NBJ Online | Article of the Month
January 2019
By Russell Taber
Civil litigation faces perhaps no greater challenge than that posed by disproportionate electronic discovery. The cost and burden of eDiscovery can be staggering, and the volume can overwhelm any notion of proportionality. Cases can easily derail, with parties and courts becoming far more focused on discovery about discovery and collateral quarreling than on the merits of the actual dispute. Some have even been known to exploit these factors to try to bludgeon their opponents into settlements that bear little relationship to the merits.
Evidence in civil cases typically resides electronically—from emails to database information to text messages. Courts have grappled with how best to limit the burden and expense of eDiscovery while giving parties access to the evidence they need to prepare and present their case on the merits. These judicial efforts gained publicity with the Zubulake decisions in the early 2000s, picked up steam with the amendments to the Federal Rules of Civil Procedure in 2006, and led to another round of FRCP amendments in 2015.
The US District Court for the Middle District of Tennessee has sought to address proactively the eDiscovery challenge as it has become increasingly acute. In 2007, the Court issued Administrative Order No. 174 (AO 174) to provide a default standard for eDiscovery, filling gaps left by the FRCP. Over time, AO 174 proved to be a less effective tool than the Court had hoped, and in some cases, it was arguably even counterproductive, leading many litigants to opt out of the default standard.
In 2013, after consulting with judges of the Middle District of Tennessee and with the Federal Court Committee of the Nashville Bar Association, a local “think tank” on eDiscovery, ambitiously named the Prometheus Project, led the drafting process to propose revisions to AO 174. It was my privilege to chair the drafting process with a team of skilled and knowledgeable practitioners. Our committee benefited from feedback from a diverse array of local legal professionals. We prepared and widely circulated a draft new Administrative Order with explanatory notes before submitting them to the Court for its consideration in 2014.
Unfortunately, at the time, the Court was soon faced with an acute shortage of judges, and our bench was understandably and rightly focused on adjudicating a massive caseload. But, in 2017, a local rules committee led by one of our Magistrate Judges resurrected consideration of the proposal to amend AO 174 in connection with a complete revision of the Middle District of Tennessee’s Local Rules. Ultimately, with just a few modifications,i the Court adopted our proposal, replacing AO 174 with an entirely new default standard on September 12, 2018.
There are many notable changes from old AO 174 to new AO 174-1, such as:
- Including a recommended checklist to guide eDiscovery discussions during the parties’ Rule 26(f) meet and confer (AO 174-1, Attachment A);
- Clarifying disclosure obligations regarding electronically stored information (ESI) during the Rule 26(f) conference (id., § 2);
- Confirming that parties are obligated to take reasonable and proportionate (but not Herculean) steps to preserve ESI (id., § 4);
- Removing the former requirement of appointing an eDiscovery and retention coordinator;
- Encouraging parties to use privilege logging methods other than traditional document-by-document logs when dealing with large volumes of ESI (id., § 8(b)); and
- Listing factors a court considers in determining whether to shift the costs of eDiscovery to the requesting party (id., § 9).
The Committee’s explanatory notes are appended to this article. While the Committee’s notes are not part of the new default standard, they explain the Committee’s reasoning in making the proposal that was eventually adopted in large part by the Court. These notes therefore may be useful to practitioners in applying the new order and, if necessary, seeking its interpretation by the Court. As the explanatory notes hopefully demonstrate, AO 174-1 had its genesis in an attempt to confront some of the root causes of disproportionate eDiscovery and seeks to serve FRCP 1’s fundamental goal of securing “the just, speedy, and inexpensive determination of every action.”
Committee Explanatory Notes to Proposed Revision to Administrative Order No. 174
On July 9, 2007, the US District Court for the Middle District of Tennessee issued an administrative order on electronic discovery (eDiscovery) on the heels of the 2006 eDiscovery amendments to the Federal Rules of Civil Procedure. That order, known as Administrative Order No. 174, fills gaps left by the Federal Rules with a series of default standards that apply unless the parties reach an alternate agreement. Administrative Order No. 174, like the Northern District of Ohio’s Default Standard for eDiscovery, was based on the District of Delaware’s Default Standard.1
Delaware substantially revised its Default Standard in 2011 based on concerns that its prior version was “basic, a bit scattershot, and meant to be a punishment to parties who failed to cooperate.”2 Administrative Order No. 174 may be subject to similar commentary. Parties routinely opt out of the standard by entering or promising to enter an alternate agreement on eDiscovery. Indeed, the phrase “Administrative Order No. 174 need not apply to this case” returns over 100 hits on Google.
Since issuance of Administrative Order No. 174, the law and technology of eDiscovery has continued to evolve, for instance, with enactment of Federal Rule of Evidence 502 in 2008 and with the emergence of a technology called “predictive coding” to assist in reviewing large volumes of electronically stored information (ESI). Moreover, the world’s volume of ESI has increased substantially, by more than 12 times just from 2006 to 2011 according to one estimate.3
Correspondingly, the expense of eDiscovery has continued to rise and now comprises a multi-billion dollar industry.4 A study from the RAND Corporation noted a “general consensus that discovery has become unnecessarily expensive” and descriptions by some of discovery costs as “skyrocketing, exploding, runaway and spiraling.”5 The study noted that, though such critiques typically originate with defense-oriented interests, “similar concerns have been voiced by some lawyers who primarily represent plaintiffs.”6
The efficacy of this expense in facilitating resolution of the merits of cases is debatable. For instance, one study concluded that “[t]he ratio of pages discovered to pages entered as exhibits is as high as 1000/1.”7 Similarly, a letter from the Microsoft Corporation to the Advisory Committee on the Federal Rules of Civil Procedure stated that, “for each one-page trial exhibit, Microsoft produces an average of 1,000 pages, manually reviews more than 4,500 pages, collects and processes more than 90,000 pages, and preserves almost 340,000 pages.”8
A recent study of the ABA Section of Litigation found over 80% agreement that discovery costs are disproportionately high in small cases, with more than 40% of respondents stating they are disproportionate in large cases.9 The survey further found that 78% of plaintiff’s attorneys, 91% of defense attorneys, and 94% of mixed-practice attorneys agreed that litigation costs are disproportionate to the value of small cases, and 33% of plaintiff’s lawyers, 44% of defense lawyers, and 41% of mixed-practice lawyers agreed that litigation costs are not proportional in large cases.10 Today, it could be said that eDiscovery threatens the goal of securing “the just, speedy, and inexpensive determination of every action” embodied in Rule 1 of the Federal Rules of Civil Procedure.
Model eDiscovery orders and local rules have proliferated in other jurisdictions in recent years in response to these issues.11 The proposed revisions to Administrative Order No. 174 are largely based on those model orders, as modified by comments from local legal professionals. The three aims of these proposed revisions are (1) to institute a default standard of eDiscovery focused on the principles of reasonableness and proportionality in order to alleviate the costs and burdens of eDiscovery, (2) to continue to afford parties full access to the evidence they need to prove their claims and defenses, and (3) to emphasize that the Court has authority to modify any provisions of the Order as appropriate in particular cases.
I. The Drafting Process
After consultation with Judges of the Middle District of Tennessee, in 2013, the Federal Court Committee of the Nashville Bar Association began the process of preparing proposed revisions to Administrative Order No. 174 for the Judges to consider. Feedback and comments have been sought from a diverse group of over 100 local legal professionals, including attorneys at small law firms, attorneys at large law firms, plaintiff’s attorneys, in-house counsel, litigation support professionals and eDiscovery vendors. This effort has been publicized by email, LinkedIn, Twitter, and by the Tennessee Bar Association in a “TBA Today” email.
A local “think tank” on eDiscovery issues called The Prometheus Project agreed to assist in preparing an initial draft of proposed changes. The Prometheus Project’s steering committee circulated an initial draft of proposed changes on November 1, 2013, for discussion at its meeting on November 6, 2013. Dozens of local legal professionals have offered (sometimes divergent) comments on proposed changes to Administrative Order No. 174. The draft that The Prometheus Project ultimately presented to the NBA Federal Courts Committee in 2014 is based on model orders and other authority from various jurisdictions, as modified by these comments. These Explanatory Notes address the legal basis and rationale for the proposed changes and also highlight those proposals that may be the focus of additional debate and discussion.
II. Proposed Revisions
1. Introduction
Parties routinely seek to opt out of the default standard and state in proposed case management orders that they have reached or will reach an alternate agreement on eDiscovery issues. Unfortunately, it appears that, many times, parties do not ultimately reach such an agreement. This practice undermines the goal of early identification of areas of agreement and problems to minimize disputes and costs going forward. In addition, the aim of Administrative Order No. 174 of encouraging parties to cooperate on eDiscovery breaks down if, for instance, a party with little or no ESI declines to cooperate and uses Administrative Order No. 174 as a way to impose unnecessary obligations on an opposing party with a significant amount of ESI.
To avoid these issues, the proposal is intended to provide a new default standard that emphasizes principles of reasonableness and proportionality that parties will want to apply in most cases. Also, the proposed section 1 requires parties who wish to opt out of the default standard to reach an alternate written agreement, signed by the parties or their counsel, and to be prepared to submit the agreement to the Court upon its request. This proposal seeks to ensure that parties who say they are opting out of the default standard, in fact, reach an alternate agreement – all without burdening the Court with more filings unless the Court specifically requests to see the alternate agreement.
2. General Disclosures
The current section 2 of Administrative Order No. 174 requires the parties to exchange and discuss various categories of information at or before the Rule 26(f) conference. Some of the language in section 2 is imprecise, such as its admonition that parties discuss “the nature, scope, character, organization, and formats employed in each” relevant electronic system. In addition, section 2 references disclosure of a “retention coordinator” and an “e-discovery coordinator,” both of which the proposed amendment recommends removing from the default standard, as discussed in section 4 below.
The proposed new language in section 2 seeks to clarify what parties should disclose at or before the Rule 26(f) conference. The proposal is based largely on part of a model eDiscovery agreement from the US District Court for the Western District of Washington.12
These types of disclosure obligations, however, have been criticized as requiring producing parties to disclose more than is required by Federal Rule of Civil Procedure 26(a).13 Proponents of the disclosures argue that they discourage producing parties from “hiding the ball” on sources of discoverable ESI and facilitate early discussion of the appropriate scope of preservation and production.
3. Checklist
Section 3 of the proposed amendment would be entirely new to the administrative order. The proposal is based on an attachment to a 2013 model agreement from the US District Court for the Eastern District of Michigan14 and provides a checklist of eDiscovery issues to discuss at the Rule 26(f) conference. The goal of the proposed checklist is to provide litigants a list of possible topics to discuss to assist them in meeting their eDiscovery obligations and facilitating prompt resolution of any known eDiscovery problems.
4. Preservation
Section 7 of the current administrative order concerns retention (or preservation) of ESI. It could be said that section 7 requires unnecessary or collateral preservation obligations without addressing areas where guidance on preservation obligations is most needed.
The current administrative order requires each party to appoint a “retention coordinator” (section 7) and an “e-discovery coordinator” (section 3). One commentator described these types of provisions as “a classic example of overreaching” beyond the requirements of the Federal Rules of Civil Procedure in compelling “a party to use a particular methodology in carrying out its [eDiscovery] obligations.”15 Some local feedback has also been critical of the “coordinator” requirements as unnecessary and counterproductive. Many parties do not need or want a retention or eDiscovery coordinator. Sometimes counsel for a producing party may be best suited for these positions, but the potential for a requesting party to seek to depose the coordinators can make designation of an attorney in these positions problematic.
Current section 7 also requires disclosure of criteria of spam and virus filtering, even though such criteria are rarely at issue in a case. In addition, the requirement to implement the specified retention procedures within seven days of designating “the identified custodians” “at or before the Rule 26(f) conference” may raise confusion about the timing of a party’s obligation to preserve ESI.
The new proposed section 4 entitled “Preservation” is entirely new to the administrative order. Similar to the Western District of Washington’s Model Agreement, the new section 4 begins with the statement that “a party has an obligation to take reasonable and proportional steps to preserve discoverable ESI in the party’s possession, custody or control.”16 The next sentence restates Principle No. 6 from The Sedona Conference’s Sedona Principles as follows: “The producing party is best situated to evaluate and defend the methods and protocols appropriate for preserving its own ESI.”17
Model orders in some jurisdictions enumerate certain types of ESI that need not be preserved in most cases due to the burden of preservation and/or the remote possibility that the ESI would contain relevant information.18 New section 4(a) draws from such provisions of the Western District of Washington and the Seventh Circuit’s Electronic Discovery Pilot Program.19
New section 4(b) is based on language from the District of Delaware’s default standard for eDiscovery.20 The new section recognizes that parties often can reduce the costs and burdens of preservation, while ensuring that needed ESI is preserved, by conferring regarding what date ranges, custodians, types of ESI and sources of ESI should be preserved.
Proposed section 4(c) stems from a local attorney’s comment about providing a mechanism to seek expedited resolution of a dispute regarding the scope of preservation.
5. Timing of eDiscovery (intentionally omitted, as the Court did not adopt proposed Section 5)
6. Collection
The current Administrative Order No. 174 does not address collection (i.e., gathering) of ESI. Like proposed sections 4 and 7, the proposal is based on Sedona Principle No. 6 in providing that “the producing party is in the best position to determine the method by which it will collect ESI.” The proposal also recognizes that the method by which ESI is collected may alter some of the ESI’s metadata. Whether or not any particular fields of metadata may be relevant or useful is a case-by-case determination and often would not be known until the Rule 26(f) conference. As such, the proposal’s default standard is that parties need not collect ESI until after they have conferred regarding form of production at the Rule 26(f) conference.
7. Search
Administrative Order No. 174’s section 5 emphasizes search terms as a means to locate relevant ESI and references the eDiscovery coordinator’s role in this process, which may be unnecessary, as discussed above in section 4. Since issuance of the administrative order, new technologies for searching ESI have emerged (e.g., predictive coding, concept searching) that, according to some commentators and judges, are more effective methods of searching for relevant ESI than using search terms.21 The proposed new section 7 on search does not specify any particular method for searching ESI but, again, draws from Sedona Principle No. 6 and applicable case law in stating that “[t]he producing party is best situated to evaluate the methods and protocols appropriate for searching its own ESI."22 The proposal also recognizes that there are limits to what the Federal Rules of Civil Procedure require to be disclosed about a party’s chosen search methodology, but that the expectation in this district (as well as others) is that parties will discuss potential methodologies for identifying ESI for production.23
8. Form of Production
Current section 6 of Administrative Order No. 174 provides a default standard for production of ESI as image files (e.g., PDF or TIFF) with the possibility of later reproduction in native format upon a showing of particular need. Feedback from local practitioners on form of production has been sharply divided. The primary argument in favor of image files is that one can affix a Bates-stamp to the pages of an image file but not a native file. Some, however, criticize image production as unnecessary, cumbersome and expensive.24 Also, files can be easily labeled at the file level without having to hire an eDiscovery vendor, and, after production, one can Bates label only the pages of particular documents used in depositions or at trial.
The new proposed section 8 does not attempt to resolve this debate. Rather, it provides a flexible standard that is consistent with the Federal Rules of Civil Procedure and is based on the proportionality principle: “If, during the course of the Rule 26(f) conference, the parties cannot agree to the form(s) of production, ESI shall be produced in a form or forms that is reasonably usable and proportionate, considering such factors as the cost of the form(s) of production, the volume of ESI at issue, and whether there is a need for searchability and metadata.”
Our district has traditionally adhered to a presumption against production of metadata.25 Consistent with that presumption, the proposal recognizes that, in most cases, metadata not preserved in a “drag and drop” collection is irrelevant and involves expense that outweighs its benefit. As such, the proposal provides that, “[i]n most cases, the parties need not produce metadata that is not preserved in a ‘drag and drop’ collection.”
9. Privilege
Federal Rule of Evidence 502 became effective in 2008 after issuance of Administrative Order No. 174. The dilemma Rule 502 addressed is this: the prospect of parties waiving the attorney-client privilege and work-product doctrine if they do not engage in painstaking privilege review of ever increasing volumes of ESI – and perhaps even if they do if a few privileged emails manage to slip through the cracks.26 Rule 502(b) establishes a general framework regarding when inadvertent disclosure can waive the attorney-client privilege or work-product protection, providing that no waiver occurs where “(1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).” Rule 502(d) authorizes a court to enter an order governing waiver of privilege/protection on terms that differ from Rule 502(b). Pursuant to Rule 502(d), proposed section 9(a) addresses the elements of waiver from Rule 502(b) and provides that “[t]he production of ESI shall not constitute a waiver of the attorney-client privilege or work product protection, even though there is a failure to take reasonable steps to prevent production of information covered by the attorney-client privilege or work product protection, or a failure to take reasonable steps to rectify the error.” Though there appears to be general agreement locally that some form of a Rule 502(d) order should be included in the District’s default eDiscovery standard, there is some disagreement on the precise wording of the provision.
Proposed section 9(b) addresses privilege logging. Where large volumes of ESI are at issue, a document-by-document privilege log can be very costly and time consuming to generate with little, if any, benefit in enabling other parties to assess the claims beyond alternative logging methods.27 New section 9(b) is based on a provision from the District of Delaware’s default standard and provides as follows:
Parties are not required to include on privilege logs any document generated after the filing of the complaint. If a log is produced, the Court expects the parties to discuss foregoing using traditional document-by-document logs in favor of alternate logging methods, such as identifying information by category or including only information from particular metadata fields (e.g., author, recipient, date). Compliance with the logging provisions of this section shall not constitute a waiver of any privilege or protection.28
Proposed section 9(c) reiterates that no provision of the administrative order limits the Court’s authority to issue a non-waiver order on other terms and conditions pursuant to Rule 502(d).
10. Costs
Shifting eDiscovery costs to the requesting party is one way that courts can disincentive disproportionately expensive requests for production. Proposed section 10 provides that the costs of eDiscovery in Phase I shall be borne by the producing party, consistent with the American Rule. The proposal goes on to state that “the Court may apportion the costs of eDiscovery upon a showing of good cause” and lists seven non-exclusive factors a court may consider in determining whether to shift eDiscovery expenses. The list of factors is patterned primarily on a local rule from the Western District of Tennessee.29
11. Court Order
New section 11 is not intended to represent a change in the substance of current section 10 and reiterates the Court’s authority to issue an eDiscovery order on other terms and conditions. To the extent that eDiscovery procedures other than the proposed default standard would be appropriate in a particular case, the Court, of course, could enter an alternate order.
ENDNOTES
i The changes were to remove proposed section 5 regarding the timing of eDiscovery and the reference to the same in the “Costs” section, and to add two sentences to the end of the introductory paragraph.
1 See Thomas Y. Allman, Local Rules, Standing Orders, and Model Protocols: Where the Rubber Meets the (e-Discovery) Road, 19 Rich. J. L. & Tech. 8, 24 (2013) (hereinafter “Allman on Local eDiscovery Rules”).
2 Id. at 23 n.62 (quoting Chris Spizzirri, Delaware District Court's Revised Default eDiscovery Standard is Horrible-Electronic Discovery, ElectronicDiscovery (May 7, 2012)).
3 Jason R. Baron & Ralph C. Losey, e-Discovery: Did You Know?, YouTube (Feb. 11, 2010) (last visited Mar. 23, 2014).
4 See David J. Lender & Hon. Andrew J. Peck, 10 Key E-Discovery Issues in 2011: Expert Insight to Manage Successfully, 19 Metro. Corporate Counsel 4, 7 (Apr. 2011) (“According to the Socha-Gelbmann Electronic Discovery Survey, electronic discovery costs exceeded $2.7 billion in 2007 and were expected to top $4.6 billion in 2010.”); eDiscoveryDaily.com, eDiscovery Trends: The Growth of eDiscovery is Transparent (Aug. 9, 2012) (last visited March 17, 2014).
5 RAND Corporation, Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery 1 (2012).
6 Id. at p. 2.
7 Lawyers for Civil Justice, Civil Justice Reform Group, U.S. Chamber Institute for Legal Reform, Litigation Cost Survey of Major Companies (2010) (last visited Mar. 23, 2014).
8 Letter from Microsoft Corporation to the Advisory Committee on the Federal Rules of Civil Procedure (Aug. 31, 2011) (last visited Mar. 23, 2014).
9 Agenda of Advisory Committee on Civil Rules, Portland, OR, April 10-11, 2014, p.83 of 580 (last visited Apr. 11, 2014).
10 Id.
11 Jurisdictions that issued eDiscovery model orders or default standards in the past several years include: the U.S. Court of Appeals for the Seventh Circuit, the Western District of Tennessee, the Eastern District of Michigan, the Southern District of New York, the District of Delaware, and the Western District of Washington. See generally Allman on Local eDiscovery Rules, supra note 1, at 30-33.
12 [Model] Agreement Regarding Discovery of Electronically Stored Information and [Proposed] Order (W.D. Wash.) (last visited March. 19, 2014).
13 See Allman on Local eDiscovery Rules, supra note 1, at 35-37.
14 Checklist for Rule 26(f) Meet and Confer Regarding Electronically Stored Information (E.D. Mich.) (last visited Mar. 23, 2014).
15 See Allman on Local eDiscovery Rules, supra note 1, at 65 n.175.
16 [Model] Agreement Regarding Discovery of Electronically Stored Information and [Proposed] Order § C (W.D. Wash.) (last visited March. 19, 2014).
17 See The Sedona Conference®, Sedona Principles 38 (2007) (“Responding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own electronically stored information.”). The Sedona Conference® is the leading “think tank” on eDiscovery. The Sedona Principles were cited at length by the Sixth Circuit in John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008).
18 See, e.g., [Proposed] Standing Order Relating to the Discovery of Electronically Stored Information § 2.04(d) (7th Cir.) (last visited Mar. 23, 2014); Model Order Relating to the Discovery of Electronically Stored Information § 2.04(d) (E.D. Mich.) (last visited Mar. 23, 2014); [Model] Agreement Regarding Discovery of Electronically Stored Information and [Proposed] Order § C(2) (W.D. Wash.) (last visited March. 19, 2014).
19 See supra note 18.
20 Default Standard for Discovery, Including Discovery of Electronically Stored Information § 1(b) (D. Del.) (last visited Mar. 24, 2014) (“Parties are expected to use reasonable, good faith and proportional efforts to preserve, identify and produce relevant information. This includes identifying appropriate limits to discovery, including limits on custodians, identification of relevant subject matter, time periods for discovery and other parameters to limit and guide preservation and discovery issues.”).
21 See generally Da Silva Moore v. Publicis Groupe, 287 F.R.D. 182 (S.D.N.Y. 2012) adopted sub nom. Da Silva Moore v. Publicis Groupe SA, No. 11 CIV. 1279 ALC AJP, 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012); Maura R. Grossman & Gordon v. Cormack, Technology-Assisted Review in E-Discovery Can Be More Effective and More Efficient Than Exhaustive Manual Review, 17 Rich. J.L. Tech. 11 (2011).
22 See also Ford Motor Co. v. Edgewood Props., Inc., 257 F.R.D. 418, 427 (D.N.J. 2009) (“[A]bsent agreement, a [responding] party has the presumption . . . that it is in the best position to choose an appropriate method of searching and culling data.”) (quoting The Sedona Conference, The Sedona Conference Best Practices Commentary on the Use of Search and Information Retrieval Methods in E–Discovery, 8 Sedona Conf. J. 189, 193, 204 (Fall 2007); Kleen Prods. LLC v. Packaging Corp. of Am., No. 10 C 5711, 2012 WL 448465, at *5 (N.D. Ill. Sept. 28, 2012), objections overruled, 2013 WL 120240 (N.D. Ill. Jan. 9, 2013) (“[R]esponding parties are best situated to evaluate the procedures, methodologies, and techniques appropriate for preserving and producing their own electronically stored information.”) (quoting same).
23 See In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig., No. MDL 2391, 2013 WL 6405156, at *2 (N.D. Ind. Aug. 21, 2013).
24 See Craig Ball, Is it Malpractice? Processing .tiff files is expensive and as messy as stabbing vampires, Law Technology News (Nov. 1, 2010).
25 See John B. v. Goetz, No. 3:98-0168, 2010 U.S. Dist. LEXIS 8821, at **239-40 (M.D. Tenn. Oct. 10, 2007) (determining that “the 2006 amendment to Rule 34(a) no longer requires production of ESI in its native format that would include metadata” and discussing the “general presumption against production of metadata”).
26 See Fed. R. Evid. 502, Committee Letter.
27 See generally John M. Facciola & Jonathan M. Redgrave, Asserting and Challenging Privilege Claims in Modern Litigation: The Facciola-Redgrave Framework, 4 Fed. Ct. L. Rev. 19 (2009); see also Genesco, Inc. v. Visa U.S.A., Inc., No. 3:13-0202, 2014 WL 935329, at *29 (M.D. Tenn. Mar. 10, 2014) (determining that “the individual listing of each document to Genesco's counsel for determining privilege seems impracticable and unnecessary”).
28 Default Standard for Discovery, Including Discovery of Electronically Stored Information § 1d (D. Del.) (last visited Mar. 24, 2014) (“(i) The parties are to confer on the nature and scope of privilege logs for the case, including whether categories of information may be excluded from any logging requirements and whether alternatives to document-by-document logs can be exchanged. (ii) With respect to information generated after the filing of the complaint, parties are not required to include any such information in privilege logs.”).
29 Local R. Civ. P. 26.1(e)(9) (W.D. Tenn.).
November 2018
By DarKenya Waller
Veterans make up just 7% of the US population. So, it’s safe to say that for large swaths of our country, the realities of military service are somewhat removed from our daily lives and sphere of understanding.
Though the sacrifices made by veterans are brought to our attention on Memorial Day and Veterans Day, the emotional or physical wounds that some vets carry are a constant, daily struggle. Some experience a spiraling effect on their personal relationships and ability to manage basic life responsibilities.
According to a 2017 HUD report on homelessness, 9% of the US homeless population is made up of veterans (40,056 veterans). It’s a tragedy when any person experiences homelessness, but especially so when their service to our country has played a role in them being in that situation.
These men and women often face a variety of legal needs. A survey released in May by the US Department of Veterans Affairs found that 4 of the top 10 unmet needs for homeless veterans result from a lack of legal assistance:
- for child support issues (#5 for males, #5 for females)
- to help restore a driver’s license (#8 for males, #8 for females)
- for outstanding warrants and fines (#9 for males, #10 for females)
- to prevent eviction and foreclosure (#10 for males)
These unresolved legal issues often contribute to the cycle of poverty that keeps these veterans in a homeless situation. Wrongful eviction or foreclosure can force residents from their homes, robbing them of a stability that we all depend on. Outstanding warrants and fines can pile up beyond a person’s ability to pay, possibly leading to jail time. The ability to bring in money through a job can be hampered by the lack of a fixed address, and without a driver’s license, commuting to a job by other means can be a struggle.
All these issues feed into one another, and the effect can be overwhelming. But, there is help available. The Legal Aid Society provides free legal services for veterans and other low-income Tennesseans throughout their 48-county Middle Tennessee and Cumberland Plateau service area.
Legal Aid Society recently partnered with several other local groups to launch The Veterans Project, a program that offers legal assistance to veterans. They take direct referrals from the Metro Homelessness Commission and the Veterans Court and coordinate the staffing of Attorney for a Day events held each Wednesday at Operation Stand Down Tennessee, where veterans from across Middle Tennessee and the Cumberland Plateau can meet with one of their volunteer attorneys from several local law firms.
Although the program’s focus is veterans who are homeless or facing homelessness, assistance is also available for a range of civil legal issues, including child support, debt, bankruptcy, car purchase/repair, family law, expungement, and reinstatement of driver’s licenses.
Our veterans have fought and sacrificed for our country, and we must do our part by fighting for them in return. Helping them confront their legal troubles is one way of bringing much-needed stability into their lives.
To schedule an appointment at Operation Stand Down’s Tennessee office, call 615-248-1981. You can also learn more about the free legal services offered by Legal Aid Society by reviewing their Legal Help Booklets.
September 2018
By Kristin Thomas
Email marketing campaigns are one of the most popular and effective tools for communicating information to existing clientele and introducing services to potential customers. If implemented properly, it is no different for law firms; this marketing strategy can generate leads, create interest, and facilitate name recognition. However, its use has not gone unnoticed by legislators—email marketing is regulated both federally through the CAN-SPAM Act and in Tennessee through the state laws codified at TCA §§ 47-18-2501, -2502 and §§ 39-14-603 to -605.
Initially enacted in 2003, the CAN-SPAM Act sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to unsubscribe from further marketing, and spells out tough penalties for violators.
For the most part, Tennessee’s statute and the CAN-SPAM Act are in agreement as to how to avoid running afoul of anti-spamming laws. The main compliance requirements are summarized below:
- Do not falsify header information or use deceptive subject lines.
- Emails must be identified as an advertisement. (The federal Act allows for considerable leeway, while TCA § 47-18-2501(d) states, “the subject line of each and every message shall include "ADV:" as the first four characters.”)
- Tell recipients where advertiser is located.
- Include an unsubscribe mechanism in each email that allows the recipient to opt out of receiving future emails from advertiser; such requests must be honored within 10 business days.
- Should the advertiser choose to hire a company to run email-marketing campaigns on their behalf, they are still responsible for compliance. The laws make clear that both the company whose product is promoted in the message and the company that actually sends the message may be held legally responsible.
Several Tennesseans have been prosecuted under these laws. Being found non-compliant is an expensive proposition; each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $40,654. Both civil and criminal cases have been successfully prosecuted under the federal statute. In 2006, the largest civil penalty obtained by the FTC to date was for a $900,000 consent decree against Jumpstart Technologies, LLC for a variety of CAN-SPAM Act infractions. Tennessee Anti-Spam penalties are also quite strict; TCA §§ 47-18-2501 to -2502 and §§ 39-14-603 to -605 allow for civil remedies, attorney fees, and $10 per email up to $5,000 per day for violations. The first step to avoiding such penalties is to understand what constitutes a compliant email under these statutes.
What exactly is the difference between a transactional (relationship) email and a commercial (sales/marketing) email? Often, emails contain both transactional information and commercial language. The Federal Trade Commission website provides detailed guidance on how to determine the difference; in short, the primary purpose of the advertiser's email dictates what type of email they are sending. If the main purpose of the advertiser email is to confirm a commercial transaction, relay information about a product a customer has purchased, or notify of changes in terms or features, it is not considered commercial. These emails can also provide account balance information regarding a membership, subscription, account, loan, or other ongoing commercial relationship; convey information about an employment relationship or benefits; or deliver goods or services as part of a transaction the recipient has already agreed to. Any email intended to advertise or promote a commercial product or service, including content on a website operated for a commercial purpose, must be in compliance with the CAN-SPAM rules.
With all these rules and requirements, ensuring the advertiser's email marketing campaign is compliant with all regulations can be a daunting task. Not to fear—like everything else in the digital age, there’s an app for that! Several, in fact. These online applications automate the most cumbersome of requirements, such as maintaining email subscription lists and immediately removing those who opt-out from further commercial email marketing.
There are many email marketing applications available; at least one offers a free option, yet many offer 30-day free trials and paid-for services thereafter. Three of the most well-known online tools are Constant Contact, GetResponse, and MailChimp. All of these platforms automate the opt-out process and features required by the law, notifying you when someone has unsubscribed from your email list. They also offer analytics based on a host of collected data that allow you to see the big picture—for example, what time of day is most popular for your email to go out—and granular details, such as who exactly clicked on your email and when, the general location where the email was opened, which embedded links were clicked in the email, if any, and other helpful data.
Comparing this data over multiple campaigns will help you determine what your audience is most receptive to (images or visual elements, language used, links or buttons). Many of these services also allow you to link your mailing campaigns with other web services; this can vary from more in-depth marketing tools (SalesForce, Capsule), analytics options (Google Analytics), social media (Facebook, Twitter), and online market fronts (Shopify, PayPal). This gives you a broader view of your client interaction and interest across the Internet.
Just like traditional forms of marketing, email can be a powerful way of introducing services to potential customers. While there are many ways to craft email campaigns, the first step to any successful strategy is ensuring compliance with the relevant laws. Thankfully, there is software available to facilitate anti-spam regulation compliance while providing the added benefit of analytics for the data collected to help you refine and perfect your email marketing strategy.
July 2018
By Eleanor K. Wetzel
In celebration of the Dog Days of Summer, you and your furry friend are invited to a CLE and networking "yappy hour" on Saturday, July 21. Our panel of animal-loving attorneys will discuss animal ordinances, metro codes, state laws, and relevant federal acts; dog injury cases in civil and environmental court; and rights of public access, including Emotional Support Animals on airplanes. Learn about the hot topics that impact man’s best friend, and enjoy networking with other lawyers and law dogs after the program—dog treats included! Attendance is FREE for those who do not want/need CLE credit.
The Reyes Decision
An increasing number of courts across the nation permit canines to accompany young or vulnerable witnesses during their trial testimony. Tennessee joined this growing trend in 2014, when the DeKalb County District Attorney’s Office requested Murch, a Labrador retriever mix, to sit in the witness box with a ten-year-old boy as he testified against his rapist. The boy had met Murch at the Upper Cumberland Child Advocacy Center in Cookeville, where Murch serves as the facility dog.
The defense objected to the presence of Murch at trial as “overly prejudicial.” The trial court denied the motion. As an issue of first impression, the Court of Criminal Appeals held that the trial court had not abused its discretion in allowing a juvenile rape victim to testify with the aid of a facility dog. State v. Reyes, 505 S.W.3d 890 (Tenn. Crim. App. 2016), appeal denied (Tenn. Sept. 23, 2016). In its ruling, the Reyes court concluded, “[w]hile the cases involving the use of a facility dog during trial are not plentiful, it is clear that the evolving law permits their use.” Id. at 896 (discussing cases from Washington, California, and New York). The court gave weight to the trial court’s use of a limiting instruction as well as the procedure employed to make the dog’s presence as unobtrusive as possible.
Notably, although the trial court denied the defense’s motion to exclude Murch from trial, the court granted the defense’s alternative motion, which requested Murch be available to assist any witness, including the defendant (should he testify). No other witnesses, however, requested Murch’s assistance.
Prejudicial Effect
While involvement of canines at child advocacy centers pre-dates the 1990s, the incorporation of canines during trial testimony began in the early 2000s. The Courthouse Dog Foundation—founded in 2012, by a former prosecutor in Washington State—takes credit for institutionalizing the use of facility dog teams to provide emotional support for witnesses in criminal trials. As of June 2018, the Courthouse Dog Foundation has placed more than 160 facility dogs in 38 states, an exponential increase from just five years ago.
This spring, a widely circulated Associated Press article raised concerns about the increasing use of canine companions in court. See Dave Collins, AP, For defenders, judges, comfort dogs do opposite (Apr. 5, 2018). Despite the headline, the article concedes that studies show “dogs have no effect on verdicts or witness credibility.” Id. This comports with the conclusions made by an American Psychology-Law Society study published in 2016. See Dawn E. McQuiston, et al., Utilizing courthouse dogs and comfort items to assist vulnerable witnesses during trial, American Psychology-Law Society, Division 41 Newsletter (June 2016) (“Currently, our data do not suggest that courthouse dogs elicit any type of juror prejudice and do not affect judgments over and above the value they offer to vulnerable witnesses.”)
Difference Between Facility & Therapy Dogs
The term “facility animal” applies to a therapy animal that is present regularly in a residential or clinical setting; they are trained for extended interaction with clients. Some Tennessee District Attorney offices (e.g., 7th Judicial District in Knoxville, 19th Judicial District in Clarksville, and 23rd Judicial District in Charlotte) and child advocacy centers (e.g., Cookeville and Gallatin as well as the Sumner and Williamson County CASAs) have their own dedicated facility dog. Facility dogs often are trained by organizations accredited by Assistance Dogs International (the entity that accredits service dog training); however, facility animals have no right of access in public unless directly supporting a client with a disability.
The majority of courts, however, utilize volunteer therapy animal teams to provide support outside of the courtroom such as in witness preparation rooms or in hallways. Therapy dogs are personal pets that provide comfort and support to multiple individuals through animal-assisted intervention, or AAI (colloquially referred to as “pet therapy”). Akin to companion animals, they have no right of public access like service dogs, but due to their temperament and training, businesses with “no pets” policies may invite therapy animals to visit. While a number of organizations credential therapy animal teams, Pet Partners is the nation’s largest therapy animal organization, registering nine species, and is the only nationwide organization to exceed published standards.
Therapy Dogs in Middle Tennessee
Therapy dogs began appearing in Tennessee courtrooms as early as 2012, when a registered Pet Partners team regularly visited Rutherford County Juvenile Court to comfort juveniles held in detention as well as juveniles testifying in court.
Locally, the Davidson County Juvenile Court began incorporating therapy dogs in 2016. Volunteer therapy animal teams participate in variety of capacities like providing stress relief to juveniles at Foster Care Review Board, visiting juveniles in detention, and comforting witnesses and victims before or after court hearings, as well as at the witness stand. The program currently consists of six teams and is seeking to expand.
To request a therapy dog in Juvenile Court or to participate in the program, contact Dana Wolfe, Victim Services Coordinator.
May 2018
By Charles K. Grant
The Lawyers Without Rights: Jewish Lawyers in Germany under the Third Reich traveling exhibit will be in Nashville from May 16 through June 1 at the Belmont College of Law. An opening reception will be held in the rotunda of the Baskin Building on Wednesday, May 16, from 5:30-7:00pm. There is underground parking in the building, and the event is free and open to the public.
In 1933, Germany was considered one of the most enlightened countries in Europe. It elected and then appointed Hitler as its absolute "Fuhrer," a leader who then made himself dictator. Afterwards, the democratic state ceased to exist. The fate of German Jews was sealed. Hitler started at the top with some of the most visible members of the Jewish community—judges and lawyers—and barred them from German institutions and government employment.
The Nazis moved quickly to eradicate all perceived Jewish influence on German law. The government took a major step and enacted two laws on April 7, 1933, which attacked two of the most influential professions, judges and lawyers. The Law on the Restoration of the Professional Civil Service applied to judges, and the Law on the Admission to the Bar applied to lawyers. With these two laws, the Nazis aimed to stamp the judicial system with the twin principles of racial superiority and Nazi political control. Both laws for the first time distinguished Jews from so-called Aryans and discriminated against Jews as a matter of law. Under these two laws, Jewish judges had to retire and Jewish lawyers could be easily disbarred.
In the book, The Law in Nazi Germany: Ideology, Opportunism, and the Perversion of Justice, lawyer-historian Douglas Morris discusses the fate of one Jewish lawyer as a result of the rise of the Nazis. On September 11, 1933, in Samaden, Switzerland, a Jewish German lawyer from Berlin shot himself to death. Earlier in the year, in late March, the lawyer's partner had told him that he intended to dissolve their law practice. The partner denied being an anti-Semite, of course, but times had changed, and he needed to worry about his own family and responsibilities. Around the same time, a former client, now a member of Hitler's Storm Troopers, warned the lawyer that he was no longer safe in Berlin and must leave. The lawyer did leave, arriving in Switzerland in mid-April. There he suffered a nervous breakdown. He refused opportunities for work, obsessed about the events in Germany, lost weight, and spontaneously broke out into tears. Fewer than a dozen people attended the funeral—much like the burial of Willy Loman in Death of a Salesman, it was a small affair that did not match the dead man's dreams.1
This funeral was for Max Alsberg—the most celebrated criminal defense lawyer of the time. Berliners knew of Max Alsberg, as he was a public figure. When the historian Werner T. Angress and his mother were walking in Berlin one day in the late Weimar Republic, she stopped, pointed and said: "That is the office of Max Alsberg." The man was worth noting and the name was worth remembering. He represented the rich and the famous. They could not have hired an attorney more knowledgeable in the law or more skilled in courtroom argument. Jurists turned to his legal scholarship; lay people crowded his public lectures. He taught, he edited, and he wrote plays. Whatever the psychology behind his suicide, Alberg's career epitomized the success that Jews had achieved in the German legal profession, and his death marked the roll-back of Jewish emancipation.2
Between 1933 and 1945, Germany's government, led by Hitler and the Nazi party, carried out a deliberate, calculated attack on European Jewry. Basing their actions on racist beliefs that Germans were a superior people and on an anti-Semitic ideology and using World War II as a primary means to achieve their goals, the Nazis targeted Jews as the main enemy, killing six million Jewish men, women, and children by the time the war ended in 1945.
The most significant perpetrators of these crimes are well-known: Hitler, Adolf Eichmann, Heinrich Himmler, and Reinhard Heydrich, among others. But less known are the contributions of "ordinary" people—doctors, lawyers, teachers, civil servants, officers, and other professionals throughout German society—whose individual actions, when taken together, resulted in dire consequences. Put simply, the Holocaust could not have happened without them.
The role of those in the legal profession in general and the actions of judges in particular were critical. Judges, especially, were among those inside Germany who might have effectively challenged Hitler's authority, the legitimacy of the Nazi regime, and the hundreds of laws that restricted political freedoms, civil rights, and guarantees of property and security. Yet the overwhelming majority did not. Instead, over 12 years of Nazi rule, during which time judges heard countless cases, most not only upheld the law but interpreted it in broad and far-reaching ways that facilitated, rather than hindered, the Nazis's ability to carry out their agenda.
The 1933 decrees refused all Jewish judges, public prosecutors, and lawyers access to the courts. Many non-Jewish German lawyers kept silent, and most did not try to help their colleagues. Why? No one knows the answer.
The fates of some Jewish lawyers and judges are told in a visually powerful, highly acclaimed international traveling exhibit entitled Lawyers Without Rights: Jewish Lawyers in Germany under the Third Reich, which will be hosted by the Belmont College of Law (Baskin Building Rotunda) from May 16 through June 1. The Exhibit documents the story of the persecution of Jewish lawyers in Nazi Germany in the 1930s through photographs, letters, and testimonials. It has been shown in nearly 100 cities in Germany, the United States, and other parts of the world.
According to a release by the American Bar Association, the idea for the exhibit was conceived in 1998, when an Israeli lawyer asked the regional bar of Berlin for a list of Jewish Lawyers whose licenses had been revoked by the Nazi regime. “The regional bar decided not only to research a list of names but also to try to find out more about the fates behind all those names.”3 “Some were able to leave the country after the Nazis came into power, but very many of them were incarcerated or murdered. The non-Jewish German lawyers of those days remained silent. They failed miserably, and so did the lawyers’ organizations. We do not know why.”
After the Berlin bar transformed its research into an exhibit, other regional bars began asking whether they could show it and add their own research. “So, like a puzzle, a portrait of the fate of Jewish lawyers in Germany has emerged step by step,” Filges said. In fall of 2012, the German Federal Bar and the American Bar Association agreed to jointly sponsor the North American showing of the exhibit. Local sponsorship of the exhibit is being provided by the Belmont College of Law, the Nashville Bar Association, Harry Phillips American Inn of Court, and the Jewish Federation & Jewish Foundation.
ENDNOTES
1 Douglas G. Morris, 5, Discrimination, Degradation, Defiance: Jewish Lawyers under Nazism, in THE LAW IN NAZI GERMANY: IDEOLOGY, OPPORTUNISM & THE PERVERSION OF JUSTICE, 105 (Alan E. Steinweis & Robert D. Rachlin eds., 2013).
2 Id. at 105-06.
3 Id.
March 2018
By Lauren M. Poole
Many practitioners hear the word “bankruptcy” and immediately say, “I don’t know anything about bankruptcy.” It’s true, attempting to navigate the Bankruptcy Code (“the Code”) can be daunting if you are not familiar with it. However, there are a few basics to know to impress your clients.
In my opinion, the general appeal of filing for bankruptcy is two-fold—a “clean slate” and protection while it is being cleaned. Under Title 11 of the U.S.C., a debtor files bankruptcy when that individual or business is no longer able to pay debts as they become due. The moment bankruptcy is filed, a curtain falls around the debtor’s estate and stops all collection, repossession, and lawsuits. The curtain is called the automatic stay and is a fundamental protection provided by the Code.1 This immediate “relief” is likely what drove 789,020 businesses and individuals to file bankruptcy in the U.S. in 2017.
Chapter 13 and Chapter 7 bankruptcy filings attributed to all but approximately 8,000 cases filed in the United States in 2017, with 294,637 and 486,347 respective filings.2 The overwhelming majority of these filings were individual/nonbusiness filings, which totaled 765,863.3 In Tennessee alone, there were 35,193 bankruptcy filings with 8,914 in the Middle District.4 The Sixth Circuit holds the second highest rate of bankruptcy filings in the U.S. out of the 12 regional circuits.5
Chapters of Bankruptcy
The process for bankruptcy relief varies by Chapter. The big three Chapters are Chapter 7–Liquidation, Chapter 13–Adjustment of Debts, and Chapter 11–Reorganization. Chapter 7 liquidation is like a yard sale—everything has to go. The proceeds/assets are collected by the Trustee and lumped together to pay debts. Chapter 13 and Chapter 11 are more like a budget, with monthly payment plans on the debts. Chapter 11 is reorganization and generally reserved for business filings; however, individuals can file Chapter 11 as well. For a business, bankruptcy laws can protect the business and help the debtor discard debt, repay and reorganize.
Debtor’s Duties
Under 11 U.S.C. § 521, a debtor shall file a list of creditors, along with a schedule of assets and liabilities, current income and expenditures, and a statement of the debtor’s financial affairs. The financial affairs statement includes a signed certificate that debtor read and understands the purpose, benefits and costs of proceeding in bankruptcy, as well as services available from credit counseling agencies. Part of the notice provides that a person who knowingly and fraudulently conceals assets or makes false oath, is subject to fine, imprisonment or both.7
The debtor is required by statute to cooperate and participate with the Court over the course of bankruptcy. Statutory requirements include but are not limited to, cooperation with the Trustee or an auditor, surrender of all property of the estate to the Trustee, and appearances at required hearings.
Types of Debt
In bankruptcy, the “fight” for a clean slate between debtors and creditors is tied into the debtors’ to secured and unsecured debt. Secured debt, such as a house or a car, should be protected and provided for in some capacity under the plan or petition. If it is not, there is a problem. Unsecured debt, credit cards for example, is usually paid cents on the dollar, if at all. In a Chapter 7, unsecured debt is “wiped out” completely without further payments to creditors unless otherwise ordered by the Trustee. If the Trustee obtains additional assets in a Chapter 7, unsecured creditors are provided a notice to file a claim.
If a debtor cannot continue to pay for a secured debt, the individual or business has the option to “surrender” the debt to the creditor. Debtor’s don’t “surrender” unsecured debt. In a Chapter 7 liquidation, if the debt is retained, it is called reaffirming on the debt. Debtor’s do not reaffirm debts in Chapter 13 as the debt is adjusted or reorganized instead of liquidated. A debtor’s intention regarding secured and unsecured debts is included in a petition or plan filed by the debtor with the court. The debtor’s payment towards secured and unsecured debts in bankruptcy is called treatment.
Plans, Petitions, and Treatment
The treatment for debts is laid out in a plan or petition filed by the debtor. Generally, Chapter 13 debtors file a plan, and Chapter 7 debtors file a petition. The plan, or petition, is a roadmap to how the debts will be repaid, to who and when. When a plan or petition is first filed, it is a rough draft, a suggestion, that can be amended and wherein debtors and creditors can negotiate treatment of the debts. The debtor must provide notice of the bankruptcy to all creditors.
There are certain hard deadlines, for example, deadlines for filing proofs of claims and objecting to confirmation of the plan. During the allowed time, creditors may file a proof of claim or negotiate treatment. Prior to the confirmation of the plan, if a creditor is unhappy with its treatment, it may object to the confirmation and a hearing will be held. Once the timeframe to object passes, claims and amendments to the plan are prohibited. There are few exceptions, but the general rule is no changes will be made.
Miscellaneous Bankruptcy Nuts & Bolts
Co-debtor Stay. Only in a Chapter 13 bankruptcy, the automatic stay “curtain” applies to a non-filing co-debtor or co-signers on debts with the bankrupt debtor. You cannot pursue the debt against a co-debtor in a Chapter 13 without a Court order providing relief from the automatic stay.
Preferences. The debtor is presumed to have been insolvent on and during the 90 days immediately preceding the date of filing. Certain transactions occurring 90 days prior to the debtor filing bankruptcy may be “undone” by the Trustee as they create preferential treatment to some creditors over others.
Lien Avoidance. Lien stripping is a bankruptcy “tool” wielded by the Trustee allowing debtors to nullify certain types of liens encumbering property claimed as exempt. If a lien is avoided it becomes an unsecured claim. Not all liens are subject to lien avoidance. The deadline to object to an exemption is 30 days after the conclusion of the meeting of creditors.
910 Claims. As of 2005, debtors cannot strip a lien or “cram-down” a claim on a motor vehicle purchased with “new money,” (PMSI, no refinances) within 910 days of filing bankruptcy. The debtor must pay the entire balance of a 910 claim.
Discharge: The Clean Slate. If a debtor successfully completes the steps in the bankruptcy process, the debtor receives a discharge. The discharge applies to all debts arising before the date of the order for relief. There are exceptions, including student loans and certain fraud related matters. As of 2005, a debtor can only receive a discharge from bankruptcy every eight years.
Do’s and Don’ts of Bankruptcy
Don't violate the automatic stay. The last straw pushing debtors into the arms of a bankruptcy attorney is debt collection actions. It may be the repossession of a vehicle or foreclosure of a home, filing of a lawsuit or an execution of garnishment and bank levy. Filing bankruptcy halts actions, at least temporarily. If you repo a vehicle and the debtor files bankruptcy, it must be returned. If you are on the steps of the courthouse reading a foreclosure cry of sale, you turn around and go back to the office. The Court takes the automatic stay very seriously. Attorneys and clients who don’t respect the automatic stay can find themselves in contempt of court with heavy fines to pay. Creditors can obtain relief from the stay through agreements with debtors and the Trustee, resulting in an Order signed by the Court. The exception is a Chapter 7 bankruptcy where once the Trustee signs a “no asset report” and notifies creditors of its “abandonment of assets,” a creditor is free to pick up a car, and either await the discharge order or obtain relief to dispose of the car.
Don’t forget to include assets and notify creditors. A Trustee wants all assets of the estate included in the bankruptcy. Not disclosing assets to the Trustee is fraud. Just ask Real Housewife of New Jersey, Teresa Giudice, and Dance Mom’s Abby Lee Miller, both of whom received hefty federal prison sentences for bankruptcy fraud. Excluding creditors and paying debts outside of the plan is a preferential treatment and is not allowed.
Do talk to an attorney who knows. In my experience, bankruptcy attorneys practicing in Tennessee and the Middle District are willing to point you in the right direction. There are several members of the Nashville Bar Association who have practiced for decades and know exactly what to do. The Code and its deadlines are not forgiving, therefore if you have any questions, seek advice when it comes to bankruptcy issues.
Do be mindful of the deadlines. If you late file a proof of claim or objection, you are time barred and it is a difficult hurdle to overcome. You need a very good reason, i.e., did not receive notice of the bankruptcy, the cooperation of opposing counsel and the Trustee if you are to have a chance to act after a deadline.
Hopefully, this article has assisted in differentiating between a Chapter 7 and Chapter 13 bankruptcy, understanding the bankruptcy process, and providing awareness of the prevalence of bankruptcy filings in Middle Tennessee.
ENDNOTES
1 11 U.S.C. § 362.
2 Id.
3 Id.
4 Id., at 33-34
5 U.S. Courts, Report F-5A, U.S. Bankruptcy Courts—Business and Nonbusiness Cases Commenced by Chapter of the Bankruptcy Code, 12-Month Period Ending December 31, 2017 (Jan. 19, 2018), hyperlinked within article and available here. The Ninth Circuit was first in bankruptcy filings in the U.S. in 2017 with 127,253 bankruptcy filings. The Sixth Circuit was second with 119,887 bankruptcy filings.
6 11 USC § 521; see also 11 USC §342.
7 11 U.S.C. § 547(f).
8 11 U.S.C. § 1325 (the “hanging paragraph”).
9 11 U.S.C § 105.
January 2018
By Chancellor Carol L. McCoy & Julie Newton
When Chief Justice Warren Burger first voiced his concern that the practice of law had become too adversarial and was moving away from its goal of finding justice, he was lamenting a growing lack of civility among lawyers. With his urging, a program was developed to increase professionalism in the legal realm, including a focus on civility, which ultimately gave rise to the American Inns of Court.
On October 21, 2017, the American Inns of Court held its annual Celebration of Excellence in Washington, D.C. The program—National Conversation on Civility—brought together a panel of distinguished judges and lawyers to discuss the definition of civility and how it can be fostered around the country. Moderator Kannon K. Shanmugam, a partner at Williams and Connolly and former law clerk to the late Justice Antonin Scalia, began the program by asking panel members for a definition of civility. The Honorable Patricia A. Millett, Judge of the U.S. Court of Appeals for the D.C. Circuit, responded that civility requires believing in the good faith of others, listening with respect to others, accepting how other people approach a problem, and engaging in respectful dialogue. Judge Benes Z. Aldana, president of the National Judicial College in Reno, Nevada, defined civility simply as respect for others. He suggested that advocacy extend to all parties involved in a legal proceeding, citing the use of “third counsel” in military courtrooms, in which the victim has an advocate. Kim J. Askew, a partner in K&L Gates in Dallas, Texas, explained how zealous advocacy can be compatible with civility and professionalism. Dean William C. Koch, Jr., President and Dean of the Nashville School of Law and former Tennessee Supreme Court Justice, suggested that the legal profession rethink its position on civility and professionalism—not as “aspirational behavior,” but as “expected behavior.” Dean Koch suggested that all law schools’ curricula devote more class time to emphatically teaching ethics and professionalism.
Judge Millett commented that lawyers, trained in our system of laws, expect that the best outcomes will result with a full and thorough professional airing of the facts and evidence. She advised that respect for one’s adversary will prove valuable when you later find yourself aligned with your former opponent in another case on another day. According to Judge Millett, attorneys never know who they will encounter in the future or where those encounters may occur, so lawyers who value their professional reputations should conduct themselves with the highest standards. She further encouraged all lawyers to look at the big picture in regard to civility by assisting the public in understanding the legal system, our rule of law, and the courts.
Judge Aldana, expanding on his suggestion that Courts incorporate the idea of “third counsel,” explained that in many criminal matters, the victim may feel that their rights are being challenged or ignored. The developing rules regarding the rights of victims are not clear, and disputes regarding those rights are often vigorously contentious. He stated that civility requires respect for the victims and for others involved in the litigation.
Ms. Askew addressed the rules of “C & P,” the lawyer’s Code and the Rules of Professional Conduct, which set the parameters for legal battles. These rules reduce the tension between advocacy and professionalism. She summarized the guidance as (a) respect, (b) listening, (c) fairness, (d) showing how one should treat others, and (e) clearly understanding one’s obligations to the client, to opposing counsel, to the court, and to our system of justice. Ms. Askew stressed the importance of reading both the Code and the Rules, asking that each attorney become an example in setting the high road.
For his part, Dean Koch noted that our profession could change from “aspirational behavior” to “expected behavior” by re-examining how ethics classes in law school have been conflated with professional expertise. He suggested that the two topics be divided into separate classes, one on ethics and one on professionalism. He opined that some professors may incorrectly believe that people learns the “right” way to behave from their parents. Dean Koch stated that, at the beginning of law school, students should be inculcated with the expected standards of professional behavior, to be followed with a formal oath of professionalism. Law students should understand that one does not yell and scream, but instead discusses, debates, and resolves.
Aside from his suggestions on formal legal training, Dean Koch posited that lessons in civility do not end at graduation. He contends that the established Bar needs to be responsible for helping new admittees act with civility and encourage both young lawyers and their seasoned counterparts to interact through the American Inns of Court programs, which could also provide each of them with written guidance and personal examples of civility. He notes that the Chattanooga Bar Association and its local Inn, the Justices Brock-Cooper American Inn of Court, in cooperation with Chattanooga’s local judges, undertook to set out specific guidelines that encourage all attorneys to abide by the need for BALANCE between zealous advocacy and civility, i.e., Be respectful, Act professionally, Litigate with civility, Advocate zealously, Negotiate with integrity, Communicate timely, and Encourage courtesy.
Mr. Shanmugam, the program’s moderator, asked the panel whether a decline in civility in the legal profession reflects a decline in civility in public discourse, or a promotion of “snarkiness.” To this, Judge Aldana observed that civility in personal conversations has indeed declined, citing as an example email disputes where individuals feel free to use abusive, abrupt and rude language that they would not use when speaking directly to the other person. He stated that lawyers need to rediscover conversation, learning how to disagree rather than merely being disagreeable.
Judge Millett emphasized that lawyers are held to a higher standard of conduct because they are responsible for protecting peoples’ rights. She used the term “Big Law” to reference those law firms that have become “big business” at the expense of the legal profession. She stressed that Big Law has a professional obligation to teach its members civility and encourage the importance of maintaining professionalism.
Noting the constant tension between zealous advocacy and civility/professionalism, Judge Millett expressed concern for women lawyers who are labeled as “nice”, since it may pressure women to demonstrate how assertive they can be. An adversarial posture does not require an attorney to be “snarky” or verbally abusive. Civility can be promoted by face-to-face conversations, such as by sharing lunch. She advocated that one should always give the other party the benefit of the doubt, such as by agreeing to disagree. She urged lawyers to educate clients about how civility promotes the resolution of cases, and to explain to them that discovery disputes are not measures to seek revenge or to punish, but are to seek relevant evidence to properly advance the client’s position. By communicating frankly with clients about the legal process, she suggested, it is easier to keep them on your side throughout the proceedings.
As part of her discussion on civility, Judge Millett also commented on written communication with the Court, cautioning against briefs that insult the other side. She said that a lawyer does not win a case by assigning “bad acts” to the other attorney, noting that some Big Law firms cannot write briefs without demeaning, insulting, and attacking the integrity of the other lawyer(s). Those briefs question the integrity of the writer, not opposing counsel, and Judge Millett recommended that the brief writer visualize how such slurs will be received by the other attorney and what type of response the writer is trying to elicit. She remarked that the case belongs to the client, a person who is concerned that the case be heard and that the Court listens to the client’s side of the argument. She reminded lawyers that their clients are entrusting the outcome of the case to the Court, and that the lawyer’s duty is to submit a compelling, well-reasoned written argument on the issues, using the evidence, facts and law to persuade the Court. She again cautioned that a client’s case is not about the other lawyer, and that unsavory language directed at an opponent may demonstrate an ethical lapse and disrespect for the Court, ultimately hurting the client’s case.
In contemplating where civility in the law intersects with civility in society, Dean Koch asked whether a system that relies on elected judges might adversely affect civility. He noted that lawyers look to judges as models for their own behavior, and that a writer’s use of acerbic, contradictory language in an opinion does not just express a difference of opinion, but attacks the intellect or integrity of other judges. He understands a judge’s desire to demonstrate model behavior and to control the courtroom, but the knowledge that a judge faces public election may cause that judge to be lax in enforcing rules of civility when the judge seeks re-election. Dean Koch asserts that every lawyer needs to stand on the same ground in court, with no favors shown to aggressive lawyers—a concern that Dean Koch feels may arise when appearing before an elected judge. He does not think that civility can be mandated, but he urges lawyers and judges to adhere to an expectation of civility, and nothing less.
When young lawyers ask Ms. Kim why they should be nice to opposing counsel, she advises them that showing respect and courtesy to an adversary is the demeanor expected of a professional; it does not necessarily mean that one must agree with one’s adversary. She recommended re-reading the Code of Professional Conduct to refresh one’s understanding of the duty to the client and to the Court, commenting that, beyond suggesting good manners, they tell lawyers what to do and how to do it.
One should note, however, that there is no specific rule that says lawyers must be civil. Jane Reardon notes in her article on “Incivility and Professionalism” that in 1990, the ABA replaced the Model Code of Professional Responsibility with the Model Rules of Professional Conduct, deleting the stated ethical considerations from the Code. The rationale, she stated, was that lawyers should only be disciplined for clear disciplinary rule violations, not for failure to adhere to aspirational goals. Ms. Reardon rhetorically questioned whether lawyers can properly advocate for their clients without being aggressive toward opposing counsel. She responded that
[m]any say no—aggressiveness is part and parcel of advocacy. And over the past few decades, anyone who is in the ring with lawyers would agree that there has been an increase in aggressiveness, also characterized as incivility. Many say the incivility is unwarranted and counterproductive. Others say the incivility is effective and rewarded by better settlements or rulings for their clients. . . [while] the public’s image of the legal profession continues to tank.
This decline in the public’s perception of attorneys was one impetus for the program and a concern expressed by each participant. Mr. Shanmugam summarized the discussion by suggesting these actions to enhance civility and professionalism as (a) draft concrete steps of conduct to guide lawyers towards professionalism, (b) lead by example, (c) educate young lawyers about expected professional conduct, (d) avoid verbal or written assaults on other people, (e) remind others that the courts are the third branch of government, (f) encourage seasoned lawyers and judges to remain active in the profession, (g) create more Inns of Court across the United States, (h) teach civility and professionalism in law schools, and (i) promote more opportunities for lawyers to interact with one another and with judges.
November 2017
By Casey Duhart
Recently the U.S. Supreme Court issued an opinion where it challenged a state court’s exercise of personal jurisdiction over a multistate corporation. In BNSF Railway Co. v. Tyrrell, No. 16-405, 2017 WL 2322834 (May 30, 2017), the Court held that a Montana court could not—consistent with due process—exercise general jurisdiction over a railroad company that maintained less than 5% of its work force and 6% of its total track mileage in the state. The case involved two lawsuits against BNSF, a railroad company, under the Federal Employers’ Liability Act (FELA). FELA permits injured railroad employees to sue for compensation from their companies. In both lawsuits, neither plaintiffs lived in Montana, nor suffered injuries in Montana. BNSF did business in Montana, but was incorporated in Delaware and had its principal place of business in Texas. Both plaintiffs sued BNSF in Montana. BNSF argued that the Montana courts did not have jurisdiction over the cases because it was not “at home” in Montana. The Montana Supreme Court, however, approved personal jurisdiction over BNSF under FELA §56, which states that a cause of action may be brought in a district “in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action.” Section 56 further provides that the jurisdiction of the federal courts is concurrent with that of the state courts.
The Court held that §56 does not address personal jurisdiction over railroads, but rather addresses venue and that state courts can exercise subject-matter jurisdiction over FELA claims. Thus, the Court turned to its holdings in Daimler AG v. Bauman, 571 U.S. __ (2014), and Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011), and reiterated that courts may exercise general jurisdiction over corporations only when they are “at home” in the forum state. The Court rejected the Montana Supreme Court’s reasoning that Daimler was distinguishable from this case because it involves a FELA claim, while Daimler did not. Important to note, the Court pointed out that “[t]he Fourteenth Amendment due process constraint described in Daimler . . . applies to all state-court assertions of general jurisdiction over nonresident defendants; the constraint does not vary with the type of claim asserted or business enterprise sued.”
Ultimately, the Court held that Montana could not exercise general personal jurisdiction over BNSF because it was not incorporated in Montana and did not maintain its principal place of business there. Interestingly, the Court acknowledged that although BNSF has more than 2,000 miles of track and 2,000 employees in Montana, it was not enough to subject it to personal jurisdiction on the plaintiffs’ unrelated claims which “have no relationship to anything that occurred or had its principal impact in Montana.”
Justice Sonia Sotomayor dissented, calling the ruling a “jurisdictional windfall to large multistate or multinational corporations that operate across many jurisdictions.” Her main concern with the Court’s ruling is that multistate and multinational corporations will hardly ever be subject to general jurisdiction in any location other than their place of incorporation or principal place of business, thereby forcing individual plaintiffs to sue in “distant jurisdictions with which they have no contacts or connection.” Further, Justice Sotomayor opined that the Court should have engaged in an International Shoe analysis where, in that case, the Court focused on the quality and quantity of the defendant’s contacts with the state, rather than a comparison between the defendant’s contacts in that state compared to its contacts in other states where it operates.
Courts will be mindful to learn from this case that whether a defendant is a railroad company, tire manufacturer, or car dealership the Due Process Clause of the Fourteenth Amendment still requires that the “at home” standard must be met before a court may assert general personal jurisdiction. Aside from the exceptional case that the Court referenced in Daimler, the Court has yet to find a corporation essentially “at home” in a state other than its place of incorporation and principal place of business. Whether the “at home” test is a “jurisdictional windfall” for large multistate or multinational corporations will continue to be a topic of debate among jurists who, like Justice Sotomayor, disagree with the Court’s general jurisdictional limits announced in Daimler.
No, Dr. Smith, producing the articles you relied on for your expert testimony would not be copyright infringement.
By A. Scott Ross
Litigate long enough and eventually you will hear it. You request a key document and get the response: “Sorry, that document is ‘copyrighted.’ Making a copy for you would be copyright infringement.” This Article takes a brief trip through some of the governing law of copyright “fair use,” focused specifically on the use of copyright protected documents in litigation. As the title implies, copying a document for use as evidence generally constitutes “fair use,” and is therefore not a copyright infringement.
Copyright protection extends to all “original works of authorship,”1 arises upon creation of the work,2 generally extends for the life of the author plus 70 years,3 and among other things prohibits copying.4 Importantly, however, copyright protection is limited by the doctrine of fair use, which allows copying of otherwise protected material under certain circumstances. Fair use is codified at Section 107 of the Copyright Act: “the fair use of a copyrighted work,5 including such use by reproduction . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.” According to Section 107, four factors should be considered in “determining whether the use made of a work in any particular case is a fair use”: “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”6
As a number of cases have held, the fair use doctrine allows copying for use in litigation. The leading case is Bond v. Blum7 from the Fourth Circuit, where an author sued over the use of his unpublished manuscript as evidence in a prior custody battle. The author’s manuscript, Self-portrait of a Patricide: How I Got Away with Murder, in which the author described how he had beaten his father to death with a hammer, had been copied and filed to show that his house might not be the best place for children. The Fourth Circuit held that fair use protected the lawyers’ and parties’ use of the manuscript as evidence in the custody case, even though the entire manuscript had been copied without the author’s permission. Noting that the Section 107 fair use factors are “illustrative,” not “exclusive,” the court reasoned that the manuscript had not been used for a commercial purpose, and use of the document in litigation would not harm the market for the work; that the work was a factual one, whereas “a fictional work might be closer to the core of copyright;” that although as a general matter the case for fair use decreases the more of a work the defendant has copied, this is an “imperfect generalization,” and copying and use of the manuscript as evidence “even the entire manuscript, does not undermine the protections granted by the [Copyright] Act but only serves the important societal interest in having evidence before the factfinder;” and finally, that defendants’ use of the manuscript as evidence would not “materially impair the marketability of the work” and would not “act as a market substitute for it.”8 Applying these Section 107 factors, the Fourth Circuit easily concluded that copying and use of the manuscript as evidence, even the entire manuscript, was a fair use and did not constitute copyright infringement. Central to its reasoning, the Fourth Circuit observed: “because the societal benefit of having all relevant information presented in a judicial proceeding is an important one, it should be furthered if doing so would not unduly undermine the author’s rights regarding his creative work.”9
Other courts have followed the Fourth Circuit’s lead. As one court summarized, “[r]eproduction of copyrighted material for use in litigation or potential litigation is generally fair use, even if the material is copied in whole.”10). Fair use protected a law firm when it viewed and printed archived copies of the plaintiff’s website found on the Internet Archive Wayback Machine.11 Fair use protected the copying and use of an attorney’s internet blog posts as evidence in attorney disciplinary proceedings, where the disciplinary case charged the attorney with making false statements about judges and other lawyers in the blog.12 Notably, the fair use defense was sustained even though it was alleged that over 1,000 pages of the attorney’s blog had been copied.13 Fair use protected a city council’s use of adult films as evidence in a nuisance abatement action.14 Fair use protected copying and filing of a potential expert’s resume, where an agreement to retain expert was never concluded and the expert was later withdrawn.15 Fair use protected attorneys’ copying and filing of plaintiff’s essays.16 Fair use protected a police department when it copied and publicly displayed photos of a murder victim seized from her photographer-employer and made use of the photos during the course of its murder investigation.17
And fair use protected a patent law firm’s copying of scientific journal articles for use in patent prosecutions.18 Of note, in evaluating the nature and markets of the original and allegedly infringing works, the law firm’s use of the articles was held to be “transformative,” in that the firm did not use the scientific articles “for the same intrinsic purpose” as their publishers. The patent lawyers “needed to make internal copies of the Articles and review those copies to provide the [patent office] with information relevant to the patentability of the firm’s clients’ inventions. By contrast, the Publishers distribute[d] the scientific articles in their journals to inform the scientific community of advancements in scientific research . . . and to allow the scientific community to test the quality of the authors’ methods and conclusions.” Although “transformative” uses often alter the original work (parodies are an example), alteration is not required.19 This concept, that use in litigation does not unfairly compete with the copyrighted work in its original market—or “supersede” the work’s original purpose, appears as a recurring theme in the cases.20
This consideration drove the holding in the one case that held copying in litigation was not protected by fair use. In that case, “litigation was one of the contemplated uses of the copyrighted photos at issue.”21 A construction firm hired an aerial photographer to document construction progress on a casino project. The agreement with the photographer called for the payment of a flat fee for each aerial photo shoot, plus a specific charge for each photo print or copy ordered. When the construction company later needed prints for an arbitration claim, it initially ordered them from the photographer, but then decided the photographer’s charge for the photo prints would be too high and instead made its own color copies. In assessing the “purpose and character of the use” of the aerial photos, the Eastern District of Michigan observed that the defendant construction company had used the color copies of plaintiff’s photos “for precisely the same purpose—or at a minimum, for one of the same purposes—as the photos themselves were intended to serve; namely, as a pictorial record of Defendant’s progress on the . . . construction project.”22 The court distinguished cases like those cited above, where litigation copies were made of “works that played some role in the underlying facts of the case,” from the present situation where the aerial photos were “created specifically for the purposes of the litigation.”23 The construction company made “intrinsic use” of the aerial photographs—used them for the purpose for which they were created—when it copied and used them in the arbitration proceeding. The reason these photos were made, and the “market” for their sale, was to document progress on the construction project in the event of litigation. As the court emphasized, “litigation was specifically contemplated, by both parties, as one of the principal “markets” for Plaintiff's photos.”24 Using them for this purpose, without permission and payment, effectively destroyed their value in the limited market for which they were created. Therefore, fair use did not protect the construction company from a copyright infringement claim by the photographer.25
These cases are easily reconciled by the “important distinction between copyrighted works that happen to capture information that proves relevant to subsequent litigation, and works that are intended to capture such information, specifically for the purpose of the litigation.” When, for example, an expert witness relies upon something, be it an article, an x-ray, a computer program, or a scribbled note, the expert’s reliance on the work, in and of itself, turns that work into an irreplaceable piece of evidence in the case. The thing relied upon must be examined as a piece of evidence, and reproducing and using it for this purpose falls squarely within protections afforded by the fair use doctrine. On the other hand, fair use does not provide an excuse for lawyers or litigants to steal the copyright-protected work product they may commission to assist them with their litigation efforts. If you hire a photographer to take pictures for your case, you must pay what you have agreed. But when you ask an opposing expert for a copy of the articles and book chapters he relies upon, you are entitled to copies, and making them does not amount to copyright infringement. That is the case even if they are “copyrighted” works, and even if you need to copy them in their entirety.
ENDNOTES
1 17 U.S.C. § 102(a).
2 Id. § 102(a).
3 Id.§ 302(a).
4 Id. § 106(1).
5 Id. § 107
6 Id. § 107
7 Bond v. Blum, 317 F.3d 385 (4th Cir. 2003),
8 Id. at 396-97.
9 Id. at 396.
10 Stern v Does, 978 F.Supp.2d 1031, 1044-49 (C.D. Cal. 2011).
11 Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey, 497 F.Supp.2d 627 (E.D. Pa. 2007).
12 Denison v. Larkin, 64 F.Supp.3d 1127 (N.D. Ill. 2014).
13 Id. at 1130.
14 Jartech, Inc. v. Clancy, 666 F.2d 403 (9th Cir. 1982).
15 Devil’s Advocate, LLC v. Zurich American Ins. Co., No. 1:13–cv–1246, 2014 WL 7238856 (E.D. Va. Dec. 16, 2014) (appeal filed Jan. 13, 2015, pending in in Fourth Circuit).
16 Hollander v. Swindells-Donovan, No. 08–CV–4045 (FB)(LB), 2010 WL 844588 (E.D.N.Y. Mar. 11, 2010).
17 Shell v. City of Radford, 351 F.Supp.2d 510 (W.D. Va. 2005).
18 American Institute of Physics v. Schwegman, Lundberg & Woessner, P.A., 2013 WL 4666330 (D. Minn. Aug. 20, 2013).
19 See, e.g., Stern v. Does, 978 F. Supp.2d 1031, 1045 (C.D. Cal. 2011) (finding transformative use where an attorney’s list serve post questioning accounting firm’s billing practices was copied and forwarded to the accounting firm; that is, by forwarding the post, defendants “conveyed the fact of the post rather than its underlying message”).
20 See, e.g., Denison, 64 F.Supp3d at 1133-34; Devil’s Advocate, 2014 WL 7238856, at *7.
21 Images Audio Visual Productions, Inc. v. Perini Bldg. Co., Inc., 91 F.Supp.2d 1075 (E.D. Mich. 2000).
22 Id. at 1081.
23 Id. at 1085.
24 Id. at 1086.
25 Id.
Beware of Spyware
Spyware Primer for Family Lawyers
By Lisa Binder and Jim KempVanEe
The use of technology to obtain evidence in divorce cases is a hot topic of growing interest to all family law practitioners across the nation. More and more common is the client who asks his or her attorney the question:
Can I spy on my spouse?
All attorneys are aware of their ethical obligation to zealously advocate for their clients and to pursue and utilize all evidence that will be helpful to their client. However, they can run seriously afoul of federal and state laws when it comes to the use of spyware or the use of evidence procured through spyware.
What Is Spyware and Is It Legal?
Spyware is any device or program that records and/or replays something typed on a computer, whether that be emails, documents, contacts, web addresses, or other. Attorneys have an ethical obligation to their clients to caution them against the illegal use of spyware and to refrain from assisting in the procurement, encouraging the procurement, or in the utilization of evidence obtained in violation of state and federal laws outlined in this article. When asked about using spyware, the best rule is simply to tell your client not to do it because the answer is complex and the rules are murky. Often involved is a slippery slope of differing definitions of “consent”.
When confronted with the client who has already retrieved information through the use of spyware, the attorney should ask his client the following questions: Did you have authorized use of the computer you used to “spy”? Is it a family computer? Do you have the password of your spouse?
If the client had consent to use the computer and access the information thereon, then the interception may not be unauthorized, and if not, there is no violation of law. Implied consent may be found when circumstances lead to that conclusion, such as when one spouse provides the other with emails and account passwords, and they use the same home computer—but be careful trying to draw this conclusion. The problem is that courts decide consent on a case-by-case basis, and since there is no uniform definition of consent, this is dangerous territory. If an attorney tells a client that he or she can use the spyware, or the evidence obtained through the use of spyware, and a court ultimately rules that there was no consent, the attorney has subjected his client—as well as himself—to possible civil and criminal consequences.
Applicable Federal Law
The Electronic Communications Privacy Act of 1986 (ECPA), 18 U.S.C. §§ 2510-22, consists of the Electronic Communications Privacy Act and the Stored Wire Electronic Communications Act. The ECPA has been amended periodically to reflect advances in technology. In short, the ECPA protects wire, oral, and electronic communications while those communications are being made, are in transit, and when they are stored on computers. The Act applies to email, telephone conversations, and data stored on computers. The ECPA is violated when a person intentionally:
- Intercepts, uses, or discloses any wire or oral communication by using any electronic, mechanical, or other device.
- Without authority, accesses a wire or electronic communication while in storage. There are financial and criminal consequences to any person who violates the ECPA, including attorneys.
The bottom line is that a family law attorney can neither obtain, nor encourage the procurement, or use the evidence obtained in violation of this Act.
The Wiretap Act prohibits the intentional, actual, or attempted interception, use, disclosure, or procurement of any other person to intercept or endeavor to intercept any wire, oral, or electronic communication. Title 1 prohibits the use of illegally obtained communications as evidence. Title II is the Stored Communications Act and protects the privacy of the contents of files stored by service providers and of records held by service providers, such as a subscriber name, billing records, or IP addresses. Title III requires the government to obtain a court order authorizing the installation and use of a pen register (a device that captures dialed numbers and related information to outgoing calls) and/or a trap and trace (a device that captures the numbers and related information from which incoming calls coming to the subject have originated).
Applicable Tennessee Law
The Tennessee counterpart to the federal act prohibiting wiretapping and electronic surveillance is spread across several chapters of Tennessee Code Annotated Title 39.
First, Part 6 of Chapter 13 addresses invasion of privacy concerns. T.C.A. § 39-13-601 specifically prohibits intentional interception, or attempts to intercept, and/or helping another person to use any device to intercept electronic communications. An attorney cannot advise a client to do this or assist a client to do this, nor can an attorney receive or use in any way the evidence procured by this illegal activity. T.C.A. § 39-13-603 provides for civil actions and injunctive relief when such interception occurs.
Section 39-13-604 governs the interception of cellular or cordless telephone transmissions. It defines communications to include those transmitted by voice, data or image, including facsimile. Interception can be either a Class A or Class E felony if the defendant knowingly publishes, distributes, or disseminates it.
Section 39-13-607 makes it a criminal offense to spy upon an individual without consent if the viewing would offend or embarrass an ordinary person.
Section 39-13-609 contains the Freedom from Unwarranted Surveillance Act, which prohibits the use of drones to conduct surveillance—except if terrorism or homeland security is at stake. It is directed at law enforcement agencies and makes clear that such would constitute a search.
Editor’s Note: Tennessee’s Wiretapping and Electronic Surveillance Act of 1994, codified at T.C.A. § 40-6-301 et seq., governs use of wiretapping in general by law enforcement and is structured similarly to the federal wiretapping statute known as the Omnibus Crime Control and Safe Streets Act of 1968, codified at 18 U.S.C. §§ 2510-2520.
Part 6 of Chapter 14 governs computer crimes and comprises the Tennessee Personal and Commercial Computer Act of 2003 (codified at T.C.A. §§ 39-14-601 through 606). This Act prohibits accessing telephone systems, telecommunications facility, computer software, computer program, computer data, computer system, computer network, or any part thereof for the purpose of obtaining money, property or services by false representations or causing computer output to be false to obtain money, property or services, or to effect or alter a financial instrument or electronic transfer of funds to disrupt, alter, misappropriate or commit fraud. Pay particular attention to section 39-14-602(c), which prohibits anyone from receiving, concealing, using, or aiding another in this. An attorney cannot advise a client to do this, or assist a client to do this, or receive or use in any way the evidence procured by this illegal activity.
GPS tracking of vehicles is addressed in Part 6 of Chapter 16. That is, T.C.A. § 39-16-606 makes it a criminal offense to electronically track motor vehicles without the consent of the lessee of the vehicle.
In addition, Tennessee’s stalking laws might be applicable to the use of spyware. See T.C.A. § 39-17-315.
Types of Spyware Readily Available
Monitoring of digital communications can be accomplished several ways, including using hardware devices, installed software, and remotely stored data. Corporate networks, home systems, and mobile devices each have their own vulnerabilities. The environment being monitored will be a factor in determining which method(s) may be used.
Spyware is available to compromise nearly every digital device, including desktops, laptops, mobile phones, and tablets. Monitoring of mobile devices is on the rise as the use of these devices has far surpassed traditional desktop and laptop computers. Exploits range from poorly managed pre-existing programs and services to commercially available services marketed as a means of monitoring employees or children. The more complex, homebrewed attacks are seen rarely in family law matters as they are typically targeted as corporate and governmental espionage.
Family law practitioners are most likely to encounter compromised home systems, mobile devices, and cloud accounts. Although the home computer and mobile devices are certainly susceptible to rogue programs and hardware, most domestic monitoring is accomplished through software and services that were in place long before the relationship between the parties failed.
The most common, non-spyware related exploits used in domestic cases involve either:
- Accessing iCloud and Google accounts with known passwords or through pre-existing settings.
- Accessing web-based accounts with usernames and passwords stored within internet browsers.
These exploits are usually brought to the family law attorney’s attention through concerns from their clients who complain the opposing party knows where they have been, knows who they have been communicating with, and knows specific content from the client’s private communications.
Family law attorneys should understand that deployment of spyware on Apple devices currently requires physical access to the device and requires the device’s operating system be altered, commonly referred to as “jail-breaking”. In some cases, Android spyware also requires the deploying party have physical access to the device and requires the operating system be altered, which is called “rooting”; however, spyware does exist for Android devices that do not require rooting and can be deployed with very little physical interaction with the device.
Mobile device services commonly exploited:
Popular mobile device exploitation software & services:
Exploitation of desktop and laptop computers is less common than mobile devices, but is still possible nonetheless. Monitoring of these devices can include capturing images of the user’s screen, monitoring chat and email communications, remote access of the computer’s webcam, and capturing keystrokes. The capturing of keystrokes can be accomplished by use of software or hardware key loggers. Software key loggers are installed directly into the computer’s operating system where hardware key loggers are normally attached directly between the computer and keyboard. Remote key loggers have been successfully used to capture the keystrokes from wireless Microsoft keyboards and are much more difficult to detect.
Common computer monitoring software:
- Veriato (formerly SpectorSoft)
- Wireless keyboard sniffer
- USB keyboard keylogger
In the event spyware or monitoring software is suspected to be in use, a digital forensic expert should be retained to ensure proper documentation of the event and remediation efforts are maintained for later presentation to the court.
Case Law to Consider
Larocca v. Larocca, 86 F.Supp.3d 540 (E.D. LA 2015)
Wife brought an action against Husband for violation of the Electronic Communications Privacy Act alleging Husband had illegally used spyware (Eblaster) to intercept emails during divorce proceedings. Husband filed for summary judgment on the basis that there was nothing “retrieved.” Acquisition but no retrieval is not an interception under the Wiretap Act. The motion was denied, however, because the product description indicated the defendant could receive by the use of the product a forwarding of each email incoming and outgoing.
Warwick v. Warwick, No. E2011–01969–COA–R3–CV, 2012 WL 5960850 (Tenn. Ct. App. Nov. 29, 2012)
Husband and Wife engaged in various lawsuits against each other, both during and after divorce proceedings. Wife sued Husband for fraud and for using spyware on Wife’s computer (used to discover her affair). The suit was brought to attack Husband’s separate estate. In this “Spyware suit,” Wife claimed that Husband withheld information about his property and the value thereof during divorce proceedings. Husband sued Wife and her attorney for conspiracy to defraud the court, abuse of process, and intentional infliction of emotional distress. He claimed use of spyware by Wife and her attorney was a part of this fraud on the court. The court stated “that the [ ] causes of action are barred by the statute of limitations or that the complaint failed to state a claim, or both.” Husband appealed. On appeal, Husband argued that the separate filing of a spyware suit was a triggering event that allowed Husband to discover his claim for abuse of process. The appellate court determined that his claim was time barred. The court said all facts alleged in the spyware case were known to Husband prior to the filing of the spyware case, so the statute began to run long before the date of filing. Wife’s fraud and spyware suit was eventually non-suited. The court noted the Marital Dissolution Agreement said there was no fraud or coercion.
Legal Avenues of Retrieving Same Information
Should an attorney conclude there is information contained on a computer that may be critical to his client’s case, it is probably best for him to seek a court order to legally make a copy of the contents, although this can get pricey. Many attorneys across the nation are already using this technique regarding telephones and are procuring the phones to retrieve call logs and text messages and so forth. A motion can be filed for the preservation, storage, and forensic examination of cell phones and/or computer hard drives. Sometimes an agreement can be reached regarding the same. Sometimes the filing of such a motion can tip the scales towards an early resolution of the matter. When it comes to computer storage, this puts the decision about retrieval in the hands of your divorce judge on the front end of the case without risk of how a judge might rule on the question at the end of litigation.
By Todd Jefferson Hartley
As the traditional law firm model changes, more attorneys are going in-house early in their careers, many of which are “millennials”―born between 1980 and the mid-1990s—today around age 25 to 35. Millennials, according to the U.S. Census Bureau, marry later, are more racially and ethnically diverse, and have spent more years in school than prior generations. They are also optimistic, cause-oriented, high achieving, team-oriented, and crave constant feedback. Along with those positive traits, millennials are often associated with negative stereotypes―a sense of entitlement, addicted to technology, and self-absorbed. Regardless of your view on millennials, demographics and evolving trends in law firm and in-house hiring point to a millennial invasion of the in-house ranks. According to The New York Times, millennials will make up half of the work force by 2020. Thus, your relationships with millennial counsel are here to stay and working effectively with them is a necessity. What follows are suggestions for working with and mentoring your new young clients.
Tip #1 | Expect More Calls from Us than You May Want
Attorneys who go in-house early in their careers may have very limited trial, motion practice, or negotiation experience. Millennial counsel are no exception and likely did not have strategic responsibility for very large matters before their in-house roles. Therefore, you may receive basic questions. Even if you already know what you plan to do, humor the questions. While it may not be the level of advice you are used to giving the senior IP counsel, it is still invaluable advice to millennial counsel evaluating strategic options for the company.
For example, I recently faced the task of settling my first in-house class action. While I practiced complex litigation before going in-house, I had never settled a large class action alone. As anyone who has ever tried to land a class action knows, it is much more intricate than a traditional single party settlement. My outside counsel in that case had resolved dozens of class actions before, including several for my company. Many of the unique aspects of class action settlement practice were mechanical and routine to him, and he brushed past some of the discrete steps we would need to take to close out the matter.
I ended up talking with another outside attorney to get a sense of the timeline for class settlement approval. I also talked with two experienced in-house colleagues to better understand the questions and dynamics we had to anticipate from our business groups. Though I like to think my outside counsel’s goal was to avoid billing too much time explaining the details of his settlement strategy, this was one case where additional discussion on the front end would have ultimately saved his client time and effort.
Remember, the day-to-day work of millennial counsel is not the same as the work of a law firm associate. We are not writing briefs or answering discovery all day. Rather, much of our work is focused on explaining the law and the risks of a matter to our business colleagues. Thus, we may need more help structuring a matter that may, to you, be fairly routine.
While millennial counsel may not know as much as you about the practice of law, they do know quite a bit about the internal dynamics of their companies. Take advantage of access to that perspective.
Tip #2 | Don’t Be Upset if We Call Your Associate First
Millennial counsel are, almost by definition, younger than most law firm relationship partners. Naturally, they are going to have much more in common, personally and professionally, with a 5-year associate than a 25-year partner. They may feel more comfortable puzzling through an issue with your associate instead of calling you because the discussion is less intimidating and better priced.
Sometimes it is easier to disagree with your associate than with you. Recently, one of my top commercial litigators and I faced a significant discovery dispute. The plaintiffs threatened to take the deposition of a senior executive unless we provided the name of a mid-level manager with knowledge of the issue as a substitute. My outside counsel’s associate, who was coordinating discovery with the plaintiffs wanted to provide a deponent. I disagreed, believing we should not give up a name and should, instead, make the plaintiffs provide a proper deposition notice naming the individual they wanted for deposition.
Ultimately, my outside counsel convinced me that the major risk of subjecting the senior executive to deposition was not worth the minor gain of potentially avoiding the discovery request. However, the fact that I challenged my outside counsel’s associate on the request pushed the firm to work harder to protect my company’s witnesses and documents, a key consideration for an in-house litigator.
Further, sometimes it is easier and cheaper to discuss certain issues, such as eDiscovery, with your associate than with you. Millennial counsel in the legal departments of major corporations often worked at large defense firms before going in-house. Many also have significant experience working with discovery counsel. They may be more familiar than you with the costs and timelines of a complex eDiscovery review. Since associates generally work up the eDiscovery, it is often better to discuss process issues directly, rather than educate the partner.
Tip #3 | Make our Relationships Accessible
While millennial counsel may be able to teach you something about eDiscovery, they still have much to learn about the business of law. Millennial counsel will skip the senior associate and junior/income partner stages of the law firm to go in-house. Thus, many parts of how the profession operates remain mysteries. You may receive novel questions from your young clients about bills, accruals, preferred rates, relationship partners, and the other facets of running a practice that are not taught in school.
For example, an area that may be especially foreign to millennial counsel is business development. The day they go in-house, your young clients suddenly become twice as smart and three times as funny as when they were your associates. That power transition can be unsettling. Forgive the faux paus as they work through what is expected in the new dynamic. And be sensitive to the internal dynamics of your in-house clients’ team when planning business development functions. Remember that everyone has a chain of command and no one wants to be viewed as “stealing” the relationship with an outside counsel.
For your young clients, the key may be to simply make things more transparent and break down barriers of entry. Also, think about including your own associates to round out get togethers. For example, one of my favorite outside counsel always brings his junior associate to dinner meetings with my assistant general counsels and me. The younger associate balances out the event so that I am not the only junior attorney in the room, putting everyone else at ease.
Finally, remember that millennial counsel also have a perspective on what works and what does not, which can be especially useful to you. Early in my in-house career, I had the opportunity to attend several “pitch” meetings in a row. After each meeting, the litigation director and senior counsels would discuss the pitches, what worked, and what fell flat. This is information that you need and, with the right relationship, probably could leverage.
Tip # 4 | Focus on the “Business” of our Business
While millennial counsel are growing attorneys that need to master the substance and business of law, they also need to learn how to be business leaders within their companies. You can help them understand how this matter, and your strategy to achieve the desired resolution of the matter, affects the company and its bottom line. While you may be only a lawyer and not a businessperson, many of you have worked in an industry for several years. Do not underestimate your knowledge.
For example, I recently faced a court ordered discovery deadline in a large multi-district litigation matter. This particular week, the senior counsel on the case and, perhaps more importantly, our paralegal were both on vacation so all the discovery redirected through me. Without my normal internal resources for locating corporate representatives and documents, my outside counsel and I had to put our heads together to gather the responsive information. We had calls every single day that week to identify the necessary information for our responses. Every time we talked, my outside counsel would say, “You know best, but I bet Betty in Accounting would have that information.” I didn’t know best, and I didn’t know Betty, but she certainly had the information. Without my outside counsel’s in depth knowledge of my company, our discovery responses would never have been complete or accurate.
What can you teach millennial counsel about their business? Probably many different aspects, but you could start with the following: your contacts and document sources within our company, good industry publications to read, experts to consult in various specialty areas, key sources of legal authority for our industry, government agency contacts to know, important industry groups to join, and any other information that will help your young clients pick up the culture of their business. In many ways, millennial counsel are the General Counsel’s “associates.” Think about what you would want your own associates to know and share that knowledge.
Tip # 5 | Above All, Be a Mentor
General Counsels in large corporations are increasingly choosing to train their own teams, rather than relying on outdated law firm training methods. Corporate legal teams are developing their own staff in standalone programs like Hewlett Packard’s Boot Camp or in conjunction with their outside counsel in programs like the Pfizer Legal Alliance Junior Associate Program. It makes more sense to many businesses to bring legal staff in at all levels to handle the myriad big and small matters affecting a company every day, while simultaneously teaching future company leaders about the business. View your interactions with millennial counsel as an opportunity to be part of this new model, rather than an impediment.
In conclusion, millennials are a new type of in-house counsel that will show up more and more often as the professional in charge of your matter, and this new relationship between outside counsel and their young clients can pay off for both parties. As you may have surmised, all of my advice is about teaching, communicating, and respecting your young clients. This is exactly what millennials want when they work with you. They want a dialogue. They want your feedback. They want to understand the strategy and values behind your negotiation of a deal or defense of a case.
Take the opportunity to mentor and everyone benefits. And while you are free to offer advice on their case management and strategic decisions, please don’t condemn those irritating habits in your young clients―the “fear” of commitment, the Instagram addiction, or the standing desk. On those points, just accept that we may never understand each other. Millennial attorneys are in the house to stay. We look forward to working with you.
By Jeffrey S. Kinsler and David L. Hudson, Jr.
The bar exam has been described as “one of life’s most dreaded experiences” and a “career threatening ordeal.”1 Studying for it “can be a hellish and grueling grind.”2 Many famous people—including John F. Kennedy, Jr.3, Robert F. Kennedy, Jr.4, California Governor Jerry Brown5, former California Governor Pete Wilson6, former Los Angeles Mayor Los Angeles Mayor Antonio Villaraigosa7, former First Lady Michelle Obama8, and former Secretary of State Hillary Clinton9—have failed at least one bar exam. Some individuals try numerous times. One man passed the California bar exam on his 48th attempt.10 Others never achieve a passing score. Widespread awareness of the exam’s difficulty has increased as passage rates have declined in recent years.11
States bar exams differ in content though there are some commonalities. Nearly every jurisdiction’s exam contains the Multistate Bar Exam (MBE), a 200-question test on seven different legal subjects: Federal Civil Procedure, Constitutional Law, Contracts and Sales, Criminal Law and Procedure, Evidence, Property, and Torts. Louisiana and Puerto Rico remain the only jurisdictions to not use the MBE. Most states utilize the Multistate Performance Test (MPT), which requires students to read a host of materials in a “File” and a “Library” before drafting an office memorandum, a persuasive memo or brief, a client letter, a will, a contract, or other legal document. Some states then require students to answer specific, state-law essay questions.
The Tennessee Bar Exam is a two-day exam. During the first day, examinees tackle one MPT and the nine essay questions. The next day examinees take the MBE.
Trending Towards the UBE
Twenty-four states and the District of Columbia have adopted the Uniform Bar Exam (UBE); seven jurisdictions have adopted the UBE in the past six months. The UBE features three components: (1) the MBE, (2) two MPT questions, and (3) the Multistate Essay Examination (MEE), six essay questions on any of the following areas: Business Associations (Agency and Partnership, Corporations, and Limited Liability Companies); Civil Procedure; Conflict of Laws; Constitutional Law; Contracts (including Article 2 on Sales); Criminal Law and Procedure; Evidence; Family Law; Real Property; Torts; Trusts and Estates (Decedents' Estates, Trusts, and Future Interests); and Article 9 (Secured Transactions) of the Uniform Commercial Code.12
The push for a uniform bar exam gathered momentum in August 2010, when the American Bar Association’s Council of the Section of Legal Education and Admissions to the Bar urged its adoption.13 The Council noted the increased demand for lawyer mobility and multijurisdictional practice. The National Conference of Chief Justices also adopted a resolution urging consideration of a uniform bar exam. Missouri became the first state to adopt the UBE and now a total of 24 states have adopted it. New York and Massachusetts adopted the UBE in 2015.
There is even more momentum in 2016 for adoption of the UBE. In February 2016, the American Bar Association’s House of Delegates adopted a resolution urging “bar admission authorities in each state and territory to adopt expeditiously the Uniform Bar Examination.”14
Reasons for Adopting the UBE
The Tennessee Board of Law Examiners should adopt the UBE for at least three reasons. First, the adoption of the UBE will enable lawyers to move more readily from jurisdiction to jurisdiction. The UBE offers a portable score that allows applicants to obtain licensure in another state more easily. This only makes sense in the increasingly interconnected world of legal practice. Erwin Chemerinsky, Dean of UC Irvine School of Law, favors the UBE, calling the current system “inefficient, burdensome, and, frankly, unjustifiable.”15
Jim Nowogrocki, the President of the Missouri Board of Law Examiners, recently explained that his state’s “adoption of the uniform bar exam in 2010 has proved both convincing and a source of satisfaction in today’s ever-changing landscape for new lawyers.”16 He explains that the UBE has provided the state with more new lawyers from different jurisdictions able to meet the changing legal needs of businesses and the public.
Second, and perhaps more importantly, the quality of the UBE essay questions is better than those currently on the Tennessee Bar Exam. The National Conference of Bar Examiners (NCBE) produces exam products of a very high quality. The organization has been writing exams for decades. “Essays go through multiple drafting sessions, verifications and are eventually pretested,” explains Nowogrocki. “It [is] simply a better product than our jurisdiction could ever produce.”17
Some essay questions on the Tennessee Bar Exam have been well-written and thoughtful. However, others have been woefully inadequate and poorly drafted. The inconsistency in quality is far from ideal. The exam focuses too often on minor issues of state law rather than on broader and more important legal principles. For example, questions have concerned Tennessee’s statute on landlord-tenant law, while ignoring other central concepts of property law.
Third, the Tennessee Board of Law Examiners does not publish model or selected answers. This lack of transparency flouts the NCBE’s and ABA’s Code of Recommended Standards for Bar Examiners, which provides in pertinent part:
An applicant who fails a bar examination should have the right, within a reasonable period of time after announcement of the results of the examination, to see the applicant’s answers to the essay questions and the grades assigned thereto, and to compare each of these answers with an approved answer.18
The Tennessee Board of Law Examiners defies this recommended standard by not giving failing applicants an opportunity to review their essay questions and not providing any approved answers. Unlike the Tennessee essays, there are well-drafted, very detailed model answers to the MEE.
Critics may worry that the adoption of the UBE would take away state control of the bar exam. Such is not the case. If Tennessee adopts the UBE, the Tennessee Supreme Court and the Board of Law Examiners can still establish passing scores, make character and fitness decisions, determine who can sit for the bar exam, and adopt rules regarding the number of times an applicant may take the exam. In addition, although UBE essay questions and model answers are drafted by the NCBE, the TBLE will continue to grade the essay answers and determine the relative weight to give to each question. In other words, adopting the UBE will not diminish state control but will improve the quality of the exam.
ENDNOTES
1 Robert Jarvis, An Anecdotal History of the Bar Exam, 9 Geo. J. Legal Ethics 359, 359 (1995).
2 David L. Hudson, Jr., Professional Responsibility 14 (2015).
3 John G. Browning, Legally Speaking: If At First You Don’t Succeed, SE Texas Record, June 29, 2008.
4 Barbara Goldberg, Now It’s ADA John F. Kennedy, Jr., United Press Int’l, Aug. 20, 1989.
5 Jay Mathews, California’s Bar Exam Breaks Breaks More Lawyers Than It Makes, Wash. Post, Aug. 2, 1983, at A2.
6 David Whelan, Law Exam is a Real Bar for Aspirants, Contra Costa Times, Dec. 7, 2003, at G7.
7 Maura Dolan, A High Bar for Lawyers, L.A. Times, Feb. 21, 2006, at A1.
8 Harrison Barnes, 10 Ways to Bounce Back After Failing the Bar and Pass on Your Next Attempt, LawCrossing.
9 Cornelius Chapman, No bar too low for lawyers turned pols, Boston Herald, June 25, 2012, at 19.
10 Marc Lacey, Passing the Test of Time: After 48 Tries, Compton Man Masters Bar Exam, L.A. Times, May 31, 1999.
11 Tamara Tabo, When Bar Scores Plummet, Who Will Examine the Examiners?, Above the Law (Nov. 7, 2014).
12 National Conference of Bar Examiners, Preparing for the MEE.
13 ABA Section of Legal Education and Admissions to the Bar, Council Resolution, Endorsing Consideration of a National Bar Exam (Aug. 6, 2010).
14 ABA House of Delegates Resolution 109.
15 Erwin Chemerinsky, A better way to license lawyers, L.A. Times (May 11, 2015), at A19.
16 Jim Nowogrocki, Testing the UBE: Missouri Benefits From Uniform Bar Exam, Law360 (July 25, 2016).
17 Id.
18 NCBE, Comprehensive Guide to Bar Admission Standards, at vii (Code of Recommended Standards for Bar Examiners) (2016).
January 2017
By Seth R. Ogden, Alex Huffstutter, and Edward D. Lanquist
SCOTUS dealt another blow to the Federal Circuit patent jurisprudence with substantial financial ramifications for litigants, by abrogating its bright-line Seagate test1 for enhanced damages. Treble damages no longer depend on an “objectively reasonable,” and often after-the-fact, noninfringement or invalidity opinion. Patentees now possess increased negotiating leverage where a defendant knew the infringement risk, and their competitors must assess the need for an opinion of counsel earlier in product development.
Historical Overview of Enhanced Damages for Patent Infringement
Patent infringement is a strict liability tort; liability does not depend on intent. However, intent may govern the size of the damages award. Courts may award treble damages for “willful” infringement.
In 2007, the en banc Federal Circuit promulgated a stringent two-prong willfulness test (the Seagate test). The first prong required an objectively high likelihood that the infringer’s actions constituted infringement of a valid patent. The infringer’s state of mind was of no consequence.2 The second prong required that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.”3 A court could award enhanced damages only upon satisfaction of both prongs. That award was subject to a convoluted trifurcated appellate review, with objective recklessness reviewed de novo, subjective knowledge reviewed for substantial evidence, and the ultimate decision reviewed for abuse of discretion.4 Consequently, the district court’s discretion failed to receive much deference.
In Halo v. Stryker, SCOTUS streamlined the “unduly rigid” two-part test5 by discarding the objective prong.6 Now, a preponderance of the evidence standard applies7, and enhanced damages should be “based on all the facts and circumstances” to punish bad-faith disregard of patent rights rather than reward counsel’s resourceful opinion drafting.8
Patentees Have Gained Increased Negotiating Leverage
Halo lowers the bar for enhanced damages. An accused infringer’s financial risk, and the concomitant pressure that can be applied by a patentee during settlement negotiations, has increased.
First, “many of the most culpable offenders” are no longer shielded by the objective recklessness prong.9 The Seagate bright-line test made the infringer’s ability to “muster a reasonable (even though unsuccessful) defense at the infringement trial” dispositive, even if unaware of the defense at the time of infringement.10 “[S]omeone who plunder[ed] a patent … [could] nevertheless escape any comeuppance under [35 U.S.C.A.] § 284 solely on the strength of his attorney’s ingenuity.”11 Now, culpability is measured against the infringer’s knowledge at the time of his or her conduct.12
Nonetheless, Halo’s true impact remains to be seen. The Federal Circuit recently held that, although subjective willfulness supports an enhanced damages award, objective reasonableness is still relevant in evaluating the totality of the circumstances.13 And district courts’ deference to jury findings of subjective willfulness has varied. Judge Reindinger of the Western District of North Carolina determined that the jury’s “finding standing alone is sufficient to support a finding of willfulness.”14 Other courts’ “sound discretion” led them to “decline to award . . . enhanced damages despite the jury’s finding of willful infringement.”15
Second, the preponderance of the evidence standard—the same standard that governs proof of infringement—makes willfulness easier to prove at trial.16 As a result, district courts will theoretically defer to jury determinations based on sufficient record evidence.17
Third, the abuse of discretion standard of review will promote affirmance.18 SCOTUS scolded the Federal Circuit for its unfounded “concern that district courts may award enhanced damages too readily, and distort the balance between the protection of patent rights and the interest in technological innovation.”19 Defendants will be less likely to expend resources appealing enhanced damages awards.
Consequences for Businesses Competing with Patented Technologies
To shield against a willfulness determination, a patentee’s competitors should be proactive in obtaining a competent opinion of counsel. Opinions should be obtained early in the product development process “before the initiation of any possible infringing activity.”20 Noninfringement opinions should be updated upon major product design revisions. There is no affirmative duty to obtain an opinion,21 but even in the wake of Halo, opinions of counsel will remain the gold standard among willfulness defenses.22
A good-faith belief of invalidity or noninfringement should avoid “increased damage or attorney fees imposed solely because a court subsequently holds that belief unfounded.”23 Thus, the ultimate legal correctness of the opinion is not determinative,24 only that the defendant demonstrates he or she relied on the opinion’s advice.25 Nevertheless, good-faith reliance requires both timely acquisition26 of a competently drafted opinion.27 Competency applies to both the qualifications of the person giving the opinion and the opinion’s content.28 Opinions from non-patent counsel or lay persons are insufficient.29
The decision whether to obtain an opinion of counsel depends on several factors: the likelihood of litigation, the litigation history of the patentee and the patent at issue, the patent licensing history, the importance of and revenue associated with the products implicated by the patent, and whether the opinion will be consistent with trial strategy and thus potentially useful at trial.30
Conclusion
Halo v. Stryker appears to lower the bar to obtaining enhanced damages for patent infringement. Patentee’s negotiating leverage has increased, but this decision creates an opportunity for potential infringers. An opinion of counsel obtained before commencing potentially infringing activity provides litigation counsel with a valuable tool to avoid a treble damages award.
ENDNOTES
1In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007), abrogated by Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016).
2 Id.
3 Halo, 136 S. Ct. at 1930 (citing Seagate, 497 F.3d at 1371).
4 Id.; see also Bard Peripheral Vascular, Inc. v. W.L. Gore & Assoc., Inc., 682 F.3d 1003, 1005, 1008 (Fed. Cir. 2012); Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1347 (Fed. Cir. 2011), abrogated by Halo, 136 S. Ct. 1923.
5 Halo, 136 S. Ct. at 1932 (quoting Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1751 (2014)).
6 Halo, 136 S. Ct. at 1933.
7 Id. at 1934.
8 Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992).
9 Halo, 136 S. Ct. at 1932.
10 Id. at 1933.
11 Id.
12 Id.
13 WesternGeco LLC v. Ion Geophysical Corp., 837 F.3d 1358 (Fed. Cir. 2016) (citing Halo, 136 S. Ct. 1923 at 1930) (an attorneys’ fees case, for the proposition that totality of circumstances applies in willfulness cases).
14 Sociedad Espanola de Electromedicina Y Calidad, S.A. v. Blue Ridge X-Ray Co., No. 1:10-CV-00159-MR, 2016 WL 3661784, at *2-3 (W.D. N.C. July 8, 2016).
15 Presidio Components, Inc. v. Am. Tech. Ceramics Corp., No. 14-CV-02061, 2016 WL 4377096, at *10 (S.D. Cal. Aug. 17, 2016); see also Trs. of Boston Univ. v. Everlight Elecs. Co., Nos. 12-11935, 12-12326, 12-12330, 2016 WL 3976617, at *4 (D. Mass. July 22, 2016).
16 Halo, 136 S. Ct. at 1934 (quoting Octane Fitness, 134 S. Ct. at 1758) (“[P]atent-infringement litigation has always been governed by a preponderance of the evidence standard.”).
17 See Radware, Ltd. v. F5 Networks, Inc., No. 5:13-CV-02024, 2016 WL 4427490, at *3-5 (N.D. Cal. Aug. 22, 2016) (granting judgment as a matter of law of no willfulness where evidence of defendant’s knowledge of the patent-at-issue consisted of citation to a patent number in correspondence from the patent office and circumstantial evidence).
18 Id.
19 Id.
20 Underwater Devices, Inc. v. Morrison-Knudsen Co., Inc., 717 F.2d 1380, 1390 (Fed. Cir. 1983), overruled by Seagate, 497 F.3d 1360.
21 35 U.S.C.A. § 298 (stating that the failure to obtain an opinion of counsel “may not be used to prove that the accused infringer willfully infringed the patent.”); see also Knorr-Bremse System Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1345-46 (Fed. Cir. 2004) (en banc).
22 See, e.g., Charles S. Barquist & Bita Rahebi, Willfulness Post-Seagate and the Decision to Rely on Advice of Counsel, 2 Patent Litig. 112, 123 (2010); see also Neil C. Jones, Ashley B. Summer & Brian D. McAlhaney, Using Opinion Letters and Defending Against Willful Infringement, 2 Patent Litig. 171, 185 (2010).
23 Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565, 1580 (Fed. Cir. 1986).
24 Id. at 1581, as amended on reh’g (Aug. 15, 1986), overruled by Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH, 383 F.3d 1337 (Fed. Cir. 2004).
25 Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1364 (Fed. Cir. 1998) (finding the opinions must be competent and followed).
26 Michlin v. Canon, Inc., 208 F.R.D. 172, 174 (E.D. Mich. 2002) (“[I]t is difficult to understand how there could be a defense to willful infringement based on an opinion rendered after the litigation began.”).
27 Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992) (noting that an opinion must be “thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.”).
28 Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996).
29 Jepson, Inc. v. Makita USA, Inc., No. CV 90-4312-GHK, 1994 WL 543226, at *7 (C.D. Cal. May 27, 1994); see also Ortho Pharm., 959 F.2d at 944 (stating competent opinion letters were obtained from “experienced patent counsel”).
30 William L. Lafuze et al., Exculpatory Patent Opinions and Special Problems Regarding Waiver of Privilege, 6 J. Marshall Rev. Intell. Prop. L. 313, 360 (2007).
