Thomas C. Hall
602-889-0842
Hill Hall & DeCiancio PLC
3131 E Clarendon Ave Ste 107, Phoenix, Arizona, 85016-7069

I definitely oppose this proposed Petition, and request that our State Bar produce data that supports its position and shows the supposed “unjust results.” The Petition spends an inordinate amount of time referring to the $1.00 OJ, but in practice, that is very, very rare. In fact, I have not seen one in probably the last 5 years. In any event, there is case law on $1.00 OJs in other states, which have held that $1.00 OJs are not unreasonable. I am not sure why the Bar is so concerned about that particular amount, when in practice that type of OJ does not seem to arise. Further, if the OJ was $1.00 and the plaintiff loses at trial, does that not also support the purpose of the rule?

I (and I suspect the majority of others) routinely include in my OJs the reasonable value of the adverse party's claims and their costs incurred and those that will be incurred through trial. My OJs are intended to encourage settlement because the OJ is propounded in an effort to save my client from having to incur significant litigation costs and expert fees. And, they are often propounded very early in the litigation such that acceptance saves the parties money and promotes judicial economy. That is the very purpose behind the rule.

If the Petition is granted, the defense will be disadvantaged because there will literally be no consequence to plaintiffs and their attorneys in filing a suit and losing. The only "teeth" currently available under the rules are Rule 77 and Rule 68. I see so many bogus suits and often times the potential for sanctions under the rule is the only thing that avoids protracted litigation, experts, etc. Further, it requires the offeree to seriously consider the risk going forward, which is a reasonable thing to ask a party to do. If I propound an OJ and the adverse party does not accept it, thereby forcing my client to spend thousands of dollars on experts and costs, why shouldn't the adverse party pay for that when I win at trial? I suspect that abrogating the rule would actually discourage settlement and result in more trials in our courts.

I would urge the Supreme Court to oppose this Petition. There is no basis in fact to the Petition; it is a solution in search of a problem.

Commenter:
James W. Rappaport

Committee:
Pima County Bar Association, Rules Committee

Mailing address:
177 North Church Avenue
Tucson, AZ 85701

Phone Number:
520-623-8258

Email address:
[email protected]

Bar Number:
031699

Wholesale abrogation of Rule 68 attempts to swat a gnat with a howitzer. I am opposed to it. I employ it in every case. As one who does both plaintiffs and defense work and who has been certified by the State Bar as a specialist in personal injury litigation since 1992, I am mystified why the proposal got this far, given the utility of the Rule in encouraging settlement, and the rarity of disproportionate and punitive sanctions.

To avoid draconian application of Rule 68 and “gotcha” gamesmanship, it makes more sense to give courts the same discretion already afforded them in determining other sanctions. A simple amendment of the rule, akin to the following, should accomplish this:

"(g) Sanctions.

(1) Amount. A party who rejects an offer, but does not obtain a more favorable judgment, [DELETE: must pay as a sanction]: [ADD: is subject to proportionate sanctions to be determined by the court, up to and including]:

(A) the offeror's reasonable expert witness fees and double the taxable costs, as defined in A.R.S. § 12-332, incurred after the offer date; and

(B) prejudgment interest on unliquidated claims accruing from the offer date.

(2) Taxable Costs and Attorney's Fees. To determine if a judgment that includes an award of taxable costs or attorney's fees is more favorable than the offer, the court must consider only those taxable costs and attorney's fees that were reasonably incurred as of the offer date.

(3) Arbitration. To determine whether to impose a sanction after an arbitration hearing, the court must compare the offer to the final judgment entered either on the award under Rule 76(b)(4) or after appeal under Rule 77."

Robert L. Greer
480-539-9400
[email protected]

.

Response in Opposition to the Abrogation of Rule 68:

The State Bar’s proposal in support of the abrogation Rule 68 on the basis that “inimical to the principle of increased access to justice in our courts” and that the amount of sanctions in relation to the offending parties. The position taken by the State Bar is not a real world, in the trenches analysis or objective review from a practitioner perceptive of cases litigated every day. Rather, the State Bar’s position and approach is to essentially “throw the baby out with the bath water” and should be rejected.

Let me explain. The filing of a Rule 68 offer requires ethical attorneys to do two things 1) analyze the facts of the case closely as to both liability and damages and 2) explain that analysis to the client so the client can make an informed decision. This is true whether it is a plaintiff filing an OJ or the defense. Moreover, if an insurance company or other claims department is faced with a decision to accept an offer of judgment or whether to extend an offer of judgment, it is typically required that someone higher up in the organization review and advise on the matter.

The suggestion by the State Bar that alternative dispute resolution procedures such as mediation or settlement conference makes Rule 68 obsolete is myopic. The abdication of Rule 68 would and/or could require parties to conduct discovery, take depositions, hire experts and spend hours and potentially years before any really analysis of the potential successes or failure is completed. If Rule 68 is abrogated, it is likely that the parties will simply wait until the time for alternative dispute resolution before any consideration is given to settlement of the matter. In other words, it allows parties to be pig headed because nothing is forcing either party to take a hard look at the facts and potential outcomes of the case. Rule 68 makes the parties realize they have skin in the game.

In the undersigned’s experience, Rule 68 does in fact encourage and cause reasonable settlement discussions to occur earlier in the litigation process. Therefore, discussions between counsel and client regarding case evaluation and settlement occur earlier in the case. In the last months, there have been two Rule 68 offers in two different cases in which our office has represented one of the parties. In one case, the offer of judgment was made by the defendant, and in the other case, the offer of judgment was made by the plaintiff. In both cases, it resulted in an early settlement. If the parties had to wait for alternative dispute resolution, then both matters would have been ongoing for another year. This same pattern has been seen by the undersigned for years.

The State Bar’s proposal would be a disincentive to early resolution. It would likely result in more litigation and discovery. Therefore, more time will pass before alternative dispute resolution occurs and there is a real analyses of the case. The costs of litigation would increase which would result in more lawyers being employed, but the benefit to the public and the clients would diminish. Please reject the State Bar’s proposal.


Lloyd J. Andrews
7310 North 16th Street
Suite 320
Phoenix, Arizona 85020
Direct: (602) 776-5688
Fax: (602) 274-5911
Bar No 006290

Kelly Jo (SBN 021525)
DIEKER VOIGHTMANN DONOVAN, PLLC
15333 North Pima Road, Suite 200
Scottsdale, Arizona 85260
(480) 348-5000

Attached please find the Arizona Association of Defense Counsel's Comment in Opposition to R-19-0015 Petition to Abrogate Rule 68, Ariz. R. Civ. P.

Jeffrey C. Warren, State Bar No. 021383
Travis Wheeler, State Bar No. 026415
Amanda E. Heitz, State Bar No. 026519
BOWMAN AND BROOKE LLP
2901 North Central Avenue Suite 1600
Phoenix, Arizona 85012
Tel: (602) 643-2300
Fax: (602) 248-0947
[email protected]
[email protected]
[email protected]

I agree with the State Bar's proposal. I have done both defense and plaintiff work in my career. The various responses to the petition seem to say that well, the rule cuts both ways, so it's fair. However, the fact is, the rule is often used as a cudgel by the defense. There are many cases with $1 offers of judgment. Such "offers" do not encourage settlement. The fact that some of those cases result in defense verdicts does not mean the cases lacked merit. It just means that the case could have gone either way, and if happens to go the defense way, then the plaintiff faces financial devastation for refusing to knuckle under to the defense. It's not fair or right I thought this when I was a defense lawyer, and I think it now as a plaintiff's lawyer.

I disagree with some of the sentiments expressed that the rule does not pose a real problem. I think it is unjust to force a party to pay potentially tens of thousands of dollars in penalties just for seeking their day in court. The losing party already owes costs and perhaps fees depending on the type of case. That is sufficient. The rules should not promote injustice. I also agree with the State Bar that while there are ways to potentially tweak the rule to call for "reasonable" settlement offers, that will get too complicated and unworkable. Eliminating the rule will not cause any great harm. As noted, the winning party can still seek its taxable costs, and in appropriate cases, attorneys' fees.

One of the comments said that this rule discourages frivolous cases. However there are already laws in effect to deal with such a problem, if it really exists. Both statutes and Rule 11 deal with this issue and allow the court to award fees and costs in the event frivolous cases are brought.

Access to Justice is already a problem in this country. This rule usually favors the defense--typically corporate defendants or defendants backed by insurance companies. It penalizes regular people for seeking redress in the courts. Yes, plaintiffs can use the offer of judgment rule too, but the effect on monied defendants is nothing like the financial disaster plaintiffs face.

It's time to eliminate this rule.

Peter Akmajian
Schmidt, Sethi & Akmajian
1790 East River Road
Suite #300
Tucson, AZ 85718
(520) 790-5600

Aditya Dynar - AZ Bar No. 031583
Goldwater Institute
500 E. Coronado Rd.
Phoenix, AZ 85004
(602) 462-5000
[email protected]
[email protected]

WILLIAM G. MONTGOMERY
MARICOPA COUNTY ATTORNEY
(FIRM STATE BAR NO. 0003200)

MICHAEL R. MCVEY
CHIEF DEPUTY (ACTING)
301 WEST JEFFERSON STREET, SUITE 800
PHOENIX, ARIZONA 85003
TELEPHONE: (602) 506-3800
(STATE BAR NUMBER 006926)
[email protected]

MARICOPA COUNTY ATTORNEY’S RESPONSE TO PETITION TO ABROGATE RULE 68, ARIZ. R. CIV. P.

Andrew Petersen
520-795-1900
Humphrey & Petersen, PC
3861 E. Third Street
Tucson, AZ 85716

The State Bar’s petition is flimsy. It fails to discuss the lengthy history of Arizona’s offer of judgment rule and asserts that it is biased against plaintiffs. The petition states that the State Bar studied possible amendments, but the petition does not include the study. Since 1990, a Rule 68 offer of judgment has been available to both a plaintiff and defendant. An offer of judgment is not difficult to craft, it is not difficult to apply, and there are no substantial problems with either parties or courts understanding how it operates. The sanctions have been part of the rule since 1990 and were increased in 1992. In my practice which is primarily representing civil defendants, I often see offers of judgment made by plaintiffs. The more typical scenarios are not the $1 offer or the $1 million offer set out by the State Bar. The more typical scenarios are offers based on each side’s reasonable value of the case. In those scenarios the offers have the most clout. The rewards of obtaining double taxable costs and reasonable expert fees is as available to the plaintiff as to the defendant. Moreover, a plaintiff is always entitled to costs even if it fails to do better than the defendant’s offer. The offset provides some relief to the defendant who has endured costly and unnecessary litigation.
The petition ignores the debate and discussion over the past twenty-five years as the rule has evolved. There is no reason to now abandon offers of judgment. This Court, and others, have recognized the policies underlying offers of judgment including encouraging pre-trial settlement, avoiding protracted litigation, and bringing finality. See 4501 Northpoint LP v. Maricopa County, 212 Ariz. 98, 102-03 (2006); Levy v. Alfaro, 215 Ariz. 443, 445 (App. 2007) (“Indeed, the Rule 68(d) language increasing the sanctions to include reasonable expert witness fees was proposed in response to the Arizona Supreme Court’s call for ‘consideration of further amendments to make the offer of judgment procedure an even more effective vehicle for the settlement of claims.’ Ariz. R. Civ. P. 68, 1992 State Bar Committee Notes. It is wholly consistent with this objective, and the language of the rule, to include as a sanction the entirety of the opposing party’s reasonable expert witness fees incurred after the making of the offer, not just those incurred while testifying at trial.”); Stafford v. Burns, 241 Ariz. 474, 484-85 (App. 2017) (declining to alter the plain language of Rule 68 because doing so would only increase the cost of litigation).
In the federal courts and in other jurisdictions, the debate over offer of judgment rules includes a call to enact the very differences adopted in our rule or go even further and include an attorneys’ fee-shifting provision. See, e.g., 12 Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam N. Steinman, Federal Practice and Procedure § 3007 (2d ed. 2015); Albert Yoon and Tom Baker, Offer-of-Judgment Rules and Civil Litigation: An Empirical Study of Automobile Insurance Litigation in the East, 59 Vand. L. Rev. 155 (2006).
The State Bar concludes its petition by saying that a change in litigation culture reduces the need for additional mechanisms. It does not explain what aspect of litigation culture will benefit from abrogating Rule 68. Assessing risk is what both sides do every day, and offers of judgment make litigants on both sides think long and hard about those risks.
I ask that the Court deny the petition.

Reply of the State Bar of Arizona
Lisa M. Panahi, Bar No. 023421
General Counsel, State Bar of Arizona
4201 N. 24th St., Suite 100
Phoenix, AZ 85016
602-340-7236
[email protected]