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In its 209th Report, the Standing Committee on Rules of Practice and Procedure proposed a number of rules changes.  The proposals were transmitted to the Court of Appeals on December 10, 2021.  The comment period will close on January 10, 2022.  The date of the Court’s open meeting on the proposed changes is not listed on its website.

The Standing Committee’s comments on one statutory amendment that is now in effect, and several proposals, are noteworthy.  This blog focuses on only proposed civil rule changes in the circuit courts.  The proposals cover appellate rules, Maryland Electronic Courts (“MDEC”), family and domestic law, name changes, access to judicial records, attorney trust accounts, and criminal procedure.

THE STANDING COMMITTEE ON RULES OF PRACTICE AND PROCEDURE CRITICIZED A MARYLAND STATUTE THAT IS NOW IN EFFECT

One of the more novel aspects of the Standing Committee’s Report is an “Informational Item.”  The Report addresses 2021 Md. Laws, Chap. 428, “which requires certain filers to include with their initial pleading or appearance a statement identifying business entity affiliates.”  The purpose of the bill is to alert judges to the existence of business affiliates that might lead to recusal.

The law took effect on October 1, 2021, and is codified in the Courts & Judicial Proceedings Article at §6-412.  Interestingly, the Standing Committee’s Report states:

The statute is poorly drafted, does not follow the wording of the Federal Rules or Rules in other States, and, indeed, is internally inconsistent as to whether it applies only to corporate filers or extends to initial filings by other business entities as well. Whatever its breadth, it will affect tens of thousands of cases filed each year. After much consideration, the Committee concluded that any Rule designed just to implement the statute would have to be based on a construction of the statute’s ambiguous and inconsistent provisions. The Committee had no objection to the general objectives of the statute, but was reluctant, in the guise of implementing it, to determine by Rule what the General Assembly intended its scope to be. If the General Assembly declines to clarify the statute in its next session, the Committee may need to revisit its decision and propose a Rule to clarify the requirement as an independent matter of judicial policy. [Emphasis added].

The statute, Cts. & Jud. Proc. Art. §6-412, states:

(a) A nongovernmental corporate party shall, with its first appearance, pleading, petition, motion, response, or other request addressed to the court, file one copy of a disclosure statement that:

(1) Identifies any parent corporation and any publicly held corporation owning 10% or more of its stock;

(2) Identifies any member or owner in a joint venture or limited liability corporation;

(3) Identifies all partners in a partnership or limited liability partnership;

(4) Identifies any corporate member, if the party is any other unincorporated association; or

(5) States that there is no such corporation.

(b) If any information filed in accordance with subsection (a) of this section changes, the nongovernmental corporate party shall file a supplemental statement.

ONE OF THE MOST WIDE-RANGING PROPOSALS MAY BE THAT IT PRESUMPTIVELY INCLUDES AND EXCLUDES CERTAIN CATEGORIES OF CASES FROM THE BUSINESS AND TECHNOLOGY “TRACK”

An amendment is proposed to Rule 16-308(c)(1) addressing assignment of actions to the Business and Technology (“B&T”) Case Management Program.  Under the proposal the B&T track presumptively includes certain types of cases and presumptively excludes others.[1]

Presumptive Inclusions to the B&T Track:

The proposal provides that State-law antitrust and securities actions shall presumptively be assigned to the B&T track.  Additionally, there will be presumptive assignment of “disputes involving the internal governance or affairs of business entities, including the rights or obligations between or among stockholders, partners, and members or the liability or indemnity of officers, directors, managers, trustees, or partners, if the dispute involves significant complexity” and stockholder derivative actions.

Further, there is a presumption of assignment of the following, if they involve “significant complexity, including complex technical or accounting evidence”:

(i) breach of contract, fraud, misrepresentation, or statutory violations arising out of business dealings;

(ii) trade secret, non-compete, non-solicitation, or confidentiality agreements; or

(iii) business torts, including actions for unfair competition or violations of the Maryland Uniform Trade Secret or Unfair and Deceptive Trade Practices Acts….

Additionally, actions by or against insurers involving business or commercial policies will be assigned to the B&T program, if the underlying dispute would be assigned there.  And, stockholder or commercial class actions, and certain technology disputes will be presumptively assigned to the B&T track.

Presumptive Exclusions From the B&T Track:

On the other hand, the following will be presumptively excluded from the B&T program:

(A) personal injury, survival, or wrongful death actions;

(B) medical and other professional malpractice actions;

(C) landlord-tenant actions;

(D) professional fee disputes;

(E) employment disputes, other than those listed in subsection (c)(2) of this Rule;

(F) administrative agency, tax, zoning, and other appeals;

(G) criminal matters, including computer-related crimes; or

(H) proceedings to enforce judgments of any type.

PROPOSAL TO CHANGE THE VOLUNTARY DISMISSAL RULE

The Report states that there has been confusion over certain aspects of stipulated dismissals under Rule 2-506.  Rule 2-506 applies to voluntary dismissals.  Two aspects of confusion are mentioned. First, some attorneys simply file a stipulation of dismissal.  “The Committee was advised that some judges, however, have refused to permit the dismissal unless the terms are stated in the stipulation.”  Second, enforcement questions have arisen:

The Rule permits a party to the settlement to enforce the terms through the entry of judgment or other appropriate relief. Some courts will reopen the case on a motion by the enforcing party. Other courts, the Committee was advised, require the issuance and service of a new summons, as if it were a new case.

The proposed amendments make clear that the stipulation need not recite the terms of settlement.  However:

The stipulation must state (1) that there is an agreement, (2) the date for satisfaction of the agreement, if a time is specified, and (3) that the agreement provides that the parties will keep each other informed of their current addresses until satisfaction of the agreement.

As to enforcement:

Subsection (b)(2) makes clear that the action may be reopened on motion of a party, but that motion must include a copy of the settlement agreement and an affidavit stating the balance due or term to be enforced.

SELECTED MISCELLANEOUS PROVISIONS

A Committee note for Rule 2-535 (Revisory Power) is proposed, stating:

When reviewing a motion to vacate a judgment based on a party’s failure to appear at a proceeding, the court must consider relevant emergency circumstances that contributed to the failure to appear, if presented with information by the moving party. In the event of a public health or other declared emergency, factors to consider include lack of transportation due to the emergency, lack of access to a platform to participate in a remote proceeding, stay-at-home or quarantine orders issued by a governmental authority, or a medically verifiable immunocompromised status of the party or a member of the party’s household.

Proposed Rule 2-504(b)(2)(J) addresses pre-filed exhibits in MDEC actions.  A proposal to modify Rule 2-649 regarding execution on a judgment is presented.  Rule 2-551 regarding in banc review is amended to reflect electronic filing.  A proposal to modify the lis pendens rule, Rule 12-102 is presented.

The Report is comprehensive, wide-ranging, and covers many other rules.

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[1] Maryland does not follow the “bursting bubble” rule of presumptions: “Unless otherwise provided by statute or by these rules, in all civil actions a presumption imposes on the party against whom it is directed the burden of producing evidence to rebut the presumption. If that party introduces evidence tending to disprove the presumed fact, the presumption will retain the effect of creating a question to be decided by the trier of fact unless the court concludes that such evidence is legally insufficient or is so conclusive that it rebuts the presumption as a matter of law.”  Md. Rule 5-301(a) (Emphasis added).  The Committee Note states: “The treatment of presumptions under this Rule is thus distinguishable from the so-called ‘Thayer-Wigmore bursting bubble’ approach of Federal Rule 301 and the ‘Morgan-Type’ presumption embodied by Uniform Rule 301. This Rule applies only to rebuttable evidentiary presumptions that have the effect of shifting the burden of production.”

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