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Last Post 20 May 2014 08:53 PM by  eskatz
R-13-0061 Petition to Amend Rule 23, Rules of Civil Procedure
 9 Replies
Author Messages
lkoschney
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20 Dec 2013 04:16 PM
    R-13-0061

    PETITION TO AMEND RULE 23, RULES OF CIVIL PROCEDURE

    Would require that a portion of residual class action funds be distributed to the Arizona Bar Foundation to provide legal services for low-income Arizona residents

    Petitioner:
    Thomas Giallanza
    Arizona Foundation for Legal Services & Education
    4201 N. 24th Street, Suite 210
    Phoenix, AZ 85016-6288
    Ph: (602)340-7366
    Fax: (602)773-3105
    [email protected]

    Filed December 20, 2013

    Comments due May 20, 2014.

    DENIED August 26, 2014.

    Attachments
    jdsmith
    Posts:

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    12 Feb 2014 03:45 PM
    James Smith
    2 N. Central Ave.
    Suite 2200
    Phoenix AZ 85004
    Phone: 602-364-7000
    Fax: 602-716-8011
    [email protected]

    The Arizona Foundation for Legal Services & Education provides much needed services to underserved communities. Nonetheless, this proposed rule amendment is not the proper way to increase funding for that worthwhile organization. This proposal is not a procedural issue but a substantive one. Thus, this type of change should result from legislation altering the substantive law of Arizona. Moreover, the notion of cy pres distributions from unclaimed class action funds hinges on allocating those unclaimed funds to a charitable or similar organization that furthers the interests of the absent class members. Allocating unclaimed funds to the Foundation does not further that purpose and, indeed, may in some instances be contrary to the interests of the absent class members. Cy pres provisions of class action settlements have come under increasing scrutiny due to that disconnect between the designated charity's purpose and the class' interests. E.g., Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012) (reversing approval of class settlement); Nachison v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (same). While the Foundation's work is noble and worthy of support, this proposed rule change is not the appropriate way to provide that support.

    sefotg
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    19 May 2014 02:18 PM
    Jeffrey Kastner
    7656 E Torrey Pt Cir
    Mesa, Az 85207
    480/205-5619
    [email protected]
    state bar #021159, reitred

    As a member of the legal services committee of the Arizona Foundation for Legal Services and Education and a former legal aid attorney, I support such petition.
    Though Arizona receives its proportionate share of federal funding for legal aid and receives generous support from state bar members, it sorely lags behind many major urban states in private and public funding of civil legal aid funding. The San Francisco Bay area alone had some 80 separate programs providing civil legal aid to low income residents. Arizona has less than a handful underfunded programs for the entire state.
    Additional funding through use of such undistributed funds would serve the interests of justice and make a statement by the courts as to their attempt at fairness and leveling the playing field for those who are unable to afford legal representation.

    toddlang
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    19 May 2014 05:32 PM
    Todd F. Lang
    Two Renaissance Square
    50 N. Central Ave., Ste. 1200
    Phoenix, AZ 85004-4408
    602-514-7500
    [email protected]

    This modest proposed change to the current rule is an excellent way to promote "access to justice" in Cy pres matters in which unused residual funds are to be allocated. In this limited circumstance, using the funds to assist with access to justice to the poor is an efficient and appropriate way to allocate these unused funds. Several other states have implemented similar rule changes, as they formulate ways for the bar to address its goals of professional responsibility.
    ATRA
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    20 May 2014 08:32 AM
    Sherman Joyce
    American Tort Reform Association
    1101 Connecticut Ave NW
    Suite 400
    Washington DC 20036
    202-682-1163
    202-682-1022
    [email protected]
    414214 (Admitted to DC Bar)

    I am writing on behalf of the American Tort Reform Association (ATRA) to express our opposition to the suggested changes to Rule 23 (g) of the Arizona Rules of Civil Procedure. ATRA, founded in 1986, is a broad-based bipartisan coalition of more than 300 businesses, corporations, municipalities, associations, and professional firms that have pooled their resources to promote reform of the civil justice system with the goal of ensuring fairness, balance, and predictability in civil litigation.

    ATRA strongly urges the Commission not to adopt the proposed changes to Rule 23 (g) of the Arizona Rules of Civil Procedure. Class actions are intended to compensate parties that were injured by a common defendant in a specific manner, and they were not intended to provide funding to third parties. The proposed rule change would allow class actions to expand substantially beyond the bounds of what they were intended to accomplish.

    The petition argues that directing residual funds from class action lawsuits is a way to make up for lost funding, but litigation should not be used for fundraising. This is an inappropriate use of the legal system and takes unfair advantage of defendants. The Arizona Bar Foundation should be required to go through the legislative process just as any other group would have to do in order to get additional government funding. If this is a vital issue to the Arizona Bar, then perhaps members can make larger voluntary contributions, and if additional funding is still needed, the Foundation should petition the legislature and go through the political process. If the Commission chooses to adopt the proposed change, the judiciary would be making a policy judgment that is better handled by the legislature.

    Proposed Rule 23(g) would make Arizona a regional and national outlier. The rule’s mandatory 50% disbursement provision places it among just a handful of states that have similar provisions (North Carolina, South Dakota, Illinois, and Pennsylvania mandate at least 50% disbursement). No neighboring state has any provision approaching a mandatory 50% disbursement. In fact, most states leave the disbursement of the residual funds to agreement by the parties at issue with discretion of the trial court to approve the final, agreed-upon disbursement. If no agreement can be reached, the court then has discretion to disburse the funds in a manner consistent with the underlying causes of action and harms. There are instances of states adding access to justice programs as an additional approved recipient of the funds, but states do not give these programs priority over alleviating the harms that underlie the cause of action. Most all states provide for the parties to agree to disburse residual funds in an agreed-upon manner to avoid a court-mandated disbursement to access to justice programs. The proposed Rule 23(g) does not allow for this freedom between the parties.

    As previously stated, class actions are intended to compensate victims who have suffered an injury due to a defendant’s negligence. If all of the victims have been compensated and made whole, and the defendant has made a good faith effort to find all of the victims, then the class action has served its purpose and unspent money should properly revert to the defendant. It is inappropriate to automatically divert funds to a third party not involved in the litigation.

    The petition argues that a main premise for class action lawsuits is to make justice available for all persons and that additional funding for the Foundation would accomplish that goal. This argument falls short because it is not the defendant’s responsibility to ensure that funding is in place for future lawsuits. Class action lawsuits are intended only to compensate the victims harmed by defendant’s conduct.

    This rule change would explicitly give an outside group a stake in any class action lawsuit filed in an Arizona court from the outset and would create a potential for conflicts of interest with class members. The Arizona Bar Foundation would be invested in the outcome of the litigation and possibly could be tempted to get directly involved a case. Additionally, the rule change would require all class members to be screened to ensure that no one was involved with or receiving aid from the Foundation to prevent any legal conflicts of interest. Murphy’s Law of unintended consequences most certainly could come into play and the judiciary needs to be prepared to handle these situations and the potential conflicts that will arise due to the interest of the third party.

    It is for these reasons that ATRA strongly urges the Commission to not adopt the proposed changes and maintain the state’s well-reasoned and balanced system.
    okfils
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    20 May 2014 03:49 PM
    Sharon Slifko
    Bar # 009301
    1740 West Claremont Street
    Phoenix, AZ 85015
    (602) 478-8762

    This rule change is an excellent idea. Lawyers in Arizona fail miserably in promoting justice for all people. This is a workable funding option for legal services that will cost the legal community very little, and it will fund legal services projects that are currently toothless because of lack of funding. The legal community needs to step up to the plate and do everything in our power to promote equal justice, and this is one way to do it.
    azchamber
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    20 May 2014 06:39 PM
    Glenn Hamer
    Arizona Chamber of Commerce and Industry
    3200 N. Central Avenue
    Suite 1125
    Phoenix, AZ 85012
    602-248-9172
    [email protected]
    015777 (inactive)

    The Arizona Chamber of Commerce and Industry (“Arizona Chamber”) respectfully submits this comment to express our opposition to Petition R-13-0061 suggested changes to Rule 23 (g) of the Arizona Rules of Civil Procedure. The Arizona Chamber is a nonpartisan, nonprofit organization that is the leading statewide advocate for the Arizona business community. Our diverse membership employs 250,000 Arizonans in all business sectors from manufacturing to services and includes small, medium, and large employers. We are committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth, and protecting businesses from unnecessary and cumbersome legal and regulatory burdens.

    The Arizona Chamber strongly urges the Commission not to adopt the proposed changes to Rule 23 (g) of the Arizona Rules of Civil Procedure. Class actions are intended to compensate parties that were injured by a common defendant in a specific manner, not to provide funding to third parties. The proposed rule change would allow class actions to expand substantially beyond the bounds of their intended purpose.

    The petition argues that directing residual funds from class action lawsuits is a way to make up for lost funding; this is an inappropriate means of fundraising. If the Arizona Bar Foundation seeks additional funds, it must participate in the legislative process just as any other group would have to do in order to get additional funding. If this is a vital issue to the Arizona Bar, then perhaps members can make larger voluntary contributions, and if additional funding is still needed, the Foundation should petition the legislature and go through the political process. If the Commission chooses to adopt the proposed change, the judiciary would be making a policy judgment that is better handled by the legislature.
    domanico
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    20 May 2014 07:02 PM
    WILLIAM G. MONTGOMERY
    MARICOPA COUNTY ATTORNEY
    (FIRM STATE BAR NO. 0003200)

    MARK FAULL
    CHIEF DEPUTY
    301 WEST JEFFERSON STREET, SUITE 800
    PHOENIX, ARIZONA 85003
    TELEPHONE: (602) 506-3800
    (STATE BAR NUMBER 011474)
    [email protected]
    Attachments
    foundation
    Posts:

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    20 May 2014 08:29 PM
    Thomas Giallanza
    Arizona Foundation for Legal Services & Education
    4201 N. 24th Street, Suite 210
    Phoenix, AZ 85016-6288
    Ph: (602)340-7366
    Fax: (602)773-3105
    [email protected]

    SUPPLEMENTAL COMMENTS TO PETITION TO AMEND RULE 23, ARIZONA RULES OF CIVIL PROCEDURE

    Attachments
    eskatz
    Posts:

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    20 May 2014 08:53 PM
    Ellen Sue Katz
    William E. Morris Institute for Justice
    202 East McDowell Road, Suite 257
    Phoenix, Arizona 85004-4536
    Phone: (602) 252-3432
    Fax: (602) 257-8138
    [email protected]
    Bar Number: 012214
    Attachments


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