CLE Program: Reflections on the 13th Anniversary of the Intelligent Design Case, Kitzmiller v. Dover Area School District and its Legal Implications.

November 1, 2018

Speakers: Steve Harvey with Lauri Lebo and Eric Rothschild

Steve will be joined by Eric Rothschild, his co-counsel in the noted case of Kitzmiller v. Dover Area School District, and journalist Lauri Lebo, who covered the trial and later wrote a book about the experience, The Devil in Dover An Insider’s Story of Dogma v. Darwin in Small-Town America. Together, they will make a presentation entitled Wandering 40 Days in the High Profile Case Desert: What to Consider When the Media is an Interested Party. Their presentation will be part of a larger CLE to commemorate the 13th anniversary of the Kitzmiller case. Other program highlights include mock argument and discussion of the outcome of Kitzmiller and a review of the ethical issues and other considerations.

The program will take place at the Delaware State Bar Association, 405 N. King St., Suite 100, Wilmington, DE.

To register and for more information go to http://media.dsba.org/CLEReg/OfficeandTrialPractice2018

 

Supreme Court Kiboshes Kids’ Climate Claims (For Now)

 

On Friday, October 19, Chief Justice Roberts issued an administrative stay order in Juliana v. U.S., a lawsuit over climate change in federal court in Oregon against the federal government with a group of children as plaintiffs. https://www.supremecourt.gov/orders/courtorders/101918zr1_086c.pdf?fbclid=IwAR0M2xwMUaoXOWUc8yuKFnXKqvImJk50pPiu0J8gULSPVhoN9jpoI9mlF5M

The trial was scheduled to begin on October 29. The case survived motions to dismiss in the trial court, two trips to the 9th Circuit, and a prior stay request in the Supreme Court, which it unanimously denied on July 30, 2018.

The government sought the stay claiming irreparable harm from being forced to participate in a trial scheduled to last 50 days that it claims is inconsistent with Article III and the separation of powers under the Constitution and allegedly violates the law in other respects.

The trial was expected to feature numerous experts testifying about a wide range of topics, including the impacts of climate change on ocean chemistry, sea level, glaciers, terrestrial ecosystems, and human physical and mental health as well as the technical and economic feasibility of transitioning to renewable sources of energy and sequestering carbon from the atmosphere.

Effect of Stay on Trial

The stay order is temporary. It lasts until after the plaintiffs file a response on October 23 and further order of the Court. Theoretically, this means the Court is only staying the case to give itself time to decide whether to issue a longer stay of the case.

The stay order will make it very difficult if not impossible for the trial to begin on October 29 or anytime soon. This will have the practical effect of preventing the plaintiffs from commanding national news attention for a lawsuit about the science and danger of climate change. Coming just days before the November 6 election, some will claim that the five conservative justices are playing politics.

The timing of the stay is particularly hard on the plaintiffs, given that the case is over three years old. According to a plaintiffs’ press release, their 20 experts, all working pro bono, have already booked their travel to be in Oregon for trial. Plaintiffs’ experts include Nobel Laureate Joseph Stiglitz and renowned climate scientists including Dr. Kevin Trenberth, Dr. Ove Hoegh-Guldberg, and Dr. Eric Rignot.

Main Allegation and Relief Sought

The plaintiffs allege that, through the government’s affirmative actions that cause climate change, it has violated the youngest generation’s constitutional rights to life, liberty, and property, as well as failed to protect essential public trust resources. They seek declaratory and injunctive relief, including an order requiring the U.S. government “to prepare and implement an enforceable national remedial plan to phase out fossil fuel emissions and draw down excess atmospheric CO2 so as to stabilize the climate system and protect the vital resources on which Plaintiffs now and in the future will depend.”

What Happens Next

It will be noteworthy if the Court issues any order before October 29. If the Court as a whole issues an order before then denying the stay, the trial could begin on or soon after October 29. Otherwise, the parties and the trial court will have to shelve the plan for the trial until the Court rules, which could take weeks. Either way, court watchers will look first to see how the justices voted on this case, which stands as a proxy for concern about climate change.

Our Children’s Trust

The plaintiffs’ legal team is led by Our Children’s Trust, a nonprofit organization based in Eugene, Oregon. Its mission is to give young people a legal and public platform on the climate issue. https://www.ourchildrenstrust.org/

Steve Harvey

Steve Harvey is the founder and president of A Call to the Bar: Lawyers for Common Sense on Climate Change, a nonpartisan, nonprofit group of lawyers, law professors, law students, and citizens dedicated to using the law to secure the rights of all people to a healthy and sustainable planet earth.

 

Advancement versus Indemnification: One Issue Every Litigator and Business Lawyer Should Spot

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The issue is called advancement of fees and expenses, and it can make or break a lawsuit for the client, the plaintiff’s counsel, and the business lawyer who had the foresight to include it in the operative contract. Here’s why.

Indemnification for Corporate Agents

Under corporation statutes in Delaware and most other states, when a claim is brought against a corporate employee, officer, or director (“agent”) that arises of out the of agent’s status as employee, officer, or director, if the agent defends the case and wins, the corporation is obligated to reimburse the agent for all attorney’s fees and costs incurred defending the claim.

  • This includes all types of claims—e.g., breach of fiduciary duty, sexual harassment, even allegations of criminal misconduct—as long as the claim arises out of the relationship with the corporation.
  • The standard for “arises out of” is very broad. Essentially it means that but for the agent’s relationship to the corporation they would not be facing the claim.
  • The only other limits are that the agent’s fees and costs must be reasonable, which is also broad and would include the hourly rates of lawyers at a good law firm, and the agent must prevail.

Indemnification Can Be Meaningless Without Advancement

Here’s the rub. To get to the point of prevailing, the corporate agent has to pay the lawyers’ invoices out of her own pocket. That could cost easily tens or hundreds of thousands of dollars. As a result, the right to indemnification is, in many cases, meaningless, unless the agent can convince a lawyer to represent them with the promise of being paid at the end of the lawsuit, assuming the agent prevails. Not many lawyers will take that risk. This is where advancement comes in.

Permissive Advancement

The corporation statutes that provide for indemnification also provide that the corporation may pay for the legal fees and costs of claims against corporate agents as the fees and costs are incurred. This is called permissive advancement, and it enables the folks who run the corporation to pay for the defense costs of themselves and members of their team facing lawsuits, provided that the agent denies the allegations and agrees in writing that she will pay back all of the fees and costs if she loses the lawsuit.

That’s all well and good if the agent is on the good side of the people who run the corporation, but what if that is not the case, such as when it is the corporation making the claim against the agent?

Mandatory Advancement

To protect against this situation, and to incentivize qualified people to work for corporations, those same statutes permit corporations to enter into agreements requiring them to pay attorney’s fees and expenses in advance of the conclusion of the lawsuit, as they are incurred. What are the requirements for mandatory advancement?

  • The contract must contain clear language requiring advancement.
  • The claim must arise out of the agents’ status as corporate agent.
  • The agent must deny the claim.
  • The agent must agree in writing to reimburse the fees and expenses if they lose the lawsuit.

Mandatory advancement provisions are enforceable in summary enforcement proceedings that can be brought in any state or federal court with jurisdiction; they are often brought in Delaware Chancery Court and federal district courts in Delaware and New York.

Practical Importance of Mandatory Advancement

Litigation about advancement almost always arises when the corporation and the agent have become adverse. In addition to funding the defense of the litigation (and the prosecution of the advancement claim), success on an advancement claim provides a powerful incentive for the corporation to settle or drop the claim against the agent.

Practice Pointer

There is an extensive body of law on the rights of advancement and indemnification. The prudent client will consult experienced counsel considering such a provision in a contract or when facing a lawsuit involving a corporate agent with allegations of wrongdoing that arose out of their corporate statute. But the main thing for those of us who get paid to spot issues is this: when drafting or reading an indemnification clause in any corporate contract, including not just employment contracts but also purchase and sale contracts, look for the magic language requiring the corporation to advance fees and expenses as incurred. It can make all the difference if the relationship later goes sour.

Steve Harvey

The lawyers at Steve Harvey Law have extensive experience litigating advancement and indemnification issues. Check out the decision of U.S. District Judge Jed Rakoff in one of our recent cases: Ryu v. Hope Bancorp, Inc., 2018 WL 1989591 (April 26, 2018)