Litigation and Trial - Max Kennerly : Philadelphia Trial Lawyer Max Kennerly : Business and Commercial Litigation : Civil Attorney : The Beasley Firm : Philadelphia Pennsylvania

Fred Wilson links to his partner Brad Burnham's post, "We need an independent invention defense to minimize the damage of aggressive patent trolls:"

I know of no case where the engineers in one of our companies were aware of the patents that are now being used to attack them. The moral rightness of this screams at me. If, as an engineer focused on solving a problem, I happened to come up with an idea that is in some way similar to yours, then that in itself should suggest that it was obvious and not patentable. Unfortunately, that does not really help. There, the burden of proof is still on the startup and it is still smarter to settle than to burn precious capital on a defense.

If, on the other hand, the troll was required to show the startup had some prior knowledge of their technology, the burden would be shifted to the attacker, and this blatant abuse would come to a grinding halt. If you believe as I do that innovation is key to social progress, please support patent reform. It is a complicated issue, but an independent invention defense is an obvious place to start.

(Emphasis mine; keep reading to see why.)

Though I sympathize with Brad's concerns — patent infringement litigation is both high stakes and notoriously expensive, and thus risky and burdensome even for defendants likely to prevail at trial — I have a couple issues with an independent invention defense. 

First, the defense already exists to some extent in the form of differing damages for "infringement" compared to "willful infringement." If the plaintiff cannot prove at least "objective recklessness" — which is quite hard to do in the wake of In Re Seagate Technology, since the defendant has no affirmative duty to avoid infringement — then the plaintiff cannot recover treble damages or attorneys' fees. The stakes are thus lower in genuine "independent invention" cases.

Second, an independent invention defense would discourage individuals and businesses from doing an adequate patent search before investing resources into novel solutions. One of the primary reasons we have a public patenting process (rather than merely protection of private trade secrets) is to make inventions easily available to the public for use. How many times would the wheel have been reinvented if it had been kept secret? Though frustrating to businesses, from a societal standpoint patent licensing is generally preferable to the redundant investment of time, effort and money into solving problems with known solutions.

Third, an independent invention defense would be ripe for abuse. Independent invention is already a defense to to a willful patent infringement claim; making independent innovation a complete defense would give defendants an even greater incentive to manufacture "evidence" showing their "independent" invention. Worse, genuine invention is often quite messy; the independent invention defense could thus perversely protect only those defendants who from the start knew to create a trail of "evidence."

That's not to say we don't have problems with our patent system. We do. I just don't think an independent invention defense is the way to go.

So let's talk about the part of Brad's post I emphasized: obviousness and the burden of proof.

A recurring theme in the comments to Brad's post and Fred's post is the complaint that many patented "inventions," particularly in the Silicon Valley industries, are not particularly inventive. Patent law is supposed to guard against this problem. Indeed, the most common defense in patent suits is a counterclaim by the defendant that the patent is invalid because it is too obvious.

35 U.S.C. § 103 forbids patents where "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." The Supreme Court has explained the analysis as such:

Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.

More pertinent here is how a finding of "obviousness" is the only tool courts have to mitigate the high stakes and high expense of patent infringement cases with questionable, but not outright dubious, merit.

Finding "obviousness" as a matter of law is a nuclear option; it requires the court dismiss the case, simultaneously creating precedent barring the defendant from any future litigation on the patent in the future and creating a basis for any current licensees to stop payment to the defendant. Courts' hesitation to use that nuclear option — particularly given the standards governing summary judgment and courts' unfamiliarity with the state of innovation in highly technical industries — is understandable.

So what to do?

Change the burdens.

It's not a new idea; employment-discrimination cases routinely apply the McDonnell-Douglas burden-shifting framework at summary judgment.

Right now, in terms of "obviousness," a court has two options:

1. Find the patent "obvious" as a matter of law, thereby blowing up the case and invalidating the patent;
2. Leave "obviousness" up to the jury, where the defendant has the burden of proving the patent is "obvious."

As Brad complains, #2 may be a hollow remedy.

So why not add another option? Why not allow the court to put the burden of nonobviousness upon the plaintiff if the defendant shows, pre-trial, a "cogent and compelling" argument that the patent was obvious? ("Congent and compelling" isn't foreign to courts either; such a showing is required in securities fraud cases under Tellabs.)

A court could further mitigate the pre-trial risk to the defendant by ordering bifurcation of the trial; i.e., first there's a trial on "obviousness," and then, if the patent is "nonobvious," there's a trial on infringement. Adding some element of fee-shifting — e.g., a plaintiff who loses the "obviousness" trial has to pay the trial fees of the defendant — would create a market for contingent fee defense of patent infringement suits, and thereby mitigate the "burn[ing] of precious capital ..."

Just a thought.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

I have no problem criticizing Bank of America for deceptive conduct or blaming Wachtell for the failure of a legal stategy, but there's nothing obviously wrong with this:

Eric Roth, a litigation partner at Wachtell, Lipton, Rosen & Katz, apparently was telling the Bank of America Corp. leadership one story about how difficult it would be to escape from the merger with Merrill Lynch & Co. Inc., while singing quite a different tune to the federal government.

E-mails from Roth and in-house lawyers at the bank were among documents released last week from the House Committee on Oversight and Government Reform, which is investigating the merger. Roth and Bank of America representatives did not return calls for comment on this story.

The e-mails show that early on the morning of Dec. 19 Roth advised the bank's chief executive, Ken Lewis, and its interim general counsel, Brian Moynihan, on how difficult and financially risky it would be to try to invoke a so-called MAC -- or material adverse change -- clause, which would allow the bank to get out of the merger with Merrill.

But another e-mail from associate general counsel Teresa Brenner to Moynihan, sent several hours later and on the same day as Roth's e-mail, says, "Eric made a very strong case as to why there was a MAC" during a conference call with some officials from the Federal Reserve.

The e-mails appear to confirm previous Corporate Counsel stories that the bank was telling federal regulators that it wanted to declare the MAC, even though its own lawyers and leaders knew that legally it probably could not succeed. If the bank were to make public its MAC threat, government regulators have said Merrill would have collapsed, causing severe damage to the shaky U.S. financial system at the time.

Although it's not a given that the Rules of Professional Conduct would apply to an argument before the Federal Reserve, let's assume that, by way of Rule 3.9, all the basic duties of merit, candor and fairness apply.

Under those rules, there's nothing wrong with advocating on behalf of your client an argument you believe "probably could not succeed." There are two sides to every story, and at least two interpretations of every legal issue. The United States uses an adversarial legal system precisely so that these stories and interpretations can be fully developed, critiqued, and challenged.

Indeed, it's clear the Federal Reserve's lawyers knew how weak Bank of America's case was:

Brenner's e-mail states that all questions other than one came from a "prickly" Thomas Baxter Jr., general counsel of the New York Federal Reserve Bank. The other question came from Scott Alvarez, general counsel to the Federal Reserve Board in Washington. Baxter "pointed out that there had never been a successful MAC case before," the e-mail says, but Roth countered "that this one essentially could be the first" because of the magnitude of Merrill's losses

Just as the NY Fed's lawyer had no duty to say if he thought the Bank of America / Merrill Lynch merger could become the first successful material adverse change case, Bank of America's lawyer had no duty to say if he thought Bank of America was unlikely to win. Lawyers have no duty to reveal what they believe are the strengths and weaknesses of their case, nor how likely they believe it is that their client will prevail.

There is, however, an ethical issue lurking deeper under the surface. There is a dispute (and shareholder class action) as to when, exactly, Bank of America learned of Merrill Lynch's losses. The executives at Merrill Lynch have suggested that BoA knew of the losses before it consummated the merger. If that's true, and Bank of America's lawyers knew it, then they're in a tighter spot, since the essence of a "material adverse change" is the change in circumstances after the merger consummation. One wonders how a lawyer could in good faith argue for a "material adverse change" arising from circumstances known before the merger.

But that's an issue for another day.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In a comment on Overlawyered, Ted Frank points to his draft paper (with Marie Gryphon), Negotiating in the Shadow of 'Bad Faith' Refusal to Settle: A Game Theory Model of Medical Malpractice Pre-Trial Settlements and Insurance Limits:

Recent empirical studies of Texas data by Hyman et al, Zeiler et al, and Silver et al suggest that insurance limits affect settlements of medical malpractice cases. Writing separately, Silver argues that insurance limits act as a de facto cap on malpractice payouts, that plaintiffs are being underpaid as a result, and that therefore legislative caps on damages are unnecessary. But this hypothesis is inconsistent with the data, which indicates that forty-seven percent of cases in which plaintiffs obtain verdicts above policy limits are subsequently settled above policy limits. We propose to reconcile the data by accounting for the effects that third-party causes of action for alleged bad-faith refusal to settle — known in Texas as a Stowers action — have on pretrial settlement negotiations. If an insurer in Texas is presented with a settlement offer within insurance limits, refuses to settle, and the plaintiff wins an award greater than insurance limits, the plaintiff is entitled to sue the insurer for the full damages amount, plus punitive damages, for refusal to settle. In this paper, we explore the game theory of medical malpractice settlement negotiations in the shadow of Stowers.

Based on their (admittedly, and necessarily, simplistic) model of malpractice settlements, they run a Monte Carlo simulation.

It's not a bad idea, but they've missed one of the most important factors in settlement — the willingness and ability of the plaintiff to fight through years of risky litigation, trials, appeals and bankruptcy, where they must succeed 100% of the time to recover — and haven't shown why the existence of third-party bad faith lawsuits (i.e., those brought by the plaintiff against the defendant's insurer) contribute more towards settlement than the existence of first-party bad faith lawsuits (i.e., those brought by the defendant against their insurer).

Let's start with the biggest missing element from their model:

Silver, et al. suggests that there are polite reasons not to seek more than [the insurance policy limits]. But this hypothesis contradicts both what we know about the incentives of attorneys and the empirical data. Are we to believe that trial lawyers, out of the goodness of their heart, refuse to seek more than [insurance policy limits]? This seems improbable: the insured doctor is likely to have substantial assets, trusts provide limited protection, and the plaintiff attorney’s fiduciary duty to her client requires her to zealously pursue the doctor’s assets.

There are indeed "goodness of heart" considerations: it's psychologically easier to take an insurance company's reserves — which have been collected and maintained for the purpose of compensating injured plaintiffs — than to take an individual's personal assets.

But let's put that aside and focus on the money. Keep in mind that, in most circumstances, the insurer can't just pay their policy limits and wave goodbye to the defendant while the plaintiff goes after the defendant's assets. If the defendant doesn't want to pay any of their own money, then the insurance company will keep defending them to a full and final conclusion, without paying the plaintiff a dime in the meantime.

Most often, the settlement of an above-policy-limits claim at policy-limits is not due to the goodness of anyone's heart: it's the rational choice between either settling at insurance policy limits and walking away with the money now, or refusing the insurance money and then chasing the doctor's assets for years (with five-or-six figure additional costs) through trial, appeals, re-trials, bankruptcy, bankruptcy appeals, and bankruptcy discharge, which often pays unsecured creditors a fraction of their claim's value. And don't forget: the plaintiff has to be successful in each and every one of those proceedings.

If the insurer actually tenders their full policy limits, then my "fiduciary duty" to the client typically compels me to recommend the client take the policy limits now, rather than starve themselves for years and endure the substantial risks of running the entire civil legal gauntlet — where they must succeed 100% of the time to recover anything — for a theoretical shot at more.

To their credit, the authors admit at the end that they haven't included these factors:

This is still a relatively simple model: it assumes instantaneous and frictionless rulings, rather than an expensive process that may take several years with substantial fees for attorneys and medical expert witnesses. We assume that the trial court’s judgment is 100% accurate, and that there will be no appeal. We therefore do not consider the issue of post-trial settlement. In real life, the risk that a favorable judgment will be struck on appeal one reason why so many large judgments are settled so seemingly favorably, but it is impossible to estimate the size of this effect without qualitative data that the Hyman “haircut” study does not have.

Trials take years. We make no effort to compare the value of a settlement in the hand with a judgment several years in the future that is stayed by appeal. On the other hand, Texas has relatively generous post-judgment interest rates with a floor of 5%. Expanding the model to consider the time-value of money from early settlement would be useful in adjudging the merits and effects of the so-called “early offers” reform. As Zeiler notes, such time-value can also result in settlements below policy limits by virtue of aggressive negotiating by insurers.

Those two economic issues — the risk of losing on appeal (and/or retrial) and the time value of money — create a massive disincentive against attempting to pursue assets beyond the insurance policy limits. Post-judgment interest is generally irrelevant in the context of cases with damages/judgments larger than insurance proceeds: unless the plaintiff wants to go all the way through appeals, retrials, judgment execution, and bankruptcy, then, regardless of any post-judgment interest, the plaintiff's recovery is still effectively capped at the insurance policy limits.

That's the first problem: the failure to consider the effect of the willingness and ability of the plaintiff to fight through years of risky litigation on settlement.

Here's the second problem: the authors "add a Stowers factor S, which is equal to expected Stowers recovery given a victory at the underlying medical malpractice trial" but don't say how they calculate S. More importantly, though, they don't explain why a third-party bad faith recovery would be expected to be any larger than the first-party bad faith claim available to the doctor if she believes the insurer did not handle the case properly.

When an insurer worries about a potential bad faith claim, they're not just worried about the plaintiff suing them. Indeed, they're usually more worried about the defendant suing them.

Like Dr. Woo:

Robert C. Woo is a Seattle-area dentist. An online guide praises his "first-class service" and "painless procedures." It is likely that Tina Alberts, his former assistant, disagrees.

Alberts cared for pot-bellied pigs, a frequent topic for office banter. Dr. Woo enjoyed taunting her with accounts of his boar-hunting trips, and a picture of a skinned pig hanging from a hook. He predicted a similar fate for Walter, her beloved pet pig. Dr. Woo informs us that this was all part of a "friendly working environment."

When Alberts required surgery to replace two teeth, Dr. Woo saw an opportunity to cement this self-impression of bonhomie. Once she was completely sedated, he halted the agreed procedure, and began a new one. Replacing her teeth required the temporary installation of standard false teeth. Dr. Woo had secretly ordered a second set of temporary teeth, shaped like boar tusks. Removing her oxygen mask, he inserted the tusks and - we must assume this was part of the friendly working environment - took photographs of her with her eyes and mouth pried open. Returning at last to his professional duties, he removed the tusks and inserted the correct temporary teeth.

A month later, Dr. Woo's staff presented Alberts with the pictures at her birthday party. The fun-loving Woo described them as a "trophy" to take home. Home she went, never to return. Instead, she sued Dr. Woo for battery, invasion of privacy, medical malpractice, and a host of related claims.

Dr. Woo's insurance company refused to defend him in Alberts' lawsuit. Dr. Woo settled the case on his own for $250,000, then sued his insurance company.

And won:

Because his insurer should have defended him, Dr. Woo recovered the $250,000 he had paid Alberts. But he also claimed emotional distress due to his insurer's abandonment. Despite "the absence of any medical, psychiatric or expert testimony" attesting these injuries, a jury awarded him $750,000, which suggests the rather even quality of justice throughout the judicial system of Washington State. And naturally, Fireman's had to pay for Dr. Woo's legal costs.

The end result was exactly what Ted Frank and Marie Gryphon's paper is supposed to focus on: a situation in which an insurance company was forced to pay more than the policy limits for a malpractice claim. Yet, in Dr. Woo's case, the third-party Stowers action had nothing to do with it — it was a purely first-party claim brought by the doctor. 

I hope there's more study down this field; the world of litigation and defense & indemnity insurance is ripe for rigorous game theory analysis. But it needs to be as thorough and rigorous as the study of any other economic situation.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Howard Bashman (of How Appealing) has a new article in The Legal Intelligencer:

Recently, however, in cases where I am representing the party that won in the trial court, I have observed experienced appellate opposing counsel who will designate the contents of the appendix or reproduced record on appeal in a far more "adversarial" manner than I would have done had I been in their position. What I mean is that the designation they are serving will include only the parts of the record that benefit their client's position, while excluding (at least until I counterdesignate them in response) those parts of the record that favor my client's position and the trial court's ruling.

Because other experienced appellate advocates are now frequently engaging in a more "adversarial" method of appendix designation than I am, I cannot help but wonder whether this "adversarial" method ever succeeds. In other words, if counsel for appellee is inexperienced or inattentive, presumably the "adversarial" method of appendix designation could ultimately result in an appellate appendix that was bereft of the evidence and other material on which the party that won in the trial court would wish to rely in arguing for affirmance of the trial court's ruling.

Howard has a good argument against the practice and why it's unlikely to succeed. Assuming the court doesn't recognize what's happening and punish the offending party for it, let's consider the question from the perspective of game theory.

The more information available to a court about a case, the more informed and thus more sound the court's analysis will be. Conversely, the less a court knows about a case, the less informed and thus less sound its opinion will be.

I agree with Howard: limiting the appellate record makes it harder for the appellate court to closely and carefully review the case, which increases the risk to both parties of the appellate court unintentionally rendering an ill-informed opinion unjustified by the actual facts.

If a party believes they have a strong case and that they will prevail on appeal, that additional risk is a bad thing. Hence their desire for as complete a record as possible.

But if a party believes they have a weak case that's likely to lose at appeal, however, then they have an incentive to make the record incomplete, and thereby increase the likelihood of the appellate court issuing an erroneous or ill-informed opinion.

Though the losers at the trial level probably have this incentive more often than the winners, the winners can have it as well — if the party that won at trial thinks their victory is unlikely to survive appeal, then they, too, have an incentive to make the record incoherent and incomplete, thereby frustrating review. Indeed, the winning party might have more of an incentive to mess up the record, if they believe, as many lawyers do, that appellate courts generally defer to trial courts, even where the standard of review is de novo.

Perhaps not the most upstanding of tactics, but not necessarily a foolish one.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Inquirer reports on a hearing I attended on Tuesday in The Inquirer's bankruptcy:

In a scathing rebuke, the judge overseeing the bankruptcy of Philadelphia Newspapers L.L.C. yesterday described the investigation of an unauthorized taping of a meeting between the company and its senior lenders as a "fine mess."

The investigation of the taping, done by one of the officers of the largest creditor, was directed by a committee of the unsecured lenders, or second-tier creditors. By failing to take sworn depositions and seek key e-mails, the committee left its interim report on the taping open to questions and criticism, Superior [ed - I don't know what they mean by "Superior," though he is the Chief] Bankruptcy Court Judge Stephen Raslavich said.

* * *

[The investigation] stems from a meeting between the company's senior lenders and its top managers at Philadelphia Newspapers' offices at 400 N. Broad St. on Nov. 17, 2008. Vincent DeVito, a managing director of CIT Group Inc., was found taping the meeting without the knowledge or permission of everyone in the room, a violation of Pennsylvania law.

Philadelphia Newspapers, in court filings, contends that its relationship with its senior lenders deteriorated dramatically after its officials made an issue of the taping. The company has asked the court for permission to hire the firm of Elliott, Greenleaf & Siedzikowski P.C. to investigate the incident to see if its interests had suffered.

That request was initially rebuffed by the court, which appointed the committee of unsecured creditors to conduct the investigation. The company asked the court to reconsider, given what it contended were inadequacies in the investigation directed by former Pennsylvania Superior Court Judge Robert A. Graci, who now works for the firm that represents the unsecured creditors' committee.

Yesterday, Raslavich made it clear that he shared those concerns, dressing down Graci for failing to take sworn depositions and issuing his interim report before seeing key e-mail files requested from DeVito.

An important piece of background that Graci himself brought up, albeit fairly late in his colloquy with Judge Raslavich: Graci's background is in criminal work, specifically in representing the Commonwealth of Pennsylvania in appeals.

Civil litigators wouldn't dream of conducting an investigation through unsworn interviews, and most litigators start with requests for important documents, like emails, then follow up with depositions. Typically, only one deposition is permitted for each witness, so you need to make it count. From that perspective, Graci's investigation looks like a joke.

Yet, most criminal investigations are performed exactly the opposite way, through informal interviews followed by document requests and possibly more interviews. Typically, prosecutors don't even get to talk to the defendant at all, given the defendant's right to remain silent, much less depose them.

That's what Graci's used to. As he said at the hearing, he initially contemplated using depositions or sworn statements, then figured that would have added another layer to the proceedings (such as endless objections by the attorneys representing the witnesses) and would have delayed everything without providing any clear benefit. So he switched gears and conducted it like a criminal investigation.

That is to say, his technique was in no way evidence that the investigation was a sham, in bad faith, or the result of incompetence. Judge Raslavich told him as much.

But there's a problem: Graci wasn't there just to get to the bottom of what happened, but to ensure the appearance of propriety. As it stands now, Judge Raslavich has to grapple with the Inquirer's legitimate complaint that, whatever the merits of the investigation, there's no record for them and their lawyers to review, just the conclusions.

The odds of there being an inadequacy or impropriety in the investigation are slim, but they're not zero, which may render the whole thing a nullity.

A good lesson and question for all lawyers -- what does your paper trail look like?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

After four days of trial, and a few hours of deliberations, the AP reports:

A federal jury ruled Thursday that Jammie Thomas-Rasset willfully violated the copyrights on 24 songs, and awarded recording companies $1.92 million, or $80,000 per song.

Thomas-Rasset's second trial actually turned out worse for her. When a different federal jury heard her case in 2007, it hit Thomas-Rasset with a $222,000 judgment.

Under our absurd (and possibly unconstitutional) copyright laws, the award per violation can range from $750 to $150,000, and the jury here roughly split the difference at $80,000 per song, about the same amount as a Manhatten jury will give you for losing the end of your pinky. The jury must have felt these particular duplicate copies of the songs were very dear to the poor record companies.

Why would twelve ordinary citizens do that?

A vigorous defense from Kiwi Camara and Joe Sibley was not enough to sway the jury, which had only to find that a preponderance of the evidence pointed to Thomas-Rasset. The evidence clearly pointed to her machine, even correctly identifying the MAC address of both her cable modem and her computer's Ethernet port. When combined with the facts about her hard drive replacement (and her failure to disclose those facts to the investigators), her "tereastarr" username, and the new theories that she offered yesterday for the first time in more than three years, jurors clearly remained unconvinced by her protestations of innocence.

Camara suspects that the jury thought Thomas-Rasset was a liar and were "angry about it," thus leading to the $80,000 per-song damages.

And there you go. Camara has it right; pity he couldn't get his client to stop lying at trial.

For comparison, not too long ago a jury awarded just $1 million in pain and suffering to this man:

After 63 days in the hospital (57 of them in a coma), 11 surgeries and 65 more days in a rehabilitation hospital, Robert Doviak was left totally and permanently blind, with a sense of touch that was seriously compromised, partial loss of hearing and no sense of smell or taste. Additionally, he had substantial orthopedic injuries including fractures of his left femur, several cervical vertebrae, both zygomatic arches and other bones in and about his face and eyes, his left hand and his right wrist.

The difference?

[D]uring summation, Doviak's attorney asked the jury to award Doviak $60,000,000 for pain and suffering, an amount Doviak's new attorneys say is preposterous and evidence of awful advocacy and which defense counsel says revealed the greed that served as the foundation of plaintiff's case[.]

Credibility matters. Who you are, what you do, and what you say matters. Don't treat the jury like they're stupid; don't try to get anything by them, and don't ask them to do or to believe something ridiculous. It will never work. If your case has a problem, concede it, deal with it, and move on.

And above all, never lie to the jury.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Elliott Wilcox at the Winning Trial Advocacy Techniques blog has a great post on “non-rulings” by trial judges:

Using a combination of body language, tone, and other non-verbal behaviors, judges subtly encourage lawyers to rephrase questions or move on to new topics. When you’re caught up in the heat of battle, it feels like the judge has issued a ruling, so you rephrase your question or move onto another topic. In reality, no ruling has been issued, because the judge hasn’t ordered you or your opponent to do anything. A common term for describing this type of action is called a “non-ruling.”

The most effective “non-ruling” judges you’ll encounter are often the friendliest judges you’ll encounter in your practice. These judges succeed at “non-ruling” by drawing upon your inner desire to be a consummate professional, while also creating a congenial courtroom attitude. By encouraging both litigators to just “go along and get along,” they can avoid issuing stern rulings (and also avoid a reversal from the appellate bench). Usually, “non-rulings” will be disguised as kindly suggestions, such as, “Why don’t you go ahead and rephrase your question, ok?” Since you don’t want to stir up the pot, you’re usually inclined to go along with the judge’s suggestion.

The post includes several great suggestions for how to respectfully and gracefully deal with these "non-rulings." New and experienced trial lawyers owe it to themselves to read the whole post.

Let me add a distinction. There are two main types of non-rulings: “move along” and “different question.” They warrant different responses.

“Different question” is usually an indication from the judge that they believe the subject matter of your question pertains to relevant and admissible evidence, but that the question itself is objectionable or prejudicial.

In a "different question" circumstance, you probably do not want to prompt a formal ruling from the judge, because the judge will likely sustain the objection yet give you no guidance as to how you should proceed, even if they believe the subject matter is probative and admissible.

The better course here it to stop, think, and find what is wrong with your question. Odds are, you have made a basic mistake like asking a leading or compound question, and by breaking it down and going through the issues step-by-step can avoid any further objections.

“Move along” is usually an indication that the judge believes the subject matter you are inquiring about is inadmissible or prejudicial.

In this circumstance, while you probably should initially attempt to rephrase your question (because the court might have misunderstood where you were going), you are probably going to be overruled no matter what you do.

As such, it makes more sense here to illicit a formal ruling from the judge, because you are going to need it post-trial and on appeal. My preferred response when I hear “move along” is to come up with a different question that will telegraph where I am trying to go to the judge. If the judge again tells me “move along,” then I request a sidebar on the record so that I can (1) determine the scope of what the court is trying to preclude and (2) obtain a formal ruling for purposes of appeal.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Amy Kolz has an extensive article at The American Lawyer detailing a merger debacle which settled last winter for $1 billion after "Vice-Chancellor Stephen Lamb [of the Delaware Chancery Court] declared that Wachtell's client, an Apollo Management, L.P., portfolio company called Hexion Specialty Chemicals, Inc., had 'knowingly and intentionally breached' its merger agreement with Huntsman Corporation in a deliberate effort to walk away from their $10.6 billion deal."

If you're interested in the subject, you should read the article.

I highlight three elements fundamental to their defeat, and the defeat of many business litigation plaintiffs:

Evading The Obvious Spirit of the Agreement:

Huntsman and its lawyers at Shearman & Sterling and Vinson & Elkins were able to negotiate a merger agreement that all but locked Hexion into the acquisition. There was no "financing out," which meant that Hexion would have to pay a $325 million termination fee if it failed-despite using best efforts-to obtain debt financing. The material adverse effect clause, as Lamb would later remark, was also "narrowly tailored." And though one of the parties had to deliver a solvency letter to the banks funding the deal, there was no "solvency out" for Hexion.

The deal also included a provision that later proved harmful to Apollo. Though the agreement capped Hexion's liability at $325 million if it couldn't complete the deal despite making "best efforts," it allowed for uncapped damages in the event of a "knowing and intentional breach of any covenant" by Hexion, a provision more often seen in deals with strategic acquirors.

If you want to be able to back out of an agreement, leave in place mechanisms by which you can. Huntsman smartly negotiated an agreement locking Hexion / Apollo into the deal.

I've seen plenty of sophisticated individuals and business make or break contracts in a manner charitably described as commercially unreasonable. I can't fix those mistakes. If you walked away from a good deal because you were afraid, I can't enforce it. If you consented to an air-tight contract because you desperately wanted the deal, I can't undo it. There's a lot I can do, but where the case would revolve around an issue fairly negotiated and clearly incorporated into the contract, that usually ends the story unless you can show fraud or fraudulent misrepresentation.

I don't know what fee arrangement Apollo had with Wachtell; Wachtell does a fair amount of contingent fee work, particularly in the mergers & acquisitions arena, and it seems like they really believed in their case, as Marty Lipton apparently assured Apollo victory at trial.

But that's not always the situation. We represent business litigation clients on a contingent fee, most of whom quickly pick up on the idea of a partnership in the litigation. Frankly, if your lawyer isn't willing to shoulder some of the risk of your lawsuit, you should ask yourself why not.

Making The Facts Fit Your Lawyer's Strategy:

Apollo arrived at the meeting, according to testimony from Apollo partner Jordan Zaken, focused on the contract's material adverse effect clause: If Huntsman's declining numbers constituted an MAE, Hexion could walk away without even paying the deal's $325 million termination fee. But Wolinsky had to know that was a long shot. Delaware courts have never found a MAE in the context of a merger agreement, and Wolinsky himself helped to litigate the precedent-setting case on the issue, IBP, Inc. v. Tyson Foods, Inc., in 2001.

Instead, Apollo and Wachtell began to consider the combined company's potential insolvency as a possible way out of the merger. The strategy was certainly intriguing. If the merger would result in an insolvent company, the banks could refuse to finance it, leaving Hexion with no choice but to abandon the deal. And if it were the banks-not Hexion-scuttling the deal, Hexion would be liable for, at most, the breakup fee.

Lawyers are smart, creative and innovative (or should be). They can change their strategies to meet a wide variety of fact patterns.

But facts are stubborn things. Trying to create facts, even in the midst of litigation, create a huge risk that the judge or jury will find your whole case to be a farce constructed for their benefit, which is what happened here: Judge Lamb ruled that insolvency wasn't even ripe for judgment.

Voiding Your Legal Protections, Like Attorney-Client Privilege:

Wolinsky explained that Wachtell was potentially interested in a formal solvency opinion, but also wanted to hire Duff in a "consultative arrangement to assess the solvency analysis," according to testimony from Duff's Philip Wisler. The firm would use Duff & Phelps, in other words, for two roles: a litigation consulting team that would provide various financial analyses to assess the possibility of deal litigation, and an opinion team that would be engaged if Hexion decided "to go forward with a particular course of action," namely litigation to end the merger.

...

From the beginning, Duff's efforts to separate the consulting and opinion teams were imperfect, at best. Wisler, for instance, attended the May 20 kickoff meeting for the litigation consulting team at Apollo's New York offices, even though he was to be the author of the insolvency opinion. The same Duff expert performed modeling work for both teams. And litigation team leader Pfeiffer, at Wachtell's request, e-mailed Wisler various deal models for the opinion analysis; Wisler later testified that he was unaware he was supposed to be walled off from Pfeiffer's work.

...

The blurry line between Duff's consulting and opinion work would later come back to haunt Wachtell in Delaware. Vice-Chancellor Lamb ultimately concluded that Duff's consulting assignment cast doubt on the objectivity of its solvency opinion. Moreover, the dual role destroyed any potential work-product privilege claim over the Hexion team's communications with both the Duff litigation consultants and solvency experts. Duff had to provide comprehensive discovery to Huntsman, which was a huge gift to Huntsman's Vinson & Elkins litigators.

Remember the Watchmen suit where a witness' testimony was so guarded and unhelpful the Court precluded the witness from testifying on the subject again, thereby warranting summary judgment?

If you misuse or abuse the law's protections and privileges, you run the risk of having them deemed waived or void by the court, as happened here. It's the same when clever businesses set up a variety of undercapitalized or alter ego LLCs and S-Corporations to evade liability -- odds are good the court will respond by striking the house of cards and seeing what's left standing, often nothing.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A picture that's been making its way around the internet:

Can you imagine how fast they were going?

From the Daily Mail, here's why this picture is evidence of triumph, not failure:

The un-named driver and his passenger were taken to the Royal Adelaide Hospital for treatment, but their injuries were said to be not serious.

"Not serious?" They destroy a race car driving it into an immobile object at a speed most people never reach and their injuries are "not serious?"

Ignore the idiot driver. Three cheers for Ferrari, for designing a car that collapsed in such a manner to slow the impact sufficiently to prevent decelleration injury, yet not permit intrusion into the driver and passenger spaces.

That is to say, the Ferrari "failed well." When things went wrong, it did its job and accomplished its primary goal of protecting the occupants.

Compare to all the things you have seen "fail badly," like the trial case that collapsed when a third party witness mixed up seemingly (to them) minor details, or the litigation that changed course entirely when you trapped a defendant with inconsistent discovery answers, or the complete waste of a day when you botched a filing procedure in the most trivial of ways and then spent hours rectifying the situation.

Before your next trial, think for a moment: what happens if I lose most of the court rulings, get beat up by my opponent's witnesses, and can't keep my witnesses from fumbling most of their testimony? 

If the answer is, "I definitely lose," then you need to rethink your strategy. You need to find a more robust theory of the case that can deliver your passengers safety to their destination.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

 

 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Ronald V. Miller, Jr., at the Maryland Injury Lawyer Blog, on the ball as always:

David Davis, a Massachusetts based jury consultant, offers five thoughts in The Jury Expert on the psychology of how jurors process requests for damage awards that I think is of interest to accident and malpractice lawyers.

I found of particular interest his theory that consumers – and by implication jurors – have a propensity to judge precise amounts of money to be lower in magnitude than similar round prices. The reason is that we tend to use precise numbers for small amounts and round numbers for larger amounts. The example Dr. Davis provides is that a precise number like $325,425 is seen as lower that $325,000 even though obviously the former number is a higher amount.

The implication for personal injury lawyers is obvious: make a request for damages that is a specific amount and back up that amount with some logical foundation. ...

This advice corresponds with the general principle of negotiation that you should start with the highest number that you can reasonably and fairly demand. Of course, when you define "reasonable" and "fair" in such situations, you do so in a way most beneficial to you and your client — the core point is to have a rational basis for your numbers, a basis others will at least consider and not reject out of hand.

There are very few situations in which $500,000 is the "rational" number, even in the context of pain and suffering, which obviously does not have a specific dollar amount. Even if the jury, at the end of the day, will likely compromise on some round number, their decision will be much easier to make if they can build a number from rational, reasonable and fair components.

Those components include, as Ronald Miller writes, per diem amounts. I am fond of including interest and attorneys fees and the like.

Of course, the Maryland injury lawyer is in a completely different situation from me, a Pennsylvania injury lawyer, as Pennsylvania does not allow lawyers to suggest exact numbers to the jury. They can, however, present evidence that includes exact numbers, such as expert analyses of lost wages and fringe benefits, and medical bills. Further, you can of course use whatever numbers you want into settlement demands; there's no reason to keep your persuasive tools on lockdown until trial.

Keep that in mind the next time you write $X,000,000 or $X00,000 as your demand.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Quite unfair:

Like a parent telling two children to go work things out for themselves, the justices declined to resolve the The Great High Court Showdown of 2008 — Olson v. Larisa.

The Court’s refusal to resolve the spat left Rhode Island, its governor and the town council of Charlestown to choose who — Supreme Court novice Joseph Larisa, or veteran Ted Olson — will appear before the justices on Monday to argue Carcieri v. Kempthorne, an Indian land case.

Their decision? Olson, according to a report on Scotus blog. Larisa, who’s never argued before the High Court, will be left to watch as Olson takes the reins on a case that Larisa has reportedly spent the better part of a decade working on

It may make sense before a Supreme Court, particularly the Supreme Court, given the limited scope of the short argument and how they generally care not one whit about the facts or details of the case, but instead focus on more general legal and policy questions. Olson knows the Court, the Court knows him, so it may make sense to bring in a big name on the eve of the argument.

But don't ever do that on a trial. Not ever. Trials are different. Trials are unpredictable. Trials can turn on "minor" details and quick-thinking during direct or cross examination.

Maybe you'll get lucky. Maybe the case really is so simple that it comes down to a lawyer's experience in a particular field or in connecting with juries.

That, however, is the exception, not the rule. Trial preparation requires not just work but time. It cannot simply be crammed into the space of a week, a few days, or the first couple nights at trial. It's not enough to read and re-read all the depositions and pleadings and motions: you need to think about them.

This point is so important it's worth mixing metaphors: the facts need to marinate in your head, and your ideas need to germinate and flower so that they can percolate at the right time during the trial.

That cannot be done in a week. It reminds me of advice I read from a preacher (to fellow preachers) many years ago: the Lord reveals far more in a month than He does in a day.

Combine that with Sun Tzu's Art of War: every battle is won or lost before it's ever fought.

And we have our motto: every trial is either won in the months, or lost in the days, before it's ever tried.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

 

White-collar trials (whether criminal or civil) are often like baseball: five minutes of glory for every two hours of boredom.

Today was no different at the Fumo trial this morning, as the jury slogged through each and every problem Christian Marrone faced as he managed the renovation of Fumo's 33-room mansion and dealt with Fumo’s neighbors. Marrone made call after call, keeping Fumo apprised via detailed “punch lists” and emails as plumbers missed deadlines, the elevator kept getting stuck, and one contractor failed to finish a wall that was adjoining a neighbor’s property. I’d estimate the jury saw a new email or memo every two or three minutes, all morning, all of which made essentially the same point: Marrone was in charge and it took him a lot of time.

Why? Because that whole time Marrone was on the Pennsylvania Senate payroll, as described in paragraph 52 of the indictment:

For the first 18 months of his employment by the Senate, Person No. 19 spent approximately 80% of his time on this job, coordinating and supervising the numerous construction contractors. He received no payment other than his Senate salary.

As a basic rule, the jury will likely believe the case is "about" the issues upon which the lawyers spend the most time. Trial lawyers thus always face a dilemma whenever they have a witness who knows a whole lot of details that are, on the surface, completely irrelevant (e.g., no one cares how many showers there are or who designed the custom cabinets) but which support a major theme of the case (that Fumo was using Senate-paid staffers for personal work).

Trial lawyers routinely overestimate the level of detail needed to “prove” a given fact and routinely underestimate the time it will take them to do so. As such, my personal preference is to give the jury the basic information and summary it needs, plus some supporting examples to bring the testimony to life, and then get it over with. I have never heard of any case in which the jury later complained that they just did not hear enough details about accounting irregularities or improperly stored emails or misappropriations of resources. After the first several dozen examples, they get the point, and put the burden on the other side to rebut it.

The difference here, which is why I believe the prosecution chose to spend several hours on these mundane details so early in the case (potentially costing them valuable momentum), is the relationship Marrone has to Fumo. Marrone is Fumo’s estranged son-in-law, and thus already exposed to multiple attacks on his credibility during cross-examination. As such, the prosecutors needed to bolster his credibility, which can be done through excessive detail.

Even if Dennis Cogan can score some hits here and there (maybe Marrone stretched his role in one or two of the incidents, and there’s ample evidence in the public record that Marrone hates Fumo and was the key witness in the investigation), it will be very hard to argue that Marrone’s testimony is not by and large the truth. There were simply too many details and too many emails for that. The afternoon session carried on the same as the morning, except that it moved from the house into more personal services and work on political campaigns (both of which are forbidden).

The big question then is where Cogan will go. My hunch is that, in addition to the normal attacks on credibility (which, even if not enough to rebut the core substance of his testimony, will at least divert attention away from the prosecution's case) he’ll turn the relationship around on Marrone, arguing that Marrone, who time has shown to have political ambition, volunteered to do all this work to please Fumo, who had just given him his first job out of college, and that Marrone also completed all of his Senate duties, which were minimal given his inexperience.

The relationship may then look exploitative, even when considering Marrone was “paying his dues” at the start of his career, but not like an illegal scheme to defraud the taxpayers. That would open the door to reasonable doubt, which is all the defense needs.

 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Put aside, for a moment, the election and whatever you know of the histories of these two individuals and just watch.

Before you follow the advice to "be yourself" when speaking in public, which I'm sure both of these persons were doing, stop and think about how you appear to others. Do you appear credible? Knowledgeable? Rational? Calm? Focused?

Or do you appear like a scared and ignorant fool cobbling together provocative phrases?

Both of these persons' appearances arose from something you can't buy in a store. You've got to grow it from a seed.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Tragic:

Michele Mallin said she was "100 percent sure" when she identified Timothy Brian Cole as the man who raped her.

Her resolve never wavered, Ms. Mallin said, until she learned last May that DNA testing had invalidated her 1985 identification. The revelation came nearly nine years after Mr. Cole died at 39 in a Texas prison from an asthma attack.

"I was more shocked than I think I had ever been in my entire life," Ms. Mallin said during a recent lawyers workshop in Fort Worth.

(ht: How Appealing) And all too common; Brandon Garrett of the University of Virginia identified faulty eyewitness testimony as the leading cause of convictions later overturned via exculpating DNA evidence:

The 200 exonerees were convicted based on eyewitness identifications (79 percent), forensic evidence (55 percent), informant testimony (18 percent), and false confessions (16 percent).

I can't tell you the number of times a witness has told me one thing in trial preparation and another on the stand. Are they lying? No. Mistaken? They don't think so.

Memory is fallible. People are fallible. Stick it on your door, your computer, your trial bag, and your notepad. Always question eyewitness testimony, no matter how sure or how sincere. And if your theory of the case isn't robust enough to survive some changes in testimony, you need to rethink it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As you've heard, even given that rock you've been living under, after President Bush, John McCain, and the Republican and the Democratic leadership of the House announced that an agreement had been reached, the actual vote on it failed, with a caucus of Republican conservatives bailing out on the bailout at the last minute, nominally because their feelings were hurt by Nancy Pelosi's speech. (Realistically, because they and their constituents hated it, and no one wants to run for re-election on an issue like that.)

So who is to blame? Treasury Secretary Paulson and Federal Reserve Chairman Bernanke. Those two idiots violated two basic rules of salesmanship and trial advocacy: do not ask for too much and do not surprise someone who has the option of walking away.

Soon after those idiots dropped a basket of rotting fruit on Congress (which they described as a basket of roses), a spokesman admitted a stupefying fact — the administration had prepared the three-page bill months ago and nonetheless decided not to let Congress or the American people in on the possibility until they believed we were all on the verge of a new depression. Such was in sharp contrast to the Fannie Mae and Freddie Mac bailout, which were deliberated by and authorized by Congress well in advance of the actual need.

It's hard not to sympathize with the House Republican caucus, whose own Administration left them out of the loop of the most expensive act ever introduced in Congress, the principal point of which was to violate several principles stated in the Republican Party platform.

The application to trial advocacy is not hard to understand: if you have a hard sell coming up, get to work early and be prepared to take on some water.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Over at PhilaLawyer, an anonymous (and largely humor-focused) part of the Rudius blog network, there are four ideas for "Shyster-Proofing the Courts:"

1. Immediate Mandatory Mediation
2. Allow Expert Witnesses to be Deposed
3. Give Frivolous Litigation Claims Teeth and Allow Expert Witnesses to Be Sued in Such Claims
4. Eliminate Referral Fees

First, let's keep something important in mind: the bulk of civil cases involve automobile accidents. So in some sense we're really missing the boat unless we're talking about that specifically. That said, I doubt any of these would make a difference.

1. Immediate Mandatory Mediation

Because I work on a contingent fee, I would like nothing better than to settle cases as quickly as possible.. Settlement puts money in my pocket, does not require my own money put out on the street for costs and fees, and puts my client back on their feet, a particular concern in personal injury and medical malpractice cases. So don't think I am ever the one driving the litigation.

Problem is, even a hypothetically perfect insurance company that promptly and fairly evaluates every claim, sets an appropriate reserve, and begins negotiation has multiple incentives not to settle early. The insurance company makes a return on every single penny in their reserves, a return that evaporates the moment they tender a check to me. The insurance company also typically starts blind on damages; they know a lot about their insured's liability, but very little about my client's medical expenses, lost wages, and the impact the injury has had on their life, and for obvious reasons the insurance company is not going to take my word for any of them. Finally, the insurance does not know how highly I really value the case. The only way they believe they can estimate my bottomline is by pushing back against me and seeing how I respond. Even at a firm with a strong reputation for taking cases to trial and for rejecting weaker (even though meritorious) cases, there is still a belief among insurers and defense counsel that some of the cases are "nuisance value" cases taken to maintain cash flow, with little expectation of a substantial settlement or verdict.

In the real world, the above analysis does not even happen at the insurance company until the case is ready for trial. The insurance adjuster, who, as a cog in a bureacracy, has the primary goal of demonstrating their usefulness to the bureaucracy by creating an extensive paper trail, frequently does not even bother to set a reserve for the case until trial schedules have been finalized. Similarly, the defense attorney, who gets paid by the 10th of the hour they spend defending the case, has little incentive to encourage a swift resolution of the case, thereby extinguishing a source of income and appearing feckless in the face of controversy.

Thus, by and large early mandatory mediation conferences will function as a subsidy for defense lawyers — by giving them something else to bill for — and a tax on plaintiff's lawyers — by taking them away from their other contingent fee cases. At the conference, the defense attorney will have authority only for a nuisance value while the plaintiff's attorney (who will be a junior associate, if the firm has them) will have authority only for the highest number the plaintiff's attorney can reasonably demand. If there is some external force which could drive early settlement, that force will do so regardless of court intervention.

2. Allow Expert Witnesses to be Deposed

That's already the case in the federal system. While it probably does reduce the need for trial because it puts almost everything on the table, it won't do anything to cut back on litigation. The point about having experts who write bogus opinions expecting a case will never go to trial is well taken, but that's already factored into our current system — if one of the sides thinks the expert will pull out the event at trial, they'll just push the case straight to trial, extracting a favorable settlement while teaching the other side a lesson. Adding a deposition, which would naturally have to occur after discovery (as it does in the federal system), won't really change that dynamic, it just slightly advances the time when the expert pulls out. There might be some savings to that, since it obviates the need for full trial preparation, but those savings would be minimal.

I don't think expert witness depositions are a bad idea, I just don't think they will result in any significant savings. Moreover, in cases worth less than, say, $100,000, expert witness depositions could have the perverse effect of making settlement less likely, because they hike up the costs of bringing the case to trial, thereby requiring the plaintiff and their attorney to raise the demand accordingly to protect the amount they get in the end, which in turn makes it less likely the insurer will meet the demand.

3. Give Frivolous Litigation Claims Teeth and Allow Expert Witnesses to Be Sued in Such Claims

Frivolous lawsuits are already actionable in most states, and are frequently acted upon right here in Philadelphia County. In Pennsylvania, there is specific statutory authorization for them under the so-called Dragonetti Act, named after the first attorney to get really walloped under it. The elements of such a wrongful use of civil proceedings suit seem reasonable to me:

§ 8351.  Wrongful use of civil proceedings

(a) ELEMENTS OF ACTION.-- A person who takes part in the procurement, initiation or continuation of civil proceedings against another is subject to liability to the other for wrongful use of civil proceedings:
 
   (1) He acts in a grossly negligent manner or without probable cause and
   primarily for a purpose other than that of securing the proper
   discovery, joinder of parties or adjudication of the claim in which the
   proceedings are based; and
 
   (2) The proceedings have terminated in favor of the person against whom
   they are brought.

...

§ 8352.  Existence of probable cause

A person who takes part in the procurement, initiation or continuation of civil proceedings against another has probable cause for doing so if he reasonably believes in the existence of the facts upon which the claim is based, and either:
 
   (1) Reasonably believes that under those facts the claim may be valid
   under the existing or developing law;
 
   (2) Believes to this effect in reliance upon the advice of counsel,
   sought in good faith and given after full disclosure of all relevant
   facts within his knowledge and information; or
 
   (3) Believes as an attorney of record, in good faith that his
   procurement, initiation or continuation of a civil cause is not
   intended to merely harass or maliciously injure the opposite party.

42 Pa.C.S. § 8351 et seq.
 

If there is a way to improve these elements, I would love to hear it. I personally can't think of any way of strengthening it without making it, at best, confusing and, at worst, a violation of the rights of due process and access to the courts.

As for moving against experts, there is always perjury. Beyond that, it's hard to imagine a worse idea than intimidating witnesses not to say what they really think. The point about this honest experts is, again, well taken, and I have tangled with my fair share of them, but such annoyances must be balanced against minor concerns like truth, justice and fairness. The best you can do now to retaliate against a lying expert is to report them to whatever professional organization of which they are a member, which hopefully have a deterrent effect against future offenders. I am loath to really encourage that idea, though, because by and large professional associations have a serious pro-defense bias, the natural result of a (perhaps understandable) desire to protect and shield their members from liability.

4. Eliminate Referral Fees

I have no idea how that would help anything. Plaintiffs lawyers bill on a contingent fee; if the case is meritless, they're a waste of time and money to pursue. Indeed, referral fees in my opinion actually reduce the number of cases filed, because they cut into the fee earned by the attorney actually pursuing the matter, thus requiring the case be stronger and have larger damages than if the case been brought in directly. Moreover, if there really is a problem of "recidivist professional plaintiffs," what good would it do to eliminate referral fees? They'll simply go to the same attorneys over and over or they'll find attorneys on their own — they're among the few people who really can find the right attorney for them on their own.

More importantly, referral fees serve a critical purpose in the civil justice system, introducing economic efficiency to an ordinarily inefficient process: the selection of a personal injury attorney by a nonlawyer. Corporate lawyers and clients don't need anything like a referral system because, as part of their paying jobs, they interact with all kinds of attorneys and generally have connections that can set them up with the right person for the job.

Your typical Wal-Mart or Wawa cashier hasn't the faintest clue about what to do when they get paralyzed by a drunk truck driver or when their spouse's brain gets blown out by an overdose of Heparin. Most lawyers don't even know to whom they'd turn in the event of a catastrophic injury. The referral system creates an incentive for the initial attorneys not just to half-assedly send a case away, but to diligently choose an appropriate attorney who can get the best result for the client.

Finally, and to me this is the most important function of the referral system, referral fees — specifically large referral fees — encourage attorneys who are not really qualified to handle large matters to refer those matters out to attorneys who are qualified. I cannot tell you the number of times I have been referred a case either because "it's just too big for me" or because "after I filed suit, the defense attorneys went nuclear on me." That is a good thing; attorneys should have no hesitation to radio SOS when the waters get rough. Eliminating referral fees gives them an incentive to hold on to these cases and "do their best," which is frequently not in the client's best interest.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Not Exactly Rocket Science fills us in on a recent Italian study revealing the unconscious decision-making of "undecided" voters:

Silvia Galdi at the University of Padova, Italy, has found evidence that the final verdicts of undecided decision-makers are only weakly related to their conscious preferences and more strongly influenced by unconscious views and biases they aren't aware of. In many cases, when people claim that they are undecided, they have secretly made up our minds, unbeknownst even to themselves.

...

All the interviewees returned to repeat the tests one week later. Among those who were previously undecided about the base, Galdi found that their conscious beliefs had little bearing on their later choices. Instead, it was their unconscious biases that had the greater influence; they predicted which way the interviewees' decisions would swing a week later, as well as any changes in direction in their conscious beliefs.

The tests show that the unconscious beliefs of these swing-voters were influential enough to sway their future decisions. Even though they said (and most probably believed) that they were undecided, they had to some extent already made up their minds.

People who had already made up their minds behaved differently. In their brains, unconscious associations held little sway and it was their conscious reasons that predicted their future choices. In fact, these reasons even predicted any changes in their unconscious associations - their beliefs were strong enough that over time, they eventually strengthened into a sort of mental reflex.

Perhaps most importantly, once the "undecided" voters had been pushed to a decision by their implicit biases, they cogently rationalized the decisions to themselves, essentially creating post hoc rationalizations for ideas long-decided for them.

As a trial lawyer you can read this simplistically as, "some jurors are just plain biased," but that's far more common in criminal trials than civil trials. In civil trials, while jurors may lean one way or another, they don't know you or the defendant from Adam, Eve or the Three Stooges.

Based on the above, there are only three things you must do:

1. use voir dire to discover jurors with harmful implicit biases, and exclude them;
2. put forth compelling arguments to arm favorable and undecided jurors in deliberations;
3. disarm unfavorable and undecided jurors from relying on the defendant's arguments.

Hopefully, you'll end up with a largely unbiased jury that has the power to rationally decide in your favor and doesn't have the ability to irrationally decide against you.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Victoria Pynchon has responded to my question about getting parties to the settlement table pre-trial, although she hasn't had a chance to answer it fully since she apparently has a real job outside of blogging.

While we're waiting, I do want to address the study (to be published in the Journal of Empirical Legal Studies, covered by the New York Times) that originally prompted her post.

Here's the punchline:

Defendants made the wrong decision by proceeding to trial far less often, in 24 percent of cases, according to the study; plaintiffs were wrong in 61 percent of cases. In just 15 percent of cases, both sides were right to go to trial — meaning that the defendant paid less than the plaintiff had wanted but the plaintiff got more than the defendant had offered.

...

On average, getting it wrong cost plaintiffs at about $43,000; the total could be more because information on legal costs was not available in every case. For defendants, who were less often wrong about going to trial, the cost was much greater: $1.1 million.

First, a caveat: I haven't seen the study, and I am always wary of commenting on the way a study was reported, which usually differs greatly from the study and its results, even with the best of reporting. Further, based on what I can gleam from the article, the authors may have conflated too many types of disparate cases together -- few trial lawyers would say that soft-tissue automobile accident cases are litigated, tried or settled the same way as wrongful death medical malpractice suits -- so the data may not be as useful as the article claims. 

That said, I think many of the conclusions around the blogosphere (e.g., "Settlement is Better than Trial") are off the mark, given what we know.

Based on those numbers before, plaintiffs should always take big cases to trial. Here's why:

The numbers show that, 61% of the time, plaintiffs get less at trial than they were offered. 24% of the time, they get more. Ergo, if you take a case to trial, the odds roughly 3 to 1 that you'll do worse for it.

But look at the difference in the money! 3 out of 4 times, a plaintiff loses on average $43,000 by going to trial. 1 out of 4 times, a plaintiff gains on average $1.14 million!

Thus, every single "win" cancels out a whopping 26.5 "losses!" Yet, based on the data above, as a plaintiff you don't "lose" 25 out of 26 cases, you "lose" 3 out of 4 (keep in mind that we've excluded the 15% of cases were both sides were right to go to trial).

The expected value / expected return for choosing trial over settlement is a whopping $1.01 million!

Based on those numbers, why on earth would I ever settle anything again?

Let me conclude: I'm assuming, as noted above, the study was either misreported or in fact jumbled disparate or outlying data together. Based on what we have, though, settlement is never the right choice unless you get every penny you've demanded.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

One of the few constants I have found across all trial is: the jury will take any opportunity to make fun of the lawyers, the parties, and the judge, in that order.

Understand that and embrace it. At the five-week trial, jurors referred to me and my co-counsel as "Batman and Robin" and to the primary opposing attorney as "Mr. Burns." Sometimes it's playful, and sometimes not. Know and prepare for the difference.

Most importantly, you want to avoid having your big, flashy centerpiece become an object of mockery and ridicule.

Take, for example, the latest Iranian missile test, revealed to have been altered to include an extra missile.

Here's what has happened to their big, flashy centerpiece:

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

A common trial / public speaking question: what do I do with my hands? How do I keep them out of my pockets or keep from waving them around?

Give them something to do. If you can't think of a persuasive use of them, then give them the job of lightly touching your pants. Then they won't move.

Most of all, make sure they, and the rest of your body, emphasize your message, and do not distract from it. Like so:

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Deliberations (which, but for copyright and manners I would simply cut and paste here every day) has up a great, short article from another jury consultant title "Stop Thinking Like A Lawyer!" A sample:

Another widespread myth is that jurors make up their minds during opening statement. Again, this simply doesn’t comport with common sense. Jurors want to see the evidence. They want to hear from the witnesses. They won’t simply accept what the lawyer says on faith.

Which is not to say that the opening statements aren’t important. Indeed, we believe opening statements are critical to jury persuasion. The problem is many lawyers don’t use this opportunity to its full advantage. For example, many litigators spend opening statement describing every single piece of evidence they will present at trial. In typical lawyer fashion they go into all the minor nuances of their case, including every last little detail.

The result is information overload. Giving jurors too much information before they have a context confuses them. Rather, you should stick to the broad strokes in opening statements. Identify the key themes and facts that tell your story and provide moral context. Use the opening statement to frame your case, to establish the
wrong that jurors must right.

Clear, simple, correct and true advice. To add an additional point not raised there, be yourself. There's, for whatever reason, a debate going on now about "Ivy retardation" sparked by some faux-rebellious article about how 'elite' universities create a divide from the mythical common man. To wit,

It didn't dawn on me that there might be a few holes in my education until I was about 35. I'd just bought a house, the pipes needed fixing, and the plumber was standing in my kitchen. There he was, a short, beefy guy with a goatee and a Red Sox cap and a thick Boston accent, and I suddenly learned that I didn't have the slightest idea what to say to someone like him. So alien was his experience to me, so unguessable his values, so mysterious his very language, that I couldn't succeed in engaging him in a few minutes of small talk before he got down to work. Fourteen years of higher education and a handful of Ivy League dees, and there I was, stiff and stupid, struck dumb by my own dumbness. "Ivy retardation," a friend of mine calls this. I could carry on conversations with people from other countries, in other languages, but I couldn't talk to the man who was standing in my own house.

The best response I've seen, courtesy of a science blogger, is:

... talking to plumbers has nothing whatsoever to do with education, elite or otherwise. It's entirely a matter of personal choices-- if you find yourself unable to make small talk with someone in a blue-collar job, it's because you have chosen to be the sort of person who is incapable of talking to people in blue-collar jobs.

The same goes for juries. Don't think of them as captive, uneducated spectators. Doing that is the same as choosing not to be able to associate with those of different backgrounds. Jurors are just people, entitled to the same respect, and capable of the same glories and mistakes, as everyone else. If you start playing around with your "image," you'll just screw that up.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Nevada Accident & Injury Law Blog describes how a Nevada Jury Awards Las Vegas Man $60 Million:

A federal jury in Nevada last week awarded $60 million to a Las Vegas man who alleged Paul Revere Life Insurance Co. and the Unum Group denied in bad faith his claim for disability benefits.

This is one of those “be careful what you wish for” cases. In a previous trial, a jury awarded Plaintiff $11.6 million but it was overturned on appeal. So the case was tried again and the second jury awards five times what the first jury awarded.

I see that a lot, particularly in tort cases with verdicts over $1 million, and I don't think it's a coincidence.

At a tort (negligence, malpractice, breach of fiduciary duty, wrongful death, etc.) trial, the defendant usually holds most of the cards. They generally know which stones you overturned on discovery and which ones you did not, and they know which evidence that you have his most embarrassing and which evidence you do not have is most absolving.

More importantly, they were there. They really know what they did and did not do, and what they were thinking when they did it, and they certainly know what they intend to say.

It does not matter how many depositions you took -- you could have had people testifying for days -- and how much written discovery you collected, trial will still be full of surprises. Even if no new facts are revealed, you will see facts presented in a new light, often at odds with the light they were presented in pleadings and during discovery. (And you will have to quickly react to this new version of the truth: don't even try to argue to the jury that a fact was "presented in a different light during discovery.")

Trial makes the defendant show their cards, clearing away their natural advantage in a tort suit. You will see the strongest defense arguments and the most favorable defense evidence. More importantly, while you can always run a mock jury and see how neutral non-lawyers react to your evidence, you will never get a chance, pre-trial, to practice cross examining a defendant to see what evidence makes them squirm, babble, or obviously lie. A deposition will give you hints, but it will never show you what will really make a defendant fold or what they'll do when the chips are down.

My view is that these big cases aren't 50-50 or longshots, they're slam dunks if you have all the evidence, know where the defendant wants to go, and know where the defendant doesn't want to go. That's how a "big" verdict becomes a "blockbuster" verdict the second time around.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

That's my interpretation anyway. From the always-great Deliberations:

I love the bumper sticker question in voir dire.  I've met lawyers and seen journalists who are surprised by it, or think it's intrusive, but when you think about it, it's a no-brainer.  If a juror holds an attitude so strongly that she'll paste it onto her car, you want to know what that attitude is.

New research suggests you should be interested in something else, too.  It isn't simply what jurors' bumper stickers say, it's whether jurors have bumper stickers at all.   Writing in the June issue of the Journal of Applied Social Psychology, Colorado State University researchers suggest that people with bumper stickers are more likely to be aggressive and angry people, or at least aggressive and angry drivers.

It even applies to people with 'peaceful' or otherwise conciliatory bumper stickers. I think that's a no-brainer as well --  if a person is of the type to broadcast their opinions to complete strangers, even where there's no dialog in return, you can assume they are also generally assertive, the type of people that will lead (or wreck) a jury.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

From National Law Journal. Best I can tell these are all trial strategies, despite the article referring to the attorneys as "litigators." There also seems to be a bias towards business lawyers; even the criminal defense is business-oriented.

Nonetheless, worth a read, not least because there's nothing new about any of them. It's the same stuff you learn in any trial advocacy program, like:

• humanize your client and get their story (not just their 'position' or 'claim / defense' in front of the jury)
• give misleading witnesses enough rope to hang themselves
• "I learned that lawyers better be straight with that jury. Don't mislead 'em, don't con 'em. Don't be too slick. Don't be slick at all."
• have a single, simple, coherent theory of the case

They're cliches and maxims for a reason: they work.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

There's nothing more I could add to this wonderful post about the new GOP slogan at 43(B)log.

Be careful about the ideas and imagery your words convey.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Juries never see cases the way lawyers do. No matter how simple the case or how obvious the issue, the only thing guaranteed after a jury trial is surprise when jurors dismiss the issues framed by the lawyers and explain how an aside by a witness or a piece of the foundational evidence revealed the case to them.

Take a look at the Geoffrey Fieger acquittal. An experienced and well-respected criminal defense attorney, with an extraordinary track record, at the very end of his career, looked facts of a campaign finance case and made selective prosecution his theme.

The jury didn't care. They felt there was little evidence of political motivation behind the prosecutions. But they still acquitted, because there was no evidence of criminal intent.

It seems the pornography / criminal obscenity trial in Florida may go the same way -- who could have guessed the jury would get caught up in the meanings of "morbid and degraded," "unhealthy interest in sex," and "candid interest in sex?" Most lawyers, including the defendant's, would have presumed that every juror thought the materials personally repulsive yet potentially permissible as free speech.

How would you feel, as a prosecutor or defender, if you heard the jury ask about a "unhealthy" versus "candid" interest in sex and you spent your whole closing on free speech?

Cover the waterfront. Give the jury the tools they need for any plausible argument, not just the one you think is important.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

At Day on Torts:

This study in PLoS Medicine reports that, based on estimates from publicly available data, drug manufacturers probably spend more money on advertising than they do for research and development.

In the words of the study:   "From this new estimate, it appears that pharmaceutical companies spend almost twice as much on promotion as they do on R&D. These numbers clearly show how promotion predominates over R&D in the pharmaceutical industry, contrary to the industry's claim. While the amount spent on promotion is not in itself a confirmation of Kefauver's depiction of the pharmaceutical industry, it confirms the public image of a marketing-driven industry and provides an important argument to petition in favor of transforming the workings of the industry in the direction of more research and less promotion."

This study makes it clear that it is using estimates to reach its conclusions.  The manufacturers don't report this data, so the authors had to take the limited available information and do what they could.  Obviously, they could be wrong.

So, why bring this to your attention?  We all remember a time when hospital ads did not appear on every seventh billboard and drug companies were absent from the print media and television.  The substance of ads from hospitals can be used in malpractice cases against those hospitals.   So to the drug company ads - and they can also be used to attack the outdated learned intermediary doctrine.  Finally, as the health and drug industries continue their assault the civil justice system on the grounds that financial responsibility is affecting their ability to offer new services and products, it is fair to demand answers to the questions of how they spend their money.   Is the public really being served by drug ads?

I have always wondered how to best deal with this problem. I think one of the greatest strengths of the jury trial system is that jurors come to the trial with their own lifetimes of experience, knowledge, and contemplation. One of the biggest drawbacks, however, is that every juror, even those who are genuinely without bias, comes to the trial with misperceptions, some so subtle that the juror would not even be able to identify them.

What do we do about these misperceptions? There is a big "pink elephant" problem: are we doing more harm when we tell the jury, for example, to ignore the effect medical malpractice lawsuits have on the availability of health care? It's like telling someone not to think of a pink elephant: the first thing they think of, of course, is a pink elephant.

The same goes with these drug ads. Large sections of the population -- probably more than the majority -- have been exposed to relentless advertising to convince them that their society is significantly held back by cost of lawsuits. There is little basis for this assertion, as even the most biased studies have found that judgments cannot exceed 1-2% of GDP, which is but a fraction of the tortious and otherwise wrongful damage done throughout our society on a daily basis.

But the meme persists, and I bet nine out of 10 jurors would tell you that lawsuit against pharmaceutical companies are one of the biggest costs the companies face, while fewer than one in 10 would say that advertising is one of the biggest costs. As lawyers, the answer to "what do we do about it?" is pretty simple, as we do whatever is possible within the confines of our trial, based upon the client, the company, the story, the jurors, and the court. As for what we should do about it, that is a tougher question to tackle.

• Email This
• Print
• Comments
• Trackbacks
• Share Link