michigan law revision commission recommendations

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MICHIGAN LAW REVISION COMMISSION

AGENDA

Wednesday, November 5, 201411:30 a.m.Room 4264thFloor

State Capitol Building

Lansing, Michigan

I. Call to Order

II. Roll Call

III. Approval of May 13, 2014 Meeting Minutes

IV. Action on Sentencing Guidelines and Justice Reinvestment Study

V. 2012 - 2013 Annual Report

(1) Recent Court Decisions, 2012-2013

(2) Licensure of International Corporate Lawyers

(3) Open Meetings Act Report

VI. Comments from Commissioners

VII. Public Comment

VIII. Adjournment


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Approval of Minutes

Michigan Law Revision Commission MeetingTuesday, May 13, 2014 9:00 a.m.

Senate Hearing Room Boji Tower Building124 W. Allegan Lansing, Michigan

Members Present: Members Absent and Excused:Richard McLellan, Chair George WardTony Derezinski, Vice ChairSenator Vincent GregoryRepresentative Andrew KandrevasRepresentative Tom LeonardSenator Tonya SchuitmakerJohn StrandJudge William Whitbeck

1.

Convening of MeetingThe Chair called the meeting to order at 9:00 a.m.

2. Roll Call

The roll was taken and absent members were excused. A quorum was present.

III. Update of Sentencing Guidelines and Justice Reinvestment StudyThe Chair invited legislative members to offer comments before the CSG presentation. Senator Gregory thanked theaudience for coming and said he looks forward to the results from CSG. Representative Leonard commented that he islooking forward to the final conclusions as well. Representative Kandrevas expressed his appreciation for the processand is pleased that the Commission is reaching a point where policy ideas can be recommended.

The Chair then called on the other legislative members present. Representative Joe Haveman thanked the Commissionfor taking the charge of reviewing needed changes to Michigans sentencing guidelines seriously when funds wereadded to the budget two years ago. He added that he will do whatever he can to help put the recommended policychanges into action. Representative Kurt Heise shared that the House Committee on Criminal Justice recently held ahearing on the initial findings and has worked with CSG on the data gathering efforts. As Chair of that committee, hestated he will be honored to receive the report from the Committee and sponsor any bills to implement the needed

reforms. Chair McLellan added that he did not feel that the efforts of the Commission should stop other legislativeefforts from moving forward.

Vice Chair Derezinski introduced Mr. Carl Reynolds, Senior Legal and Policy Advisor of The Council of StateGovernments, and asked him to begin the presentation. Mr. Reynolds began by introducing the members of the CSGteam and then highlighted the following findings and policy options:

Finding 1: People with similar criminal histories convicted of similar crimes receive significantly differentsentences.Policy Option: Structure sanctions in the guidelines to produce more consistent sentences.

Finding 2: After a person is sentenced, it remains unclear how much time they will actually serve.Policy Option: Make the length of time a person will serve more predictable at sentencing.

Finding 3: Supervision resources are not prioritized to reduce recidivism.

Policy Option: Use risk of re-offense to inform probation and post-release supervision.Finding 4: High recidivism rates generate unnecessary costs.Policy Option: Hold people accountable and increase public safety for less cost.

Finding 5: Funds to reduce recidivism are not targeted to maximize the effectiveness of programs andservices.Policy Option: Concentrate funding on those programs most likely to reduce recidivism.

Finding 6: Policymakers and practitioners do not have an effective mechanism to track sentencing andcorrections outcomes.

Policy Option: Monitor changes to the states sentencing practices, along with their impact.


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Approval of Minutes

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Finding 7: Data currently collected do not sufficiently measure victimization or inform the extent to whichrestitution is collected.

Policy Option: Survey levels of statewide victimization and track restitution collection.

The CSG Report to the Committee entitled Applying a Justice Reinvestment Approach to Improve MichigansSentencing System and the Report Techn ical Appendix: Compilation of Michigan Sentencing and Justice Reinvestment

Analyses were presented to Commission members. Both documents are attached to these minutes. A copy of the CSGpresentation is also attached to these minutes.

IV. Comments from CommissionersAfter the presentation, the Commissioners were allowed the opportunity to ask questions regarding the CSG report.Afterwards, Vice Chair Derezinski explained that the next step in the process is to gather information for the drafting oflegislation and administrative rule changes.

V. Approval of March 19, 2014 Meeting MinutesThe Chair asked for a motion to approve the minutes of the March 19, 2014 meeting. No corrections or additions wereoffered.Vice Chair Derezinski moved, supported by Representative Leonard, to adopt the minutes of theMarch 19, 2014 Michigan Law Revision Commission meeting. There was no further discussion. Theminutes were unanimously approved.

VI. Public CommentThe Chair asked if there were any public comments. There were no public comments.

VII. AdjournmentHaving no further business, the meeting was adjourned at 11:00 a.m


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Sentencing Guidelines and Justice Reinvestment Study

CSG Final ReportMay 2014


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Summary of Revisions to Draft Legislation

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Michigan Justice ReinvestmentFirst Draft Concepts, Second Draft Revisions, and Jail Impacts

Introduction

In 2013, Michigan leaders requested that the Council of State Governments (CSG) Justice Center

examine how Michigan could cost-effectively improve public safety and increase offenderaccountability, and to report findings to the Michigan Law Revision Commission (MLRC).After extensive data analysis and stakeholder engagement across the state, the CSG JusticeCenter issued a report in May. Throughout the summer, the CSG Justice Center worked with theMLRC to gather input from stakeholders regarding specific policy options that could address thechallenges identified in the May report. In August the MLRC made a first draft of legislationpublicly available and requested additional written feedback.

This first bill draft contained a number of new policies aimed at reforming Michigans

sentencing guidelines, how supervision resources are allocated, and the amount of time peopleserve in prison, as well as implementing new mechanisms to gather information on crime andrestitution. The MLRC received a number of comments, some in great detail, on the first draft.

This is a testament to the commitment of stakeholders in the state, and to the value oftransparency in policy development. While some stakeholders supported aspects of the firstdrafts proposed sentencing changes, most expressed concern that changes to the statessentencing system should be more extensively discussed and considered over time.

The original proposed changes to the states sentencing guidelines may be best considered over alonger period of time, and under the auspices of a commission with that charge. The seconddraft, therefore, no longer contains proposals to change the sentencing grids, provide mitigatingfactors, allow a first time offender waiver, set supervision and sanction terms at sentencing, andhave judges set maximum sentences.

The key policies that remain in the second draft reflect those challenges that Michigan can andshould act to address in 2014, to ensure that the states criminal justice system is better able tohold offenders accountable, reduce crime, and allocate scarce resources more precisely.

Key Issues

Certainty in Prison Time.The second draft would build on the existing truth in sentencingconcept in Michigan by increasing the certainty of prison release upon serving the minimumsentence, unless there is evidence of defined, appropriate reasons to deny release at that time. Inessence, the proposal is to codify current practices and bring structure to decisions at the backend of the system, comparable to the structure that Michigan has already imposed, throughsentencing guidelines, on the front end.

Habitual Enhancement.The second draft, like the first, limits habitual enhancements to usingonly those prior convictions that have not been, or are not able to be, factored into the PRVscore. A conforming amendment is added to section 771.21.

Probation Terms.The second draft does not suggest supervision terms by grid column, asproposed in the first draft. Targeting supervision remains a resource concern, and supervisionterms are slightly more targeted in the second draft by allowing supervision terms up to 2 years,with longer probation terms allowed for those needing more time to fulfill restitution, or those


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certainty for severity of sanctions (see detail below).

Prison demandwill decrease somewhat from shorter sanctions in response to violations.

Prison growthwill be avoided by increasing the certainty of prison time. The currentaverage minimum sentence is 46 months, and the average maximum is 175 months; those

translate to 33,000 beds versus 127,000 beds. Stability between those extremes isessential and it can be achieved at or below the current size of the system.

Cost impactsare also anticipated, by virtue of population shifts and policy choices. In additionto proposed statutory amendments, efforts are underway to develop specific budgetary impactsof the changes in policy in concert with the impact modeling. The major impacts expected are:

Savings to county jails and the state corrections system due to reduced lengths of stay forsupervision violations.

Cost avoidance due to increased certainty of prison time.

Investment in SSSP implementation by corrections and the courts.

Investment in community-based recidivism reduction programs.

Potential investment, depending on jail impact, in the County Jail ReimbursementProgram, underscoring the intention to hold counties harmless from changes tosentencing policy.

Jail Impact of SSSP and Violation Sanctions

SSSP.Michigan has about 48,000 people on probation, 10,000 of whom are at high risk ofviolating their conditions of supervision or committing new crimes. These proposed policiesfocus on the public safety implications of that reality, along with the jail impact.

Consider the use of 300 jail beds statewide with these choices: (1) send 600 violators to jail for 6months each (which is about the time they spend now when they are revoked to jail) and ignoremany other violations due to lack of jail space ; (2) sanction 36,000 violators for their firstsupervision violation for 3 days each; or (3) sanction 18,000 violators twice for 3 days each.These policies are pushing toward the latter scenarios, emphasizing the importance of a certainresponse to violation, which conforms to the known psychology of punishment and behaviorchange, and allows Michigan to hold more offenders accountable for supervision violations.

To model impact it is useful to examine the experience in Washington State, where a policy ofswift and certain sanctions was implemented statewide. In their 2013 report to the legislature, theWashington Department of Corrections notes: What DOC experienced is what was expected:

that there would be a significant decrease in the use of confinement beds, an increase in thenumber of arrests, and a significant decrease in the number of hearing processes. From thetechnical assistance provided by BJA, DOC has learned that these trends are similar to thosefound by other locations that have implemented the swift and certain principles.

1

1Community Corrections Practices; 2013 Report to the Legislature As required by Second Engrossed Second Substitute SenateBill 6204, 2012, Washington DOC, December 1, 2013


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The following assumptions for violation dynamics are more aggressive, to avoid underestimatingjail impact, than the reality observed in Washington:

48,000 felony probationers on active supervision

75% will have one low-severity or compliance violation (followed by a non-custodialsanction)

40% (of the 48,000) will have a second compliance violation (followed by a 3-day jailsanction)

25% (of the 48,000) will have a third compliance violation (followed by a 3-day jailsanction)

15% (of the 48,000) will have a fourth compliance violation (followed by a 3-day jailsanction)

5% (of the 48,000) will have a fifth compliance violation (followed by a 3-day jailsanction)

Those assumptions yield 40,800 instances of imposing a 3-day jail sanction over the course of ayear. Based on the seasonal flow of violations and responses spaced more or less evenlythroughout the year, the number of jail beds needed to accommodate such sanctioning is equal todemand for approximately 335 jail bedsthroughout the state on a given day. (Obviously, thegeographic distribution of those beds would need to be correlated with where the probationersare being sanctioned. It is assumed that this kind of distribution can continue to beaccommodated through contractual arrangements.) That usage can be subsidized by the CountyJail Reimbursement Program, but may also be mitigated by the policy for sanctioning highseverity offenders, discussed next.

Violation sanction limits. The policy would impose a limit on violation sanction confinementin response to serious or risk violations of supervision conditions.Three policy scenarios arepresented in the table below: a sixty day sanction for both probation and parole (60-60), a forty-five day sanction for both probation and parole (45-45), and a thirty day sanction for both

probation and parole (30-30).

Impacts* of Sanction Limits on

Technical Parole and Probation Violators

Scenario All Sanctions Served in Jails

CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021

60-60 Prison BedImpact

-1,399 -2,061 -2,497 -2,536 -2,573 -2,618 -2,663

Jail BedImpact

790 190 460 589 602 612 623


-1,399 -2,061 -2,497 -2,536 -2,573 -2,618 -2,663

Jail BedImpact

641 -145 17 108 113 117 122


-1,399 -2,061 -2,497 -2,536 -2,573 -2,618 -2,663


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Jail BedImpact

492 -481 -426 -373 -376 -378 -379

* Impact totals reflect end of calendar year bed impacts and should not be added across years.

Again note that this depiction assumes that all sanctions will be served in county jail. Regardlessof what that sanction length looks like the impact to the prisons is the same across all scenarios.Consequently, the differential impacts associated with each scenario are seen in the impacts tothe jails.

The significant decrease in jail impact from CY2015 to CY2016 in all three scenarios is due toan assumed 18-month phase-in for the probation impacts to account for the fact that mostprobation violations on day one will be comprised of those sentenced to probation prior to the

effective date of the policy. Within 18 months of the effective date, the pool of probationviolators will be comprised almost exclusively of those sentenced to probation on or after theeffective date of the policy.

Jail impacts increase from CY2016 to CY2017-18 due to the impact during that time of violatorslooping back into the system for subsequent sanctions.

Summary Tables Comparing 1stand 2

ndDrafts

In order to update stakeholders in more detail on the second draft, the tables below reflectchanges to individual policies, organized by the first draft summary of 8 different pieces oflegislation.


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1. Sentencing Rules

First Draft Concept Stakeholder Concerns Changes Based on Stakeholder

Concerns

(New to seconddraft)

Local government concern thatail populations will be

exacerbated by changes tosentencing structure and increaseduse of jails for supervisionviolation sanctions.

dded amendments to the County

ail Reimbursement Program,

nderscoring the intention to (at ainimum) hold counties harmless

rom changes to sentencing policyincluding violation sanctionresponses.

1.A Require the courtsand MichiganDepartment ofCorrections (MDOC)to track and reportvictim restitutioncollection.

SCAO concern over thelegislature dictating performancemeasures to the third branch.

MDOC concern/misunderstandingabout the scope of the obligation.

Revised court amendment to voice

egislative intent that the Supreme

Court develop restitutionerformance measures for courts.

DOC amendment is clarified as

applying only to those sentenced torison.

1.B Require thatsentences to prisoninclude a judiciallyimposed minimumand a maximum forthe initial term, withthe maximum set in arange between 1.5

and 2 times theminimum.

PAAM/AG concern that statutorymaximums would be nullified,and (along with SCAO) that tyingmaximum to the minimumincreases vulnerability to a rightto a jury challenge. (Note: see

Appendix: The Lockridge

Issue)

SADO/CDAM/CAPPS/ACLUconcern that 2X the minimumwould still allow too long a tail

of parole board discretion,suggestion that the maximum be1.5X minimum or 5 years morethan the minimum whichever isless.

Removed the concept of setting a

aximum at sentencing.


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Concerns

1.C Require a choicebetween using priorconvictions for

scoring criminalhistory under theguidelines, and usingthem for habitualoffender sentencing.

PAAM concern over loss ofdiscretion to utilize habitualenhancement.

AG concern that enhancementonly affects the maximum sodouble counting is not aproblem. (Note: enhancementaffects both the min-max andthe statutory maximum.)

SCAO concern that amendmentsare ambiguous without acorresponding amendment to

PRV scoring statute (777.21).SADO/CDAM/CAPPS/ACLUconcern regarding court decisionsinPeople v TrudeauandPeople vLamb, which interpreted769.12(5)(a) to mean thatprisoners otherwise eligible forgood time could not have thecredits they earned applied totheir minimums unless thesentencing court approved;

suggestion to eliminate subsection(5) to put habitual offenders in thesame position as all otherprisoners for purposes ofreceiving whatever good conductcredits are available.

dded an amendment to 777.21 to

clarify the requirement that PRVcoring should not include offenses

sed as prior convictions forurposes of habitual enhancement.

This suggestion was not

incorporated, pending further

iscussion and clarification of theimplications.

1.D Spell out sentencingrules under thedistinct zones in the

sentencing grids forsentencing to prison,ail, and intermediate

sanctions.

Judicial/defense/prosecution/AGconcern that presumptive zonesallow for insufficient discretion to

tailor sentences. Offenses of avery different nature are togetheron the same grid and the straddlecells accommodate for that realityin the guidelines.

Restored the straddle cell zones in

all grids by not amending grids atall.


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Concerns

1.E For sentences to jailand prison thatinclude three terms

of time, provide forthe:Initial term ofimprisonment in jailor prison, with aminimum and amaximum,

Supervision term

to begin after release,and

Sanction term,

available to be usedfor sanctioningnoncompliance whileon supervision.

PAAM concern about theadditional complexity required bythis concept.

AG concern that short supervisionterms will not allow for restitutioncompletion.SADO/CDAM/CAPPS/ACLUconcern that judicial supervisionterms could be very long if notcapped and parole board has thebetter option of determining the

appropriate length of parolesupervision at the point of release.

SADO/CDAM/CAPPS/ACLUconcern that across-the-boardsanction terms for everyonesentenced on a particular griddoes not accomplish the goal oflimiting exposure to longrevocation for technical violationssince minimums allowed within a

grid vary so widely; suggestionfor a combination of percentageswith an absolute maximum.

MDSVPTB concern withdomestic violence/sexualassault/stalking offenders servingtheir full sanction terms.

Revisions related to threeentencing components are removed

rom the second draft.

s noted above, revised to requireaximum to be no more than the

tatutory maximum.

Removed judicially-established

upervisions terms for prison

entences so the parole board

ould continue to set supervisionerm.

Revised intermediate sanction

entencing instructions toallow/encourage judges to set a

ost-jail supervision term equal to

he jail sentence.

Removed sanction term concept.

1.F Provide for somesentences tointermediatesanctions withoutail, but with a

potential sanctionterm in jail.

MDSVPTB/PAAM/victimconcern that jail lockout cells

would make felony punishmentlower than misdemeanorpunishment; specific concernswith OUI and domestic violenceoffenses.

Grids are not amended in the

econd draft, and intermediate

anction sentencing instructions arerestored to the status quo except forhe language allowing/encouraging

udge to set a supervision term to

equal the jail term in jail-boundcases.


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Concerns

1.G Provide the judiciarywith a specific optionto sentence some

prison-bounddefendants to jail.

Local government concern overpopulation / cost impact to jailsand counties.

Removed from the second draft.

1.H Provide statutorymitigating factors

(reasons forleniency) to enhancethe exercise ofudicial discretion.

SADO/CDAM/CAPPS/ACLUsupport for concept but withsuggestions for refinement.

SCAO concerns with unintendedconsequences and need forrefinement of the concept.

PAAM/AG/victim concern with

entire concept and individuallanguage of factors.

Removed the proposed mitigatingactors, which were intended to

romote discretion to depart but are

ess critical due to the restoration otraddle cells.

1.I Repeal the so-calledTanner rule, anunnecessary statutelimiting judges to aprison sentence thatis no more than two-thirds of the statutorymaximum.

No comments received specific tothis concept.

Tanner rule restored in the second

raft.

1.J Create a criminalustice policy

commission tomonitor sentencingand advise theLegislature onrelated policy,guided by astatement of policyon the purposes of

sentencing.

SADO/CDAM/CAPPS/ACLUconcern that HB 5078 language isalready worked out.

Revised by merging ideas withconsensus previously reached on

HB 5078.


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2. Sentencing Grids


Concerns

2.A Allow the risk ofrecidivism to guide

decisions aboutlength ofsupervision, asembodied in thePrior RecordVariable score underthe guidelines.

MDOC concern that COMPASscore is a better predictor than

PRV score.

AG concern that short supervisionterms will not allow for restitutioncompletion.

Removed the supervision guide

concept embedded in the grids and

based on Prior Record Variablescore.

Instead, the pre-sentenceinvestigation (PSI) statute isamended by repealing the

requirement that officers

recommend a sentence, but adding

a requirement that they propose thelength and conditions of

supervision, based on risk, and

stating that risk assessment at

sentencing may not be used todetermine whether or how long toincarcerate.

2.B Create distinct zonesin the sentencinggrids for sentencingto prison, jail, andintermediatesanctions, andeliminate straddle

cells, so that mostcases will have apredictable result.

Judicial/defense/prosecution/AGconcern that presumptive zonesallow for insufficient discretion totailor sentences. Offenses of avery different nature are togetheron the same grid and the straddlecells accommodate for that reality

in the guidelines.

Restored straddle cell zones in allrids by not amending grids at all.


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Concerns

2.C Revise the gridranges in generalaccording to the

following rules:o Narrow prison

sentencingranges and shapethe ranges inyearlyincrements whenpossible, in alogicalprogression asseverity

increases.o Make all

sentences thatallow jail time tobe for zero to 12months tomaximizediscretion forthat level ofsentencing, andto end the fiction

of up to 17month jailsentences in thecurrent grids.

o Use numbers thatare used inpractice, such as18 months (1.5years) instead of19, and 24instead of 23.

SADO/CDAM/CAPPS/ACLU

concern that M2 and A gridsshould also be revised in keepingwith the rest of the first draftproposal.

PAAM/MJA concern withreducing judicial discretion bynarrowing ranges.

AG concern with narrowingranges because Michigan already

has a low rate of sentencing toimprisonment. (Note: the changesto ranges would not affect theproportion of sentences to prison.)

Second draft does not amend grids.


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3. Probation


Concerns

3.A Provide for Swift andSure Sanctions

Probation (SSSP) asa commonly usedcondition by settingout criteria for usingSSSP with felonyprobationers.

SADO/CDAM/CAPPS/ACLUsupport in general but concern

with allowing probation officer toboth recommend placement andthen have delegated authority tosanction.

Revised by maintain the probationofficer recommendation feature but

then to require prompt judicialdeterminations of violations.

3.B Create a distinctionbetween low andhigh severitysupervision

violations, withcorresponding shortand longer terms ofconfinement assanctions.

PAAM concern with lack ofincreasing severity of sanctionresponses.

ot revised as research indicates

certainty of sanction is the keyrather than ramping up the severity.

3.C Provide for ageneral-purpose,first-time offenderdiversion anddischarge.

SADO/CDAM/CAPPS/ACLUsupport the concept and hadsuggestions for refinement.SCAO provided suggestions forrefinement.PAAM/AG opposed to theconcept.

Removed the first time offender

waiver provision from second

draft, as insufficiently foreshadowedearlier in the process.

3.D Remove therequirement that aprobation officerrecommend asentence in the pre-sentenceinvestigation, andadd a requirementthat the officer

inform the courtwhether thedefendant fits thecriteria for SSSP.

See concern and revision noted in3.A.


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4. Violations


Concerns

4.A Change the SSSPprogram from a

grant-fundedvoluntary conceptinto a statewidefeature of felonysupervision.

No specific concerns noted. SSSP grant program reinstated andre-purposed to provide for

increased judicial activity onviolation dockets.

4.B Provide probationofficers withauthority to imposeshort sanctions forlow severity

violations ofsupervision, unlessthe authority iswithheld by theudge.

MJA andSADO/CDAM/CAPPS/ACLUconcern with due process issuearound delegated authority.

Revised to require prompt judicial

determinations of violations.

4.C Require the MDOCto promulgate rulesto guide probationofficers whenimposing sanctions.

MLRC concern with resorting torulemaking.

Revised to provide for guidance in

statute rather than by rulemaking.

4.D Provide requirementsfor judges whohandle probationviolations outside ofthe SSSP model.

No specific concerns noted. Revised to reflect judicialdeterminations as the default

option.


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5. Prison Release and Return


Concerns

5.A Provide for delayedrelease from prison

after the initial,minimum prisonterm is served forserious andpersistentinstitutionalmisconduct.

AG concern with avoiding victimprotest aspect of current parole

process.

SADO/CDAM/CAPPS/ACLUsupport for concept but concernwith description of institutionalmisconduct; suggestion for tyingthe decision to parole guidelines.

Revised by integrating with thearole statutes to create greater

certainty of prison length of stay forthose with high or average

robability of parole release.

5.B Provide forrevocation of parolefor high-severityviolations withgraduated use, in 90-day increments, ofthe sanction term.

SADO/CDAM/CAPPS/ACLUsupport for concept but concernwith lack of distinction betweenlow and high severity violationsand responses.

Revised to divide parole sanctions

into high(risk) and low(noncompliance) severity

violations, similar to proposal forrobation violations.

oncompliance violations may leadto progressive community-based

sanctions or up to three days jail

confinement. First and second riskviolations entail sanctions up to 30

days and the third risk violation

allows for full revocation..


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6. Community Corrections and Reentry


Concerns

6.A Focus programs andservices to be funded

on recidivismreduction; requireMDOC to engage ina data-driven andcollaborative processto determine theresources needed ineach locality todeliver communitycorrections andreentry programs.

Community corrections officialsand MACCAB concerns with loss

of local control, potential loss ofresources, and removal ofemphasis on jail monitoring as apurpose for communitycorrections funding.

MCCD provided Issue Brief andproposed Community PartnershipRecidivism Reduction Act as apossible substitute for the firstdraft language and for the existing

PA 511 in totality.

Revisions pending joint discussionwith community corrections

representatives and MDOC toarrive at compromise that achieves

oals of targeting resources toreduce recidivism, and bureaucraticefficiency, with need for community

buy-in.

6.B Include reentryprograms under therenewed umbrella ofthe communitycorrections fundingand process.

Community correctionsofficials/MACCAB/ MCCDconcerns with loss of local controland merging perceived successfulprogram (community corrections)with struggling program (reentry).

(see above)

7. Drug Offenses

Policy Proposal Stakeholder Concerns Changes Based on Stakeholder

Concerns

7.A Bring second-offense, drug-crimeenhancement intoalignment withgeneral second-offense

enhancement.

No concerns noted. (unchanged)


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7.B For drug-offenseenhancement, requirea choice betweenusing priorconvictions for

scoring criminalhistory under theguidelines and usingthem for habitual-offender sentencing.

No concerns noted. (unchanged)

8. Victimization Survey

First Draft Concept Stakeholder Concerns Stakeholder Reactions

8.A Require the Crime

Victim ServicesCommission toconduct avictimization survey,which would reportresults to thegovernor, attorneygeneral, SupremeCourt, andLegislature.

SCAO concern that purpose and

meaning of victimization surveyis unclear and if it involves re-contacting known victims it couldbe a re-victimization.

Revised to define purpose and what

is meant by victimization survey,and stipulate that it does not mean

re-contacting victims.


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CSG Memo Regarding Draft Legislation

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Michigan Justice Reinvestment

Memorandum to the Michigan Law Revision Commission

Meeting Date November 5, 2014

Introduction

This final memorandum advises the MLRC on the progress of legislative proposals that date back to the

May, 2014 report of the Council of State Governments Justice Center. Since publishing this report, CSG

staff have traveled to Michigan seven times to present at regional meetings of stakeholders across the

state and speak with Michigans leaders and practitioners in over fifty meetings and nearly 150 phone

calls.1 This inclusive process culminated in the wide circulation of a first draft of legislation for public

comment, then a scaled-back second draft, then stakeholder meetings to refine some of the concepts in

the second draft and turn them into bills from the Legislative Service Bureau (LSB).

Bill Drafts

The summaries below describe LSB requests for bills that will be provided to the MLRC prior to theNovember 5 meeting, in the form of bluebacks that are currently in production. Below is a table

summarizing all of the requests made to LSB for this project, which provides an organizational frame for

the remainder of this section.

Request # LSB Description Draft 1

Received

Draft 2

Received

6301 Criminal procedure; sentencing; jail reimbursement

program; modify

10/7/14 10/17/14

6302 Corrections; prisoners; criteria for basis of minimum

sentence range; modify

10/3/14 10/17/14

6303 Criminal procedure; probation; fixing period and

conditions of probation; modify

10/6/14 10/21/14

6304 Criminal procedure; probation; probation swift and

sure sanctions act; modify

10/6/14 N/A

6305 Corrections; parole; criteria for placement on parole;

modify

10/20/14 N/A

6306 Health; substance abuse; sentencing for individual

convicted of a second drug offense violation; modify

9/22/14 N/A

6307 Corrections; alternatives; criteria for community

corrections program eligibility; modify

9/26/14 10/24/14

6308 Crime victims; compensation; powers and duties forcrime victims services commission; modify 9/22/14 N/A

1 The May report came after a year of work including six public presentations to the MLRC, analysis of millions of

records, and more than 100 in-person meetings and 200 conference calls with, among others, prosecutors, judges,

victim advocates, defense attorneys, MDOC staff and administrators, legislators, law enforcement officers, and

county leaders.


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Request 6301

This bill originally encompassed four disparate objectives within Chapter IX of the Code of Criminal

Procedure: (1) monitoring victim restitution as a performance measure for courts and corrections; (2)

altering the rules for the use of habitual enhancement; (3) creating a sentencing or criminal justice

policy commission; and (4) updating the county jail reimbursement program to provide greater certainty

to counties for reimbursement. The blueback version is unchanged as to topics (1) and (4) but otherwise

reflects various inputs from stakeholders. The use of habitual enhancement (2) was negotiated among

defense, prosecution and judicial stakeholders, moving away from the original concept of eliminating

the double counting of prior criminal history and toward a less dramatic expansion of sentence ranges

when habitual enhancement is used. While negotiations continue, no agreement has been reached as of

this date. The sentencing commission (3) language has been amended to reflect ideas that were already

negotiated in HB 5078, and to charge the commission with specific tasks of monitoring the

implementation of the legislation summarized in this memorandum.

Request 6302

This request is no longer in play. It provided a conforming amendment for the concept, in 6301, of

eliminating double counting prior criminal convictions, i.e., using them only for purposes of PRV

scoring, or habitual enhancement, but not both.

Request 6303

This bill amends probation law (Chapters XI and XIA, Code of Criminal Procedure) and had three original

objectives: (1) expand Swift and Sure Sanctions Probation (SSSP) to a statewide operational level; (2)

guide probation supervision terms to be longer for certain situations; and (3) provide for a sanction

regimen based on gradations of the severity of the technical supervision violation, emphasizing

certainty of sanction over severity. The blueback version continues to pursue (2) and (3) but in light of

concerns by sheriffs and counties, (1) is no longer pursued, though the SSSP statute is amended to

provide important definitions for the sanction regimen. The blueback also addresses concerns regarding

the kinds of cases that receive longer terms of probationproviding longer terms for domestic and

sexual violence casesand concerns about allowing full revocation for supervision violations of a more

severe nature -- arrest for serious crimes, and violation of a protective order.

Request 6304

This request is no longer in play. The bill draft replicated some of the material in request 6303.

Request 6305

This bill amends the Corrections Code with two objectives: (1) provide for greater certainty of paroleunder the existing parole guidelines; and (2), as with probation, address concerns about allowing full

revocation for supervision violations of a more severe nature -- arrest for serious crimes, and violation of

a protective order. This draft has been negotiated among defense, prosecution and judicial stakeholders

and is still under discussion as of this date.


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Request 6306

This request may no longer be in play. The bill draft amended the Public Health Code and was

conceptually linked to the habitual enhancement provisions in 6301 that have not been resolved in

negotiations.

Request 6307

This bill amends the Community Corrections Act, 1988 PA 511, and began with the following objectives:

(1) moving away from the purpose of reducing the prison commitment rate and toward the purpose

of recidivism reduction; (2) requiring a gap analysis to arrive at appropriate funding levels for programs

at the front end of the justice system; and (3) suggesting that localities consider including prison reentry

in their community corrections planning. Alternate proposals were submitted by the Michigan Council

on Crime and Delinquency, and by the Michigan Association of Community Corrections Advisory Boards.

A compromise was reached that updates PA 511 to be more operationally relevant and provide greater

emphasis on evidence-based practices to reduce recidivism.

Request 6308Crime Victims Compensation Act

This request is no longer in play. The bill draft would have required the Crime Victims Compensation

Board to contract for a periodic victimization survey, a concept that was not opposed by stakeholder

groups, but victim advocates suggested that any additional resources for victims could be better spent.

Jail Population Impacts

Ultimately, the objective is greater public safety through lower recidivism. The key for Michigan is

leveraging certainty of sanctions for many people instead of severe sanctions for a few. Consider the use

of 300 jail beds statewide, with three choices for responding to technical violations among a probation

population of 48,000: (1) revoke 600 violators to jail for 6 months each; (2) sanction 18,000 violators

twice apiece for 3 days each; or (3) sanction 600 violators with one month apiece and 6,000 violators

twice apiece for 3 days each. The policies push toward the latter scenarios, emphasizing the importance

of certainty over severity of response, and allowing Michigan to hold more offenders accountable for

supervision violations.

Jails would experience impacts from both types of violation sanctions in the proposals, 3 day and 30-day

sanctions. Wider use of 3 day swift and certain responses will tend to emulate the recent experience in

Washington state: a significant decrease in the use of confinement beds, an increase in the number of

arrests, and a significant decrease in the number of hearing processes.2

The followings assumptions, based on the Washington experience but inflated to avoid underestimating

the impact on counties, yield 40,800 instances of imposing a 3-day jail sanction over the course of ayear. Based on the seasonal flow of violations and responses spaced more or less evenly throughout the

year, the number of jail beds needed to accommodate such sanctioning is equal to demand for

approximately 335 jail beds throughout the state on a given day.

75% of 48,000 probationers will have one noncompliance violation and a non-custodial sanction

2 Community Corrections Practices; 2013 Report to the Legislature As required by Second Engrossed Second

Substitute Senate Bill 6204, 2012, Washington Department of Corrections, December 1, 2013.


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40% will have a second compliance violation (followed by a 3-day jail sanction)

25% will have a third compliance violation (followed by a 3-day jail sanction)

15% will have a fourth compliance violation (followed by a 3-day jail sanction)

5% will have a fifth compliance violation (followed by a 3-day jail sanction)

With regard to 30-day sanctions, jail population is decreased by shorter sanctions applied to those whopreviously went to jail, and increased by sending violators to jail who previously went to prison. The

following table shows a net decrease in jail average daily population statewide. Analysis of sentencing

patterns in the ten largest counties showed that all except Wayne would experience a decrease, a

manageable problem through cooperation with MDOC.

Year End 2015 2016 2017 2018 2019 2020

Probation Violator (formerly to Jails) -177 -812 -796 -703 -704 -711

Probation Violator (formerly to MDOC) 37 110 139 143 146 150

Parole Violator (formerly to MDOC) 632 221 218 219 220 222

Combination Impact Total 492 -481 -439 -341 -338 -339

Prison Population Impacts

Three policies would reduce pressure on the states prison population. Parole changes proposed in 6305

would have the largest impact, as shown in the table below. However, 6305 is still the subject of

negotiations, which will likely reduce the impact. Technical violator sanction policies for probation

(6303) and parole (6305) would also decrease pressure on the prison population.

Year End 2015 2016 2017 2018 2019 2020

Parole -10 -316 -1,045 -1,930 -2,771 -3,653

Probation Violator -98 -760 -1,158 -1,029 -990 -1,014

Parole Violator 0 -1 -32 -132 -244 -380

Combination Total -108 -1,077 -2,235 -3,091 -4,005 -5,047

The combination of prison population impacts would change the expected growth in the system to look

something like the red line below, instead of the blue line.


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These impacts would likely generate cost savings for the state. The Department of Corrections estimates

a marginal savings of $4000 per prisoner; i.e., 104 fewer prisoners would save $432,000. Much largersavings per prisoner are possible when prison wings or entire units can be closed. 1,000 beds could

translate to $18,000,000 in savings, and 2,000 beds could save $30,000,000-$40,000,000.

Under the policies depicted, it is possible to achieve a more just and effective distribution of Michigans

correctional resources. Decreased prison pressure and cost for the state would support reinvestments

to further improve public safety. Until the policies themselves are fully resolved, savings cannot be fully

determined, and reinvestments cannot be appropriated. Engagement and commitment of stakeholders

to pursuing these reinvestments will be the final step in the justice reinvestment process in 2014. The

obvious choices for consideration are:

Probation supervision and court staffing to support closer attention to violations. Community corrections funding to bolster recidivism-reduction programs, as well as pretrial

innovations to reduce pressure on jails.

Jail reimbursement to reassure sheriffs and counties that they will not be shafted by changes in

sentencing policy.

Victim services such as a model program of restorative justice.


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2012-2013 MLRC Annual Report

Recent Court Decisions, 2012-2013

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Report on Recent Court Decisions Identifying Statutes for Legislative

Action and Recommendations to the Legislature

As part of its statutory charge to examine recent judicial decisions for the purpose of discovering

defects and anachronisms in the law and to recommend needed reforms, the Michigan LawRevision Commission undertook a review of Michigan Supreme Court and Court of Appealsdecisions issued from January 1, 2012 through December 31, 2013, urging legislative action.That review identified eight decisions for which the Commission makes no recommendation.The decisions examined by the Commission are:

1.People v. Walker, 491 Mich. 931; 813 N.W.2d 750 (2012).2.People v. Carp, 298 Mich. App. 472; 828 N.W.2d 685 (2012).3.In re Certified Question from U.S. Dist. Court for W Michigan, 493 Mich 70; 825 NW2d

566 (2012)

4.In re Talh, 302 Mich. App. 594; 840 N.W.2d 398 (2013).

5.Price v. High Pointe Oil Co.,Inc., 493 Mich. 238; 828 N.W.2d 660 (2013).

6. Fisher Sand and Gravel Co. v. Neale A. Sweebe, Inc., 494 Mich. 543; 837 N.W.2d 244

(2013).

7.People v. Hardy, 494 Mich. 430; 835 N.W.2d 340 (2013).

8. Titan Ins. Co. v. American Country Ins. Co., 495 Mich. 896; 838 N.W.2d 887 (2013).

1. Spousal Access to Email Accounts

A. Background

The Fraudulent Access to Computers, Computer Systems, and Computer Networks Act, MCL752.795 et seq. prohibits a person from intentionally and without adequate authorizationaccessing (or causing access to be made to) a computer, computer program, computer system, orcomputer network to acquire, alter, damage, delete, or destroy property or otherwise use theservice of a computer, computer program, computer system, or computer network.

InPeople v. Walker, No. 304593, 2011 WL 6786935 (Mich App December 27, 2011), the Courtof Appeals held that defendant violated MCL 752.795 by accessing his wifes email accountwithout her permission by guessing the password to the account, and using that access to givecopies of messages to a third party.

The Supreme Court denied Defendants application for leave to appeal.People v. Walker, 491Mich. 931 (2012). Justice Markman, joined by Justice Young, concurred but wrote separately,stating that while the defendants alleged actions unquestionably fell within the range of

conduct proscribed by MCL 752.795, he shared Justice Kellys concern that the statute

potentially covers an extremely broad range of conduct. Justice Markman thus urged theLegislature to consider whether it intends to criminalize the full range of conduct to which thestatute potentially extends.


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Justice Marilyn Kelly would grant leave to appeal, noting the significant criminal penaltiescarried by the statute, the broad range of arguably innocuous conduct that the statutecriminalizes, and that the instant case could be the first time MCL 752.795 had been used toconvict a defendant of accessing a spouses email account without permission. Justice Kelly

referenced the introduction of HB 4532 of 2011, which would legalize the defendants conduct,

and called on the Legislature to further consider the issue.

B. Question PresentedShould MCL 752.795 be amended to clarify the circumstances under which a persons

unauthorized access of an email account is legally prohibited?

C. Recommendation

The Commission recommends legislative review of this issue but makes no recommendation ofspecific legislative action. The Commission notes that HB 4532 was referred to committee andhas not come to a vote by either the House or Senate.

2. Mandatory Life Imprisonment of Juvenile Offenders

A. BackgroundIn 2012, the United States Supreme Court held that sentencing juvenile defendants to mandatorylife imprisonment without the possibility of parole was a violation of the Eighth Amendmentsprohibition on cruel and unusual punishment. See Miller v. Alabama132 S. Ct. 2455 (2012).Judges and juries must consider mitigating circumstances, including the defendants youth and

the corresponding possibility of rehabilitation, before such a sentence is imposed.

InPeople v. Carp, 298 Mich App 472 (2012) the Michigan Court of Appeals held thatMillerdidnot apply retroactively, and thus denied the appeal of a juvenile defendant for reconsideration of

his life imprisonment. However, noting that Michigans trial courts require guidance in order toensure a consistent application ofMiller,the court urge[d] our Legislature to address with allpossible expediency the issues encompassed by and resulting fromMillerthat necessitate therevision of our current statutory sentencing scheme for juveniles.Id. at 537. The plaintiff inCarpappealed to the Michigan Supreme Court, which granted the motion for leave to appeal.People v. Carp, 838 N.W.2d 873 (Mich. 2013).

B. Question PresentedHow should Michigans sentencing laws be amended to implement theMillerdecision? Shouldit apply retroactively, and if so, by what means should it affect those already serving sentencesand those who are eligible for parole?

C. RecommendationThe Commission notes that 2014 PA 22 was enacted, which modifies Michigans sentencing

laws in response to theMiller decision, and that the Michigan Supreme Court issued its ruling inthis case on July 8, 2014.


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3. Inheritance Rights of Children Conceived After the Intestate Death of a Biological

Parent

A. Background

Under Michigan intestacy laws, the right to intestate inheritance vests at the time of a decedentsdeath. Modern fertilization techniques have introduced the possibility of saving sperm and eggsoutside of the body for an extended period of time, such that a child can be conceived after thedeath of one or both biological parents.

In 2012, the Michigan Supreme Court answered a certified question from a federal district courtasking whether, under Michigans intestacy laws, MCL 700.2101 et. seq., children conceivedafter their fathers death are eligible to inherit Social Security survivors benefits as the

decedents children.In re Certified Question from U.S. Dist. Court for W Michigan, 493 Mich70 (2012). The Supreme Court held that a claimant is not a surviving descendant (and thus hasno claim to intestate inheritance) unless the claimant is alive at the time of the decedents death.

Accordingly, the Court found that the plaintiffs were not the decedents children for the purposeof intestate succession, and thus could not inherit from the decedent.

Justice Marilyn Kelly concurred but wrote separately to state that she found the resultlamentable. Justice Kelly noted that while Michigans intestacy law does not make provisionfor children conceived after the death of a parent, the Legislature does not appear to haveconsidered this situation. Stating that the situation is likely to reoccur, Justice Kelly urged theLegislature to keep our laws abreast of our times and to specifically address the issuepresented in the case.

B. Question Presented

Should the Legislature amend Michigans intestacy laws to permit children, not yet conceived atthe time of their parents death,to claim inheritance from their intestate parent?

C. Recommendation

The Commission recommends legislative review of this issue but makes no recommendation ofspecific legislative action.

4. Child Support Rights and Obligations and Imprisonment

A. Background

Under MCL 710.51(6), the parental rights of a putative father can be terminated if, despitehaving the means to do so, that parent fails to provide regular and substantial support for the

child, or fails to comply with a support order for a period of two or more years.In re Talh, a

biological father acknowledged paternity on April 2, 2001. The father failed to comply with the

terms of a child-support order, developing arrears of more than $5,000 by June 2010. In May

2010, the father was convicted of unarmed robbery and sentenced to between 4 and 30 years


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imprisonment. Because of his inability to pay, the support order was modified on June 9, 2010,

reducing the payments to zero dollars per month.

The childs biological mother subsequently remarried, and on May 4, 2012, petitioned for the

termination of the biological fathers parental rights, and for stepparent adoption. The lower

court found that the biological father had substantially complied with the terms of his supportorder for 23 months since the time of modification, which required no payments from him.

Because the biological father had not failed to substantially comply with that order for two years

or more immediately preceding the filing of the termination petition, the lower court found that

his parental rights could not be terminated.

In aper curiam opinion, the Court of Appeals affirmed the decision of the lower court, but

urge[d] the Legislature to revisit MCL 710.51(6) to address a situation such as the present one.

It seems ill-advised indeed for a person to fail to provide child support, accrue arrearages, and

then fail to fall within the parameters of the statute because of criminal actions leading to his or

her incarceration and a resultant modification (to zero) of an earlier child-support order.


Whether a parent who fails to comply with a child support order, is later sentenced to a term of

imprisonment, and who thereby is required to pay nothing towards the support of the child,

should be considered to be in substantial compliance with the terms of that order for the purpose

of terminating parental rights under MCL 710.51(6)?

C. Recommendation

The Commission recommends legislative review of this issue but makes no recommendation of

specific legislative action.

5. Non-economic Damages for Negligent Injury to Property

A. Background

Under Michigan common law, the measure of relief for property damage in tort is the

replacement of the affected property or repair of the damage. InPrice v. High Pointe Oil Co.,

Inc., the Supreme Court heard an appeal involving a plaintiff who suffered damage to her home

when several hundred gallons of fuel were negligently pumped into her basement, flooding the

home and destroying her belongings. The circuit and appellate courts held that the plaintiff was

permitted to recover non-economic damages, including emotional distress, that stemmed from

the defendants negligence.

The Court held that the remedy for injury to real property caused by negligence is the difference

in the market value before and after the injury, or the cost of repairs. After reviewing a series of

historical decisions, the court found that non-economic damages are not recoverable for the

negligent destruction of real or personal property.


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The Court then discussed whether, as the principal steward of the common law, it should alter

the common law to permit the recovery of non-economic damages for negligently inflicted

damage to property. The Court thus evaluated the merits of the current rule. It noted that

subjective valuation of property is generally greater than market value; that non-economic

damages are difficult to measure; that non-economic damages are subjective and would thus

result in disparate recoveries; and that prohibiting non-economic recovery reduces uncertaintyregarding the potential exposure faced by businesses that come into regular contact with real

property. However, the Court concluded by noting that the common law may be improved, and

stated that [w]e therefore leave it to the Legislature, if it chooses to do so at some future time, to

more carefully balance the benefits of the current rule with what that body might come to view

as its shortcomings.

B. Question presented

Whether the common law rule that non-economic damages are not recoverable for negligent

damage to property should be modified by statute?

C. Recommendation



6. Treatment of Claims Arising Out of Contractual Account Disputes

A. Background

Under Michigan contract law, claims arising out of contracts for the sale of goods must be

brought within four years, MCL 440.2725(1), whereas claims arising out of non-goods contracts

must be brought within six years, MCL 600.5807(8).

In Fisher Sand and Gravel Co. v. Neale A. Sweebe, Inc., the Supreme Court held that regardless

of the nature of the underlying contract, if contracting parties agree that a sum certain is due,

either party may sue upon that independent promise. By establishing a claim on an account

stated, the parties effectively create a separate contract. Claims arising out of this promise are

subject to the six year statute of limitations, even if the underlying contract was for the sale of

goods.

The Court stated that the Michigan Legislature has treated these claims inconsistently, alternately

including and excluding open account claims and claims on an account in statutory

definitions without apparent justification. The Court added that [t]o the extent the Legislature

desires to clarify this area of the law, it might consider revisiting the statutory framework that

corresponds with these collection actions.


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Should the Legislature amend those statutes applying to claims on an account stated and open

account claims to eliminate inconsistent treatment of such claims?

C. Recommendation

The Commission recommends legislative review of this issue but makes no recommendation ofspecific legislative action.

7. Clarifying the Aggregated Physical Abuse Variable in the Sentencing Guidelines

A. Background

Michigan sentencing guidelines provide that a criminal defendant may be given an enhanced

sentence if the defendant treated a victim with sadism, torture, or excessive brutality, or conduct

designed to substantially increase the fear and anxiety a victim suffered, MCL 777.37(1)(a).

InPeople v. Hardy, the Court considered two consolidated cases appealing the application of this

statute, in which both defendants argued that their conduct during robberies did not rise to the

level necessary to trigger heightened sentencing under MCL 777.37(1)(a).

The Court held that in applying this statute, lower courts should determine the baseline level of

fear and anxiety that a given crime would inflict. Courts should thus consider the severity of the

crime, the elements of the offense, and the ways in which those elements can be satisfied. Next,

the court should consider whether the defendants conduct went substantially beyond that

baseline level.

Justice McCormack concurred with the decision but wrote separately to encourage the

Legislature to amend MCL 777.37, offense variable (OV) 7, to define, or more clearly articulate

its intent in including, the language conduct designed to substantially increase the fear and

anxiety a victim suffered during the offense. Justice McCormack cited a troubling potential

for subjectivity in lower court interpretations of the statute, particularly with regard to the words

conduct designed.


Should the Legislature reevaluate the language of MCL 777.37(1)(a) to clarify the meaning of

conduct designed to substantially increase the fear and anxiety of a victim suffered during the

offense?

C. Recommendation




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8. Claim Adjustment and Reimbursement Between Insurance Carriers Under No-Fault

Insurance

A. Background

In Titan Ins. Co. v. American Country Ins. Co., the Supreme Court denied leave to appeal from

an unpublished Court of Appeals decision dealing with reimbursement between no-faultinsurance carriers. Justice Markman concurred with this decision, but wrote separately to

highlight this case for the possible attention of the Legislature.

In this case, a claimant was involved in two car crashes, each of which was assigned to the same

insurance carrier by the Michigan Assigned Claims Facility. See2013 WL 1223310. The

claimant sued the plaintiff insurance carrier to acquire additional benefits, which resulted in two

settlements. The first accident caused injury to the claimant, while the second accident did not.

Despite this, the first accident claim was settled for $10,000, and the second accident claim was

settled for $25,000. The plaintiff insurance carrier then sued the defendant insurance carrier

under MCL 500.3172 of the Insurance Code for reimbursement of the second claim.

MCL 500.3172(1) provides that insurers who are assigned claims are entitled to reimbursement

from defaulting insurers to the extent of their liability, and are entitled to adjust the value of

claims. In his concurrence, Justice Markman noted that the law surrounding insurance

reimbursement promotes a form of gamesmanship. An insurance carrier that knows it can

recoup its expenses from another insurer is incentivized to adjust claims so that the greater

portion of a claim can be recovered from the other insurance carrier, even if this adjustment does

not correspond to the harm suffered by the claimant.

Justice Markman further stated that the law currently leaves defendant[s] without any effective

means of ensuring that its liability arose from the accident that the defendant is obligated to

cover and not from other accidents that the defendant is notobligated to cover.


Should the Legislature reconsider these provisions of the Insurance Code to prevent the

unfairness between insurers that may result in circumstances such as those found in this case?

C. Recommendation




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Licensure of International Corporate Lawyers

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In-house counsels licensed in other states go through unnecessary burdens to get limitedrecognition of their professional status.

An in-house counsel who successfully practices law in Michigan may be required toleave the state if he or she chooses to pursue his or her legal career in private practice.

A Michigan lawyer having knowledge that another lawyer licensed in a foreignjurisdiction and serving as in-house counsel of a global corporation may be required toinform the Attorney Grievance Commission on the grounds that the lawyer hasknowledge that the foreign in-house counsel has committed a significant violation of theRules of Professional Conduct. In such situations, the very limited special certificates forcertain foreign lawyers are not available. [Compare/opinions/ethics/numbered_opinions/CI-602.htmlCI-602I]

Background Research and Consultation

In preparing this Proposal, the Commission has consulted with corporate general counsels, theleadership of the State Bar of Michigan, the Chief Justice of Michigan, The Executive Office ofthe Governor, the Chairs of the Michigan House and Senate Judiciary Committees, the Deans ofMichigan Law Schools and the Michigan Economic Development Corporation (MEDC).

SBM Executive Director Janet Welch and then-Justice Maura Corrigan met with theCommission Chair to explore the issue of encouraging more international law and lawyers inMichigan.

The Commission has substantially benefited in its consideration of this matter by a Report to theCommission entitled Modernizing Michigans Law Regulating Licensure of Foreign andDomestic Attorneys submitted by Troy Cumings, of the Warner Norcross & Judd LLP firm.

SBM Judicial Crossroads Task Force

In 2009, the State Bar of Michigan created a Judicial Crossroads Task Force. The Task Forcelooked broadly at reforming Michigans judicial system and created a Business Impact

Committee as one of its four committees.

In 2009, representatives of the Law Revision Commission made a presentation to the BusinessImpact Committee on the issue of international lawyer licensing. The Business ImpactCommittees Interim Reportincluded the following:

The task of the Business Impact Committee is to determinewhether there are procedural or structural changes thatwouldimprove the system that, if implemented, would serve to

improve the judiciary while strengthening those businesses and,in turn, our states economy.

In its final Report, the Task Force addressed the international lawyer issue, including thefollowing:
http://www.michbar.org/opinions/ethics/numbered_opinions/CI-602.htmlhttp://www.michbar.org/opinions/ethics/numbered_opinions/CI-602.htmlhttp://www.michbar.org/opinions/ethics/numbered_opinions/CI-602.html


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Michigans court system is not positioned to help the state compete

in a global economy, attracting the confidence of internationalbusiness and the trust of newcomers to the state.

***

Most states, including Michigan, have not comprehensivelyaddressed the full potential for promoting national andinternational business development within their jurisdictionsthrough modernization and streamlining of their attorney licensingrules. The red tape for licensure needs to be reduced to allow

easier entry for out-of-state and out-of-country attorneys with

significant experience who are seeking to practice law in

Michigan on behalf of their business employers. (Emphasissupplied.)

The Report included the Findings of the Business Impact Committee, including:Rules for Licensing Attorneys From Other States and Countries

3. Allow attorneys licensed to practice law in Michigan under aspecial certificate to change employers without significantadditional paperwork. Implementation must also facilitate theissuance of special certificates to non-Michigan attorneys whotransfer to Michigan to hold in-house positions, whilepreserving the character and fitness verification necessary.Alternatively, and more dramatically, broadly open admissionto the Bar to any lawyer working in Michigan for a

corporation, provided the lawyer is already properly licensed inany other state of the United States and so long as the lawyers

practice is limited to work as an attorney on behalf of his or heremployer. There could also be consideration of a requirementthat the attorney and the attorneys employer maintain an

appropriate level of liability insurance.

4. Streamline the special legal consultant process and create apro hac vice rule for lawyers licensed in countries other thanthe United States who are working for firms.

The Commissions legislative proposal for international lawyers is substantially consistent withthe general proposal made by the SBM Task Force and the findings of the Business ImpactCommittee.

MCL 600.901.

The Commissions decision to propose changes in the law to enhance Michigan as a

headquarters location for Fortune 1,000 and international corporations is within the scope of the


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Commissions jurisdiction to, inter alia:

(d) Recommend changes in the law [the commission] considersnecessary in order to modify or eliminate antiquated andinequitable rules of law, and bring the law of this state into

harmony with modern conditions.

MCL4.1403(1)

Practice of Law

Michigan law does not have an explicit definition of the practice of law. Most of the legaldevelopment comes out of cases focusing on the unauthorized practice of law (UPL). But there

is no question that an in-house legal counsel to a corporation is practicing law.

Licensing of Attorneys Is a Legislative Matter and A Proper Subject for the

Commission

While the State Bar and the Michigan Supreme Court have the primary regulatory role withrespect to the licensure of attorneys, the scope of that licensure is initially a matter of statuteenacted by the Legislature. The law creating a licensing system for lawyers reads:

The state bar of Michigan is a public body corporate, themembership of which consists of all persons who are now andhereafter licensed to practice law in this state. The members of thestate bar of Michigan are officers of the courts of this state, andhave the exclusive right to designate themselves as attorneys andcounselors, or attorneys at law, or lawyers. No person is

authorized to practice law in this state unless he complies with therequirements of the supreme court with regard thereto.

Principles That Apply to the Practice of Law

In developing its proposal, the Commission recognizes that the following basic principles applyto the licensing and regulation of the practice of law in Michigan:

The practice of law is a licensed profession.

The admission to practice law in the United States is primarily a state matter, but federalrecognition of admission to federal courts take precedence over the state.

In Michigan, the framework for licensure of attorneys is established by the legislature instatute.

In Michigan, the admission of attorneys is administered by judicial branch agencies aspart of Michigans one court of justice.


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The Legislature has made exceptions to the requirement to be licensed to practice lawbefore certain administrative agencies, e.g., Tax Tribunal, Workers Compensation.

Policy Theory Underlying the Licensure for the Practice of Law

Historically, government imposed licensure of work has been based on the theory thatgovernment licensure is necessary to protect the public. Licensure provides the basis forimposing standards and barriers, including:

o Education requirements, including continuing education and training.o Testing and examination of candidates for licensure.o Residency requirements.o Government-established ethics requirements and professional rules.o Government price fixing.o Enforcement against persons not licensed.

While consumer protection is one rationale, the protection of the economic interests of licensed

groups through barriers to limit supply and raise the market value of the licensed servicefrequently becomes the primary goal as the licensed group takes over the process.

In the licensing of lawyers, residency requirements historically served as a barrier to entry. But,over time, with the changes in the economy and the practice of law, these barriers made littlesense and were largely removed. In addition, there has been an evolution from state only to stateand national regulation of lawyers, including:

Law schools are largely regulated and accredited by a national private organization(American Bar Association Committee On Law Schools), not the states.

The Bar Exam is now primarily focused on a multi-state questionnaire with each statesetting its own passing level.

Federal regulation of lawyers is expanding under federal law, e.g., Sarbanes Oxley. NAFTA and other international agreements are beginning to focus on harmonizing

professional regulation on an international basis.

Geographic Restrictions Are Outdated

Michigans lawyer licensing and the business of law has reflected that anachronism of most

geographic restrictions:

The Michigan Legislature repealed the residency restriction to be admitted to the StateBar. Previously, Michigan had a strange requirement that a candidate to be a lawyer had

to be a resident of a state, not Michigan, but any state. This requirement was used toprevent the licensure of Canadians who received joint law degrees from Michigan-basedlaw firms.

A small portion of the Michigan bar participates in multi-jurisdictional law firms and afew have established foreign offices.


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Michigan-based national and global companies have facilities and operations throughoutthe nation and in foreign countries.

Global companies headquartered in Michigan have a need for lawyers with skills andexperience throughout the world.

Some Michigan-based companies have outsourced significant commodity legal work toforeign lawyers working outside the state.

General Agreement On Trade In Services GATS)

The General Agreement on Trade in Services (GATS) is a treaty of the World TradeOrganization (WTO) that entered into force in January 1995 as a result of the Uruguay Roundnegotiations. The treaty was created to extend the multilateral trading system to service sector, inthe same way the General Agreement on Tariffs and Trade (GATT) provides such a system formerchandise trade.

Historically, public services such as health care, postal services, education, professional services,etc. were not included in international trade agreements. Such services were traditionally classedas domestic activities, difficult to trade across borders. Some services, for example educationalservices, have been "exported" for as long as universities have been open to internationalstudents. Other services are rapidly globalizing, including accounting, consulting and law. Evenmedical care is now subject to globalization through medical tourism.

Recent technical and regulatory changes in Europe and other jurisdictions, has opened additionalservices to private commercial participation and reduced barriers to entry. The development ofinformation technologies and the Internet have expanded the range of internationally tradeableservice products to include a range of commercial activities such as distance learning,

engineering, architecture, advertising and freight forwarding.

Under U.S. law, many services are regulated at the state rather than national level. While theoverall goal of the GATS is to remove barriers to trade, the U.S. national government has notattempted to impose liberalization on any sector.

With respect to legal services, the Commissions proposal represents a very modest step in

recognizing the global nature of legal services and the benefit of voluntarily implementing theprinciples of GATS in Michigan.

Unique Issues Facing Global Companies Headquartered In Michigan

Headquarters staffs of global corporations manage business throughout the world.

The supply chains of most manufacturers involve suppliers from many countries andrequire the ability to understand multiple legal systems.

Good management practice requires frequent transfers of personnel from the field toheadquarters, including lawyers.[For an example, read the now-outdated book Why GMMatters.]


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Global transactions require lawyers with transnational experience. Federal securities,corporate transactions and complex litigation all require a mix of lawyer skills andexperience.

Global legal staffs include lawyers licensed in foreign jurisdictions that work in teamswith U.S.-licensed lawyers.

State Interests In Including Corporate Legal Staffs Under State Licensure

Insofar as licensure is in the public interest, Michigan should maximize the number ofcorporate lawyers under its regulatory scheme.

It is in Michigans economic interest to have global companies maintain headquarters in

Michigan including their global legal staffs.

The State should encourage, not discourage, corporate lawyers to remain in this state topractice law if they leave in-house corporate practice.

ommissions Proposed Changes In Michigan Law to Encourage Corporate

Legal Staffs

Eliminate 3 of 5 years rule for institutional lawyers who have been practicing in-house inMichigan.

Encourage, rather than discourage (as under present law), in-house lawyers to committheir professional careers to Michigan even if they leave in-house practice and enterprivate practice.

Create a membership category (optional) for foreign lawyers working in institutionalsettings if they are part of an integrated corporate legal team.

o Recognize as member of the bar.o Practice within institutional setting only; private practice not permitted (except

under Special Certificate of Qualification, see below)o Collect dues.o Subject to bar ethics.o Disclosure requirements on letterhead, business cards, opinions, etc.o Permit participation in State Bar committees.

Summary of Present Michigan Lawyer Requirements and Categories

Regular Member of the Bar

Be 18 years old or older.

Possess good moral character.

Have completed, before entering law school, at least 60 semester hours or 90 quarterhours toward an undergraduate degree from an accredited school or while attending anaccredited junior or community college.


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Have obtained a JD from a reputable and qualified law school incorporated within theU.S. or its territories and the school must require a certain number of years of study tograduate. [The State Board of

michigan law revision commission recommendations

Documents