Paralegals Celebrate 20 Year Anniversary

Paralegals Celebrate 20 Year Anniversary with Utah State Bar

The paralegal division of the Utah State Bar is celebrating its 20-year anniversary with the Utah State Bar with a Platinum Anniversary Celebration on Friday, Apr. 22, 2016 at the at the Grand Hall at the Gateway. In recognition of the foresight of the Utah State Bar in creating the paralegal division and of the paralegal division for its accomplishments over the past 20 years, the current board of directors of the division is bringing together members of the legal community to celebrate. The semi-formal evening, presented by Platinum Sponsors Alpine Court Reporting, Christensen & Jensen, Eisenberg Gilchrist & Cutt, Parsons Behle & Latimer, Injury Care Solutions, Strong & Hanni, Trask Britt, 1-800 Contacts, Robert J. Debry & Associates and the Utah State Bar will feature a fun and energetic program with Party Rock Project (Coca-Cola, GE, United Way, NBC, Sharp) and pre-dinner entertainer Mental Mysteries Paul Draper (A&E, History Channel, Hell’s Kitchen, Yale, Apple Cupertino HQ).

The paralegal division was created by the Utah Supreme Court on Apr. 6, 1996 upon petition by the Utah State Bar and the Board of Bar Commissioners. The division was created, in part, to assist the legal community in meeting the legal needs of the public. The ABA adopted this definition of paralegals, “A legal assistant or paralegal is a person, qualified by education, training or work experience who is employed or retained by a lawyer, law office, corporation, governmental agency or other entity and who performs specifically delegated substantive legal work for which a lawyer is responsible.”

The paralegal division has been operating for the past 20 years as a section of the Bar and has been consistent in its efforts to serve its members, the Bar, and the community. Our members bring a high level of skill and professionalism to the delivery of legal services and come from all venues of the legal community including law firms, corporations, and government offices. They also participate in a variety of community service projects.

The paralegal division also thanks its Gold Sponsors Cicayda, DepoMax, Kipp and Christian, Intermountain Health Care, Ray Quinney & Nebeker, Litigation Services, Richards Brandt Miller & Nelson, Siegfried & Jensen and the Young Lawyers Division of the Utah State Bar and Silver Sponsors Wasatch Attorney Services, Resilient and the Utah Minority Bar Association. More information about the paralegal division, paralegal profession and purchasing tickets may be found at Members of the Utah State Bar may also login to their member portal to purchase tickets.

A New Kind of Paralegal is Coming to Help Utahns Navigate the Court System


A new kind of paralegal is coming to help Utahns navigate the court system

The Salt Lake Tribune
UPDATED: DECEMBER 14, 2015 10:41PM

There are issues with how Utahns access their justice system, a Utah Supreme Court justice said.

Many people either can’t afford lawyers, Deno Himonas said Monday, or simply don’t want to hire one to help them navigate the court system as they file for divorce, settle debts or resolve eviction issues. “Lawyers have been incredibly generous with their time,” Himonas said. “And are trying to address [those issues] through pro bono measures. But at the end of the day, though, we need to come up with an economically viable model that will help improve access for those individuals in our civil justice system.”

To that end, the Utah Supreme Court has approved the creation of a new legal profession: limited paralegal practitioners.

An LPP, or paraprofessional, will have more training and responsibilities than a normal paralegal, but is not quite a lawyer. The paraprofessional will be able to help the public in those areas where Utahns generally aren’t hiring lawyers.

“They will really help [their clients] navigate the system, if you will,” Himonas told the Utah Judicial Council at its monthly meeting Monday.

Himonas, who chaired a task force committee that explored whether LPPs could help Utahns have better access to courts, told the council that the committee spent the past seven months exploring other states where similar programs exist, and examining what was successful and what was not.

The task force said an LPP can be a cheaper alternative for people who can’t afford a lawyer or don’t want to spend their money on one.

“We recognize the valuable services that lawyers provide to their clients every day, in and out of court,” the report reads. “But the data shows that, even after years of effort with pro bono and low bono programs, a large number of people do not have a lawyer to help them. … The people facing these situations need correct information and advice. They need assistance.”

An LPP will help fill in that gap — assisting clients outside of the courtroom by filling out forms, representing clients in mediated negotiations or preparing settlements.

“[But] there is a limit,” appellate court administrator Timothy Shea told the judicial council. “And that is essentially the courtroom door. An LPP cannot represent someone in the courtroom.”

This means the paraprofessional cannot present evidence inside a courtroom, question witnesses or make arguments before a judge. LPPs will be required to have a certain amount of education, according to the report. They will be required to have either a law degree or an associate degree with a paralegal certificate. They will also need to be experienced as a paralegal and complete further courses in their practice area.

The Utah State Bar would oversee licensing and disciplinary concerns for the newly formed program, according to the report. Spokesman Sean Toomey said Monday that the bar is pleased with how quickly the Supreme Court task force issued its report and “looks forward to considering its recommendations.”

Donor Intent and the Failure of the Honor System

by David L. Wilkinson
The private sector of philanthropy is facing huge challenges today, at a time unfortunately when government resources to assist those in need are shrinking. The assets of charitable foundations in the USA declined by 28% in 2008 according to a study by The Chronicle of Philanthropy. See Daniel J. Popeo, Op-Ed., Freedom of Philanthropy?, N.Y. Times, Feb. 23, 2009, available at This was the biggest drop of the past four decades. The loss to the nonprofit organizations they fund and to society was actually much greater due to the multiplying effect of the charitable dollar. A study by The Philanthropic Collaborative calculated that the $43 billion foundations distributed in 2007 generated identifiable social and economic benefits of $368 billion. See id.
The decline in the value of assets of American charitable foundations is only part of the picture. Recently released IRS figures show that charitable giving declined some 20% in 2008-09. See Editorial, Protecting Charitable giving, Deseret News, June 26, 2011.
Charities have come under fire in the eyes of Americans who count the most – those who contribute. Those Americans who contribute include 65% of all households with family incomes below $100,000. A 2007 survey showed that 59% of over 3000 respondents were more concerned than they had been a decade earlier that their charitable donations were not getting to the people who need it the most; 46% said they are more worried today about charity fraud or theft of funds or services. See William Robertson, Donor Intent Revisited, The Washington Times, September 28, 2008, available at
A front-burner issue is that the charitable deduction in the tax code has been under fire from President Obama and members of Congress who are looking to find ways to shrink the nation’s growing deficit. See Lisa Chiu and Suzanne Perry, Charitable Deduction Could Be Under Threat in Coming Deficit-Panel Talks, The Chronicle of Higher Education, Aug. 2, 2011, available at Among those submitting testimony against the possible impairment of the charitable deduction was Elder Dallin H. Oaks representing Utah’s largest, and one of America’s largest, charities, the Church of Jesus Christ of Latter-day Saints. Quoting from his testimony: “Some also assert that reductions in the charitable deduction would not cause charitable organizations to suffer financial losses from decreased private gifts since the government would make up some of these losses by additional appropriations.” Testimony Submitted by Elder Dallin H. Oaks, Senate Finance Committee Hearing, Oct. 18, 2011, available at He then concludes: “[M]ost Americans would not have us relinquish the freedom and diversity of our vigorous private sector of charities in exchange for the assurance that the government would select and manage their functions.” Id.
Donor Intent in Jeopardy
Many scholars believe a more serious threat to the health of charitable giving than the tax code is the widespread and growing disregard for donor intent by recipient charities. One law professor begins a leading law review article on the subject:

The cat is out of the bag: Donors are fast discovering what was once a well-kept secret in the philanthropic sector – that a gift to public charity donated for a specific purpose and restricted to that purpose is often used by the charity for its general operations or applied to other uses not intended by the donor.


Founder Dallin H. Oaks’ Visit Spurs Call to Join of Utah-born American Inns of Court Movement


by Isaac D. Paxman
Did you know that the American Inns of Court (“AIC”) movement was born here in Utah? Designed to enhance the skills, professionalism, and ethics of the bar and bench, the movement has swept the country, impacting over a hundred thousand attorneys and judges over the last three decades.
Dallin H. Oaks Addresses First Inn
On January 24, 2012, Dallin H. Oaks, who helped found the AIC movement, dined with and addressed the first American Inn at an evening event held in his honor at the courtroom of the Utah Supreme Court in Salt Lake City, Utah.
Utah Chief Justice Christine M. Durham introduced Elder Oaks, as he is now known in his calling as a member of the Council of the Twelve Apostles of The Church of Jesus Christ of Latter-day Saints. Chief Justice Durham, a long-time member of the A. Sherman Christensen American Inn of Court I, served with then-Justice Oaks on Utah’s highest court almost thirty years ago. She recalled the keen intellect, engaging stories, and warm humor Oaks brought to his interactions with fellow justices. Oaks, in turn, spoke highly of Chief Justice Durham as both judge and administrator, noting that the court was good before she arrived, but notably better after her arrival.
Oaks then recounted for those in attendance how he became involved with the founding of the AIC movement.
Oaks was president of Brigham Young University when he received a phone call announcing that Warren E. Burger, Chief Justice of the United States Supreme Court, was vacationing in Utah and wanted to meet with Oaks and Rex E. Lee, dean of the law school at BYU. Although both Oaks and Lee had clerked for justices of the U.S. Supreme Court, Oaks noted that neither had met Burger previously.
On an August morning in 1979, Oaks and Lee drove to a spot near the Upper Provo River. As they arrived at a cabin owned by O.C. Tanner, Burger greeted them in shorts, a tank top, and sandals. It is an image that Oaks said he can recall as though it was yesterday. “His distinction was far greater than his appearance,” quipped Oaks. As the Chief Justice bustled in and out of the kitchen, making and serving breakfast, Oaks and Lee still had no inkling of the reason for the unusual invitation.
After the meal, however, Burger confided that he was concerned about the trial skills of American attorneys. He was impressed with the English system, with its Inns of Court and the mentoring that occurred there, and wondered if BYU would launch a pilot program designed to capture some of the benefits of the English model. According to Oaks, Burger chose BYU because of his high regard for Dean Rex E. Lee, former U.S. Assistant Attorney General, and because he knew that Oaks, another U.S. Supreme Court law clerk, was its president. Burger “had all the authority he needed in that room” to get an immediate decision from the university, noted Oaks. Oaks and Lee accepted the invitation, and shortly thereafter a pilot program was underway.

Utah Department of Health Hearing Process

by Drew B. Quinn
While relatively few people have experience filing requests for administrative hearings with the Utah Department of Health, this lack of know-how should not prevent attorneys representing medical assistance beneficiaries or providers from doing so. This area of law may afford attorneys the opportunity to provide pro bono services to Medicaid clients who can benefit from legal representation. The following article describes the steps an attorney must take to assist such a client, pro bono or otherwise.
Administrative fair hearings for Medicaid applicants, beneficiaries, or providers are an interplay of federal law, federal regulations, state law, state administrative rules, and policy and provider contracts. This article provides the ABCs of negotiating the hearing process at the Office of Formal Hearings, Division of Medicaid and Health Financing, Utah Department of Health (“DOH”).
The right to a Medicaid hearing originates in Title XIX of the Social Security Act. The Code of Federal Regulations requires states to provide a fair hearing to a Medicaid applicant or recipient whose claim was denied, given limited authorization, not acted upon promptly, or whose previous authorized service is reduced, suspended, terminated, or denied. See 42 C.F.R. §§ 431.200, -201. Utah rules also grant the right to a hearing to an “aggrieved person,” which includes providers. See generally Utah Admin. Code R410-14. These broad provisions open the door to an applicant, recipient or provider who for some reason disputes the action taken by Medicaid. To request a hearing, the following steps must be followed.
The Department of Workforce Services (“DWS”) determines eligibility for Medicaid and other medical assistance programs such as Children’s Health Insurance Program and Primary Care Network. Appeals from denials of eligibility must be filed with DWS, except for appeals from denials of disability under the Medicaid program. Responsibility for disability appeals was recently moved to DOH, and the request for hearing must be filed with the Office of Formal Hearings.
All Other Claims
Most appeals come from clients or providers who either have not received, or not been paid for, medical services. The correct place for filing these and other appeals is with the Office of Formal Hearings at DOH. However, there is an extra step for Medicaid clients living along the Wasatch Front who are required to enroll with a managed care organization (“MCO”) such as Molina Healthcare or Healthy U. A client or provider who is displeased with an action taken or denial given by an MCO must file his or her appeal and complete the appeal process with the MCO before having the right to a fair hearing with the State.
A hearing request must be filed within thirty days of the agency’s written notice of an intended action, except that an expanded time limit of ninety days in which to file an appeal is given to persons denied eligibility for Medicaid. A request must also be filed within thirty days of an appeal of a denial by an MCO.
A request must be in writing, and should be on the Request for Hearing form found on the Utah Medicaid website under “Forms.” See (last visited May 30, 2012). Please fill the form out as completely as possible and include all relevant documentation. Incomplete information delays the processing of the file. If you are an attorney joining an appeal that was already initiated by a Medicaid client or provider, you must file a notice of appearance in order to have access to information about the case. (more…)

I Finally Got My Day in Court

by Peg McEntee
EDITOR’S NOTE: A version of this article was previously published in the Salt Lake Tribune. The Bar Journal does not ordinarily publish material that has appeared elsewhere, but given the subject of the column, an exception seemed appropriate in this case.
Last fall, I was talking to a top cop and mentioned I was on a list for jury duty. Don’t worry, he said, they never choose cops, lawyers, or reporters.
The next morning, I reported to a Third District courthouse, where the jury pool was questioned briefly about age, profession, marriage status, children, and residence. Then the attorneys spent about ten minutes deciding which of us to keep. In the interim, the judge read us a brief history of justice, starting with the hunter-gatherers and ending with the U.S. system, which he deemed the finest in the world.
So it was with considerable surprise that, despite my profession, I was named to a six-member jury for a criminal trial. We were sworn in and took our seats. By serving as jurors, the judge told us, we would not only be doing our civic duty, we would be ennobled by the experience. Then we got down to work.
The trial involved allegations that, in the midst of an acrimonious divorce, one person violated a protective order and engaged in criminal mischief. The protocol was familiar to what I’ve seen covering scores of trials. The defense and prosecution offered opening statements and the first witness took the stand, describing what she believed the defendant had done. More witnesses followed, each with his or her version of the chain of events, some in conflict with the others. Periodically, we’d be led out of court and to the jury room by a bailiff who lightened the mood with truly awful jokes, most involving Utah and BYU football players. When we returned to court, the bailiff would proclaim, “All rise for the jury!” For the first time, people were rising for me.
We were released for lunch, and I headed to a diner the bailiff recommended. As it happened, the accuser and who I assumed was an attorney were there, and I took care to sit as far away from them as possible. Back in court, we heard a last witness, and then the defense attorney and prosecutor gave their closing arguments. But before we were led to the jury room, the judge advised us that one of the charges had been resolved. Meantime, the criminal mischief charge had been reduced to a class B misdemeanor.
The moment the door shut, we chose a foreperson, who seemed to really want the job, then started talking. The judge had given us a general instruction on how to consider the thirty-three specific jury instructions. For example, all the jury instructions were equally important and should be thought of in the context of all the rest. We must obey the instructions and cannot reach decisions that go against the law. (It’s worth noting that after the column dealing with my jury experience ran in the Tribune, a gentleman brought me some literature on jury nullification.) Very important: keep an open mind and don’t look at news reports regarding the case. Most important: we must agree that the prosecution has proven its case beyond a reasonable doubt to reach a verdict of guilty. (more…)

The Utah Territorial Bar Association: Our Forgotten Heritage

by Michael S. Eldredge
On the official Utah State Bar website, the history of the Utah bar before 1931 condenses into one compound sentence: “The history of the Utah State Bar began in the early 1900s with the association of several Utah lawyers hoping to improve communication within the legal community and to find ways of serving the general public.” See “Utah State Bar History & Purpose,” Utah State Bar,, (last visited April 1, 2012). Whether because of oversight, or a generally accepted lack of relevance, the result is the same; Utah is forgetting its legal heritage, one that is as unique, colorful, and controversial as Utah’s struggle for statehood and beyond.
The seal of the Utah State Bar has emblazoned on the bottom, the year “1931.” However, regarding the organization of the legal community in Utah, 1931 is misleading. If anything, it merely commemorates the year that the Utah State Bar became integrated; all lawyers practicing in Utah were required to be members. The Utah State Bar became a creature of statute and reformed the entity of organizational existence; the people, the goals and ideals remained the same.
Utah attorneys have a heritage similar to Wisconsin, which organized in 1878. Indeed, the American Bar Association also formed in 1878, but because of its multi-jurisdiction membership it remains a voluntary organization today. Wisconsin, Utah, and several other state bar associations went from elite associations of lawyers whose membership did not include all resident attorneys, to becoming fully integrated by the mid-twentieth century. Perhaps revisiting the legal historical roots in Utah will shed some light on what may be misperceptions by many as a gross oversight of our true legal heritage.
The Organic Act for the Territory of Utah passed on September 9, 1850, as part of the Compromises of 1850. However, Brigham Young did not receive word until the following January 28, 1851, when George Q. Cannon returned from California. Cannon had purchased an old copy of The New York Tribune in Los Angeles in December, delivered from a ship traveling from the Panama overland route. Although chagrined at the changes in area and name of the State of Deseret, Young accepted his appointment as governor. See Orson F. Whitney, History of Utah 452 (George Q. Cannon & Sons Co. 1892-1902.
Justices Lemuel G. Brandenbury and Perry Brocchus arrived in August 1851 and joined by Zerubbabel Snow, a Mormon already residing in the territory, gave Utah its first judiciary capable of admitting lawyers to the bar of the federal courts in Utah. The dubious session, however, ended abruptly as Brandenbury and Brocchus fled the jurisdiction in September 1851 in the famous case of the “runaway judges.” Justice Snow was left behind, and on October 6, 1851, an improvised court seal was adopted. The legislative assembly authorized him to hold district court in all three districts, necessitating him to admit members of the bar in the Territory of Utah. Without addressing the history of the troubles of the bench and bar of the Utah Territory over the next forty years, about which much has been written, suffice it to say that the profession of lawyering had some interesting and colorful challenges.

Survey Says…Mentors Reap Benefits of Mentoring

by Elizabeth A. Wright
At the Utah State Bar Summer Convention in Sun Valley, Idaho, the Bar Commission will recognize Sharon Donovan of Dart, Adamson & Donovan and Riley “Josh” Player, an Assistant District Attorney at the Salt Lake County District Attorney’s Office, as Outstanding Mentors in the New Lawyer Training Program (“NLTP”). New lawyers who have been mentored in the NLTP were invited to nominate their mentors for the first “Outstanding Mentor” award to be given in July. Though Ms. Donovan and Mr. Riley are to be commended for their outstanding service, there were many other terrific nominees. The large number of thoughtful nominations indicates that the new lawyers are truly appreciative of the time mentors devote to them and the relationship that is formed. The following comments from mentees demonstrate the significance of mentoring in the early stages of a lawyer’s career:
• “The relationship that [my mentor and I] developed through the mentoring program is one of the most valuable assets I maintain in my practice.”
• “[My mentor] guided me through my first year as an attorney and continues to do so as I become a more experienced attorney. I am a better attorney because of [my mentor’s] guidance.”
• “I gained a life-long friend and confidant.”
• “My mentor taught me how to be a good member of the legal community.”
• “[My mentor’s] encouragement and advice helped me through a very difficult first year as a new lawyer.”
• “[My mentor] was genuinely interested in making sure that I was prepared to be a well-rounded and skilled attorney.”
The Bar’s mentoring program has been humming along nicely since 2009. The NLTP requires new admittees to the Utah State Bar to work with a Utah Supreme Court Approved Mentor during their first year of practice.1 The mentor and new lawyer are required to meet once a month for twelve months to discuss the new lawyer’s legal work, professional development, and adjustment to the practice of law. They are also required to discuss the Rules of Professional Conduct as a means of more effectively teaching and fostering professionalism, ethics and civility. Both the new lawyer and the mentor receive twelve CLE credits for participating in the program. There are 804 approved mentors in the NLTP, 285 of whom are currently mentoring new lawyers. By the time this article appears in print, 561 new lawyers will have completed the program.
As Coordinator of the NLTP, I have the pleasure of interacting on a regular basis with our state’s newest lawyers and have found it extremely rewarding to work with new lawyers as they begin their careers and find their way in the profession and our legal community. I am glad to answer new lawyers’ questions about the Utah State Bar, how it works and what it offers to them professionally and personally.
However, because of the way the NLTP is designed, I have much less interaction with our NLTP mentors. I am aware of the time and effort NLTP mentors are devoting to their mentees, not only because I know what the program requires of them, but because I hear from the new lawyers about the work they do together. I know the practice of law is stressful and time consuming. I know people’s personal lives are busy. I know that mentoring hours are non-billable. So when I see and hear what NLTP mentors are doing to teach and help their mentees I am appreciative, but I also hope and wonder if they are glad they took on this huge task. (more…)

The Mortgage Lender’s Primer on a TILA Rescission Claim

by Aaron B. Millar
The latest statistics show that although the Utah foreclosure rate has decreased, Utah foreclosures are still quite high relative to the nation. In Q3 2011, one in 145 Utah homes was in foreclosure, sixth highest in the nation. See Consumers often turn to consumer protection statutes, such as the federal Truth in Lending Act (“TILA”), for protection against foreclosing lenders.
Imagine this scenario: Hours before the foreclosure sale, the mortgage lender receives a fax from the defaulting borrower’s lawyer stating that the borrower rescinds the loan and that the lender is obligated to reconvey its deed of trust because the finance charge in the loan disclosures was understated by $36. The borrower further demands that the lender return all of the fees and interest payments the borrower made on the loan. Possible? Yes. Many lenders have been unprepared to confront a rescission demand under TILA. Given the tight statutory time frame and the risks involved, the lender must proceed expeditiously and with caution when responding to a rescission demand.

TILA is a strict liability statute that requires lenders to provide certain notices and disclosures to consumers so that the consumer can shop interest rates. Failure to provide accurate disclosures subjects lenders to TILA’s damages and rescission remedies. If a consumer elects to rescind the loan transaction, a lender can lose its security interest in the property and be required to pay back all fees, costs, and interest payments that it received from the borrower. Just as daunting, the lender has a mere twenty days to rescind upon receipt of the borrower’s rescission notice. After the lender fulfills its obligations, the borrower must tender the loan proceeds. The lender’s failure to rescind can result in severe penalties. In one case outside of Utah, for example, the court held that because the lender failed to accept the borrower’s valid rescission notice, the borrower did not have to tender and was able to keep the loan proceeds. See Family Fin. Servs v. Spencer, 677 A.2d 479 (Conn. App. Ct. 1995).
Notwithstanding the potentially draconian nature of rescission, the narrow drafting of TILA and the equities taken by federal courts in Utah have limited its application. Thus, a proper TILA analysis will often show that the loan at issue affords no right of rescission. The following is an issue checklist for lenders to consider upon receiving a rescission notice:
Has the statute of limitations run on the TILA rescission claim?
The TILA rescission remedy is popular among consumers because it expires three years after the loan consummation if “right of rescission” or accurate material disclosures are not given to the borrower. (In contrast, a TILA claim for damages has a short, one-year statute of limitations.) The U.S. Supreme Court has held that even if the rescission claim is brought as a defense to a foreclosure proceeding, or is in the nature of “recoupment,” the three-year period is not extended. See Beach v. Ocwen Fed. Bank, 523 U.S. 410, 416 (1998). If the borrower files for bankruptcy protection before the three-year period has run, however, the statute of limitation is extended two years. (more…)

Article – Utah Originalism

by Troy L. Booher
The Utah Supreme Court has had a tenuous relationship with originalism. Originalism is a collection of views unified by their treatment of events at the time constitutional text was drafted and ratified as determinative of how that text later should be interpreted. Although originalism is often associated with political Conservatism, it is worth keeping in mind that originalism produces decisions in line with other political viewpoints. Consider, for example, State v. Hernandez, 2011 UT 70, 268 P.3d 822, a recent case in which the Utah Supreme Court, in light of the history and original understanding of Article I, Section 13 of the Utah Constitution, held that a preliminary hearing is required not just in cases involving felonies but also in cases involving Class A misdemeanors. See id. 2011 UT 70, ¶ 29. While originalists look to the views of the founding generation, originalism does not require that those views track any particular political ideology.
The Utah Supreme Court has not settled on what information it will consider when interpreting the Utah Constitution. For instance, in 1993, the court described the relevant considerations as “historical and textual evidence, sister state law, and policy argument in the form of economic and sociological materials.” Soc’y of Separationists, Inc. v. Whitehead, 870 P.2d 916, 921 n.6 (Utah 1993). But in 2006, the court expressly removed “policy argument” from that list of relevant considerations and stated instead that it will consider “text, historical evidence of the state of the law when it was drafted, and Utah’s particular traditions at the time of drafting.” Am. Bush v. City of S. Salt Lake, 2006 UT 40, ¶ 12 n.3, 140 P.3d 1235. Then in 2007, the court declared that historical arguments “do not represent a sine qua non in constitutional analysis.” State v. Tiedeman, 2007 UT 49, ¶ 37, 162 P.3d 1106. It again stated that relevant considerations include “historical and textual evidence, sister state law, and policy argument in the form of economic and sociological materials.” Id.
The primary dispute emerging from those cases is not whether text and historical evidence are relevant to constitutional interpretation, but whether policy arguments also are relevant. See, e.g., State v. Walker, 2011 UT 53, ¶ 32 n.9, 267 P.3d 210 (Lee, J., concurring); Am. Bush, 2006 UT 40, ¶ 73 n.2 (Durrant, J., concurring). Viewed through the lens of originalism, that dispute can be understood in at least two ways: (i) whether originalism is the method by which the Utah Constitution should be interpreted or (ii) whether originalism authorizes courts to consider policy arguments in interpreting the Utah Constitution.
In addressing the relationship between originalism and policy, justices of the Utah Supreme Court in opinions and members of the Utah State Bar in various articles published in this Journal have assumed that originalism dictates the same analysis when applied to the Utah Constitution as when applied to the United States Constitution.1 That assumption is unwarranted. Utah originalism is different because Utah history and the Utah Constitution are different. And those differences make it far from obvious that policy arguments are irrelevant when interpreting the Utah Constitution, even for originalists. (more…)

Advice on Not Giving Investment Advice

by Jason D. Rogers and Brad R. Jacobsen
Many people would believe that investment advisers are only those that give opinions on which stocks, bonds, or mutual funds to buy. However, under applicable securities laws “investment adviser” is much more broadly defined than commonly thought, potentially including those who simply give general financial counseling or planning or those who recommend the purchase of a particular asset.
The question of whether or not a person is an investment adviser frequently arises in a real estate, insurance, or other sales context. Such salespeople would not generally think they are subject to the securities laws, but, depending on their activities, they may be.
The following will be addressed:
• What makes an individual an “investment adviser”?
• What steps may be taken to avoid being deemed an investment adviser?
“Investment advisers” generally must be licensed by an applicable regulator. Investment advisers are regulated by both federal and state law.
Federal Regulation
At the federal level, investment advisers are governed by the Investment Advisers Act of 1940 (the “Act”). See 15 U.S.C. § 806-1 et seq. The Act defines an investment adviser as “any person who, for compensation, engages in the business of advising others…as to the value of securities or as to the advisability of investing in, purchasing, or selling securities….” Id. § 806-2(a)(11). “Securities” include a broad array of instruments and agreements, including much more than the commonly-used definition of the word.
Special rules apply to investment advisers, including specific prohibitions against fraudulent practices, undisclosed conflicts of interest, fee splitting with unregistered investment advisers, deceptive advertising, limitations on referral fees, and prohibitions of certain advisory fees. Additionally, investment advisers generally must be registered with federal or state regulators. Violations of these rules can subject investment advisers to civil and criminal penalties.
The U.S. Securities and Exchange Commission (SEC) has set out the following three requirements, all of which must be satisfied to be an investment adviser. A person is an investment adviser if the person:
(1) Provides advice, or issues reports or analyses, regarding securities (“investment advice”);
(2) Is in the business of providing such services; and
(3) Provides such services for compensation.
SEC Interpretive Release No. IA-1092, 1987 SEC No-Act. LEXIS 2555 (Oct. 8, 1987) (referred to as “IA-1092”).
Each requirement will be discussed.
Provides Investment Advice
There are few clear-cut rules to define investment advice. Most of the guidance has come through SEC no-action letters dealing with the following particular situations.
General Rules
Giving advice on specific securities is investment advice, such as providing market timing services. See Lee F. Richardson, 1990 SEC No-Act. LEXIS 32 (Jan. 9, 1990). A person who provides advice concerning securities, even if the advice does not reference specific securities, is generally an investment adviser. See IA-1092. This includes advising clients concerning the relative advantages and disadvantages of investing in securities in general as compared to other investments. See Richard K. May, 1979 SEC No-Act. LEXIS 3967 (Dec. 11, 1979). Encouraging people to liquidate securities to purchase real estate, insurance, or other assets could be considered investment advice.
Situations That May Be Investment Advice
A person could be providing investment advice if, in the course of developing a financial program, he recommends that clients allocate certain percentages of their assets to life insurance, high yielding bonds, and mutual funds. See IA-1092. Investment advice also may include analyzing information to give categories of investments that similar investors historically have been satisfied with. See Financial Psychology Corporation, 1988 SEC No.-Act. LEXIS 413 (Mar. 23, 1988). A person providing advice as to the selection or retention of an investment manager also may be giving investment advice. See IA-1092. (more…)

Severance Damages Take a Sea-Change With Admiral Beverage

by Richard E. Danley, Jr.
In October of 2011 the Utah Supreme Court issued its opinion in Utah Department of Transportation v. Admiral Beverage Corporation, 2011 UT 62, 693 Utah Adv. Rep. 16. The opinion has not been released for publication. Admiral marks a sea-change in how Utah determines severance damages involving actual takings. It allows the claimant to recover the full diminution in fair-market value, without limiting recovery under the traditional severance damage rules, simplifies the determination of loss and, for the first time awards severance damages for loss of visibility from changes made to a public highway. However, the Utah Supreme Court limited the eligibility to recover under Admiral to four preconditions. First, an actual taking must occur; second, the property taken must be essential to the project; third, recovery must be limited to real estate; and fourth, the loss must be caused by the taking. See id. ¶ 29. If these four conditions are present the supreme court said the claimant only need prove the taking of a protected property interest to be entitled to full recovery for loss under the State Constitution. See id. ¶ 43.
Historically, recovery for severance damages was limited by a body of common-law rules developed to determine if the loss is constitutionally protected and recoverable. For ease of reference these are referred to as “severance damage rules.” The holding in Admiral appears to set aside some or all severance damage rules when there is a taking and permit the claimant full recovery when the lost value is caused by the taking. Under Admiral, portions of two lots were taken and the owner sought recovery for diminution in value from the lost view out to the east and the lost visibility from the freeway due to its elevation by twenty-eight feet. See id. ¶ 2. Under Utah’s severance damage rules, loss of visibility from a public highway is not a protected property interest. See State v. Harvey Real Estate, 2002 UT 107, ¶¶ 11-14, 57 P.3d 1088. Following the severance damage rules, the lower courts in the Admiral case rejected recovery for any loss in value for visibility from the freeway and also applied the so called “abutment rule” to prevent recovery for the blocked view. See Admiral, 2011 UT 62, ¶ 7. The abutment rule prevents recovery for lost view or other damage if the improvements causing the damage are not constructed, at least in part, on the land taken from the claimant. In Admiral the claimant’s property abutted the frontage road, not the freeway, and none of the elevated freeway was constructed on the land taken from the claimant. See id. ¶ 2. Taking a new direction, however, the supreme court permitted full recovery for all diminution in value for both the lost view out and the lost visibility from the elevated freeway. See id. ¶ 43. The Admiral court held no portion of the elevated freeway needed to be constructed on the property taken from the claimant for recovery to occur and revised the abutment rule so that it does not apply if the property taken is essential to the project for which the taking occurred. See id. ¶ 29. It also said that once a taking of a protected property interest is demonstrated (such as the taking of the owner’s land) recovery for all damages caused by the taking is required under Utah law. See id. ¶ 31. This includes recovery for a property interest that is not a recognized or protected interest under Utah law (i.e., the loss of visibility from the freeway). The supreme court said that the constitutional requirements for just compensation from a taking are only satisfied when the owner is made whole by placing the owner in the same position he or she would have occupied but for the taking. See id. ¶ 28. Quoting Stockdale v. Rio Grande Western Railway Co., 28 Utah 201, 77 P. 849 (Utah 1904), the court said once the landowner demonstrates an actual taking of a protected interest, the owner is entitled to just compensation to the extent of all damage suffered. See Admiral, 2011 UT 62, ¶ 28 (quoting Stockdale, 77 P. at 852). (more…)

Books From Barristers

http://www.trelease-on-reading.comhttp://www.trelease-on-reading.comby Elaina M. Maragakis
It’s impossible to imagine my world without books. Not only am I surrounded by them in my office, but they are packed into walls of bookshelves at home. These days, our home is filled with children’s books, as well. I have crammed them into bookshelves, baskets, and bins. I have surrounded myself – and I suspect that you have, as well – in what researchers call a “print rich environment.” It’s little wonder that some of my earliest and fondest memories are of peeling open the pages of The Berenstain Bears or Dr. Seuss or Little Golden Books, and diving into those wonderful and classic stories.
Sadly, many children never have this experience, even though educational research is replete with evidence that reading has a powerful and direct impact on a child’s success. It is such an obvious way to connect children with lifelong skills, that we often overlook it in its simplicity. The harsh reality is that many children have no access to books of their own. In fact, one study found that in low income neighborhoods, the ratio of books to children is an astonishing one book to every 300 children.1 This unimaginable statistic is alarming and troubling, but fortunately, we have the ability to change this course one child at a time. In his book The Read-Aloud Handbook, author Jim Trelease explores and explains the critical nature of reading and the abundant benefits that flow from reading aloud to children. His research is a powerful testament to the transformative power of books. He writes “we have to find a way to get books into the lives of poor urban and rural children.”2
With this simple goal in mind, it’s my pleasure to introduce a new program of the Utah State Bar called “Books from Barristers.” The goal of Books from Barristers is to provide children in underserved communities with new books on the topics of law, government, American history, and civics. Our hope is that if children can own their own book, they will come to understand the value of reading, which will, in turn, help to solidify a lifelong love of learning. While we hope to eventually expand the program, in its inaugural year we are targeting our efforts to first grade children located in Salt Lake, Davis, and Utah Counties.
Statistics underscore the importance of a program like Books from Barristers. A U.S. Department of Education study showed a direct correlation between the number of books at home and average test scores. This study showed that students with more than 100 books in their homes had higher test scores in science, civics, and history than those who reported having fewer books. Not surprisingly, test scores declined steadily as the number of books in the home declined.3 Beyond success in school, frequent readers also fare better in society than their counterparts who read less. For example, proficient readers are significantly more likely to be employed than below-basic readers.4 Notably, the benefits go far beyond the individual, and have a concrete impact on society as a whole. In its groundbreaking 2007 report titled “To Read or Not to Read,” the National Endowment for the Arts reported that adults who read well are more likely to volunteer, vote, attend cultural and civic activities, and exercise.5 (more…)

Utah Law Developments

Young Living Essential Oils, LC v. Marin: Clarifying the Limited Scope and Content of the Implied Covenant of Good Faith and Fair Dealing
by Cory A. Talbot and J. Derek Kearl
“[S]hrouded in mystery.”1 “[F]rustratingly elusive.”2 “[I]nexact.”3 Each phrase has been used to describe the implied covenant of good faith and fair dealing. In general terms, this implied covenant imposes a duty on contracting parties to act consistently with the parties’ agreed upon common purpose and to not do anything to destroy or injure the other party’s right to receive the benefits of the contract. See Oakwood Vill. LLC v. Albertsons, Inc., 2004 UT 101, ¶ 43, 104 P.3d 1226; St. Benedict’s Dev. Co. v. St. Benedict’s Hosp., 811 P.2d 194, 200 (Utah 1991). The doctrine “is based on judicially recognized duties not found within the four corners of the contract,” Christiansen v. Farmers Ins. Exch., 2005 UT 21, ¶ 10, 116 P.3d 259, and, although it has long been a part of Utah law, continues to pose difficulties to contracting parties, practitioners, and judges alike.

Young Living Essential Oils, LC v. Marin, 2011 UT 64, 266 P.3d 814, represents the latest Utah Supreme Court decision on this important, but all-too-often misused and misunderstood, doctrine, and the Young Living court took the opportunity to “clarify…the proper scope” and emphasize that the court has “chart[ed] a limited role for the covenant of good faith and fair dealing.” Id. ¶¶ 1, 9. The result is a framework that should provide more predictability to Utah law, a very good thing.
This article briefly describes the decisions that have shaped the implied covenant of good faith and fair dealing in Utah and informed the court’s decision in Young Living, explores the reasoning and holding in Young Living, and discusses the impact that Young Living will have on legal claims made pursuant to the implied covenant.
Leading Up to Young Living – Good Faith and Fair Dealing in Utah Law
Utah courts adopted the implied covenant of good faith and fair dealing over the late 1970s and early 1980s and have continued to refine the margins and contours of that doctrine ever since. In doing so, these courts have admittedly experienced some difficulty, noting that the doctrine is “inexact” and “not susceptible to bright-line definitions and tests” and “should therefore be used sparingly and with caution.” Berube v. Fashion Ctr, Ltd., 771 P.2d 1033, 1041 (Utah 1989); Olympus Hills Shopping Ctr. v. Smith’s Food & Drug Ctrs., 889 P.2d 445, 450 (Utah Ct. App. 1994).
Nonetheless, a few key cases have served as guideposts in explaining the role of the implied covenant under Utah law. The first is Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985). In Beck, the Utah Supreme Court established that a claim for breach of the implied covenant of good faith and fair dealing sounds in contract, not in tort. See id. at 798. In rejecting a position taken by other courts, the Beck court held that the ability of a plaintiff to recover in tort for the breach of the implied covenant of good faith and fair dealing “has the potential for distorting well-established principles of contract law” and will not be permitted. Id. at 799; Berube, 771 P.2d at 1046 (citing the same). Thus, Beck established a more restrictive, contract approach to this doctrine. (more…)

Blow the Whistle: The Dodd-Frank Act Creates New Incentives for Whistleblowers – and Compliance Issues for Utah Businesses

by Barry Scholl and Kevin Timken
A new client makes an appointment to discuss an employment issue with you. When you talk, she tells you that she works in the warehouse for a widget distributor. Recently, right before the end of the prior fiscal year, her warehouse received an unusually large shipment of widgets from a public company. She heard her boss tell the public company’s auditor that he requested the shipment and that the widgets were not returnable – but she also heard the public company’s president thank her boss for accepting the unusual shipment and assure him that as soon as the audit was completed, he could return all of the widgets he had not sold. Her boss owns the company she works for, and when she mentioned the difference between what he told the auditor and what the agreement really was, he threatened to fire her.

Thanks to the Dodd-Frank Financial Reform and Consumer Protection Act (Dodd-Frank) signed into law in 2010, this is not only an employment law problem, but now also a securities law issue. See 15 U.S.C. § 78u-6 (2010).1 Sometime this year, the Securities and Exchange Commission (SEC) is expected to pay its first rewards to whistleblowers who provided original information about violations of the federal securities laws that led to enforcement penalties. Those violations do not necessarily need to involve public companies – there are a number of ways in which a privately held company can violate the federal securities laws, particularly when it is seeking investors and selling securities.
Spurred by calls for greater oversight of Wall Street in the aftermath of the financial crisis, Dodd-Frank included provisions requiring the SEC to pay a bounty to financial insiders and others who voluntarily provide information about violations of the securities laws. See id. § 78u-6(b). Tipsters whose original information leads to an SEC enforcement action resulting in monetary sanctions of more than $1 million are to be paid between 10% and 30% of the money collected by section 78u-6(a)(1), (b)(1). Awards are available to employees, vendors, investors, financial analysts, and others – essentially anyone who provides “original information,” which is defined as information that is derived from an individual’s independent knowledge or analysis, not exclusively derived from a judicial or administrative hearing, and not known to the SEC from any other source. See id. § 78u-6(a)(3).
Although the SEC had previously adopted rules paying bounties to those who reported insider-trading violations, this represents new ground for the SEC, and the new provisions continue to provoke strong reactions. Because the rules allow whistleblowers to go straight to the SEC and bypass internal reporting mechanisms, critics have expressed concern that they may divert important resources away from daily business and force companies to investigate and defend allegations of wrongdoing, regardless of the validity of the tips. Supporters, on the other hand, have praised the provisions as a giant leap for whistleblowers and a boon for employer-employee communications in the corporate sector.
Despite their disagreements, however, both detractors and supporters agree that the new whistleblower provisions have the potential to dramatically increase SEC enforcement activity. Since the rule became effective late last summer, the SEC has already begun to amass a growing pile of whistleblower tips. The SEC filed 735 enforcement actions in 2011, the most ever in a fiscal year. See U.S. Securities and Exchange Comm., FY2011 Performance and Accountability Report (2011) at 2. It seems likely that number will increase – perhaps substantially – in 2012, given the SEC’s increasing commitment to enforcement and the new wave of whistleblower complaints to investigate. (more…)