Minnesota

State Bar

Association

Assembly

Call to Order

The meeting was called to order at 12:30 p.m. on Thursday, April 30, 2009, at the Minnesota CLE Center in Minneapolis. President Michael Ford presided, with Secretary Aaron Biber recording. The Roll Call is attached.

I.  Award Presentations

The session opened with presentation of two of Bar's most prestigious awards honoring pro bono service:

David Graven Public Service Award was presented to James L. Baillie of Fredrikson & Byron, Minneapolis.

Bernard P. Becker Awards were presented to the following individuals:

• Attorney Award: Karla Kruger, St. Cloud Area Legal Services
• Staff Award: Sue Harvey, Legal Services of Northwest Minnesota
• Law Student Award: Sara McBroom, William Mitchell College of Law

II.  President’s Report

President Ford noted that the MSBA may examine its meeting standards in the wake of the current news regarding swine flu, with the possibility of conducting meetings via teleconference or other electronic means. He then recognized two MSBA staff members to address the Assembly.

Executive Director Tim Groshens provided a report on the current and potential impact of the economy on membership recruitment, retention, and billing. Despite the downturn in the economy, he noted that the Bar was having one of its best recruitment years in recent history, and expressed optimism that the MSBA would continue to build on that trend. He indicated that Bar leaders would be provided with regular updates throughout the June 1-October 31, 2009 billing period, and would work with the Operations Committee if necessary to revise expenses. Throughout this period, the MSBA will examine steps by comparable state bars and membership organizations, and would continue its multi-pronged campaign to attract and retain members.

Marketing Director Margaret Dean then discussed aspects of this campaign. She displayed materials related to the current "We Are the Bar" marketing drive stressing themes of diverse and essential services available throughout the state. The campaign utilizes statements from current MSBA members. She encouraged all Assembly members to emphasize the value of MSBA membership in their contacts with both members and nonmembers.

President Ford then presented several items of interest to Assembly members. He characterized the MSBA as an organization that coordinated the collective talents and actions of attorneys across the state, citing several examples:

• When news reports broke regarding potential flooding on the Minnesota-North Dakota border, the MSBA developed contingency plans in tandem with the North Dakota bar, the district bar president Kim Pennington, legal services agencies, and FEMA.

• Minnesota's current budget deficit, coupled with bleak economic projections, have led lawmakers to consider drastic cuts in state court funding, as well as proposals to boost revenues through a sales tax on legal services. The MSBA has mounted concerted drives on both of these fronts. At the time of the Assembly meeting, President Ford reported some progress in the area of court funding, and expressed hopes that the sales tax proposal would not be passed in the current session. Both of these initiatives benefited from coordinated efforts of MSBA members, Bar leaders, and volunteers working together with the judiciary and legislators.
• A similar concerted effort forms the foundation of the MSBA's continuing initiatives in the area of judicial selection and elections. President Ford reported that a judicial elections bill was unlikely to move forward in the 2009 session, but he praised progress made at the Capitol this term.
• On the national front, President Ford reported that the MSBA would join forces with minority bar associations and legal services organizations to urge reauthorization of the federal Legal Services Corporation. In a related effort, all of these organizations were expected to urge Congress to ease restrictions on categories of work that can be performed by offices receiving LSC funding.

III.  Treasurer’s Report

President Ford recognized Treasurer Terry Votel, praising him for his efforts to oversee MSBA finances during this difficult economic year. Treasurer Votel directed attention to written materials presented in advance of the session. He noted that dues collections, expressed as a percentage of revenue, were on track with the previous fiscal year. Revenues and expenditures as of March 31, 2009, were also on track with the same period last year, despite the economy. He credited ongoing recruitment and retention efforts, as well as expenditure reductions, as positive factors in the current budgetary snapshot. He expressed confidence that the deficits anticipated for both the current and the upcoming fiscal years would be reduced.

IV.  Consent Calendar

A.         Approval of minutes of the December 12, 2008 meeting

B.         Action on the Recommendation of the Governance Committee to approve the amendment to the Bylaws of the Tax Law Section

President Ford entertained a motion for these two items to be considered separately. Hearing no such motion, he called for a motion to approve. A motion was made, seconded, and carried to approve the Consent Calendar.

V.  Additional Agenda Items

It was moved and seconded to authorize consideration of a new item appearing in the agenda under the Operations Committee report. In the revised agenda, as distributed at the meeting, this was listed as item XI.B. The motion carried, and the item was considered later in the session.

VI.  Elections/Appointments Committee

Committee Chair Aaron Biber reported that the committee had reviewed Qualifications and Interest Statements from all candidates listed below. On behalf of the committee, he moved that the Assembly nominate the entire slate.  President Ford called for additional nominations; hearing none, he called the question. The motion carried.

Nominated under the motion were:

• Richard Nethercut, Fillmore County: Client Security Board
• Christopher Cain, Blue Earth County, and Judge Kathleen Sanberg, Hennepin County: State Board of Continuing Legal Education
• Edward Cassidy, Ramsey County: Legal Services Advisory Committee
• William O’Brien, Hennepin County: State Board of Legal Certification
• Leonardo Castro, Ramsey County, and Donald Campbell, Hennepin County: Bar Admissions Advisory Council
• Jon Saunders, Kandiyohi County: Central Minnesota Legal Services Board
• Michael Miller, Hennepin County, Judge Jon Stafsholt, Pope County, and David Stowman, Becker County: MSBA Delegates to the ABA

VII.       General Policy Committee – Mary Ward, Chair

Committee Chair Mary Ward presented a brief report on committee activities, then directed attention to item VII.B. as it appeared in the meeting materials:

Action on the Recommendation of the Committee regarding the request of the Labor and Employment Law Section to apply for authorization to begin certifying attorneys in the area of employment law

On behalf of the committee, Ms. Ward moved that the Assembly approve the recommendation and report as it appeared in the meeting materials.  In discussion before the Assembly, it was clarified that the program would be funded by the section, and that certification requirements, including those affecting disclosure, would be standardized for all certification programs operated by the MSBA. The motion carried.

VIII.  Governance Committee

Committee Chair Fred Finch opened his report by asking Assembly members to observe a moment of silence for Richard Nelson who passed away recently. Noting that the Assembly had approved amendments to the bylaws of the Tax Law Section earlier in the session, Mr. Finch praised the tireless efforts of Mr. Nelson, who was instrumental in performing many of the detailed reviews of Bar-related bylaws and other documents.

Mr. Finch then directed attention to the following recommendation and its attendant report as they appeared in the meeting materials:

Action on the Recommendation that the MSBA repeal its current conflicts policy (Policy #1) and adopt the proposed conflicts policy; and that the MSBA adopt a Disability and Succession Policy.

He provided a brief history of the two policies and their provisions. Recognizing the need for a comprehensive policy regarding conflicts of interest, 2007-08 MSBA President Brian Melendez drafted and the Assembly adopted a document, which was later revised and adopted by the Governance Committee. That document has since been revised as part of a review that also included development of a Disability and Succession Policy. Taken together, the two policies spell out parameters regarding conflicts, and provide mechanisms of succession in the event that an officer is disqualified or otherwise unable to serve.

In separate motions, Mr. Finch moved that the Assembly approve both policies. Both motions carried.

IX.  Reports

President Ford reported on behalf of the Convention Committee. He noted that the upcoming annual convention in Duluth was to be the last conducted in the familiar format. Beginning in 2010, convention activities are to be replaced by one-day events hosted at each of the state's eight outstate judicial districts, with a ninth event in the Twin Cities. These Bench Bar Forums will be patterned after events launched by 2005-06 MSBA President Susan Holden, and will include sessions on issues of local and regional interest, as well as CLEs and speakers.

X.  Legislative Committee

Committee Chair Susan Holden presented a brief report summarizing the reviews of recommendations submitted by Bar constituencies in December 2008, the subsequent adoption of the MSBA legislative agenda, and ongoing work during the current session. She then directed attention to four recommendations and reports as they appeared in the meeting materials (items X.B-D). Each of the following items was treated under a separate motion.

B. Action on the Recommendation that MSBA adopt the Committee's report and proposed policy concerning legislation directed at or directly affecting a matter pending on appeal to Minnesota Appellate Courts 

Ms. Holden noted that the recommendation had been revised from the version initially distributed to Assembly members in advance of the meeting. The revised version, presented to the Assembly with a motion to approve by the Legislative Committee, stated:

Resolved: That the MSBA adopt as policy a long-standing practice that: The MSBA will not advance legislation that directly changes the law result of an individual case, or makes moot an issue in a case, that is pending on appeal to Minnesota's appellate courts, unless the proponent demonstrates that exceptional circumstances exist justifying immediate action before appeals to Minnesota's courts are exhausted.

Ms. Holden noted that this standard has been followed informally, but urged that it be formalized now to ensure that the Bar does not act in ways that might be deemed disrespectful to courts or parties, or result in piecemeal legislative changes later. She anticipated that this policy would not be so general as to affect all such cases.

A motion was then made to amend the committee's main motion and to adopt the red-lined version as it appears above. The motion to amend carried. President Ford then called the question to adopt the main motion as amended. The main motion carried.

C. Action on the Recommendation that MSBA adopt a position that opposes a proposed federal law, S. 569, the Incorporation Transparency and Law Enforcement Assistance Act

Business Law Section Vice Chair Robert Beattie presented this recommendation and report as it appeared in the meeting materials. The bill in question, reintroduced in the U.S. Senate, was intended to thwart the use of shell entities in money laundering, terrorist financing, and tax evasion. Mr. Beattie lauded these intentions, but identified Section concerns over specific provisions of the bill as drafted, including reporting and record requirements. On behalf of the section, he moved that the Assembly adopt the recommendation to oppose the bill. Because this is a proposed federal law, the MSBA would not engage in lobbying activities. The motion carried.

D. Action on the Recommendation that the MSBA renew the existing legislative position #3 so that the position does not expire under the six-year rule in our Bylaws

Resolved that in an era when safeguarding Minnesotans’ civil rights has become more important than ever, the Legislature should not move to withdraw, or more narrowly define, any currently-protected class from the scope of the Minnesota Human Rights Act

Ms. Holden noted that under MSBA Bylaws, legislative positions adopted by the Bar expire after six years unless reauthorized by the MSBA. She recognized Diversity Committee member Phil Duran, who urged that the Assembly renew legislative position #3 as it appears above. Mr. Duran said that renewing this position would help to ensure continuing protection of all protected classes under the state Human Rights Act. The motion carried.

E. Action on the Recommendation that the Animal Law Section proposal regarding Minnesota Statutes Section 35.71 be referred back to the Section for further study

Ms. Holden presented the motion to refer this matter back to the section pending further study. She indicated that the Animal Law Section would consult with its members and other Bar constituencies and report back in fall 2009. The motion carried.

Ms. Holden next recognized MSBA Legislative Representative Lloyd Grooms, who reported on current lobbying and legislative initiatives by the Bar. Mr. Grooms reported on major activities related to court funding and judicial elections. Legislation proposed to implement the "Quie Commission" recommendations regarding judicial selection/election had moved through the Senate, but no hearings were anticipated in the House. Mr. Grooms expected that no final action would come before the 2010 session.

Mr. Grooms praised the tireless efforts of all parties to address sweeping cuts initially proposed in the area of court funding. At the time of the Assembly meeting, bills in conference committees would restore portions of cuts originally proposed in the areas of public defenders, legal aid, and general court funding. He reported that new fees might be implemented to "backfill" and to generate new revenues for these areas. While court funding is still proposed at levels far below those advocated by the MSBA and by the judiciary, Mr. Grooms expressed hope that these cuts may not be quite as severe as initially proposed.

He also reported that an MSBA-endorsed real property bill was now before the governor. Before both the House and Senate were bills regarding probate, uniform laws, and arbitration. Proposed sales taxes on legal services did not appear in House or Senate funding bills, but could still be reintroduced in the current session, Mr. Grooms said.

Ms. Holden closed by noting that the current session had been marked by unprecedented budgetary concerns. She thanked all members of the MSBA and the judicial system for their contributions, singling out the work of President Ford and Secretary Biber on initiatives related to judicial funding.

XI.  Operations Committee

Committee Chair and MSBA Treasurer Terry Votel presented a brief report on activities of the committee and its five subcommittees. He then moved approval of the appointment of Murray Sagsveen to the Operations Committee. (This new agenda item, approved earlier in the session, appeared as item XI.B in a revised agenda distributed at the session.) This motion carried.

Mr. Votel then presented separate recommendations on behalf of the Operations Committee:

            C.       Action the Recommendation to approve changes in section dues

He directed attention to a chart listing current and proposed section dues for 2009-2010. The motion carried.

            D.       Action on the Recommendation to approve the proposed Three-Year Plan for 2010-12 and the Budget for 2009-10

Mr. Votel directed attention to written materials appearing in the meeting materials. He noted that the current three-year planning cycle -- ending June 30, 2009 -- was marked by a planned spend-down of MSBA reserves, which in July 2006 had reached 51% of annual operating expenses, well above the 25-30% level considered optimal. He also noted efforts by Bar leaders and staff to reduce expenditures in the wake of current economic difficulties. These cuts, coupled with the strong recruitment and retention figures mentioned in the report and by speakers at the Assembly session, represented cause for optimism in the coming year.

Under the proposed three-year plan and 2009-10 budget, program categories have been reorganized and presented in a manner intended to be easier to evaluate. Program-related expenses and activities related to diversity are now presented under one umbrella, for example, as are those related to online member services.

Other items from the written materials highlighted by Mr. Votel:

• The 2009-10 budget projects a 93% retention rate.
• Section fees will be reinstituted.
• The Operations Committee reexamined relationships with affiliated organizations, in some instances passing on direct costs previously borne by the MSBA.
• The annual Bench & Bar print directory will be suspended to save costs.
• Capital expenditures are reduced for the first year of the planned three-year cycle.
• The Bar will defer leasing additional conference space.

Mr. Votel also noted that the MSBA's current membership software will need to be upgraded and/or replaced at some point during the three-year cycle. He closed his presentation by referring to a chart of projected revenues and expenditures, and repeated that the current and projected deficits may come in lower than originally projected.

The motion to approve the MSBA's three-year plan for 2010-12 and the budget for 2009-10 carried.

President Ford next recognized Karna Peters, member of the Minnesota CLE Board, and Frank Harris, Executive Director of Minnesota CLE, for the following agenda item:

            E. Action on the Recommendation to approve the proposed Minnesota CLE Budget for 2009-10

Ms. Peters highlighted items from the written materials distributed in advance of the meeting. Among those highlights:

• The budget projects a slight reduction in revenue; coupled with cost savings, it comes in balanced.
• Current levels of live, webcast, video programming, and published materials will be maintained.
• Scholarships for lawyers in need and support for attorneys performing pro bono work will be continued.
• The Small Firm Resource Center will be expanded.
• Initiatives to expand live CLE programs in Greater Minnesota will continue.

The motion to approve the 2009-10 MCLE Budget carried.

XII.  Announcements

President Ford called attention to announcements as they appeared in the meeting materials and as presented below:

        A. Notice of elections (Elections will take place at the June 26, 2009 meeting of the Assembly.)

                1.    Nomination of Candidate for MSBA Secretary -- Notice is hereby given that, pursuant to the MSBA Bylaws, §9.3, the representatives of the outstate affiliated district bars will nominate a candidate for MSBA Secretary on Saturday, June 6. 

                2.    Nomination of the Outstate Representative to the Council – The term of Margaret Erickson, District 13, expires June 30, 2009.  Ms. Erickson is eligible and interested in serving an additional term.  (This nomination will also be made by the outstate representatives to the Assembly at their June 6 meeting.)

                3.    The Assembly, sitting as the members of the Minnesota State Bar Foundation, will elect directors of the Foundation.  The three-year terms of the following directors expire on June 30, 2009:  Robert Enger, Juan Hoyos, Warren Ortland, Gary Voegele, and Judge Lloyd Zimmerman.  Mr. Enger, Mr. Ortland and Mr. Voegele are eligible and interested in serving an additional term.  Mr. Hoyos and Judge Zimmerman are not interested in serving an additional term.  In addition, Pamela Waggoner will resign from the Foundation Board effective June 30; opening a position to complete the final two years of her term. 

            B. Draft 2009-10 Assembly Meeting Schedule – Review these proposed dates and contact the MSBA staff with any concerns.

Date	Time
Friday, September 11 – Bar Leader Conference	12:00 noon
Friday, December 11	12:00 noon
Thursday, April 29	12:00 noon
TBD -- June 2010	TBD

            C.       Future Meetings

                Friday, June 26, 2009 9:00 a.m. – Duluth Entertainment Convention Center

XIII.      Adjournment

The session adjourned at 3:00 p.m.

Respectfully submitted,

Aaron F. Biber

Secretary