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Archive for March, 2018

Economic Resolution of Cases Through An Expedited Jury Trial

Posted on: March 16th, 2018

By: Melina Shahbazian

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It is no secret that litigation is time consuming and extremely expensive. Sometimes, depending on the circumstances of the case, the lengthy costly litigation process is the only choice.  Other times, particularly with lesser value cases, the parties have the option of conducting expedited jury trials in civil cases.

California’s expedited jury trial is a consensual, binding jury trial before a reduced jury panel and a judicial officer. (Code Civ. Proc. § 630.01(a).) The trial is heard by eight jurors (instead of twelve), with six votes needed for a verdict. Each side is allowed to exercise up to three peremptory challenges (unless the court permits additional challenges), and is given five hours to put on their case, inclusive of jury selection.

The parties can request an expedited jury trial, by submitting a Consent Order to the court, no later than 30 days before any assigned trial date. (Code Civ. Proc. § 630.03(a); Cal. Rules Ct., Rule 3.1547(a).) The proposed Consent Order must confirm parties’ understanding and agreement to participate in an expedited jury trial, outline the roadmap for the trial, and their agreement to alter any procedures, such as method of presenting evidence, limitation of witnesses, and any agreements on damages. The parties could set a cap for damages by entering into a “High/Low Agreement” prior to trial which specifies a minimum amount of damages that a plaintiff is guaranteed to receive from the defendant, and a maximum amount of damages that the defendant will be liable for, regardless of the ultimate verdict. (CCP § 630.01(b).)

If the parties agree to an expedited jury trial, the verdict is binding and they waive their rights to an appeal. The verdict from an expedited jury trial can only be disregarded in the event of misconduct by a judicial officer or the jury, or corruption or fraud or some bad act that prevents a fair trial. Otherwise, the court will enter a judgment based on the verdict.

The expedited jury trial offers a streamlined method for handling civil actions to promote the speedy and economic resolution of cases and conserve judicial resources. Has it? Only time will tell.

If you have any questions or would like more information, please contact Melina Shahbazian at [email protected].

When the Midas Touch Does Not Protect You From Your CLE Obligations

Posted on: March 15th, 2018

By: Jonathan M. Romvary

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As part of every attorney’s ongoing duty of competence, each jurisdiction requires attorneys to attend Continuing Learning Education classes each year. The failure to attain the minimum required credit hours for substantive and ethical topics may result in fines, suspension or worse. Multi-jurisdictional attorneys have a further obligation to remain in compliance with each of their jurisdiction’s varying CLE obligations.

Recently, the general counsel for TBC Corp., the parent company of car parts companies Midas and National Tire & Battery, got a two-year stayed suspension from the Board of Professional Conduct of the Supreme Court of Ohio for practicing out-of-state despite prior suspensions from the state for failing to comply with his CLE obligations. The decision arises out of charges that the general counsel engaged in unauthorized practice in Florida while under suspension in Ohio.

In 2009, Marciak was hired as general counsel for Florida-based TBC Retail Group and later promoted to senior vice president, general counsel and secretary of TBC Corp. As General counsel, Marciak oversaw a team of in-house attorneys managing litigation and was otherwise in a legal position requiring him to have a current license to practice. Despite his legal work in Florida, Marciak did not obtain a certification as an “authorized house counsel” until December of 2015.

Marciak’s problems began when a former employee of TBC filed a bar complaint with the State of Florida in 2015 alleging Marciak was being engaged in the unauthorized practice of law, resulting in disciplinary  action. The same employee thereafter filed a bar complaint with the State of Ohio alleging violation of their local rules, including the practice of law in another jurisdiction while suspended.

According to the court’s records, Marciak was suspended from the practice of law in Ohio in 2007 and sanctioned in 2009 and 2011 for failing to comply with his Ohio CLE credits. According to the Court Marciak failed to certify his compliance with Ohio’s biennial CLE compliance reporting for seven years. Further, Marciak only obtained the Florida certificate as authorized house counsel after the initial bar complaint was filed against him. Ultimately, the Ohio Supreme Court entered the two-year stayed suspension, saying that Marciak did not represent a future risk to the public and was attending and presenting at CLE classes. However the court warned that if Marciak failed to remain in full compliance, the stay would be immediately lifted and he would be required to serve the entire two-year suspension.

Despite receiving a stayed suspension, the lessons from Marciak’s natter is clear: every lawyer must familiarize themselves with the rules of the court and professional rules of conduct for the jurisdiction in which you practice and any other states in which you might practice law.

If you have any questions or would like more information, please contact Jonathan Romvary at [email protected].

Head In the Cloud – United States Supreme Court Takes On Application of Domestic Warrant To Information Stored Internationally

Posted on: March 9th, 2018

By: Glenn M. Kenna

Image result for search warrantThe Supreme Court is set to decide a vital question this term – Can the government use a warrant served in the United States to obtain emails stored abroad?  The United States Government says it can, Microsoft disagrees.  The Case is United States v. Microsoft Corporation, in which the Supreme Court heard oral argument on February 27, 2018.

To understand the nature of the conflict a little back story is necessary.  Congress passed a law in 1986, the Electronic Communications Privacy Act (ECPA).  Part of title II of the ECPA, 18 USC § 2703, allows law enforcement agencies to issue warrants, so called Section 2703 Warrants, to discover electronic communications stored in an “electronic communications system.”  In other words, the government can serve a warrant on an email service provider, such as Microsoft, and obtain emails stored on Microsoft’s servers.

In the Microsoft case, the Government did exactly that.  It served a warrant on Microsoft in Redmond Washington to discover electronically stored communications in connection with an ongoing investigation into a crime allegedly committed in the United States.  The issue at the heart of the dispute is that the warrant sought the contents of communications stored on servers in Ireland.  In response to the warrant, Microsoft turned over domestically stored information (in this case certain metadata about the emails) but refused to turn over the contents of the communications stored abroad.  A legal battle between the Government and Microsoft has ensued, ultimately leading to the Supreme Court granting cert.

In the ongoing dispute between Microsoft and the Government, Microsoft contends that the Government’s attempt to enforce the warrant is an extraterritorial act, i.e. and attempt by the Government to enforce Untied States Law abroad.  It further asserts that complying with the warrant could run afoul of the law in the country where the information is stored.  The United States’ position is that, should the ECPA not apply to information stored abroad, every service provider would simply move their servers out of the United States – taking the communications beyond the reach of US law enforcement agencies.  Moreover, it reasons, Microsoft can access the information domestically regardless of where the information is stored, which the government contends does not require the application of the ECPA abroad.

The ECPA pre-dates the internet.  Email as we know it today did not exist in 1986.  The drafters of the ECPA could not have imagined a world where people stored their entire lives on remote servers, or a world where those servers could be located anywhere across the globe.  Those are issues with which courts continue to struggle, including the Supreme Court in this case.

It remains to be seen how the Court will rule in the Microsoft case, or if Congress will act to modernize the ECPA before the Court’s decision (indeed, a bipartisan group of senators has introduced the CLOUD act to address the issues raised in the Microsoft case.)  What is clear, however, is that Microsoft represents just one small part of an ongoing clash between law and technology.  While not at issue directly in the Microsoft case, the dispute also raises the question, what right do we have in the privacy of our electronic worlds?

If you have any questions or would like more information, please contact Glenn Kenna at [email protected].

Avoiding the #%&^%!& Swearing Contest

Posted on: March 9th, 2018

By: Seth F. Kirby

Related imageIn the course of defending professionals in all manner of disputes, a common theme is often repeated.  It usually involves some variation of the former client (now plaintiff) claiming that they “were told” or that it was “their understanding” that the professional would do something different than what actually occurred.  While these claims are obviously self-serving, if the client is willing to swear under oath that oral communications with the professional occurred, we can end up in a swearing contest in which a jury may have to determine the credibility of the competing testimony.

Thankfully, the law does not always allow alleged oral communications to alter contractual relationships or create legal duties.  Indeed, depending upon the circumstances and applicable law, claims of oral representations may not be allowed to impact the duty owed to the client at all.  Nevertheless, the ability to attack the credibility of claims based upon oral representations in as many way as possible is an invaluable asset in the defense of the professional.

As defense counsel, I am always pleased to review a file in which the professional has taken careful steps to outline the scope of their representation and to confirm, in writing, what was discussed or agreed upon in the transaction.  For attorneys this usually takes the form of engagement letters issued at the outset of the representation that are followed up with reports to the client in which the various options are presented and the decision on how to proceed is confirmed.  For insurance agents, it can be policy summaries (assuming that they are accurate) that discuss the policies that were considered, obtained and/or rejected.  That summary is then followed up by a letter which forwards the actual policy issued and a warning to the client to read the policy and ensure that it conforms to the client’s expectations.  The existence of these types of confirming documents often stop a threatened claim in their tracks (i.e. pre-suit).  When claims of oral representations are made which contradict the written confirmations, they are met with great skepticism, if not outright rejection, by judges and juries.

As they say, an ounce of prevention is worth a pound of cure.  Professionals of all stripes should create and implement procedures in which their scope of responsibility is defined from the outset and the client’s buy-in to decisions is confirmed contemporaneously.  Let us know if we can help you with implementing such procedures.

If you have any questions or would like more information, please contact Seth Kirby at [email protected].

FINRA to Pick Up the Check on Unpaid Arbitration Awards?

Posted on: March 8th, 2018

By: Theodore C. Peters

Image result for giving moneyAs recently reported, unpaid FINRA arbitration awards is a growing problem.  As FINRA has acknowledged, roughly one quarter of FINRA arbitration awards issued in 2016 went unpaid.  If lawmakers have their way, FINRA itself may ultimately be stuck with the check, and be required to pay such awards.

On March 6, Sen. Elizabeth Warren, D-Mass, introduced legislation that would require FINRA to compensate investors for unpaid arbitration awards.  The Compensation for Cheated Investors Act would direct FINRA to establish a “relief fund” pool that could be used to provide investors with the full value of unpaid arbitration awards against brokerage firms or brokers regulated by FINRA.  The fund would derive “first from penalties paid by brokers and then from sources determined by FINRA.”  In the event FINRA fails to take steps to establish such a fund, the bill proposed by Sen. Warren would nevertheless require FINRA to compensate investors from its general budget.  The bill also provides that FINRA may require investors to subrogate their claims against brokers, and that FINRA may pursue additional remedies against the brokers.

Also of note, FINRA would not be permitted to limit the amount that an investor may receive from the relief fund, nor would FINRA be allowed to prohibit any investor from submitting a claim to the fund.  FINRA would also be required to annually disclose, among other things, the total number of arbitration awards issued in favor of investors against brokerage firms or brokers under its watch, the number and amount of unpaid awards, and the names of the brokerage firms/brokers at issue.

If you have questions or would like more information, please contact Ted Peters at [email protected].