights many of the significant amendments to the Rules. Readers are advised to review the Superior Court Rules in full to ensure that they are fully informed of all of the changes that affect their practices.

Rule 9A: Civil Motions.  A noteworthy amendment to Rule 9A, at 9A(a)(3), modifies the procedure related to reply memoranda. Litigants are no longer required to seek leave of court to file a five-page reply. To file a longer reply, which is “strongly disfavored,” a party must seek leave of court in the manner outlined in the revised Rule 9A(a)(3); and under the unchanged portion of Rule 9A(a)(5), any longer reply memoranda “shall not exceed 10 pages.” Sur-replies continue to be “strongly disfavored,” and leave to file them must be sought from the court. The Rule 9A amendment does not expand the circumstances in which reply memoranda are permitted, which remains “[w]here the opposition raises matters that were not and could not reasonably have been addressed in the moving party’s initial memorandum” and the reply is “limited to addressing such matters.” Furthermore, it does not alter the requirement in Rule 9A(b)(2) that the full Rule 9A package be filed within ten days of receipt of the opposition.

Rule 13: Hospital Records.  Amended Rule 13 now requires that applications for orders for hospital records comply with Rule 9A if they are opposed. While previously a request could be filed after seven days notice to the opposing party, under the amended Rule 13 a party seeking an order for hospital records must now serve the adverse party with the request at least thirteen days before the order is needed, to allow for the possibility that the request will be opposed and that such opposition will be served by mail.

Rule 17: Recording Devices.  Revised Rule 17 now requires recordings and transmissions of court proceedings to comply with Supreme Judicial Court Rule 1:19 (Electronic Access to Court), which prohibits photographs, recordings and transmissions in any courtroom, hearing room, office, chambers or lobby of a judge or magistrate without prior authorization of the judge or magistrate. The amendment to Rule 17 also eliminates the requirement that any court order authorizing the recording or reproduction of the proceedings be issued upon the condition that no such recordation may be used to impeach, discredit or otherwise affect the authenticity or accuracy of the record or the official transcript.

Rule 22: Money Paid Into Court. Rule 22 has been amended to increase the threshold at which money paid into Court must be deposited into an interest-bearing account from $500 to $5,000. The revised Rule 22 also contains a new, second paragraph which provides that, when money paid into court is unclaimed for 30 days “after the claim(s) of every party to the funds has been eliminated by default or court order,” the clerk is directed to schedule an assessment hearing after which the session judge may enter final judgment escheating the funds to the Commonwealth. However, judgment to this effect may not enter any sooner than three years after the funds are paid into Court. This amendment is consistent with M.G.L. c. 200A § 6, which provides that money paid into court is considered abandoned after three years or as soon after three years as all claims made for those funds have been disallowed or settled by the court.

Rule 29: Cover Sheet; Statement as to Damages.  Rule 29(5) previously required Superior Court judges to transfer cases to the District Court if it appeared from the statement of damages in the civil action cover sheet that there was no reasonable likelihood that recovery would exceed the Superior Court threshold. It also permitted –  but did not require – judges to transfer such cases if it appeared from any pre-trial event that the threshold would not be met. Amended Rule 29(5) is consistent with M.G.L. c. 212 §3A(b), and now limits the basis for such a determination to the statement of damages in the civil action cover sheet, as opposed to any information developed at a pre-trial proceeding. It also permits the parties to make written submissions and be heard at a hearing on the issue. Finally, Rule 29 no longer compels the transfer of such cases to the District Court; instead, it permits (but does not require) judges to dismiss such cases without prejudice.

Former Rule 30A/[New] Rule 9C(b).  The provisions of former Rule 30A (Motions for Discovery Orders) have been renumbered without change as new Rule 9C(b) (the title of Rule 9C remains Settlement of Discovery Disputes).

[New] Rules 30A, 31 and 33. Three former Standing Orders were incorporated into the Rules. The verbatim texts of Standing Orders 1-06 (Continuances of Trial), 1-07 (Consolidation of [Civil] Superior Court Cases) and 1-09 (Written Discovery) were incorporated into the Superior Court Rules as new Rules 33, 31 and 30A, respectively, and those Standing Orders were repealed. This amendment streamlines the rules that govern Superior Court procedure as more of the procedures governing practice before the Superior Court can now be found in the same location, although lawyers should still check the Standing Orders.

The Rules in their Proposed form and the Supreme Judicial Court’s approval, may be viewed on the Judicial Branch’s website.

Heather V. Baer is a partner at Sally & Fitch LLP, where she focuses her practice on the representation of corporations and individuals in the areas of civil litigation, employment law and criminal defense, including white collar matters and government investigations.