Costly Comments: The $6 Million Verdict

A recent verdict in Pennsylvania awarded plaintiffs $6.2 million for age discrimination. This was before attorneys’ fees and possible enhancements. The New Jersey Employment Blog summed up the key “take-away” for employers exceedingly well:


“Downsizings are difficult on many levels. Companies need to be sure that their age-related analysis of the impact of the employees selected is done fairly and honestly, and not merely to justify management's desire to get rid of age-protected employees.”


Law.com mentions another interesting aspect of this case. There were several pre-trial motions in which the parties battled over whether managers’ comments should be admitted as evidence. Some were considered hearsay, having been overheard in hallway conversation, others were comments made in a deposition. According to Law.com, the defendants won some and lost some. But, apparently, the ones they lost were costly.


Sometimes, comments are unfairly taken out of context or distorted. Nonetheless, there is little excuse for straying from a strictly professional approach when discussing age, downsizing and other sensitive issues.

 

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Clothes Make the Man... But What About the Case?

The Legal Blog Watch recently posted a story about a judge who admonished an attorney for his client’s appearance in court. Surprisingly, this happens more often than one may think.

In fact, a fellow attorney blogged about a motion recently filed in Florida, alleging that a trial lawyer is wearing beat up shoes to gain sympathy with juries: “Upon reasonable belief, Plaintiff believes that [name] wears these shoes as a ruse to impress the jury and make them believe that [he] is humble and simple without sophistication."

Admittedly, human nature often wins the battle with common sense, and subliminal perceptions may play a role in deliberations. As we know, attire can support or interfere with the message one is trying to get across to a judge or jury.  At a minimum, as a distraction (flashy drawing away attention); at worst contradicting (nervous adjustment contradicts attempts to appear truthful). So, following are some additional common sense dressing tips we’ve found helpful for court appearances:

Choose: comfortable clothing (adjusting your clothing may make you appear nervous and suspicious), conservative suits in modest colors.

Avoid: trendy clothing, expensive, excessive or flashy jewelry  (especially if one is looking for a financial settlement), loud colors , revealing outfits, inappropriate shoes. Do not wear a lot of perfume or cologne.

In general, dress as nicely as you can on your budget, and most importantly, make sure your client leaves home anything that can be perceived as a potential threat (chains, Swiss army knives, etc).

At one time we would have said the issue is respect for the law and the institution of the courts. These days, that is not a compelling argument. However - a big however – interference with a successful outcome is always a compelling argument.

Do You Download Music? Willing to Pay the $1.92 Million Penalty?

Intellectual property law is usually not on our beat. But counseling clients who don’t want to settle their litigation is definitely up our alley.


The Wall Street Journal Law Blog featured the Minnesota woman who was ordered by a jury to pay $1.92 million for the music that she downloaded.


In pursuit of our mission to translate legal issues for a non-legal readership, here are the highlights:


• This is the only case of this kind to go to trial – all the others settled;
• This was the second trial; the verdict from the first was vacated on a technical issue;
• The verdict from the first trial had been $220,000;
• The judge from the first trial thought $220,000 was excessive;
• Despite losing to the tune (excuse the pun) of $220,000, the defendant didn’t settle and opted to re-try the case;
• The damages are “statutory damages,” meaning that they are not based on actual loss to the plaintiff, but on the provisions of a statute;
• The range of statutory damages and, therefore, the stakes in the case, were known to the defendant and her lawyers throughout.


We tend to have difficulty convincing clients that litigation is inherently uncertain and that settlement at some point is usually the best option. Here is a good horror story to illustrate our point.


The WSJ Blog post also discusses some of the avenues of appeal, mostly on constitutional grounds, and the possibility that the case may yet settle.


Incidentally, the defendant was accused not just of downloading but putting music in shared folders for others to access without charge. If you download from iTunes (or a similar service), always pay, and never, never put the music in a shared folder. You never know who’s watching!


Images:  Ipod Shuffle (above); Wildwood Flower LP, from the days before downloading. Both images courtesy of Wikimedia.

Two Blog Posts With Good Advice About E-mail

Recently, two blog posts had some very good advice about e-mail in the context of litigation.

Daniel Schwartz in the Connecticut Employment Law Blog entitle his post, “You’ve Been Sued, What Phrases Are ‘Hot’ for Electronic Discovery Searches?   ABAJournal.com, carried a post by Molly McDonough entitled “Things You Should Never Put in an E-mail.”

 

Here is, for me, the simple version of Mr. Schwartz’ advice:

 

don't put something in an e-mail that you wouldn't want your mother to see on the front page of the New York Times six months later.

 

Here is the essence of Ms. McDonough’s advice, quoting a court reporter, Ron Sylvester:

 

My wife says you should never put anything in a company e-mail that you don’t want to be shown to 12 strangers on a big movie screen.

 

How could I say it any better? Thus, I merely make a modest effort to distribute the message further.

 

The message is on the surface merely defensive. In the context of litigation, it says that through discovery, things you put in e-mail will come back to hurt your case. Or, in a more general context, it says e-mail can come back to really embarrass you. More positively, careful attention to what and how you communicate, by e-mail in this case but in any medium generally, can only be beneficial to the business and all connected with it.

Article: Keep It Simple a Trial

ABAJournal.com, as it often does, brought out attention to an interesting article, this time on keeping things simple at trial. The article is by Kris W Scibriorski is in New Jersey Lawyer and entitled “Tools of the trade: Here’s how to win (or blow) a trial.

The primary tip that the article offers is its “seven little words” tip” “Say it. Prove it. Say it again.”

 

The point is made in a clever way. And, the entire article is a lively, quick read.

 

The article is targeted, of course, to lawyers. But, reprints might be handed to clients on the eve of trial. They are likely to be nervous. Sometimes, unsure of the dynamics of the trial, they will sometimes try to second-guess the trial strategy or, afraid something important will be left out, urge their attorneys to throw in the proverbial “kitchen sink.”

 

The essence of winning at trial, should you be unfortunate enough not to be able to settle your case first, is to communicate the fundamental aspects of your case - - simply and clearly.

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Former Employees As Witnesses

When a former employee is to be a witness in litigation involving the employer, issues are raised which need to be resolved carefully and thoughtfully. Law.com, in an In-House Counsel post by Linda L. Listrom of The Corporate Counselor, has covered the issues and developed useful guidelines for attorneys acting as in-house counsel for the employer (“When Your Witness Is a Former Employee”). We offer some additional insights for the smaller business employer, especially one too small to employ in-house counsel.

The guidelines offered by Ms. Listrom are summarized in her conclusion:

A former employee can be a pivotal witness for your company. Fortunately, the ethics rules permit you to help your former employee by alleviating some of the hardships of testifying. If a former employee wants counsel, you can provide it. If he wants to be compensated for his time, you can do that, as long as the fee is reasonable. But you cannot discourage him from cooperating with your opposing counsel, if he chooses to do so.

The analysis presented by the post is primarily for in-house lawyers since it is focused on the interpretation and application of ethical rules for lawyers, relying on the ABA Model Rules. Here are a few thoughts that may be of interest to the nonlawyers who may be running a small business (as well as the attorneys who advise them):

  • The situation where a former employee is to be a witness highlights the problem of “burning bridges,” a problem we usually associate as the employee’s, not the employer’s. An employee who is “forced out’ by harassing tactics, rather than leaving on good terms may present a whole new set of issues. The better management practice is to be aware of the possibility and always take the high road when it comes to terminations and performance management.
  • The Law.com post notes that it is proper to compensate former employees for their time acting as witnesses, within certain limits. If you use a severance agreement, and you probably should, you should discuss with counsel the possibility of including these provisions. They cost nothing unless you really are in litigation. Then, cooperation may be priceless.
  •  If the business has no in-house counsel, it is all the more important to contact to get advice from outside counsel on how to handle the former employee witness. In fact, as reflected in the Law.com post, it is primarily the lawyer’s role to contact former witnesses, even employers. Conversations about the case between a manager and a former employer are not likely to be privileged and are likely to be the proper subject of cross-examination,

Common sense tells us that if the employer business is involved in litigation, it is no stretch to anticipate that an employee may be a witness.  That's why it is important to understand the issues presented and the appropriate ways to deal with the situation.

Pyrrhic Victory: Brokers Win One, Lose Two

Pyrrhus of Epirus, Image from Wikipedia CommonsTwo mortgage brokers in Pennsylvania might want to consult the Wikipedia entry on Pyrrhus of Epirus after their experience with arbitration and a federal court.

Law.com carries their story in a post by Gina Passarella (“Brokers’ Employment Suit Backfires, Defendant Awarded $1.6 million) of the Legal Intelligerncer. It is an interesting, well written story, about Field v. Gateway Funding, and we won’t go into details since the full story is available by clicking on the title or here.

Essentially, the brokers sued because they claimed the mortgage company infringed on their promised, exclusive sales territory. The case went to arbitration and they won well over $300,000. Problem: the defendant won too, on two claims that: (1) the brokers took advances they did not earn and (2) they provided confidential information when they went to work for a competitor. A federal court confirmed the arbitration award. The net award against the brokers: $1.6 million.  

A few general lessons:

1. The case illustrates the inherent uncertainty of litigation.

2. It is possible that the brokers knew they would be sued so they sued first but, in fact had to litigate. It is also possible the brokers should have had a better understanding or acceptance of their position before commencing litigation. We don’t have the actual back story.  But, it sure looks like if they had quit while ahead, they would have been way ahead.

3. The case illustrates the general nature of arbitration. It is a more efficient, less costly way to resolve disputes and mandatory under some contracts. But, once the arbitrator makes a decision, the courts will generally confirm it. Exceptions are very narrow and hard to get.

Clients will sometimes resist the suggestion to settle or drop a claim. They want a victory. But, a pyrrhic victory is a costly one.   

Image: Pyrrhus of Epirus, from Wikipedia Commons

How Do You Cross-Examine an Ostrich?

Readers might have noticed that we like commenting on posts in the Wall Street Journal Law Blog. We don’t cover “Big Law” or “Big Business” nor do we usually comment on criminal law, all LB specialties, but some LB posts just stimulate thought and, in this case, memories.

So it is with the recent post by Dan Slater on how Judge Richard Posner, U.S. Court of Appeals, 7th Circuit, allowed the “Ostrich Instruction” in a criminal jury trial (“Conrad Black’s Sentence Upheld; 7th Circuit OKs Ostrich Instruction”). We’ll pass on commenting on the criminal matter under discussion in the post.

Instead, the concept of an “Ostrich Instruction” reminded me of our firm’s experience with a civil matter, specifically an adverse possession matter that also involved a jury trial. I believe that without being aware at the time, we were confronted with a similar concept which, with apologies to Judge Posner, we will call the “Ostrich Defense.”

An earlier post on this blog generally described the concept of adverse possession ("Losing Your Property Rights Through Inattention". For the sake of brevity, we will now simply say it is a claim that you own part or all of your neighbor’s property after a prescribed period of claimed continuous possession; there is more to it, of course, and for the rest I refer you to the earlier post.

The “Ostrich Instruction,” in a criminal context, is explained by LB in its post with a quote from Judge Posner, who coined the term, as follows:

An “ostrich instruction,” Posner explains, “tells the jury that to suspect that you are committing a crime and then take steps to avoid confirming the suspicion is the equivalent of intending to commit the crime.” Posner also clears up a fallacy: The legend that ostriches bury their head in the sand when frightened, he says, is “pure legend and a canard on a very distinguished bird.”).

The situation involving our derivative “Ostrich Defense” was as follows: In New York, for adverse possession, it is a settled principle that when claiming ownership of a neighbor’s property, the claimant’s knowledge of the actual boundary lines is not all that relevant. However, acknowledgment of the boundary lines would soundly defeat the claim. 

In our adverse possession case, the claimant maintained he could not possibly have acknowledged the boundary lines because he never had knowledge of the boundary lines. This, despite signing numerous documents submitted to municipal authorities that did acknowledge the boundary lines. He claimed to have signed the documents in blank so he never could have had the requisite knowledge

There was, of course, cross-examination (by our firm’s other partner Beverley Rogers) and the jury found for our client, the property owner. On appeal, the claimant dropped the adverse possession claim and tried only for a prescriptive easement, where you have right to use but do not own the property. That failed too, the appellate case is 40 AD3d 577, 834 N.Y.S.2d 330 (2d Dep’t 2007).

Well, how do you cross-examine a witness who is relying on the “Ostrich Defense?” Persistently. In this particular case, it was a matter of allowing the claimant to bring out his own inconsistencies.

On the other hand, could the “Ostrich Defense” actually be effective? I have to concede it could be a legitimate and effective defense in a civil matter under the right circumstances.

But, that would be a different case and a different post.

The Sudoku Mistrial Lesson: Trial Attorneys Should Be Alert to Possible Distractions

The recent Sudoku mistrial post in the Wall Street Journal Law Blog caught my attention (“The Sudoku Jury, Redux: Are the Lawyers to Blame?”). It was about a mistrial declared after a 105-day drug trial in Australia because some of the jurors were playing Sudoku. LB was following-up on an earlier post (“Can You Blame Them? Lengthy Trial Aborted After Jurors Played Sudoku”).

While every trial has its moments when the testimony is not titillating, it's the job of the attorneys to keep an eye on the jurors to make sure they are not otherwise distracted from listening to the witnesses' testimony. The distraction need not be Sudoku or any game.   More often it is simple fatigue. Not every juror gets a good night's sleep so they are sleepy during the day (especially in the afternoon if they had a big lunch).  And, no juror is focusing on the witnesses' testimony one hundred percent of the time. 

Successful trial attorneys are entertaining because they love being on trial.  Trials are the original improv and successful trial attorneys are great actors who enjoy performing.  Successful trial attorneys sense the mood of the jurors and tailor their trial tactics accordingly.  Sleepy jurors may need to take a break to grab a cup of coffee. Or, they may need to take a break to stretch their legs. Regardless, the successful trial attorney needs to make sure he or she has the jurors' attention and can hold it in the palm of their hand.  

The parties in any litigation rarely benefit when a mistrial is declared.  

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What Do You Win When You Win At Trial?

Many people remember the long-running Broadway (and national) show, Les Miserables, or, at least, its music. Some may also remember that it was based on Victor Hugo’s 19th century novel Les Miserables and that both the old TV program and the movie, The Fugitive, loosely reflect the same novel in story and concept. The character, Inspector Javert, the detective who doggedly pursues the main character, Jean Valjean, for years, may be less-well remembered.

I was reminded by a recent court decision that many prospective plaintiffs need to contemplate whether they will have to become Javerts themselves in order to gain any benefits from their litigation. 

Thus was I thinking when I read the decision reported recently in the private blog of the Real Property Law Section of the New York State Bar Association. A New York County Appellate Division decision (for out-of-staters: first level of appeal after a trial in the court of general jurisdiction, the Supreme Court), held that a renewal judgment is entered as of the date it was granted, and the liens of mortgages (recorded prior to that date) receive priority over that judgment. Gletzer v. Harris, 2008 WL 678589 (Sup.Ct., N.Y. Co.). The controversy arose when a judgment creditor applied for renewal of a judgment lien for a second ten-year run and was ultimately granted the renewal but nunc pro tunc (retroactively) to a date four years earlier.

The decision is somewhat technical and its impact may not be appreciated without a great deal of background. However, the decision affords the opportunity to fill-in some of that background by reviewing fundamentals that should be reviewed with a client before commencing a lawsuit. One can start with a very fundamental question: what do you win when you win at trial?

In most cases, you win a judgment. If it is a money judgment, you hope that the defendant will simply pay it. And, many do pay, which in that case ends the discussion. If the defendant doesn’t pay it, what have you won? 

 

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