The Hall & Evans Rocky Mountain Litigation Reporter is a periodic online newsletter directed to a select group of individuals and organizations. In this issue we review a recent decision from the Colorado Supreme Court; summarize a new federal statute concerning removal procedure; describe new pilot rules for commercial litigation in Colorado courts; and highlight a new rule from the National Labor Relations Board.

Topics In This Issue

Supreme Court Determines That Award of Exemplary Damages Can Match Award of Compensatory Damages Plus Pre-Judgment Interest
Congress Clarifies Removal Procedures
Colorado Adopts Pilot Rules for Commercial Litigation
National Labor Relations Board’s Final Rule Pertaining to Notification of Employee Rights Under the National Labor Relations Act

Supreme Court Determines That Award of Exemplary Damages Can Match Award of Compensatory Damages Plus Pre-Judgment Interest

In Colorado, a jury may award exemplary damages in an amount equal to, but not greater than, the total award of compensatory damages. C.R.S. § 13-21-102. There has been some debate whether the amount of compensatory damages, against which the exemplary damages are measured, should include the statutorily mandated award of pre-judgment interest. The Colorado Supreme Court recently settled this debate and decided that the amount of compensatory damages awarded, to which the exemplary damages are compared, should include the statutorily mandated award of pre-judgment interest. Full text of opinion . . . Vickery v. Evans, 2011 Colo. LEXIS 931 (Colo. 2011).

Congress Clarifies Removal Procedures

The United States Congress has enacted an Act simplifying the procedures concerning removal of actions from state court to federal court. This new statute adopts the “later-served defendant rule,” codifies the rule of unanimity, provides a procedure to establish the amount in controversy when that is not apparent from the complaint, and creates a bad faith exception to the one year limit on removal. H.R. 394. Under the new statute, when an action is removed on the basis of diversity, “All defendants who have been properly joined and served must join in or consent to the removal of the action.” Further, each defendant is allowed 30 days “after receipt by service on that defendant of the initial pleading or summons” to file the notice of removal. If defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that defendant did not previously initiate or consent to the removal. With respect to the amount in controversy, the district court must find “by a preponderance of the evidence, that the amount in controversy exceeds” the jurisdictional requirement for a diversity action. In doing so, the court may consider “information relating to the amount in controversy in the record of the state proceeding, or in responses to discovery.” In addition, a case may be removed more than one year after it was filed if “the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.”

Colorado Adopts Pilot Rules for Commercial Litigation

If you have coverage litigation in Colorado in 2012-2013, you will be affected by the Colorado Civil Access Pilot Project (CAPP). Intended to streamline cases and change the litigation culture, this sea-change raises the stakes for litigants. Though limited to commercial cases filed in just four counties, coverage litigation will likely be one of the most affected areas of litigation.

CAPP increases the burdens on the parties, limits the discretion of the courts and mandates sanctions for even inadvertent failure to comply. The increased burden is immediate. The scope and the timing of initial disclosures are changed. Parties must serve initial disclosures 21 days after service of the case, making the disclosure due at the same time as the answer. Carriers served with a coverage suit in Colorado in the next two years should be prepared to immediately send the claims file, underwriting materials and other potentially relevant information to counsel as soon as they receive notice of a new case. The parties cannot negotiate a different timeline and the courts have very limited discretion to grant one. Moreover, CAPP imposes mandatory sanctions for failure to satisfy the disclosure requirements.

Discovery will be governed on the basis of proportionality. The parties are required to confer and provide a report to the court specifying the issues to be litigated. The court will then issue case management orders structuring the discovery on a case by case basis. This order will also set the deadlines and trial date. Once set, the court has very limited discretion to modify these deadlines; motions for extension are “strongly disfavored” and must be denied absent “extraordinary circumstances.

There are a few benefits. Because the parties are required to identify the issues early in the case and provide the court with a proportionality assessment for purposes of setting discovery limitations, plaintiffs’ attempts for broad bad faith discovery may be limited. At the very least, carriers will have an opportunity to head it off early and rely on the proportionality directive as an argument against such broad discovery. Another benefit is the requirement that complaints must set forth the claim with more specificity than is currently required. This should not only better define the issues early in the case, but minimize the chances that the case will grow over time. Finally, if successful, CAPP should reduce litigation costs as fewer discovery disputes should arise; that, at least, is the hope.

If you would like a copy of the new rules, or would like some additional information, please feel free to contact Lisa Mickley, member of Hall & Evans, LLC, at 303-628-3300, or by email to MickleyL@HallEvans.com.

National Labor Relations Board’s Final Rule Pertaining To Notification of Employee Rights Under The National Labor Relations Act

On August 30, 2011, the National Labor Relations Board (NLRB) issued a final rule requiring all employers subject to the National Labor Relations Act (the Act) to post a notice informing employees of their rights under the Act (the “Notice”). The final rule states:

Notice of the right of self-organization, to form, join, or assist labor organizations, to bargain collectively, to engage in other concerted activities, and to refrain from such activities, and of the Board’s role in protecting those statutory rights is necessary to effectuate the provisions of the National Labor Relations Act.

The rule took effect November 14, 2011.

Purpose of this Final Rule

The Notice requirement prescribed by the final rule is an effort by the NLRB to inform employees of their rights to engage in union and other concerted activity as well as their right to refrain from doing these activities. Further, the Notice informs employees that it is illegal for an employer to prohibit any employees from talking about or soliciting for a union during non-work time or from distributing union literature during non-work time in non-work areas. Finally, the NLRB wanted to detail prohibited union activity such as threatening or coercing employees to gain support for the union or taking adverse action against employees who choose not to join or support the union.

Who Must Post

The obligation to post the Notice applies only to employers that are subject to the Act. Specifically excluded from this obligation to post are the United States government, any wholly-owned government corporation, any State or political subdivision, any Federal Reserve Bank and any person subject to the Railway Labor Act. The obligation to post does not apply to entities over which the Board has been found not to have jurisdiction. This would primarily pertain to small businesses whose effect on interstate commerce is de minimis. Additionally, the obligation to post does not apply to entities that employ only supervisors, independent contractors, or agricultural laborers. Nor does the obligation to post apply to anyone employed as a domestic servant.

The Notice

The Notice can be downloaded from the NLRB’s website or can be obtained from any of the NLRB’s regional offices. The Notice must be placed in conspicuous places including all places where notices to employees are customarily posted. In addition, the Notice should be published on an internal or external website if other personnel policies or workplace notices are posted there. If there are employees working at remote sites, a Notice should be posted at those locations as well. However, a referral business that sends employees to work at other employers’ premises is only required to post a Notice on their own premises or at worksites where they have the ability to post the Notice. If twenty percent or more of your employees are not proficient in English, the Notice must be posted in their native language. The NLRB will provide translations of the Notice. Finally, employers must take all reasonable steps to ensure that the Notices are not altered, deface or covered by other materials.

Failure to Post

Because the NLRB does not audit workplaces, a failure to post the Notice would need to be brought to the NLRB’s attention in the form of an unfair labor practice charge by employees, unions or other person. The NLRB expects that a failure to post the Notice is due to the employer’s unawareness of the rule and that the employer will comply once an unfair labor practice case is initiated. If an employer knowingly and willfully fails to post the Notice, that failure may be considered evidence of unlawful motive in an unfair labor practice case involving alleged violations of the Act. The Act also states that in certain circumstances, a failure to post the notice may toll the statute of limitations for filing unfair labor practice charges against an employer.

Steps to Take

  1. Determine whether your organization is subject to the obligations under the NLRA and in turn this final rule.
  2. Obtain and appropriately post the required Notice of Employee Rights, including posting non-English versions for languages spoken by at least twenty percent of your organization’s employees.
  3. Implement reasonable steps to ensure that the Notice is not altered, defaced or covered by other materials.

Contributing Authors and Editors

Andrew D. Ringel, Esq. at (303) 628-3453

Robert M. Ferm, Esq. at (303) 628-3380

Malcolm Mead, Esq. at (303) 628-3301

Lisa F. Mickley, Esq. at (303) 628-3325

Emma Skivington at (303) 628-3319

Inquires or Comments

If you have inquiries or comments, please contact Robert Ferm at (303) 628-3380; or Malcolm Mead at (303) 628-3301


The Hall & Evans Rocky Mountain Litigation Reporter is for informational purposes only and not for the purpose of offering legal advice or a legal opinion on any matter. No reader should act or refrain from acting on the basis of any statement in the Hall & Evans Rocky Mountain Litigation Reporter without seeking advice from qualified legal counsel on the particular facts and circumstances involved. Links to full text of opinions are provided by the Colorado Bar Association (http://www.cobar.org).

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