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Wednesday, April 21, 2010

Robert Gildersleeve et al. v. State of Ohio, Case no. 2009-1086
8th District Court of Appeals (Cuyahoga County)

Squire, Sanders & Dempsey L.L.P. v. Givaudan Flavors Corporation, Case no. 2009-1321
8th District Court of Appeals (Cuyahoga County)

Richard Cordray, Ohio Attorney General, et al. v. The International Preparatory School et al., Case no. 2009-1418
8th District Court of Appeals (Cuyahoga County)

In re Adoption of J.A.S. and J.N.S., Case nos. 2009-1695 and 2009-1980
9th District Court of Appeals (Lorain County)

Does ‘Adam Walsh Act’ Require New Hearing to Exempt Pre-2008 Sex Offender from Community Notification?

When Sentencing Court Found Notification not Required Under Pre-2008 Law

Robert Gildersleeve et al. v. State of Ohio, Case no. 2009-1086
8th District Court of Appeals (Cuyahoga County)

ISSUE:  In cases where  a defendant was sentenced prior to Jan. 1, 2008, for a sexually related crime, and where the sentencing court determined at a hearing that under the pre-2008 version of Ohio’s sex-offender statute  the defendant was not subject to community notification, do amendments to the law that took effect in 2008 require that pre-2008 offenders who have been reclassified as Tier III offenders must undergo a new hearing to reestablish their exemption from community notification? 

BACKGROUND: Effective Jan. 1, 2008, the General Assembly amended Ohio’s former sex offender registration and community notification statutes to conform them with the federal Adam Walsh Act (AWA). Under the amended Ohio statutes, thousands of persons who had been classified as lower-level sex offenders under the pre-2008 version of the law were reclassified as Tier III (highest level) sex offenders. The new provisions require that, after Jan. 1, 2008, 1) all Tier III offenders must  register with local law enforcement agencies every 90 days for life, and 2) sheriffs must provide regular notices regarding the identity, residence, place of employment and other information about Tier III offenders to neighbors, schools and specified others in the communities where the offender lives and works.

However, a separate provision in the 2008 rewrite of the law, R.C. 2950.11(F)(2), specifically exempts a Tier III offender from the requirement of community notification (but not the duty to register): “if a court finds at a hearing ... that the person would not be subject to notification” under the previous version of the sex offender statute (i.e. the version that was in effect from 2002 through 2007).

This case involves a group of nine people, including Robert Gildersleeve, who were convicted and sentenced  prior to Jan. 1, 2008 as sex offenders.  In each of their cases, the sentencing court held a required hearing and determined that the defendant was not a sexual predator or a high-risk habitual sex offender, and therefore, under the pre-2008 version of the sex offender statute, was subject to registration but was not subject to community notification. Following enactment of the Ohio AWA, each of the plaintiffs received a notice from the attorney general’s office informing him that he had been reclassified as a Tier III sex offender and would from that date forward be subject to both the more stringent registration requirement and the community notification requirement imposed on Tier III offenders by the AWA.

The plaintiffs filed suit in the Cuyahoga County Court of Common Pleas seeking a judgment that 1) retroactive application of the AWA to offenders who had already been classified under the pre-2008 sex offender statute was unconstitutional; and 2) even if retroactive application of the AWA to them was constitutional, they were entitled to relief from community notification under R.C. 2950.11(F)(2) because each of them had already undergone a hearing and been found not to be subject to community notification under the pre-2008 version of the statute. The trial court ruled that retroactive application of the AWA to previously classified sex offenders was constitutional, and also held that the plaintiffs were not entitled to relief from community notification.

Gildersleeve and his co-plaintiffs appealed.  On review, the 8th District Court of Appeals affirmed that the AWA was constitutional as applied to the plaintiffs, but held that they were entitled to relief from community notification under R.C. 2950.11(F)(2), because the courts that sentenced them had judicially determined that they were not subject to community notification under the pre-2008 version of the law.

Both parties sought Supreme Court review of the portion of the 8th District’s ruling unfavorable to them.  The Court accepted Gildersleeve’s appeal regarding retroactive application of the AWA and held that appeal pending the Court’s ruling in a similar case that has already been argued but not announced (State v. Bodyke). The Court agreed to hear arguments on the state’s claim that R.C. 2950.11(F)(2) does not provide “automatic” relief from community notification for any past offender who was found not subject to community notification under the prior version of the statute at the time of his original classification.

 Attorneys for the state argue that R.C. 2950.11(F)(2) exempts an offender from the requirement of community notification under the AWA only if a court has conducted a de novo (new) hearing at which it considers 11 criteria set forth in the 2008 statute, and has made a new and independent finding  that the offender would not have been subject to community notification under the pre-2008 version of the sex offender law.  They point out that the hearing requirement in R.C. 2950.11(F)(2) is written in the present rather than the past tense, which they say indicates legislative intent that courts considering appeals by pre-2008 offenders should not rely on the court proceedings conducted at the time of that person’s original classification, but rather should conduct a new and independent review of the statutory criteria and make a new determination regarding the offender’s likelihood of reoffending.

Attorneys for Gildersleeve and the other plaintiffs point out that the hearing criteria set forth in R.C. 2950.11(B)(2) are virtually identical to the criteria that were considered in determining at the time of their original classification that they were not subject to community notification under the pre-2008 version of the statute.  They argue that in cases involving offenders who were classified under the former statute, “a court” has already conducted a hearing at which the statutory criteria have been considered, and has ruled that the offender was not subject to community control under the pre-2008 law. They assert that interpreting the law to require an entire new hearing at which the same criteria are applied to make exactly the same legal determination would be redundant and wasteful of judicial resources, and also contrary to the doctrine of res judicata (that issues decided by a court and not appealed should not later be relitigated).

Cullen Sweeney, 216.443.3660, for Robert Gildersleeve and other plaintiffs.

Matthew E. Meyer, 216.443.7800, for the state and Cuyahoga County Prosecutor.

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Does Exception to Attorney-Client Privilege Apply in Lawsuits Between Law Firm and Former Client?

When Client Withholds Payment, Asserts Malpractice Claim Against Law Firm

Squire, Sanders & Dempsey L.L.P. v. Givaudan Flavors Corporation, Case no. 2009-1321
8th District Court of Appeals (Cuyahoga County)

ISSUE: Does Ohio recognize a common law “self-protection” exception to the attorney-client privilege that allows a law firm to disclose otherwise confidential client communications in the context of a lawsuit between the firm and a client in which the firm seeks to recover unpaid legal fees and/or to defend itself against the client’s claims of overbilling and other malpractice?

BACKGROUND:  From 2003 to 2007, the Cleveland-based law firm of Squire, Sanders & Dempsey (SSD) represented Givaudan Flavors Corporation in product liability litigation. In 2007, Givaudan severed its relationship with SSD and retained new outside counsel. SSD billed Givaudan for $1.8 million in unpaid legal fees. When Givaudan refused to pay, SSD filed suit. Givaudan filed a counterclaim alleging that SSD had overbilled for services it had performed, had billed Givaudan for services that were never performed, and had engaged in other false, deceptive and unethical business practices during the period of representation.

During the pretrial discovery process, Givaudan refused to produce any of the billing records or other documents documenting the legal services SSD had provided during its representation, or to answer most of the questions posed to company officials by SSD during depositions.  Givaudan also asserted that because communications between itself and the law firm during the period of representation were exempt from disclosure under the attorney-client privilege, SSD was barred from disclosing to the court documents in its own files that disclosed communications between the law firm and Givaudan.  SSD asked the trial court to order Givaudan to comply with its discovery requests and respond fully during depositions in the case. 

The trial court granted the motion to compel discovery, holding that a recognized exception to the attorney-client privilege allows disclosure of otherwise confidential communications when such disclosure is necessary to the fair adjudication of  a lawsuit between  the lawyer and client arising from their business relationship. Givaudan appealed that ruling. On review, the 8th District Court of Appeals reversed and remanded.  In its opinion, the court of appeals held that the trial court erred in recognizing a “self-protection” exception to the attorney-client privilege, and that under Ohio’s attorney-client privilege statute, R.C. 2317.02(A), communications between SSD and Givaudan during the period of representation may not be disclosed unless SSD could show that Givaudan had waived the privilege either by giving express consent to disclosure or by voluntarily testifying about those communications. SSD sought and was granted Supreme Court review of the 8th District’s decision.

Attorneys for SSD argue that courts across the country have recognized a self-protection exception to lawyer-client privilege to prevent exactly the situation that has arisen in this case: a client has refused to pay its legal bill based on claims of malpractice and dishonesty by its attorneys, and then has used claims of privilege to prevent the law firm from obtaining documents and witness testimony without which it cannot effectively prosecute its collection action against the client or defend itself against the client’s claims of improper business practices. They argue that  the 8th District wrongly based its ruling on a 2006 Supreme Court of Ohio decision, Jackson v. Greger, in which the Court denied an attempt by a law firm to compel disclosure not of its own communications with a client, but of the client’s confidential communications with a successor law firm. They contend that the 8th District mistakenly applied a legal standard applicable to the waiver of a privileged communication, and failed to recognize that under the self-protection exception to attorney-client privilege, the privilege doesn’t need to be waived by the client because it never existed within  the limited context of a lawsuit between a lawyer and client.

Attorneys for Givaudan urge the Court to affirm the 8th District’s holding that Ohio does not recognize a “self-protection” exception to attorney-client privilege, and that the only legal bases for allowing discovery of confidential attorney-client communications are the criteria for waiver of the privilege set forth in R.C. 2317.02(A).  Even if the Court were to recognize a common law exception to privilege in the context of a lawsuit between an attorney and client, they assert, SSD still would not be entitled to disclosure in this case because it did not make a showing in the trial court  that the client documents and testimony it sought from Givaudan were essential to its legal arguments, or that the same information could not be obtained from other, non-privileged sources.

John M. Newman, 216.586.7207, for Squire, Sanders & Dempsey LLP.

Anthony J. Hartman, 216.781.5515, for Givaudan Flavors Corp.

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Is Treasurer of Charter School a ‘Public Official’ Subject to Strict Liability for Misspent State Funds?

Or Does Status as Corporate Officer Preclude Individual Liability?

Richard Cordray, Ohio Attorney General, et al. v. The International Preparatory School et al., Case no. 2009-1418
8th District Court of Appeals (Cuyahoga County)

ISSUE: Is the treasurer of an Ohio community or “charter” school operated by a non-profit corporation a “public official” subject to strict liability under R.C. 9.39 for the proper disposition of public funds the school receives from the state, or does the treasurer’s status as a corporate officer exempt him or her from personal liability for improper handling of state funds by the school, absent a showing of personal wrongdoing by the treasurer?

BACKGROUND: The International Preparatory School (TIPS), a publicly funded community or “charter” school located in Cleveland,  was founded in 1999 by a non-profit corporation controlled by Da’ud Malik Shabazz and his wife, Hasina Shabazz.  The school was in business from 1999 until it closed its doors in October 2005 as a result of ongoing financial problems.

Shortly thereafter the Ohio Attorney General and Ohio Department of Education filed suit against TIPS and the Shabazzes as individuals, alleging misappropriation and misspending of state funds that were paid to the school.  Among other irregularities, the state’s complaint alleged that TIPS and its officers had significantly overstated the number of students enrolled in the school in reports filed with the department, resulting in large overpayments for which the state was entitled to reimbursement.

In January 2007 the Auditor of State issued an audit report indicating that TIPS had improperly sought and received $1,407,983 from the Department of Education by submitting inflated enrollment figures for the 2004 and 2005 school years. Based on those overpayments, the auditor issued a finding for recovery in favor of the Department against TIPS as an entity and the Shabazzes as individuals.

Upon receiving the auditor’s finding, the state filed an amended complaint in the Cuyahoga County Court of Common Pleas to convert the audit finding to a judgment against the defendants.  (Da’ud Shabazz has since died, leaving Hasina Shabazz as the sole named individual defendant in the state’s recovery action.) Both sides filed motions for summary judgment.  The trial court granted summary judgment in favor of the state, ruling that TIPS and Shabazz had not presented any evidence to rebut the auditor’s finding of overpayments, and rejecting Shabazz’s claim that because the school was organized as a corporation, her status as corporate treasurer and a board member precluded a finding of personal liability against her for the actions of the school.

Shabazz appealed.  On review, the 8th District Court of Appeals reversed the trial court’s award of summary judgment and remanded the case for further proceedings. In its opinion, the 8th District held that Shabazz was not a “public official” subject to strict liability for state funds received by the school, and that the auditor’s findings had not conclusively established that Shabazz was subject to individual liability for the actions of the school. The attorney general and Department of Education sought and were granted Supreme Court review of the 8th District’s ruling.

They point out  that R.C. 117.01 defines a “public official” as “any officer ... of a public office,” and defines a “public office” as any “political subdivision, or other organized body, office, agency or entity established by the laws of this state for the exercise of any function of government.”  They cite prior court decisions holding that charter schools are “public schools” and are “part of the state’s program of education,” and note that charter schools are funded from the same pool of state tax dollars that supports traditional local boards of education, and are subject to the same auditing requirements. Based on those facts, they assert, the 8th District erred in reading R.C. 9.39 to impose strict liability on the treasurers of traditional school districts across the state for proper disposition of state monies their schools receive, but not to impose the same standard of accountability on treasurers of charter schools. The attorney general also points out that the state law authorizing charter schools, R.C. Chapter 3314, specifically immunizes officers and corporate board members of such schools from personal liability for contractual obligations incurred by the school, but confers no similar immunity from liability arising from statutory causes of action such as the state auditor’s findings against TIPS and Shabazz.

NOTE:  Amicus curiae (friend of the court) briefs supporting the position of the state have been submitted to the Court by the Ohio Education Association and by a group of labor and professional associations including the Ohio Federation of Teachers, Ohio School Boards Association and the Buckeye Association of School Administrators.

Attorneys for Shabazz argue that she cannot be held personally liable for overpayments made to TIPS under R.C. 9.39 because 1) the officers and board members of a nonprofit corporation who receive state funds are not subject to the same strict liability standard as “public officials;” 2) Shabazz never functioned as the school’s treasurer because she never personally received or disbursed state funds paid to the school;  and 3) as treasurer and a board member of a corporation operating a charter school, she is exempt from personal liability for the school’s actions absent proof that her own acts or omissions contributed to the inflated attendance figures and resulting overpayments. Because the state auditor’s findings did not conclusively establish a direct role by Shabazz in those financial transactions, they contend, the Court must affirm the 8th District’s ruling that the state is not entitled to summary judgment.

Benjamin C. Mizer, 614.466.8980, for Ohio Attorney General Richard Cordray and the Ohio Dept. of Education.

Brett E. Horton, 216.589.9610, for Hasina Shabazz.

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Is Consent of Natural Parents Required Before Party With Legal Custody of Child May Initiate Adoption?

Where a Juvenile Court Has Awarded Custody of Abused, Neglected Child

In re Adoption of J.A.S. and J.N.S., Case nos. 2009-1695 and 2009-1980
9th District Court of Appeals (Lorain County)

ISSUE:  Under one section of Ohio’s adoption laws, R.C. 5103.16(D), when a child is not in the custody of its natural parents but the parents’ parental rights have not been permanently surrendered or revoked by a court order, the custodial party may not enter into any agreement for adoption of the child unless it completes a mandatory administrative process in probate court which includes obtaining the informed consent of the child’s natural parents to the adoption placement.  

However, under a different section of the same statute, R.C. 5103.16(E), if the party seeking to become the child’s adoptive parent is the child’s step parent, grandparent or legal guardian, the law states that those persons may apply in probate court to legally adopt the child without the consent of the child’s natural parents if: 1) the prospective adopter demonstrates to the court that  the natural parents have abandoned the child by failing without justifiable cause to have any meaningful contact with or to provide for the support of the child for one year or longer; 2) the court finds the proposed adoptive home suitable, and 3) the court finds that the proposed adoption is in the best interest of the child. 

In this case, the Court is asked to determine whether the process for seeking adoption without parental consent set forth in R.C. 5103.16(E) also applies to persons to whom a juvenile court has awarded legal custody of an abused or neglected child, and with whom the child has been living since custody was awarded.

BACKGROUND:  In October 2006, a Lorain County couple identified as R.S. and S.E.S. were granted legal custody of two children identified as J.A.S. and J.N.S. by the county juvenile court after the children had been removed from their parents’ home and the juvenile court declared the children to be abused or neglected. The juvenile court did not enter an order permanently revoking the parental rights of the children’s  natural parents. In October 2008, after the children had lived with them for two years, R.S. and S.E.S. filed an application in the Lorain County Probate Court seeking to adopt J.A.S. and J.N.S..

In their application, R.S. and S.E.S. asked the probate court to waive the requirement imposed by R.C. 5103.16(D) that the children could be placed for adoption only if  the children’s natural parents

appeared before the probate court and consented to that placement. Instead, they asked the probate court to rule that,  because legal custody of the children could only be awarded to them by the juvenile court after a determination that the children were abused or neglected and that the custodians’ home was suitable, they were on the same legal footing as a step parent, grandparent or legal guardian and should therefore be eligible to apply for adoption if they could prove abandonment and the other criteria for adoption without the consent of the natural parents set forth in R.C. 5103.16(E).

The probate court ruled that R.S. and S.E.S.’ status as legal custodians was irrelevant, and that under R.C. 5103.16(D), they could seek placement of the children for adoption, by themselves or by any person other than the children’s step parent, grandparent or legal guardian, only by having the children’s natural parents appear in court  and give their informed consent to the placement.  R.S. and S.E.S. appealed.  On review, the 9th District affirmed the probate court’s ruling that their application for adoption could not be considered without the consent of the children’s natural parents.  The 9th District subsequently certified that its ruling was in conflict with a decision of the 2nd District on the same legal issue.  The Supreme Court has agreed to review the case to resolve the conflict between appellate districts.

Attorneys for R.S. and S.E.S. argue that the legislative intent underlying R.C. 5103.16(D) is to prevent “baby-selling” by preventing custodians who are not licensed by the state as adoption agencies from arranging the private adoption of a child by a third party who is not a close relative without the oversight of a court.  In cases such as theirs, they assert, the judicial oversight at the heart of R.C. 5103.16(D) is met through the juvenile court’s appointment of them as legal custodians and that court’s continuing jurisdiction over the children.  In cases where the persons seeking to adopt a child have already been appointed by a court to exercise full custody and control of that child, and the child has lived as a member of their household for an extended period, they contend that there is no rational basis for treating such applications differently than an application submitted by a step parent, grandparent or legal guardian under R.C. 5103.16(E). The effect of the lower courts’ rulings, they argue, is to confer on natural parents who have been found unfit to have custody of a child an absolute “veto” that unconditionally bars their child from ever obtaining the stability and security of a permanent adoptive placement with a non-relative custodian, even when there is clear evidence that such a placement would be in the child’s best interest.

NOTE:  The American Academy of Adoption Attorneys and Ohio Adoption Law Roundtable have entered amicus curiae (friend of the court) briefs in support of the position of R.S. and S.E.S.

Attorneys for the children’s natural mother urge the Court to affirm the lower courts’ rulings, which they say uphold the fundamental right of a natural parent who retains residual rights to the control of a child to either consent to or bar the permanent placement of that child in an adoptive home. They point out that in enacting R.C. 5103.16(E), the legislature specified that the consent of natural parents to a proposed adoptive placement may be waived only in cases where the party seeking to adopt is a step parent, grandparent or legal guardian.  If lawmakers had intended to extend the same exception to court-appointed legal custodians, they argue, it could and would have included such persons in the statutory exception.  In the absence of such language, they say, R.C. 5103.16(D) clearly requires that the adoptive placement of a child may not be approved without the formal consent of natural parents unless their residual parental rights have been voluntarily surrendered or permanently revoked by a court order.

Joel D. Fritz, 440.323.1203, for prospective adoptive parents R.S. and S.E.S.

Elizabeth I. Cooke, 614.292.6821, for J.W.W., natural mother of children J.A.S. and J.N.S.

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.