Retired NFL Players’ Suit: Is It Legal Malpractice To Not Find A Hearsay Exception For An Email By An Out-of-State Witness?

At The American Lawyer:

Two separate classes of retired NFL players have sued the two firms, Manatt, Phelps & Phillips and McKool Smith, alleging that they left some retirees out of the settlement and blew the chance for much greater damages, according to a copy of the complaint. The original class action accused the NFL players’ union of intentionally excluding retired players from licensing deals, including the ultra-lucrative deal through which the video game maker Electronic Arts purchased the right to use player names and images in its popular John Madden franchise. The union, represented by Dewey & LeBoeuf, denied the allegations, but a sympathetic jury delivered the $28 million verdict, which was to be distributed to about 2,000 retired players. (The two sides eventually settled for just over $26 million.)

In short, the players claim their attorneys botched the trial of the case in two ways:

  • by failing to effectively introduce a series of emails — or a witness testifying about the same point — in which an Electronic Arts executive complains that the players’ union refused to include retired NFL players in the licensing negotiations; and,
  • by failing to introduce sufficient evidence demonstrating the extent of damages caused by the players’ unions breach of fiduciary duty, which was the only claim the jury actually accepted.

I litigate legal malpractice cases, and let me tell you: the deck is stacked in favor of the defendant.
Even where the defendant outright fails to do a basic task — like fail to file a claim within the statute of limitations — the plaintiff still must prove they would have won the "case within the case."* That is, of course, just as hard as winning the case in the first place, and then you also have to win the malpractice case, too.

Let’s put aside the second error raised by the retired NFL players, the proof-of-damages issue. While it would certainly be less-than-ideal for a lawyer not to cover all of their bases at trial, analysis of such an issue is necessarily very fact-intensive. No time for that; this is a blog, after all.

The complaint portrays the first error as garden variety malpractice, since the emails were "obvious hearsay," and so couldn’t be introduced without (a) an EA employee providing testimony that triggered the "business records" exception to hearsay or (b) the author of the email testifying about the email itself.

The admissibility problems of email aren’t anything new; Gregory Joseph wrote a thorough article about them two years ago. Although not every email by a non-party is admitted into a civil trial — many, probably most, aren’t — It would indeed be garden-variety malpractice to not know your way around the Federal Rules of Evidence well enough to even try to get the email in. The complaint’s allegations on this point, however, don’t make sense to me:

At the final pretrial conference the District Court requested supplemental briefing on the extent to which Strauser’s internal EA e-mail statements were admissible. Defendants promised to provide a brief because the admissibility of this document was "critical." Following submission of the briefs, the District Court found that the proper foundation had not been laid for admitting the Strauser portions of the e-mail into evidence.

I’d assume those briefs would cover most of the bases claimed now as malpractice; did the lawyers really not even mention the business records exception or the possibility of calling Mr. Strauser?

The question bothered me enough that I looked up the relevant briefs on admissibility; here’s the plaintiff’s brief and here’s the defendant’s brief. Sure enough, there was ample briefing on the business records exception; plaintiffs apparently just plain lost that one. That’s not, in itself, surprising; Gregory Joseph’s article mentions plenty of cases holding the same (though plenty of cases holding otherwise).

The plaintiff’s lawyers tried to call the email a "business record" and tried to call the email a "present sense impression" of the EA executive, and lost on both. Losing an argument before the judge is not same thing as malpractice.

That leaves the question of calling Strauser to the stand. At one of the hearings, the Court and the plaintiff’s lawyer had the following exchange:

THE COURT: Why don’t you bring in Strausser, who’s
the guy, and let him be cross-examined?
MR. HUMMEL: I would love to. I understand he lives
in Florida. We did not depose him in the case. We will have
Mr. Linzner here under subpoena, and Mr. Linzner can testify as
to Mr. Strausser’s position, and his authority to speak within
the context of the EA.

Mr. Hummel’s predicament is understandable; "the subpoena power of a court cannot be more extensive than its jurisdiction." U.S. Catholic Conf. v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 76, 108 S.Ct. 2268, 2270, 101 L.Ed.2d 69, 76 (1988). As the Southern District of New York noted (in evaluating service of subpoenas on members of the PLO):

Service of a subpoena, even if properly effected, is only valid if served on a party who is subject to personal jurisdiction within this district. The Due Process Clause of the Fourteenth Amendment limits the exercise of personal jurisdiction to persons having certain "minimum contacts" with the forum. Ina Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945). A court may exercise personal jurisdiction only over a defendant whose "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980)).

Since Strauser apparently lived (and worked?) in Florida, any subpoena served by the attorney wouldn’t have been effective.

I don’t know enough about Mr. Linzner’s role to say if he was indeed the best witness to call to authenticate the email and provide testimony that would trigger a hearsay exception. It sure seems like the plaintiff’s lawyer thought he was the most knowledgeable witness they could subpoena.

There is another issue that needs explanation, though: Electronic Arts quite obviously transacts substantial business in the Northern District of California, and so would have been subject to service under Rule 45(b). Why not subpoena them to produce the witness most familiar with the email in question? That’d be a backdoor method of getting Strauser on the stand, and the failure to do so demands some explanation.

Then again, as shown by the transcript, the Court itself accepted at face value counsel’s inability to call Strauser, and so many have implicitly accepted that the backdoor method was either unreasonable or also not available for some reason. That makes me wonder why the email wasn’t admitted under Rule 807:

A statement not specifically covered by Rule 803 or 804 but having equivalent circumstantial guarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence.

That seems to be precisely the situation here; no one genuinely doubted the email was authentic, or that it represented the actual thoughts and perception of Strauser. The issues preventing its admission were all legal technicalities.

I don’t know if the plaintiff’s referenced that exception, but I also don’t know if it matters — the Court knows the Rules just as well, and likely better, than the attorneys. It seemed the Court was intent on excluding that email no matter what the plaintiffs said, which makes me wonder if it was really malpractice not to get the email admitted. Put simply, if a judge wants to rule one way, it’s usually not the lawyer’s fault if they can’t convice the judge otherwise

 

* They settled the case-within-the-case; as such, can they come back now and say their own settlement wasn’t enough?

The complaint itself cites Durkin v. Shea & Gould, 92 F. 3d 1510 (9th Cir. 1996) for the proposition that "a court-approved settlement does not preclude a malpractice claim." As the Nevada Supreme Court noted in 2005, there are ample cases permitting malpractice suits following a supposedly insufficient settlement:

See, e.g., Durkin v. Shea & Gould, 92 F.3d 1510, 1515-16 (9th Cir. 1996) (concluding that prior proceeding on settlement agreement did not provide adequate opportunity to litigate facts underlying malpractice claim based on attorney’s advice regarding settlement); Grayson v. Wofsey, Rosen, Kweskin, 646 A.2d 195 (Conn. 1994); Keramati v. Schackow, 553 So. 2d 741, 744 (Fla. Dist. Ct. App. 1989) (mere acceptance of a settlement in a prior suit does not foreclose a malpractice suit against the attorney who handled the case); Thomas v. Bethea, 718 A.2d 1187, 1190-95 (Md. 1998) (attorney malpractice action was not barred on the grounds of nonmutual collateral estoppel because it is unjust to preclude a malpractice action when the clients may have been misinformed as to the actual worth of their case); Cook v. Connolly, 366 N.W.2d 287, 290-91 (Minn. 1985) (for collateral estoppel purposes, issues in client’s settlement approval hearing when client was represented by attorney were not the same issues presented in client’s claim against attorney for malpractice in advising them to accept an allegedly inadequate settlement); see_also Ryan v. Ford, 16 S.W.3d 644, 648-49 (Mo. Ct. App. 2000); Novack v. Newman, 709 S.W.2d 116, 118-19 (Mo. Ct. App. 1985); Ayre v. J.D. Bucky Allshouse, P.C., 942 S.W.2d 24, 27-28 (Tex. App. 1996).

As the Pennsylvania Superior Court held (here’s my reference to that in coverage of another case):

"In cases wherein a dissatisfied litigant merely wishes to second-guess his or her decision to settle due to speculation that he or she may have been able to secure a larger amount of money, i.e. ‘get a better deal’ the Muhammad rule applies so as to bar that litigant from suing his counsel for negligence. If, however, a settlement agreement is legally deficient or if an attorney fails to explain the effect of a legal document, the client may seek redress from counsel by filing a malpractice action sounding in negligence."

As I paraphrased the rule: a plaintiff can claim the fact of settlement at that amount was caused by malpractice, but cannot claim the amount of settlement itself was malpractice.

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