Oregon State Bar

Meeting of the Board of Governors

September 21-22, 2000 Portland

Mission Statement: The mission of the Oregon State Bar is to serve justice by promoting respect for the rule of law, by improving the quality of legal services, and by increasing access to justice.

Open Session Minutes

The meeting was called to order by President Rew on Thursday, September 21, 2000 at 3:30 p.m. The open session on Thursday was from 3:30 p.m. to 4:25 p.m. and on Friday from 8:20 a.m. to 4:30 p.m. (recessed to the Judicial Proceedings agenda from 4:25 p.m. to 4:35 p.m. on Thursday and 8:00 a.m. to 8:20 a.m. on Friday; and recessed to the Executive Session agenda from 4:35 p.m. to 4:50 p.m. on Friday). All members of the Board of Governors were present with the exception on Thursday of Ed Harnden from 4:20 p.m. to 4:50 p.m. and all day for David Hytowitz, Sarah Rinehart and Malcolm Scott; and on Friday Malcolm Scott, Sarah Rinehart from 8:00 a.m. to 8:40 a.m., and John Tyner from 8:00 a.m. to 10:55 a.m. Staff present, for all or portions of the meeting, were Karen Garst, Executive Director; Susan Grabe, Public Affairs Attorney; Sandy Hise, Executive Assistant; Bob Oleson, Public Affairs Director; Kay Pulju, Communications Manager; George Riemer, General Counsel; Jeff Sapiro, Disciplinary Counsel; Rich Cecchetti, OLF Administrator; and Rod Wegener, Chief Financial Officer. Present were PLF directors Tom Peachey (chair) and Mary Alice Bjork; and PLF staff Tom Cave, CFO; Barbara Fishleder, Director of Loss Prevention; and Bruce Shafer, Director of Claims. Also present in order of appearance were Ron Bryant, Bill Van Atta, Ira Zarov, Mona Buckley, Mike Phillips, Ross Shepard, Trina Laidlaw, and Bill Taylor.

1.Report of Officers

A.Report of the President

1.Meeting with Chief Justice Carson

Mr. Rew mentioned highlights of the meeting on September 6 which he attended with Ms. Garst and Mr. Oleson.

2.Appointment of a study group regarding the Oregon Supreme Court decision In Re: Gatti

Mr. Rew reported on the appointment of the following members to the DR 1-102(A)(3) Study Group: Charles Williamson, Mike Greene, Beth Bernard, Peter Chamberlain, David Hytowitz, Cynthia Ingrebretson, Peter Jarvis, William Marshall, John Potter, Peter Shepherd, James Sutherland, Brad Tellam, David Thornburgh, Robert Udziella, Steven Wax and BOG public members Bruce Anderson and Mary Burrows.

The charge of the committee is to consider whether and, if so, how DR 1-102(A)(3) should be amended to permit lawyers to authorize and supervise undercover investigations, and report to the board as soon as practicable. Sylvia Stevens will be staff liaison. The first meeting is schedule on October 3.

3.BOG hosts at Awards Luncheon

Mr. Rew reviewed the board's role to host award recipients at the Annual Awards Luncheon on September 22, 2000.

    1. New admittee swearing-in October 4

Mr. Rew encouraged board members to attend the new admittee swearing in October 4, 1:30 p.m., at Willamette Law School's Smith Auditorium.

5.Report on Commission on Professionalism meeting - September 6

Mr. Rew attended the September 6 meeting of the Commission on Professionalism and reported they have resumed their activities and are planning a CLE in conjunction with the PLF 'Learning the Ropes' program,

B.Report of the President-Elect

1.New BOG orientations October 13 and November 10

Mr. Harnden reviewed plans for the new BOG orientations and indicated that the new PLF directors would be invited to participate. Mr. Peachey indicated that a date for the PLF orientation for new directors and new BOG will be scheduled soon.

2.2000 BOG committee/liaison appointment process and assignment of mentors

Mr. Harnden reviewed the upcoming process to appoint governors as members and chairs of BOG committees and as contacts to OSB groups. The preference forms will be sent out to the 2001-2002 BOG members next week. The BOG Appointments Committee, composed of the board's 'upper class' members, will meet on October 27 to review preferences and to recommend assignments.

3.November BOG retreat

Mr. Harnden discussed retreat plans developed with Ms. Garst to concentrate on finalizing the strategic planning matrix as a tool to prioritize bar services and programs for 2001. Ms. Garst indicated that the board's annual dinner to honor outgoing and welcome incoming BOG members will be held at the retreat.

4.Mr. Harnden reported that he attended one day of the Washington State Bar Association annual convention in Spokane. The WSBA's Access to Justice Conference had a large turnout due to combining the bar's leadership conference and the judicial conference into a single forum. He suggested that a similar format at the OSB convention may also facilitate a bigger turnout. Mr. Harnden will make the agenda and materials available to staff and the board upon request.

C.Report of the Executive Director

1.Staffing changes in CLE Programs Department

Ms. Garst reported on staff changes in the CLE Programs Department with the departure of Keir Karson, CLE Programs Manager, and Jennifer Roumell, CLE Programs Attorney. She praised the efforts of Mr. Riemer to assume management oversight of CLE Programs in the interim. It is anticipated that the program attorney position will be filled next week and the manager's position by November 1.

2.Report on legislative initiative to secure funds for Access to Justice

Ms. Garst reported on the formation of a group to secure access to justice funds. Those involved include the Chief Justice, the Attorney General, Chip Lazenby from the Governor's Office, Eric Lindauer, legislators Lane Shetterley and Ron Patridge, Ira Zarov, Charlie Williamson, Linda Clingan and Ms. Garst. Development of legislative solutions and other strategies are being considered. Two issues being explored are the instigation of a pro hac vice application fee and a portion of the criminal fees and assessments account.

3.Request for nominations for Legal Citizen of the Year

Ms. Garst asked the board to consider recommending to the Classroom Law Project candidates for its Legal Citizen of the Year award.

4.Multnomah Bar Association meeting assignments

Ms. Garst asked board members from Region 5 to sign up to attend MBA meetings during the year.

5.Retirement notice by Sandy Hise

Ms. Garst reported that Ms. Hise will retire from the OSB, effective December 31, 2000, after nearly ten years in support of the Executive Director and the Board of Governors. The board expressed its thanks for Ms. Hise's many years of service.

2.Swearing-In of New BOG Member

Mr. Rew swore in new board member James M. Brown, Region 6, to fill the vacancy created by the resignation of Mitzi Naucler. Mr. Brown was congratulated with hearty applause.

3.Rules and Ethics Opinions

A.State Professional Responsibility Board (SPRB)

1.Proposed amendment to BR 3.3(a) regarding reporting criminal conduct

Mr. Sapiro presented the recommendation of the SPRB to amend Bar Rule 3.3(a) to more narrowly define those occasions when the SPRB is required to report to a district attorney's office possible criminal conduct engaged in by a lawyer. The revisions presented on agenda exhibit page 16 leaves mandated reporting requirements for top priority matters. A discussion about possible wording changes ensued with no change to the proposed amendment.

Action:Ms. Burrows moved, Mr. Tyner seconded, to adopt the proposed amendments to BR 3.3(a) - Allegations of Criminal Conduct Involving Attorneys, subject to the review and approval of the amendments by the Disciplinary Rules and Procedures Committee. The motion was approved by the board (13-0-3; absent Hytowitz, Rinehart, Scott).

B.Request from Attorney General to reconsider Oregon State Supreme Court decision In Re: Gatti

Mr. Sapiro reviewed the Gatti matter and discussed the attached update from the SPRB's meeting on September 15, 2000 which indicated the SPRB had decided to not seek reconsideration by the Supreme Court. Discussion ensued about the difficulty of formulating a disciplinary rule in the area of undercover investigations and that the ABA ethics committee has discussed this issue at length without resolution. Concern was expressed about a public maelstrom when it realizes that the government is asking to make it ethical for government attorneys to lie in certain situations.

EXHIBIT, p. 1-3

4.OSB Committees, Sections, Councils, Divisions and Task Forces

A.Client Security Fund (CSF) Committee

1.Request to reconsider denial of CSF Claims:

Alice Bartelt, Client Security Fund Secretary, was present with Sylvia Stevens to discuss the following requests to reconsider denial of claims by the Client Security Fund Committee.

a.No. 99-49 Morrow v. Anunsen

Ms. Stevens reviewed the request of Robert K. Morrow, Inc., Trustee in Bankruptcy for Hans Hoeck, for the board to review CSF Committee denial of this claim. Discussion included the following: (1) It appears the bankruptcy trustee expects the bar do its work to get a judgment. (2) Should the Anunsen claims be sent to the DA's Office? (3) Underlying purpose of the fund is to help the public where no recourse exists. None of this money will go to the public.

Ms. Stevens pointed out that the CSF Committee believes a bankruptcy may be an eligible claimant under CSF Rule 2.1. She also pointed out that no disciplinary complaint was filed in connection with most of the Anunsen claims before Mr. Anunsen resigned. Most clients did not know about his dishonesty until it was too late.

Action:Mr. Hytowitz moved, Mr. Baldwin seconded, to deny CSF Claim No. 99-49 Morrow v. Anunsen. The motion was approved by the board (9-4-3; no Burrows, Brown, Lopez, Williamson; absent Rinehart, Scott, Tyner).

Action:Mr. Williamson moved, Mr. Orf seconded, to consider in the future CSF Claim No. 99-49 Morrow v. Anunsen, if Mr. Morrow succeeds in obtaining a judgment. The motion was approved by the board (9-4-3; no Baldwin, Cohen, Hytowitz, Sowle; absent Rinehart, Scott, Tyner).

b.No. 00-01 Hansen v. Anunsen

Ms. Stevens reviewed the request of the claimant that the board review CSF Committee denial of this claim. The client is asking the BOG to approve the claim without a judgment. Ms. Stevens discussed the possibility of changing the CSF claims form to ask whether there is a hardship that has prevented the claimant from pursuing judgment. The board discussed the following: (1) Consider instructing the claimant to pursue the matter in either small claims court or through a collection agency. (2) Discontinue informing claimants of the CSF Committee's recommendation prior to the BOG taking action on a matter. (3) Think about the claimant's situation. Is the bar saying 'tough luck', go to small claims court?

Action:Mr. Williamson moved, Mr. Baldwin seconded, to approve CSF Claim No. 00-01 Hansen v. Anunsen. The motion was approved by the board (13-0-3; absent Rinehart, Scott, Tyner).

c.No. 00-02 - Havercroft v. Anunsen

Ms. Stevens reviewed the request of the claimant that the board review CSF Committee denial of this claim.

Action:Mr. Baldwin moved, Mr. Williamson seconded, to approve CSF Claim No. 00-02 - Havercroft v. Anunsen. The motion was approved by the board (14-0-2; absent Scott, Tyner).

Mr. Hytowitz proposed a motion to ask the DA to prosecute the Anunsen matters. The board took subsequent action to send this claim to the District Attorney.

d.No. 00-16 Moser v. Anunsen

Ms. Stevens reviewed the request of the claimant that the board review CSF Committee denial of this claim.

Action:Mr. Baldwin moved, Mr. Hytowitz seconded, to approve CSF Claim No. 00-16 Moser v. Anunsen. The motion was approved by the board (14-0-2; absent Scott, Tyner).

e.No. 00-17 Vickers v. Miller

Ms. Stevens presented the request of the claimant that the board review CSF Committee denial of this claim on the basis there was no judgment and evidence that Miller performed significant services on serious criminal charges. Discussion ensued about how this matter differed from the Anunsen claims and the process required of the claimant to get a judgment.

Action:Mr. Williamson moved, Mr. Orf seconded, to deny CSF Claim No. 00-17 Vickers v. Miller. The motion was approved by the board (11-3-2; no Baldwin, Burrows, Lopez; absent Scott, Tyner).

2.CSF Claim No. 99-59 - Reese v. Miller

Ms. Stevens reviewed the request of the claimant that the board review CSF Committee denial of this claim.

Action:Mr. Baldwin moved, Mr. Lopez seconded, to approve CSF Claim No. 99-59 - Reese v. Miller in the amount of $4,800. The motion failed (5-9-2; yes Anderson, Baldwin, Burrows, Cohen, Lopez; absent Scott, Tyner).

Action:Mr. Willianson moved, Mr. Hytowitz seconded, to reaffirm denial of CSF Claim No. 99-59 - Reese v. Miller. The motion was approved by the board (13-1-2; no Lopez; absent Scott, Tyner).

A lengthy discussion ensued about avenues of resolution for the Anunsen claims and the upcoming press release the board decided to inform the Marion County DA of the Anunsen claims.

Action:Mr. Baldwin moved, Mr. Williamson seconded, to refer to the CSF Committee to study whether it should refer certain claims to the district attorney and whether claimants should be required to cooperate with the district attorney. The motion was approved by the board (9-5-2; no Burrows, Cohen, Lopez, Rinehart, Sowle; absent Scott, Tyner).

3.CSF Claim No. 99-28 - Simmons v. Gloyn

Ms. Stevens reviewed the recommendation of the CSF Committee that this claim be paid as shown in the attached exhibit (distributed as a handout).

Action:Mr. Baldwin moved, Mr. Williamson seconded, to approve CSF Claim No. 99-28 - Simmons v. Gloyn. The motion was approved by the board (14-0-2; absent Scott, Tyner).

EXHIBIT, p. 4-7

B.MCLE Committee

1.Proposed amendments to MCLE rules and regulations

Ms. Stevens presented the recommendation of the MCLE Committee to amend the MCLE Rules and Regulations as presented on agenda exhibit pages 76-94. Some of the revisions are grammatical and the more detailed ones were reviewed individually by Ms. Stevens and discussed by the board. The BOG is authorized to approve MCLE regulations and refer MCLE rules to the Supreme Court for its approval.

MCLE Regulation 3.400, Practical Skills Requirement, was discussed at length. Barbara Fishleder suggested wording to retain education about the negative aspects of substance abuse as a practical skill and to consider practice management as a separate item. Ms. Stevens discussed the difficulty of tracking and managing these separate items for MCLE credit.

Action:Mr. Hytowitz moved, Mr. Williamson seconded, to adopt and recommend to the Supreme Court the amendments to the attached MCLE Rules and Regulations proposed by the MCLE Committee with the change suggested by Ms. Fishleder. The motion was approved by the board (14-0-2; absent Scott, Tyner).

EXHIBIT, p. 251.2-251.21

2.Future of MCLE Committee

Ms. Stevens discussed the recommendation to continue the MCLE Committee indefinitely. She felt that the advisory committee adds value to the MCLE process to review rules, the process and keep up with MCLE nationwide. It also relieves the BOG from involvement in minutiae. Ms. Garst discussed the history of the prior MCLE Board and the expense involved. The MCLE Committee is on a par with other advisory committee's which preclude a budget. A discussion ensued about the value of retaining the committee.

Action:Mr. Williamson moved, Ms. Rinehart seconded, to refer to the Policy & Governance Committee the question whether to continue the MCLE Committee and to include the MCLE Committee in this process. The motion was approved by the board (14-0-2; absent Scott, Tyner).

3.Report on compliance/audit process changes

Ms. Stevens reported on plans to streamline the MCLE program. Proposed improvements being considered will shift the timing of the work cycle, reduce steps to process compliance reports, and require spot audits in designated situations. Ms. Garst commended Ms. Stevens as MCLE Administrator for major improvements in the MCLE process over the past year.

5.BOG Committees, Special Committees, Task Forces and Study Groups

A.Policy & Governance Committee

1.Consider donation requests from sections

Mr. Baldwin reviewed the committee's recommendation to approve requests from the Government Law and Securities Regulations Sections as outlined in the following motion.

Action:The Policy & Governance Committee moved to approve the donation of: (1) $350 by the Government Law Section to the Classroom Law Project to fund a scholarship; and (2) $500 by the Securities Regulation Section to the law student earning the highest grade on the final exam in the Securities Class at each of the three Oregon Law Schools. The motion was approved by the board (14-0-2; absent Scott, Tyner).

2.PLF/BOG liaisons conflicts issue

Mr. Baldwin presented the consensus of the Policy & Governance Committee to ensure a wall exists to prevent BOG PLF liaisons from being privy to factual PLF claims information. He and Mr. Peachey indicated satisfaction with the substitute BOG Policy 14.201(B) as shown on agenda exhibit page 102.

Mr. Williamson felt it was too limiting to prevent BOG PLF liaisons from ever sitting in on such claims discussions, and that this made the liaisons useless. Ms. Rinehart indicated that, as a BOG PLF liaison, it's unfair to ask the liaison to make this distinction and that this clarity is critical. Mr. Rew and Mr. Peachey commented on confidentiality complications related not only to board members but to their firms and how it might limit the pool of available BOG members. Mr. Davis addressed the issue of delegating trust to the PLF, to the radar committee, and to the liaisons to detect problems should they arise. He felt it was hard to believe that a secret claims strategy could exist in that environment. Ms. Garst expressed her high comfort level with Mr. Peachey's memorandum on exhibit pages 104-108 and for the need to delegate and trust. Mr. Riemer discussed the components of the proposal.

Action:Mr. Baldwin moved, Ms. Rinehart seconded, to waive the one meeting notice in order to take action on BOG Policy 14.201(B). The motion was approved by the board (15-0-1; absent Scott).

Action:The Policy & Governance Committee moved to approve the attached BOG Policy 14.201(B). The motion was approved by the board (13-2-1; no Hytowitz, Williamson; absent Scott).

EXHIBIT, p. 8

3.Proposal to repeal requirement that an election be held with only one candidate

Mr. Baldwin presented proposed changes to ORS 9.040 and 9.152 to remove the requirement that an election be held when a contest does not exist. If approved, a resolution would need to be added to the HOD agenda to approve this and related legislative changes, for introduction at the 2001 legislative session.

Action:The Policy & Governance Committee moved to approve changes to ORS 9.040 and 9.152 to remove the requirement that an election be held when a contest does not exist and to add this change as an amendment to the 2000 HOD Agenda as BOG Resolution 9. The motion was subsequently withdrawn.

A discussion about asking the HOD for special consideration to add this items to the agenda ensued. Concern was expressed about the BOG setting a precedent to add an item that has not been reviewed in advance by the members of the bar. There was consensus to wait until next year to present this change to the HOD.

4.Proposed MCLE Rule for diversity training

Mr. Baldwin presented the Policy & Governance Committee's recommendation to amend MCLE Rule 3.3 to expand the scope of the ethics requirement to encompass a broader concept of Professional Responsibility. The discussion focused on the recommendation to require mandatory diversity CLE training within the ethics requirement. It was felt this will facilitate a greater awareness by the attorney of his or her role in society. Input from the Legal Ethics Committee and the CLE Committee influenced the change from six to nine ethics credit hours.

Mr. Baldwin explained the Policy & Governance Committee also considered recommendations from Barbara Fishleder to revise MCLE Rule 3.3(a) to include the following, ' . . gender fairness, disability issues, personal and practice management and access to justice.' He also corrected the reference to the member's general credit requirement to 33 36 instead of the current 36 39 as shown on agenda exhibit pages 113 and 114. Ms. Fishleder suggested the language be further revised to reflect, '. . personal management, and practice management.'

Action:The Policy & Governance Committee moved to approve the attached amendments to MCLE Rule 3.3 to include the change to MCLE 3.3(a) from six to nine ethics credit hours and the language changes in the preceding paragraph.

The discussion included the following: (1) This will not be well received by the membership and will further complicate filling out MCLE reports. (2) The proposed amendments on top of the child abuse reporting make the process more cumbersome. (3) Remove diversity training from the core ethics requirement and make it part of general credit courses. (4) The addition of the personal management and practice management language will create an inconsistency in the rules where it states you cannot use ethics credits as a practical skill. (5) This isn't something one can learn in a class and it should not be added as a requirement. We are not agents for social change (6) These are similar comments to those heard when one conducts sexual harassment training or diversity training for employers and the only way to be protected is to provide this information and hope some social change will occur for individuals unfamiliar with the law. (7) Nine hours is not onerous and the proposed changes to the amendments conflict with task force reports related to these matters. (8) Excluding personal management and practical management as practical skills is inconsistent because racial, ethnic and gender training are practical skills too. (9) The Legal Ethics Committee and MCLE Committee feel very strongly about not reducing the ethics credit requirement. (10) It's important that lawyers have time to learn about their areas of practice without adding new CLE requirements for other specialty areas. (11) It's critical to have lawyers be aware and cognizant of what a self-deprecating human condition racism is. People harbor racial feelings and often delude themselves into denying it. These programs are important to help people become aware of their feelings of racism and work through how it limits them personally and the people who are targets of racism.

Action:Mr. Williamson moved, Mr. Hytowitz seconded, to amend the main motion for MCLE Rule 3.3(a) to include the change from nine to six ethics credit hours and delete the last two sentences, and eliminate the addition of personal management and practice management. The motion failed (4-10-2; yes Brown, Hytowitz, Rinehart, Williamson; absent Scott, Tyner).

Action:The main motion was approved by the board (10-4-2; no Brown, Hytowitz, Rinehart, Williamson; absent Scott, Tyner).

EXHIBIT, p. 9

B.Public Affairs Committee

1.Update on legislative activities and current issues

Mr. Harnden's update included the 2001-2003 preliminary budget issues for the Department of Justice, Ballot Measure 93 (Initiative Measure 47). He also noted Ballot Measure 98 involving voter approval of fees and its uncertain effects on the bar. On October 26 the Indigent Defense Task will discuss its findings with the Public Defense Services Commission. He also reported on the New Lawyer Division's mentor project that pairs up about 15 young lawyers interested in the legislative process with legislators and others.

Mr. Oleson discussed plans for the legislative workshop get bar leaders, committees, sections, etc., up to speed for the 2001 Legislative Session.

Mona Buckley, MBA Executive Director, provided a quick report about the crisis regarding lack of court house space. Mr. Harnden thanked Ms. Buckley for her hard work with the Multnomah Bar Association.

2.Possible bar priorities for 2001 legislature regarding justice system needs

Mr. Harnden reported on committee discussion which tentatively identified bar priorities for the 2001 legislative session. In addition to maintaining current service levels for the judicial branch, there was general agreement that civil and criminal access come first. Also involvement was anticipated with the forthcoming 'Gleaves Committee' report on system needs involving judgeships and related matters.

3.Ballot Measure 93 - Voter Approval of Fee Increases

This matter was not presented.

C.Access to Justice Committee

1.Status of Legal Needs Assessment

Mr. Harnden reported that the Legal Needs Assessment Report will be available within the next ten days. It will be shared at the October 18 open houses for Legal Aid Offices.

D.BOG/PLF Joint Facilities Study Group

1.Proposed resolution for OSB/PLF office space

Mr. Davis reviewed the BOG/PLF Joint Facilities Study Group's efforts to seek more office space for the OSB and PLF staff that were put on hold until the PLF governance issues were resolved. The interest has been for both groups to remain together physically, but it is not possible presently. Other options studied included constructing a new building in the same area or leasing office space. The prospect of selling the concept of a new $16 million office building to members was not an appealing one. In order to keep both organizations in close proximity it is proposed to move the PLF into leased space in the new office building immediately west of the OSB Center. The use of creative signage will direct traffic entering the parking lot. The study group requests authorization to negotiate for 8,000 to 10,000 square feet of office space when it becomes available in three or four months to house the PLF staff.

Further consideration included the loss of $140,000 to $150,000 from the PLF as annual rent, the necessity of passage of the dues increase, and available options should the dues resolution failed at the House of Delegates. Cost justification of building versus leasing over the long-term was also discussed. Mr. Williamson proposed that members should be polled immediately about building a new building as a more cost effective solution. Mr. Harnden felt that no amount of convincing would work in the short term. Mr. Davis explained the study group had considered these factors and concluded that a minimum of three to five years would be needed to educate the members about the growing need for more office space and the required investment. The $1.2 million bar office mortgage will also be paid off in 2005. Mr. Davis indicated that a viable solution exists, but it will not be cost free, and it needs to happen soon. Mr. Peachey indicated that the PLF is paying subsidized rent at this time that is being supported by all bar members. Other pros and cons were discussed at length.

Action:Mr. Davis moved, Mr. Harnden seconded, to authorize the PLF to negotiate a ten-year lease for new office space in the new office building adjacent to the west of the OSB Center. The motion was approved by the board (12-3-1; no Brown, Hytowitz, Williamson; absent Scott).

E.Budget & Finance Committee

1.Classroom Law Project request for funds for a grant writer

Ms. Garst presented a request for a one-time appropriation of $10,000 to the Classroom Law Project for the purposes of securing assistance in grant writing.

Action:Ms. Burrows moved, Mr. Harnden seconded, to approve a one-time appropriation of $10,000 from 2000 contingency funds to the Classroom Law Project for the purposes of securing assistance in grant writing. The motion was approved by the board (15-0-1; absent Scott).

6.Professional Liability Fund

A.Introduction of new PLF CEO, Ira Zarov

Mr. Peachey introduced Ira Zarov who will become the new Professional Liability Fund CEO, effective November 1, 2000. Mr. Zarov commented on his awareness of the work that has been accomplished by the PLF and the BOG. He looked forward to new opportunities to work with lawyers and with the public. Ms. Garst commented on Mr. Zarov as a person of great integrity and that his skills in the legislature will serve the bar well.

Mr. Peachey indicated that Mr. Zarov will accompany Kirk Hall to the reinsurance meeting with Lloyds of London in October.

B.PLF assessment for 2001

Mr. Peachey discussed the PLF assessment for 2001. The PLF Board recommended it remain at $1,800 (which is unchanged from 1999). Mr. Cave discussed financial information attached to the agenda and the risk analysis that determined PLF retained earnings are in good shape to maintain the status quo for next year.

Action:Mr. Tyner moved, Mr. Harnden seconded, to approve the PLF assessment for 2001 in the amount of $1,800. The motion was approved by the board (15-0-1; absent Scott).

C.Proposed amendment to PLF Bylaw 3.5 Selection of Board of Directors

Mr. Peachey presented the amendment to PLF Bylaw 3.5 that states the PLF Board of Directors shall forward to the Board of Governors a list of recommended director nominees equal to or greater than the number of positions on the PLF Board by August 31.

Action:Mr. Tyner moved, Mr. Harnden seconded, to amend PLF Bylaw 3.5 - Selection of Board of Directors. The motion was approved by the board (15-0-1; absent Scott).

Ms. Garst commented on the exhibit which referred to the proposed annual joint meeting of the BOD and BOG in November that will be scheduled later in the year. The November BOG retreat is set aside as the annual planning session for the board to set priorities for the bar in the year ahead.

D.Proposed new PLF Policy 4.275 Disclosure of PLF Involvement

Mr. Peachey reviewed PLF Policy 4.275 that states the PLF's strong preference to fully and voluntarily disclose its involvement in matters to courts and opposing counsel or parties unless legal, ethical, or professional constraints dictate otherwise. Mr. Baldwin felt the policy could be revised to more directly assert the 'full and voluntary disclosure' wording. After considerable discussion, Mr. Peachey explained the wording was developed with sensitivity to liabilities that may be created.

Ms. Cohen felt this was an instance where more specific examples are needed to illustrate circumstances or the extent of limitations. Mr. Davis explained he didn't understand the qualifier and that a fundamental problem exists to facilitate public understanding and reduce mistrust of lawyers. Mr. Tyner described the quandary to provide useful examples in view of many variations in the law and complicated cases. Ms. Rinehart said she sat with the Claims Committee when it developed the language and favored the 'strong preference' language. Other suggestions and ways to address revisions to PLF Policy 4.275 were discussed.

Action:Mr. Williamson moved, Ms. Burrows seconded, to adopt PLF Policy 4.275 - Disclosure of PLF Involvement as shown on agenda exhibit page 189.

Action:Mr. Anderson moved, Mr. Davis seconded, to postpone the main motion for further study. The motion was approved by the board (8-7-1; no Brown, Harnden, Hytowitz, Lopez, Orf, Rew, Rinehart; absent Scott).

E.Appointment of one attorney member and one public member to the PLF Board of Directors

Ms. Sowle reviewed the selection process for new PLF Board members. The Appointments Committee recommended new attorney member Stephen M. Bloom (Pendleton) and new public member Ronald Palmer (Cottage Grove). She explained that Mr. Bloom's appointment is contingent on determining whether a conflict exists with his work as a part-time U.S. magistrate. Should that conflict exist, Joe Robertson was recommended to be appointed in place of Mr. Bloom.

Action:The Appointments Committee moved to appoint the following new directors to the PLF Board: Stephen M. Bloom (attorney member) and Ronald Palmer (public member). Mr. Bloom will be replaced with Joe Robertson should a conflict exists with Mr. Bloom's part-time U.S. magistrate position. The motion was approved by the board (15-0-1; absent Scott).

F.PLF Claims Department follow up on PLF Policies & Procedures Task Force Report

Mr. Shafer discussed his follow-up report to the June 30, 2000 joint BOG/BOD meeting as shown on agenda exhibit pages 218-267. He addressed changes implemented by the PLF, resulting from the PLF Policies & Procedures Task Force Report, that were presented at the August 25, 2000 PLF board meeting.

Ms. Rinehart provided the attached handout of subsequent changes to the PLF Claims Handling Procedure Manual, II.C.1, Settlement Authority to sub-section f.(1), (2) and (3) (replaces sub-section text shown on agenda exhibit pages 246-247). The Claims Committee went over items in the manual point by point.

EXHIBIT, p. 10

G.Modification of BOG/PLF Governance & Structure Task Force Report

Mr. Harnden presented revisions to the Report of the joint OSB/PLF Governance Task Force adopted on June 30, 2000. The change addresses the role of the PLF Chair to provide input during the executive director performance evaluation process as an ex-officio member.

Action:Mr. Harnden moved, Mr. Davis seconded, to approve revisions to the joint OSB/PLF Governance Task Force Report as shown on agenda exhibit page 268. The motion was approved by the board (13-0-3; absent Hytowitz, Scott, Tyner).

7.Appearances/Special Issues

A.Joint meeting with Oregon Law Foundation

OLF Chair Judy Shipler Henry presented an update about the Oregon Law Foundation's activities and financial picture. Highlights included: (1) IOLTA rulings from the IRS in Indiana and the status of the U.S. Supreme Court decision in the Phillips v. Washington Legal Foundation case. (2) In 2000 the OLF grant funds were $1,117,500, down 3 percent from 1999 due to a drop in interest income. Interest in the past quarter improved by 7 percent. (3) Key Bank dropped interest rates from 2.2 percent to 1.09 percent which translates to an estimated loss of $100,000. A discussion about various strategies to restore rates ensued. (4) Since 1994, the endowment fund has increased from $150,000 to $529,000 with a focus to continue this trend to provide consistent funding of legal services. She thanked the BOG for authorizing the bar dues check off that has bolstered the endowment fund by $40,000 a year. (5) Plans for a joint planned giving venture with the Campaign for Equal Justice and the bar to be kicked off January, 2001. (6) Communications strategy with bar staff to increase OLF's visibility in the business community. (7) An award to be presented to U.S. Bank for being the major contributor to IOLTA.

A question and answer period ensued. Mr. Rew mentioned the 2.2 percent interest rate for his firm's trust accounts at Columbia River Bank. Ways to give thanks to the banks and to simplify account management for the banks was discussed by Ms. Henry. Ms. Garst indicated she would have OLF Administrator Rich Cecchetti contact Mr. Rew in order to follow up with Columbia River Bank. Ms. Henry was thanked for her appearance before the board.

B.House of Delegates

1.Review results of HOD regional meetings

Mr. Rew reported on good participation at the HOD regional meetings in August that permitted delegates in each region to discuss and debate resolutions on the 2000 HOD agenda.

2.Review of board responsibility for the HOD meeting

A general discussion about parliamentary procedure and BOG responses to questions from the floor was held.

3.Consider positions on HOD resolutions

a.Request to support Delegate Resolutions 1 and 2 regarding proposed election to HOD of chief delegate and regional delegates and proposed future of HOD role concerning the operation of the PLF's

Mike Phillips requested BOG support of Delegate Resolution 1 for the election of a HOD chief delegate and regional delegates. For the most part he felt that HOD was working satisfactorily and would be enhanced with the leadership of these delegates. He also felt the current system was not facilitating communications with members to address matters such as the recent PLF issues. Mr. Phillips felt adoption of Delegate Resolution 1 would not reduce the authority of the BOG and that the HOD would function more effectively.

Mr. Shepard commented that he did not intend to run for chief delegate as he had stated in 1999 and asked the BOG to not create unnecessary opposition to the resolution. Ms. Laidlaw described one benefit of having chief regional delegates would be to encourage more members to run for the HOD, to have more responsibility within each region, and to have articles presented in bar publications.

Board feedback included the following: (1) Startup problems with the HOD over the past five years have included more focus on procedural rules than the issues before the bar. (2) The HOD was intended to replace the town hall structure and provide a forum to represent the members, not to replace the BOG. (3) Mr. Rew is the HOD chief delegate and the other BOG members are regional chief delegates. To add another layer of leadership would be cumbersome, increase costs for governance, duplicate work for the staff, and create an adversarial relationship between the BOG and the HOD. (4) Members interested in being a chief delegate should run for a position on the Board of Governors. (5) Two rounds of regional meetings this year were well attended and provided opportunities for the delegates to communicate. (6) In 1999 the BOG supported the chief delegate resolution and it didn't pass the house. The BOG is irrelevant to this effort. Take it to the house for debate. If it is approved, the board will embrace it.

Ms. Laidlaw presented Delegate Resolution 2 and asked the board to support it. She felt the HOD should serve as a forum and voice of the members before any changes are implemented and that joint BOG/HOD agreement would enhance the effectiveness of such decisions. The resolution would facilitate the right of the HOD to focus on fundamental operational changes. The BOG's authority would not be changed to appoint and remove PLF directors or to make executive personnel decisions.

The board asked questions about the definition of fundamental change, authority to call a meeting, problems with privileged information that cannot be shared, the critical timing related to decisions and money matters, the learning curve to get up to speed on complicated issues in an emergency situation, and what budget projections are available for the proposed resolution.

Mr. Rew explained that doing a 30-day notice to more than 200 delegates would not have worked to handle the complexity and timing of the PLF matters resolved by the BOG and the BOD. What would happen if the meeting lacked a quorum? Mr. Williamson noted that the PLF had no statutory basis independent of the OSB. If the PLF gets sued it could result in the assets of the bar being attached, including the OSB Center building. The proposed resolution would substantially weaken the bar's governance process. Mr. Lopez reviewed the constructive steps taken by the BOG/BOD to resolve PLF issues and suggested that Mr. Zarov be given time to do his job before considering these policy changes. Mr. Peachey expressed satisfaction that the BOG and BOD will continue to be able to handle future matters without escalating decisions to the HOD level.

The board thanked Mr. Phillips, Mr. Ross and Ms. Laidlaw for appearing before the board to discuss the resolutions. No action was taken on Delegate Resolution 1 or Delegate Resolution 2.

b.Proposed revision to BOG Resolution 5 - Proposed study of Multidisciplinary Practice (MDP) issue

Mr. Riemer reviewed the proposed revision to BOG Resolution 5. There was consensus that it addressed the suggested improvements from various delegates and to substitute it for the original version on the 2000 HOD agenda.

Action:Mr. Harnden moved, Mr. Sowle seconded, to approve the replacement resolution (shown on agenda exhibit page 273-275)for BOG Resolution 5, Multidisciplinary Practice to be formally presented at the 2000 HOD Meeting. The motion was approved by the board (15-0-1; absent Scott).

c.Promulgation of proposed DR 5-103(B) pursuant to ORS 9.490(1)

Mr. Riemer recommended the approval of Delegate Resolution No. 3 (HOD Agenda Item 18) for purposes of compliance with ORS 9.490(1) to ensure it was properly before the HOD.

Action:Ms. Cohen moved, Ms. Sowle seconded, to approve Delegate Resolution No. 3 (HOD Agenda Item 18) for purposes of compliance with ORS 9.490(1). The motion was approved by the board (15-0-1; absent Scott).

d.Proposed revision to Delegate Resolution 4 - Supports Measure 4

Bill Taylor discussed substitute wording for Delegate Resolution 4 as shown on agenda exhibit pages 279-282. He reviewed the history of various measures leading up to Ballot Measure 94 and presented corrections budget information. Mr. Taylor felt his substitute resolution promoted more moderate changes in existing sentencing laws than would be achieved by voter approval of Ballot Measure 94 in the upcoming election. He felt his approach would allow the state to achieve more cost-effective results with large groups of offenders. The substitute resolution will require the bar to sponsor neutral public forums on the issues to bring people together for education and debate.

A discussion of the pros and cons of the resolution included concerns about public perception that the bar is supporting Measure 94. Questions about Keller compliance were raised. No action was taken on the proposed substitute to Delegate Resolution 4.

8.Consent Agenda

Action:Mr. Hytowitz moved, Mr. Tyner seconded, to approve the following consent items. The motion was approved by the board (15-0-1; absent Scott).

A.Reading and approval of meeting minutes for June 2-3, 2000, July 21-22, 2000 and August 15, 2000 (including attached revisions)

EXHIBIT, p. 11

B.Appointments Committee

1.Appointment to Oregon Law Commission

2.Appointment to Clackamas/Linn/Marion County LPRC

3.Appointment to Jackson/Josephine County LPRC

4.Appointment to Lane County LPRC

EXHIBIT, p. 12

C.Client Security Fund Committee

1.CSF Claim No. 99-50 Corno v. Anunsen

2.CSF Claim No. 99-54 Curtis v. Anunsen

3.CSF Claim No. 00-06 Rasmussen v.McNamara

4.CSF Claim No. 00-18 Holt v. Miller

5.CSF Claim No. 99-36 Stewart v. Gloyn

D.Policy & Governance Committee

1.Web advertising policy

2.OSB Bylaw 6.7 - CLE Diversity Policy

9.Default Agenda

A.Report of the President

1.Child Abuse Reporting CLE

a.Consumer Law Section Executive Committee letter

b.Letter from Joyce Cohen

c.Reply to Joyce Cohen from Julia Follansbee and Fred Isaacs

B.Report of the Executive Director

1.Operations Report

2.Research results on Annual Meeting attendance per years of service

C.House of Delegates

1.Out-of-State HOD delegates activities and regional meeting plans

D.Client Security Fund Committee

1.CSF Claims Report

10.Good of the Order (Non-action comments, information and notice of need for possible future board action)

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