Tag Archives: lawsuit

Can’t We All Just Get Along?

fdreDo you fight over discovery? Admit it. It’s ok, we’re all friends here, no?

Apparently lawyers still wage discovery battles. I won’t pretend that I’m immune. I still mix it up with the best of them. But I came across an article in the November, 2013 issue of Practical Law which attempts to make a compelling case why we might serve our clients better by adopting a spirit of cooperation.

In their article, “Learning to Cooperate,” Jonathan Redgrave and Peter Hennigan talk about The Cooperation Proclamation originally published by The Sedona Conference in 2008. They say:

“At the time of its release, The Cooperation Proclamation provided attorneys with a practical, if aspirational, framework to understand cooperation. Today, there is really no longer any question of whether or not counsel should cooperate in discovery. Cooperation is required by the current and proposed rules, expected by the courts and consistent with attorneys’ ethical obligations. Perhaps most important, cooperation is also what the clients want.” (Id. at 27.)

Well hold on now. Isn’t litigation an adversarial process? What about zealous advocacy? We’re talking about opposing parties and opposing counsel here, right?

Merriam-Webster defines “cooperation”–which, in case you wondered, is pronounced \(ˌ)kō-ˌä-pə-ˈrā-shən\–as “1 : the action of cooperating: common effort; 2 : association of persons for common benefit.”

“Common effort?” “Common benefit?” What!?! Your guy sued my guy, right? You’re demanding some ridiculous sum of money and, because my client won’t just pay you, you’ve prepared and filed a civil complaint, dragging my client into court, isn’t that right? Why on God’s green earth would my client want to make any common effort to do anything for your client’s benefit?

Before we get our dandruff up,† let’s stop for a second and find out what “cooperation” is supposed to mean in this context. Are we supposed to just give in? Roll over? Do our opponent’s job for them? The authors claim the answer is no.  Citing the Proclamation, Redgrave and Hennigan say:

“The Sedona Conference explicitly states that cooperation:

  •  Is not capitulation.

  • Is not an abdication of appropriate and vigorous advocacy.

  • Does not require volunteering legal theories to opposing counsel or suggesting paths along which discovery might take place.” (Id.citing The Case for Cooperation, 10 Sedona Conf. J., 339, 340, 359 (2009).)

What’s left? Here, the authors offer some “ABCs of Cooperation.” A few of these make a lot of sense:

  • “Be flexible. Like any negotiation, counsel may have to compromise or use alternative means to get the discovery or relief that the client needs.

  • Consider what discovery is truly needed, and not just desired.

  • Document the agreements reached with opposing counsel, as well as any areas of dispute, and try to obtain resolution without the court’s intervention where possible.” (Id. at 29.)

I can go along with these. But I think it needs to be said that the rationale underlying this spirit of cooperation should properly be that it ultimately benefits our clients. If done properly, cooperation in litigation and discovery saves our clients money. It makes their lives easier. As the authors point out:

“The best argument in favor of cooperation is that clients want it. Clients are beginning to realize that a scorched-earth approach to discovery, and the wasteful and time-consuming discovery disputes such an approach invites, rarely (if ever) serves their interests. Moreover, clients want cooperation because they recognize that being cooperative enhances their attorneys’ credibility with the court.” (Id.)

Where I part ways with the authors is their appeal to some other, ethereal motive for cooperation. They spend a lot of time citing various courts and model rules, etc. and harp on about “duties to the tribunal, the judicial system, opposing counsel and opposing parties.” (Id.) Blah, blah, blah. Save it! What matters at the end of the day–at least for those of us in the trenches–is getting the best possible outcome for our clients. If the straightest road to that result is through cooperation, I’m all for it. But let’s not forget it’s our client–not opposing counsel or opposing parties–who keeps the lights burning.  

†The earliest known citation for this strange saying was in the April, 1853 Wisconsin Tribune, wherein someone apparently wrote: “‘Well, gosh-all Jerusalem, what of it?’ now yelled the downeaster, getting his dandruff up.”


Don’t Try This Alternative Fee Arrangement At Home

rewwThis article originally appeared in the Los Angeles Daily Journal.

Lawyers, on the whole, make pretty poor business owners. Ask any MBA graduate or marketing guru. I never gave this a second thought during my first decade of practice, when I was too busy wondering why I wasn’t earning as much as some of my classmates (while admittedly earning more than others) to think about the bottom line. It turns out, however, that stars really must align in order for a billed hour to ripen into a collected greenback. A client is needed who not only can afford to pay, but who will pay. This axiom is apparently so obvious that most law schools don’t waste even a minute teaching it. Go figure.

Talk of alternative fee arrangements is all the rage. While opinions differ about which arrangements work, or are really “alternative,” I can identify one arrangement that is virtually guaranteed to fail, eventually: I call it the “hourly-contingency” model.

I was introduced to the mechanics of the hourly-contingency model by a colleague with whom I worked a few years back. I considered him a dunce then, and I remember him as one now. But I’ve come to realize that the hourly-contingency model as he structured it — however inadvertently — is actually a common practice by litigators everywhere, from solo practitioners to BigLaw firms.

Here’s what I’m talking about. A client finds her way into your office with a set of facts that simply scream for redress. It’s a business spat, a breached contract or a real estate deal gone bad. Her case is sufficiently textbook. There are promising facts on the plus side and manageable details on the negative. The biggest plus of all is a solvent defendant. You discuss costs; she’s prepared to pay. You sign her up and you’re off to the races.

Things start out well. The opposition balks at your demand. This was expected. You file a complaint, exchange discovery, some documents, emails, computer files, etc. Some key early depositions are conducted. The facts that made the case attractive remain strong and you continue to believe you can manage the negatives. But one thing does change: your client, so gung-ho to sue and so prompt to pay at the outset, has been slow to return calls and even slower to pay her bill. As soon as her A/R hits 90 days you call her in for the “talk.”

As you expected, money has gotten tight. Your client still wants to pursue the case and promises to pay, but just simply can’t right now. You extract a small check toward her A/R, send her on her way and privately vow to handle the case more “economically” going forward, at least until your client gets current.

Only your client never gets current. And your opposition decides to ramp things up, making it impossible to handle the case more economically. A few months and another “talk” with the client yield nothing, not even another check toward her now rapidly growing A/R. Well, you think, the case should settle soon, and she can get current with the proceeds …

Where the story goes from here doesn’t matter. Or, actually, it makes all the difference, and that proves my point. Either the case settles or gets tried, a favorable result is reached and the client pays up, or things don’t go well and you end up eating a substantial chunk of your bill. When this happened to my … er … colleague, he ended up eating about $80,000 in unpaid fees, not because the client did not want to pay, but because she couldn’t and he had allowed the case to get into this unfortunate posture.

The hourly-contingency case. You bill clients for your time, but there’s no guarantee you’ll collect unless you win. But it’s not a true contingency fee because there’s no bonus for a great result to justify the gamble of taking the case on contingency. It’s not what either the lawyer or the client intended, but both acted in concert, if purely through inertia, to allow it to happen.

How do you keep an hourly case from unintentionally going contingency? It turns out it’s not terribly complicated, but it does require discipline. And it begins with a retainer check. I left this out of the hypo above, and I could just hear readers muttering under their breath, “Of course there’s a retainer, right?”

I left out the part about the retainer because lots of lawyers do business with new clients without a retainer. It’s not because lawyers, even those who lack business acumen, do not understand the wisdom of collecting a retainer up front, it’s that we really don’t enjoy doing it. It’s an uncomfortable conversation. But it’s a necessary one. Lawyers who are diligent about getting a retainer fee are less likely to get stuck holding the bag if a case, a client, or both go south.

Lawyers and clients can agree to apply the retainer to the first billings, or for the funds to be held in client trust until the close of the case, and applied to unpaid invoices or refunded at that time. Beware: all but the wealthiest clients will want — and may expect — the retainer to be applied right away. But this would be no help at all in our hypothetical above. The upshot is that it takes discipline, both to ask for the retainer, and to retain the retainer until the case is closed and the client is current.

If it takes discipline to protect yourself with a retainer, it takes far greater discipline to recognize you’re sliding into the hourly-contingency situation and to cut the client off. This is particularly true if, as in our hypothetical, you share your client’s belief in the quality of her case. And could there be a more uncomfortable conversation? The temptation exists to believe if you just hang on a little bit longer the case will settle and you’ll get paid.

It’s only with discipline, by tempering that temptation, that you can prevent a case that’s headed for the hourly-contingency sinkhole from getting there. Leave this particular alternative fee arrangement for someone else.


Beware The Words That Might Be Stuffed In Your Deponent’s Mouth

ghfAnyone who has taken or even attended a deposition is at least somewhat familiar with the litany of admonitions that are customary before the substantive examination begins. These include explaining to the deponent, and generally asking her to confirm her understanding, how a deposition works, i.e., don’t answer unless you understand the question, use words not gestures when responding, etc.

I attended a deposition last week of two of my client’s experts for an upcoming trial. The questioning attorney, obviously reading from an outline or script that he either drafted or was provided to him, attempted to get both experts to buy into the following:

“Q. If  you answer a question without telling me you didn’t understand it, I’m going to take the position — if you try to later say you didn’t understand the question — that you did and you were trying to get out from under the answer.  Do you understand that?”

In each instance, although I objected, my deponent ultimately agreed with the statement. I expect if my opponent attempts to use the testimony at trial the judge will probably sustain my objections. But he might not. Which leads me to think I should have better prepared both deponents (both of whom, by the way, are seasoned expert witnesses, very familiar with the deposition process). I will certainly prepare future witnesses for this kind of question, particularly by this particular attorney (whom I do generally respect for his frequent creative, outside-the-box thinking and approach to his cases).

What’s the problem?

The question asks the witness, in a complete vacuum, to buy into a set of circumstances and motivations that have no basis. Folks who have spent time in the world of depositions know that this isn’t a perfect science. Questions are only rarely (if ever) perfect. However, even seasoned experts get swept into the unconscious desire to “help out” the examiner, sometimes answering questions that weren’t asked, were very poorly asked, or supplying missing terms that help a problem question make sense. It’s not fair to ask that witness, who later explains a “bad” answer by suggesting she did not fully understand the question when it was originally answered, to agree in advance that any such effort is really “trying to get out from under the answer.” No.

Hearing a witness try to “back pedal” out of a bad deposition response by suggesting she didn’t understand the question when it was first asked is generally going to be viewed with suspicion by the jury. This is particularly true if it happens more than once. So, it is not a huge issue how the deponent answers the question above. However, the admonitions generally occur at the start of the deposition. If an examiner asks questions like that at the outset and the deponent answers without realizing words are being stuffed into her mouth, there is a good chance that questions and testimony are coming later in the deposition that will create a dangerous record.

So be on the lookout!


I Don’t Always Do ADR . . .

993785_370610139728020_64149524_nBut when I do, I vastly prefer mediation to arbitration. Here are five reasons why:

1. The Split-The-Baby Problem.

I’ve had retired judges and other neutrals tell me they don’t like presiding over arbitrations because they invariably lose a future potential client: the lawyer for the losing side. There is one thing arbitrators will try to do to temper this inevitability: they may issue a “split the baby” award, giving an allegedly aggrieved plaintiff something even if he failed to prove his case or suffered no damages. While many will argue that a small “split the baby” award is far better than a runaway jury verdict, in cases involving fee-shifting statutes, such as employment discrimination litigation, the employer who might have won outright in front of a jury is forced to pay the “prevailing” plaintiff’s attorney’s fees (in addition to the arbitrator’s fees and costs).

2. Informality Is Not Necessarily A Good Thing.

It is often thought that arbitration is preferable to a bench or jury trial because the proceedings tend to be more informal. Informality might sound good, but it can be a problem if your arbitrator decides to relax the rules of evidence (which is typically within her discretion) and your opponent’s case hinges on an item of otherwise inadmissible evidence, such as a hearsay statement.

3. No Appellate Review.

What do you do if you lose the arbitration due to a clearly erroneous ruling by the arbitrator? Don’t look to any appellate court for relief. While it is true that the Federal Arbitration Act (FAA) and other schemes may create a situation in which some appellate review is available, the circumstances and scope of review is inevitably limited compared with a state or federal appellate court.

4. Good Luck With That Summary Judgment Motion.

While it can be argued that certain courts are more or less likely to grant meritorious summary judgment motions, many will agree that obtaining summary judgment in a case pending before a private arbitrator may be the toughest sell of all. Without naming names, I suspect there are two reasons for this. First, an arbitrator who grants summary judgment is foregoing a significant income opportunity. While many first-rate neutrals are so fully booked they have no trouble filling time gaps created by a vacated arbitration hearing, this is not always the case. Second, a party who is deprived its right to a full evidentiary hearing because of a summary judgment will almost certainly feel shorted. Her lawyer is unlikely to hire the neutral again.

5. It’s Damn Costly.

Many practitioners feel as I do that arbitration is just too costly to be seriously considered as an alternative to resolving a dispute in state or federal court. In addition to the arbitrator’s hourly rate, which equals or exceeds that of most lawyers, many ADR providers tack on large administrative charges. Those of us that represent employers in employment litigation are stuck trying to explain to our clients why they must deposit, in advance, all of the arbitrator’s fees and costs.

I recognize these are pretty broad strokes. But in most instances, given the choice between a bench or jury trial and a binding arbitration, I’d prefer to stay in court and try to resolve the case through mediation.


Could The Five Year Rule Become Relevant Again In California?

trfftAs I grow older, I become increasingly familiar with the feeling of “dating” myself by admitting to TV shows I watched, music I liked, or even sports I played (remember Dodgeball?).  I date myself as a California litigator when I reminisce about the “Five Year Rule.” The Rule wasn’t repealed. It’s still part of the California Code of Civil Procedure. Section 583.310 provides: “An action shall be brought to trial within five years after the action is commenced against the defendant.” Section 583.360(a) says: “An action shall be dismissed by the court on its own motion or on motion of the defendant, after notice to the parties, if the action is not brought to trial within the time prescribed in this article.” (All emphases added.)

The statute sounds ominous, doesn’t it? I remember being a new defense lawyer in the early 1990s opposing motions to exempt a case from the Five Year Rule for some reason or another. I was awed by the relative calm with which plaintiff lawyers argued these motions, on the very eve of expiration, as though they had nothing at all to worry about. I knew that I would be an absolute wreck if I thought there was even the smallest chance my client’s case would be dismissed. But, I never had a case get dismissed for failure to start trial in five years. It seemed like the statute had more bark than bite.

The Five Year rule never went anywhere. Instead, the California courts changed, rendering the Rule completely irrelevant. Around my third or fourth year, the state courts initiated the Delay Reduction Act, or “fast track” rules. When the fast track rules (majority of cases to be tried within one year) were first implemented, I remember judges were really difficult if you wanted to exempt a particular case from the fast track. God forbid a case might legitimately take 18 months or, gasp, 2 years to be ready for trial. Certain judges were so committed to the new rules that they would set a trial date within 12 months even if it fell on Christmas eve or interfered with someone’s wedding or honeymoon. I suppose it seemed particularly draconian because I hadn’t yet realized that, regardless when they’re set, most civil cases never actually start trial.

While it’s mostly dinosaurs like me who remember the Five Year Rule, it now seems that, with the massive changes to California’s courts occasioned by the budget crisis, the Rule could become relevant again. If we do see a resurgence of motions to dismiss under the Five Year Rule, here are a couple of things to keep in mind:

  • The parties can stipulate, either in writing or orally in open court, to extend the time for trial to occur. (CCP §583.330)
  • The time is calculated to exclude time during which the court lacked jurisdiction, or prosecution of the trial was stayed or enjoined, or getting the case to trial was impossible, impracticable or futile. (CCP §583.340)
  • Courts have significant discretion in their application of the §583.340 exceptions. See, Bruns v. E-Commerce Exchange, Inc., 51 Cal.App.4th 717 (2011).

However, even armed with dicta from Bruns, lawyers representing plaintiffs must be able to show they’ve been diligent in moving the case along. Otherwise, mandatory dismissal is technically possible.


Your Expert’s First Role In Any Case

ioLitigating any case is stressful business. But I had a real nail-biter some time back. It was a product liability case and my client was a small mom-and-pop outfit that supplied a component which had been materially altered, mis-installed, and ultimately caused a rather horrendous accident.

Legally, it should not have been a difficult case to defend. The problem I found myself having was grasping exactly how the alteration and mis-installation had ultimately impacted my client’s component. Any product liability lawyer will tell you this was crucial to the defense. The technical issues were pretty complex, at least for me (a philosophy major, not an electrical engineer), and no matter how hard I tried to understand, no matter how much I thought I’d finally “got it,” I would struggle anytime I tried to explain how the alteration and mis-installation had fouled up my client’s product.

In any other case, I would have relied on our technical liability experts to teach me all of the technical details I need to know. The problem here was that my client was defending the case on a shoestring budget. If we weren’t careful, this case would bankrupt his company. He insisted that he would serve as the primary expert, since he was an engineer who’d invented the component in the first place and nobody knew the technology better. The obvious issue with this was he has no cloak of independence. His testimony would be viewed by the jury as completely self-serving; his opinions suspect as such. The less obvious issue that I had with this plan was the fact that, while my client was undoubtedly a first-rate engineer, his teaching skills were less than stellar. If he couldn’t teach me, how could I expect him to educate the jury? Meanwhile, my opponent was retaining expensive, experienced testifying experts from Exponent, etc.

I typically wouldn’t hire anyone as an expert who couldn’t help me understand, since (1) my comprehension of the technical details is absolutely crucial to my ability to confront the plaintiff and her experts, both in discovery and at trial; and (2) our expert’s ability to educate someone of less-than-genius-level intelligence (i.e., me) is going to be needed in order to help the jury understand why my client can’t be liable. The importance of an expert’s ability to educate the trial lawyer, as well as the lawyer’s responsibility to conduct his/her own outside learning, is discussed by Professor McElhaney, in Litigation. He says:

“The first job for the [expert] witness is to explain everything to you [the trial lawyer]. You have to keep asking questions and demanding answers until you are satisfied. Do not just rely on the witness, either. Read as much additional literature as you have time for; it is not just background information. Learned treatises that support the witness are admissible under Rule 803(18) of the Federal Rules of Evidence.” (p.62)

Our case ultimately settled, and I breathed a deep sigh of relief, but not before spending several near-sleepless nights worrying how I was going to overcome the challenges of sufficiently understanding the technology to deal with both the plaintiff’s and defense liability experts. It was a learning experience in several ways. I learned to quickly recognize when I’m having difficulty grasping the complex technical concepts necessary to effectively defend (or build) a case. I learned that, regardless of budget constraints, it will not suffice to rely on testifying experts who, though knowledgeable in the subject matter, cannot effectively teach it to a complete novice. I learned that selection of experts is not a discussion to put off having with a client until the time for expert retention, but should be addressed at the outset, to ensure the client has an opportunity to think about how an appropriate, qualified expert can be identified and compensated, even with severe budget constraints.


Sound Strategies For Litigating In A Crumbling Court System

86282430_b8b63c3d76_zThis originally appeared in the Los Angeles Daily Journal.

At the risk of ridiculous understatement, all is not well in the California state court system. Last week it was reported that, over the last five years, about $1.2 billion has been taken away from our state judiciary, leading to the closure of 164 courtrooms and roughly 2,000 layoffs. In Los Angeles courts, the situation is just going to get worse. Another round of cuts are slated for June, meaning 25 percent fewer courtrooms, and the 16,000 pending personal injury cases will be divided among just three judges.

For those of us who cannot just “pack it in,” but must continue to ply our trade in this challenging environment, the question becomes how to effectively cope with these developments. The most natural response would be to choose a different forum. But federal district court is only an option when it is an option. And, while binding arbitration gives clients the chance to have their disputes heard where, when and by whom they chose, I argue this is rarely a reasonable alternative for at least two reasons. First, arbitration costs an arm and a leg, and these costs are frequently borne at the outset by just one party — usually the defendant. Second, putting one’s fate in the hands of a single decision-maker, with no possibility for review, is a bold step not to be taken lightly.

So, assuming federal court and arbitration are not viable alternatives, what can litigators do? Here are some suggestions:

Take control. The days of state court judges with the time or inclination to micromanage a case are behind us. This creates both a burden and an opportunity. If it furthers your client’s interests to take the helm and control the course of the litigation (and it usually does) and you package your plan in a way that is easy for the judge to adopt, it is possible to gain a tactical advantage.

Consider the Case Management Conference, which is often the first chance to meet the judge. Increasingly, it may be your only time with the judge before trial. Make the most of it. I’m not suggesting judges will begin to show interest in those vanilla Case Management Statement forms. But that doesn’t mean you can’t come to the conference prepared to get something done. Have an agenda and be specific. Want staggered expert disclosure deadlines? Raise it at the conference. Already having problems getting the other side to agree to deposition dates? Ask the judge to schedule them, making the dates part of the minute order. Many judges will appreciate having at least one attorney in the case who is awake at the wheel and ready to advance the ball. You will both curry favor with your judge and advance your client’s interests.

Look for early exit opportunities. This isn’t new or revolutionary. But fewer available courtrooms means it will take longer for your client’s case to reach trial. There was a period when judges aimed to push cases through within a year. This just isn’t going to be viable going forward. If an early exit by summary judgment or settlement is a possibility, pursue it earlier and save your clients the inevitable costs of languishing. Perhaps formulate a reasonable estimate of how early a summary judgment motion could be heard and reserve the hearing date right away. If you don’t, you may learn (as I did) that the court can’t hear your motion until about a week before your trial date (if then), which pretty much defeats the purpose of seeking summary judgment.

Be proactive in simplifying the case. Historically, it was not uncommon for a plaintiff to pursue every theory and keep every party initially sued in the case until the bitter end. This is not an indictment, but an observation. While ancillary theories are ultimately abandoned and unnecessary parties inevitably dismissed, the truth is they probably didn’t belong in the case to begin with and should have been omitted or “cut loose” much sooner. Simplifying the case sooner is not only the right thing to do; it will help reduce the judicial logjam.

Learn to meet and confer. We know the rules of civil procedure require us to demonstrate a good faith effort to meet and confer with opponents before filing discovery motions. Regardless whether we took that obligation seriously in the past, there is no question we must be sincere in our efforts to informally resolve discovery disputes now, since we’re unlikely to get rapid, if any, relief through judicial intervention. Meeting and conferring means earnestly trying to solve a problem, not just posturing.

Manage client expectations. Clients may have wildly different expectations about how a case will progress toward trial. To the extent these expectations may be unreasonable, based on another venue or a different era, take steps to ensure they are in line with the current environment. It is our court system, and not your practice, that is in crisis. Make sure your clients understand this.

Keep abreast. One major complaint cited in a recent Law360 article was the situation of showing up for a firm trial date only to learn it has been continued for weeks or months. We all know how disruptive trial preparation can be, not only for businesses, but also for individual clients. Contacting the clerk as a trial date approaches can often (though not always) yield information that helps reduce the surprise and attendant costs when the trial has been continued.

Is a court action really necessary? Pre-suit settlement has always been an option, but not always one taken seriously by lawyers or their clients. The current judicial budget crisis should change that. Not only will it take longer to get a case to trial, but the costs of getting there — from rising routine filing fees to optional, party-funded court reporters — are rapidly increasing. Where parties might have historically elected to proceed straight to litigation solely to enhance bargaining power or demonstrate resolve, it makes much more sense in the current environment for every party to thoroughly explore settlement before filing a complaint or refusing to further negotiate.

It is not inconceivable that more state general fund money will be allocated to the judiciary to alleviate the courtroom closures and staff layoffs. Until then, however, it falls on practitioners to do what we can to protect our clients during this challenging time. Hopefully these suggestions will help.


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