Civil Procedure Archives - Page 3 of 4

Sanctions Imposed for Failure to Preserve Call Recordings

Sec. Alarm Fin. Enters., L.P. v. Alarm Protection Tech., LLC, No. 3:13-cv-00102-SLG, 2016 WL 7115911 (D. Alaska Dec. 6, 2016)

In this case, Plaintiff was sanctioned pursuant to Rule 37(e), as amended on December 1, 2015, for its failure to preserve relevant customer call recordings.

Plaintiff alleged that Defendant had “illegally ‘poached’” its customers and defamed the plaintiff. Defendant, in turn, alleged tortious interference with its contractual relationships and defamation by the plaintiff. In the course of discovery, Plaintiff produced approximately 150 customer call recordings (out of “thousands”) that were “generally favorable” to it but, when asked, was unable to produce any others and claimed that the recordings were lost, apparently as the result of the “normal operation of a data retention policy.” Defendant sought sanctions pursuant to amended Rule 37(e).

Taking up the motion, the Court first addressed whether the “newly revised or the former version of Federal Rule of Civil Procedure 37” applied. Concluding that the revised version was appropriate, the Court reasoned that it was “clearly not impracticable to apply the new rule” and that while it would be “unjust to apply a new rule retroactively when that rule governs a party’s conduct,” Rule 37(e) “does not govern conduct” but rather limits the Court’s discretion to impose particular sanctions, without changing the parties’ duty to preserve as it existed prior to the amendments.

Turning to whether Plaintiff had a duty to preserve, the Court noted that the recordings were destroyed after litigation was ongoing and reasoned that Plaintiff should have known and in fact knew of the calls’ potential relevance, citing its memorandum to employees asking them not to use certain words on calls with Alaskan customers (circulated around the time of the complaint and close in time to being accused by Defendant of defamation during contact with Alaskan customers) and—more importantly—the fact that Plaintiff “flagged the existence of the recordings” in its initial disclosures.

Regarding the threshold question of whether Plaintiff took reasonable steps to preserve, the Court rejected Plaintiff’s argument that its “general litigation hold” was sufficient, despite not encompassing the recordings. Moreover, the Court noted that “reasonable steps [to preserve] were available,” citing Plaintiff’s admission that the calls could have been extracted to avoid being overwritten and the fact that some recordings were saved. Recognizing that sanctions are precluded when the information can be restored or replaced through additional discovery, the Court indicated that there was no suggestion that the calls were available elsewhere and thus turned to the question of appropriate sanctions.

First, the Court took up the question of whether the recordings were destroyed with the intent to deprive the other party of the information’s use in the litigation and indicated that based on the “relatively murky record before the Court” regarding the nature of the parties’ discussions surrounding the recordings and their treatment in discovery, it could not conclude that Plaintiff overwrote the recordings with the requisite intent to deprive. Turning next to the question of prejudice, the Court considered whether the information was available through other means, but reasoned that the call notes and depositions of Plaintiff’s employees were “likely to be far inferior” compared to the calls themselves. Thus, the Court concluded that Defendant was entitled to a remedy “no greater than necessary to cure the prejudice” as allowed by Rule 37(e)(1).

To address the prejudice suffered by Defendant, the Court ordered that Plaintiff pay Defendant’s reasonable attorneys fees incurred in bringing the motion, that neither party would be allowed to introduce recordings made to or from Plaintiff’s call center absent stipulation or a subsequent order, and that the parties may present evidence related to the lost recordings at trial (although Defendant was barred from arguing that the jury may or should presume that evidence would have been favorable to it). The Court also indicted that it would instruct the jury that Plaintiff was under a duty to preserve the calls, but failed to do so.

ARTICLE BY e-Discovery Analysis and Technology Group of K&L Gates

New Federal Rules of Civil Procedure: 3 Must Read Changes

Although the Supreme Court will say they’re simply more “proportional,” it seems they were trying to find a new phrase that would lead to less abuse of the relevancy standard. This, however, is only one of the significant changes recently doled out in the December 1, 2015 amendments to the Federal Rules of Civil Procedure (FRCP). It will be interesting to see how these new standards evolve. With respect to IP litigation and expert discovery, we see three major changes:

Faster

Andale! The new rules are speeding things up. Remember when you used to have 120 days to serve the defendant in federal court? You could file your complaint, sit back, enjoy a cup of java and relax a little. The Supreme Court says, “No longer.” The previous Rule 4(m) deadline has been shaved down to a mere 90 days ─ a period that can fly by when you’re trying to locate or track down a difficult defendant. Once the defendant is served, the court must issue a Rule 16(b)Scheduling Order within 90 days, as opposed to the previous 120. Everything has been expedited. This is significant because the Rule 26(f) (known by many as the “meet and confer”) requirement is tied to this date as well as the commencement of discovery. Meaning, the new rules have accelerated the first few stepping stones of the litigation process by as much as one to two months. Ultimately, litigants will be required to disclose experts and respond to expert discovery sooner. For plaintiffs and defendants alike, case strategy, themes and expert opinions will need to be formulated and forged much sooner. If you’re working under a ticking expert clock, we’re here to help.

Stronger

Do you believe the previous “reasonably calculated to lead to the discovery of admissible evidence” was a weak standard? It appears the Supreme Court did, or at least they believe the standard was too often used to expand the permissible scope of relevant evidence, which was not the intent. The new Rule 26(b) defines discoverable evidence as that which is: a) relevant (simple as that ─ it must be relevant) and b) “proportional to the needs of the case.” While the latter may seem a little loose, it likely will create a stronger resistance to outlandish, burdensome, disproportional discovery requests, such as “all emails sent within your entire corporate infrastructure since 2004.” Interestingly ─ while we’re on this topic ─ in the ESI (electronically-stored information) department, the new Rule 37(e) also provides a stronger, more uniform standard for sanctions available if a party fails to properly preserve ESI. The Committee notes suggest excessive effort was being exerted to preserve ESI once litigation commenced and too much litigation time was spent fighting over arguably-applicable sanctions for failure to preserve ESI. The new rule allows the court to award curative measures only upon a finding of 1) failure to preserve ESI and 2) prejudice. In addition, the sanctions must be “no greater than necessary to cure the prejudice.” This is definitely a cleaner, stronger standard that will hopefully lead to less costly and less frequent ESI disputes.

More Stringent

“I have a patent and you infringed it.” Previously, under Form 18 ─ “Complaint for Infringement” ─ in the FRCP Appendix of Forms, this bare-bones allegation was all you needed to file a complaint for patent infringement. However, the new rules amendment to Rule 84 has abdicated the Appendix of Forms and while the Committee has clearly stated its intent that this abdication “does not alter existing pleading standards,” it seems many IP attorneys can see the writing on the walls. If there is no longer a sanctioned form that permits such bare-bones allegations, many believe IP complaints will now need to meet the “plausibility” requirements of the Supreme Court’s long-standing Iqbal and Twombly precedent. Only time will tell, but IP attorneys should anticipate more motions to dismiss under the plausibility standard and the need to file more detailed complaints for patent infringement.

See more at: http://www.natlawreview.com/article/new-federal-rules-civil-procedure-3-must-read-changes#sthash.ZGTZHxxb.dpuf

Key Changes to the Federal Rules Governing Discovery

Important amendments went into effect on December 1.

The major changes to the Federal Rules of Civil Procedure that govern discovery in federal cases affect Rules 26, 34, and 37.^[1]

Changes to Rule 26(b)(1)

The concept of proportionality and its factors are specifically included in the scope of discoverable information. The factors relating to proportionality include

the importance of the issues at stake in the action;
the amount in controversy;
the parties’ relative access to relevant information;
the parties’ resources;
the importance of the discovery in resolving the issues; and
whether the burden or expense of the proposed discovery outweighs its likely benefit.

The language that defines the scope of discovery has also changed—the former language that discovery should be “reasonably calculated to lead to the discovery of admissible evidence” was removed. The Advisory Committee stated that this language was wrongly interpreted to define the scope of discovery and that such a reading has lead to abusively overbroad discovery.

Further, the new version of the rule includes a cross-reference to 26(b)(2) to underscore the court’s obligation to supervise discovery to prevent abuse by appropriately limiting the scope of discovery.

Last, the amendment drops the language “for good cause, the court may order discovery of any matter relevant to the subject matter involved in the action” for being unnecessary and rarely invoked.

Changes to Rule 26(c)

In a protective order, the rule now specifically states that the court can allocate expenses for the disclosure or discovery of information. Judges have always had the authority to shift the cost of discovery, but it is now codified in the rule.

Changes to Rule 26(f)(3)

The discovery plan (26(f) report) must now specifically address any issues about preserving electronically stored information (ESI) and should also include any requests that the court enter an order under Fed. R. Evid. 502(d) if the parties agree on a procedure to assert privilege after production.

Changes to Rule 34

Under revised Rule 34(b)(2), objections to document requests must be made with specificity, and boilerplate general objections are insufficient. If a producing party is withholding documents pursuant to its objections, it must say so. The party need not create a “log” of withheld documents in the manner of a privilege log, but should state, for example, the limits that the party will place on a search for documents responsive to a request that it objects to as overbroad.

Revised Rule 34(b)(2)(B) also includes language that specifically codifies the typical practice of producing copies of documents in lieu of permitting inspection, adding that parties may “state that it will produce copies of documents or of electronically stored information instead of permitting inspection.”

Changes to Rule 37

The standard for imposing sanctions for failing to preserve ESI has changed under Rule 37(e). Under the new standard, a court may sanction a party if (1) ESI should have been preserved, (2) the party failed to take reasonable steps to preserve it, and (3) it cannot be restored or replaced through additional discovery.

If the court finds that a party has prejudiced by the failure to preserve evidence, the court may only order sanctions sufficient to cure the prejudice. However, if the court finds that the party that failed to preserve acted with “intent to deprive another party of the information’s use in litigation,” it may order severe sanctions (i.e., an adverse inference or even a dismissal or default judgment against the spoliating party).

This change addresses the varying standards that courts have established in regard to sanctions, essentially adopting the rule that bad faith on the part of a spoliating party must be established for a court to order severe sanctions (compare to the Southern District of New York case law prior to these amendments that allow severe sanctions for negligent spoliation).

Other Changes

Rule 1: Amended to specifically state that parties also bear responsibility to employ the rules to “secure the just, speedy, and inexpensive determination of every action and proceeding” and not just the court. This change does not create a separate basis for sanctions. The Advisory Committee debated but ultimately did not include an explicit “duty to cooperate” on discovery.

Rule 4(m): Changed the time limit for service of a complaint from 120 days to 90 days.

Rule 16 (b)(3): Reduced the time to issue a Scheduling Order to the earlier of 90 days after any defendant has been served or 60 days after any defendant has appeared, and added three items to the list contents permitted in a Scheduling Order: (1) a provision regarding preservation of ESI, (2) a provision regarding any agreements under Fed. R. Evid 502, and (3) a requirement that before filing a discovery motion, the movant must request a conference with the court.

Rules 30, 31 and 33: Parallel amendments were made to these rules to reflect the proportionality considerations added to Rule 26(b)(1).

Rule 55: Amended to make clear that the court may set aside a final default judgment pursuant to the standards set forth in Rule 60(b) only.

Rule 84 and the Appendix of Forms: This rule, which provided a set of sample forms to use in federal cases, was abrogated as no longer necessary.

Conclusion

Many of these amendments are codifications of existing case law that governs discovery, but some, especially the amended Rule 37(e) and Rule 34(b)(2), represent the adoption of one approach from multiple competing lines of cases. The Advisory Committee notes that accompany the rules are instructive and helpful, especially in the areas where substantial changes have been made. Litigants who engage in discovery in federal court should be aware of these changes and adjust their practices accordingly.

Article By

Stephanie A. “Tess” Blair

Morgan, Lewis & Bockius LLP

_{[1] Amendments went into effect for Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, and 55. Rule 84 was abrogated. These amendments apply in civil cases filed on or after December 1, 2015 and “insofar as just and practicable” in all cases pending as of December 1, 2015. April 29, 2015 Order of the United States Supreme Court. A brief list of the amendments to Rules 1, 4, 16, 30, 31, 33, 55 and 84 is provided at the end of this article.}

Controlled Burn: Attorney Perspective on Lone Pine Orders

A Lone Pine order is basically a controlled burn, or it accomplishes the same objective at least. In theory, it is a “fire” used to prevent the growth or blaze of meritless litigation. Don’t want a nasty, complex lawsuit to grow or blaze out of control? Hit it with a Lone Pine order early on in hopes of killing that volatile vegetation. Is it fair? It depends on which side of the courtroom you’re sitting on. Because it acts essentially as an early motion for summary judgment, generally speaking, plaintiff’s attorneys hate them, defense lawyers love them. Does it work? A recent opinion from the Colorado Supreme Court suggests a similar response is required. It depends on which courtroom you’re sitting in – federal or state (and if state, which one).

So what is a Lone Pine order? It’s basically a case management order from the court that requires plaintiffs to produce a certain measure of evidence to support their claims at a very early stage in the litigation. Typically, the orders require plaintiffs to produce evidence of (1) exposure; (2) damage (a disease or property damage); and (3) causation. Lone Pine orders are most often used in complex litigation to identify meritless claims and streamline the litigation. They are typically issued under Rule 16 of the Rules of Civil Procedure, which allows courts to adopt special procedures for managing potentially difficult or protracted actions. Fed. R. Civ. P. 16(c)(2). This sounds kind of like an ambiguous instruction to The Fixer in the mafia: “We need you to handle this Big Nicky.” As a defense attorney, if you want to put some heat to a complex case, you ask the judge for a Lone Pine order. If plaintiff’s counsel cannot put forth sufficient evidence to support the claims, the case is dismissed. The burn is initiated, the dry, delicate tinder is extinguished and there will be no raging wildfire today.

While defense attorneys will argue the bar is not high ─ in that plaintiff’s counsel should have compiled evidence sufficient to meet the requirements of a Lone Pine order long before filing suit ─ plaintiff’s attorneys see Lone Pine orders as premature summary judgment because it forces them to make a prima facie showing of their claims before they are entitled to a lick of discovery from the defendant. Even assuming the burden can be met, it still requires plaintiff’s counsel to essentially “show their hand” very early in the litigation without a similar requirement from the defense. In short, while a Lone Pine order can be an effective case management tool, it is a pretty high bar to set right out of the gate before any discovery has been conducted in the case. This is likely the reason the Colorado Supreme Court recently struck down the trial court’s use of a Lone Pine order in Strudley v. Antero Resources Corp. No. 13SC576, 2015 WL 1813000 (Colo. Apr. 20, 2015).

In Strudley, the trial court dismissed the plaintiffs’ case following their failure to make a sufficient evidentiary showing under a Lone Pine order. Plaintiffs appealed and the Colorado Court of Appeals reversed based on its conclusion that Lone Pine orders were not permitted under Colorado law. The Colorado Supreme Court recently affirmed, finding Colorado’s Rule 16 did not provide a trial court with authority to “fashion its own summary judgment” by filtering and dismissing claims during the early stages of litigation. This finding was based primarily on a comparison of the state rule and its federal counterpart and Colorado’s decision not to adopt the “special procedures for managing potentially difficult or protected actions” that are included in the federal version of Rule 16. The court rejected defendant’s arguments that the spirit of the state rule encouraged early dismissal of frivolous claims in explaining a stated goal does not equate to a grant of authority to achieve that goal.

While Strudley was a win for the plaintiff’s side and shows that an overly-aggressive state court Lone Pine order may face scrutiny on appeal, it seems this was an anomaly overall. Most federal courts and many state courts find the federal version of Rule 16 supports use of a Lone Pine order to identify meritless claims and streamline litigation. It’s like a controlled burn of their docket.

Article by Annie Dike of IMS ExpertServices
© Copyright 2002-2015 IMS ExpertServices, All Rights Reserved.

The Culling Fields: Date Range and Custodian Culling

This is part Six of the continuing series on two-filter document culling. This is very important to successful, economical document review.

First Filter – Date Range and Custodian Culling

Even when you collect in bulk, and do not keyword filter before you put custodian ESI in the review database, in most cases you should filter for date range and custodian. It is often possible for an attorney to know, for instance, that no emails before or after a certain date could possibly be relevant. That is often not a highly speculative guessing game. It is reasonable to filter on this time-line basis before the ESI goes in the database. Whenever possible, try to get agreement on date range screening from the requesting party. You may have to widen it a little, but it is worth the effort to establish a line of communication and begin a cooperative dialogue.

The second thing to talk about is which custodians you are going to include in the database. You may put 50 custodians on hold, and actually collect the ESI of 25, but that does not mean you have to load all 25 into the database for review. Here your interviews and knowledge of the case should allow you to know who the key, key custodians are. You rank them by your evaluation of the likely importance of the data they hold to the facts disputed in the case. Maybe, for instance, in your evaluation you only need to review the mailboxes of 10 of the 25 collected.

Again, disclose and try to work that out. The requesting party can reserve rights to ask for more, that is fine. They rarely do after production has been made, especially if you were careful and picked the right 10 to start with, and if you were careful during review to drop and add custodians based on what you see. If you are using predictive coding in the second filter stage, the addition or deletion of data mid-course is still possible with most software. It should be robust enough to handle such mid-course corrections. It may just slow down the ranking for a few iterations, that’s all.

To be continued …….

Article By Ralph C. Losey of Jackson Lewis P.C.

Part 1: Two-Filter Document Culling: Advanced Document Review Technique

Part 2: License to Cull: Why Efficient and Effective Document Review is Important to Our System of Justice

Part 3: The Culling Fields: Some Software is Better than Others at Efficient Document Culling

Part 4: To Cull a Mockingbird: Popular, but Risky, “Keyword” Collection Filter

Part 5: I’d Tell You My Keywords, But Then I’d Just Have to Cull You

Part 6: The Culling Fields: Date Range and Custodian Culling

Gone, But Not Forgotten – A Deactivated Facebook Account Can Be Discoverable

Courts have long grappled with social media in a legal context. The struggle to understand social media issues — and to craft coherent applicable legal policy — renders Crowe v. Marquette Transportation Co. Gulf-Inland, LLC amusing to show how the less-than-honest actions of an employee-plaintiff can make these difficult legal questions fairly simple for a court.

In May of 2014, Brannon Crowe sued Marquette Transportation, his employer, for an injury to his knee that he claimed to have suffered in an accident at work. Interestingly, however, Crowe allegedly sent a co-worker a message on Facebook which stated that he received the injury during a fishing trip, and not at work. When confronted with the message to the co-worker by opposing counsel during a deposition, Crowe stated the account the message was sent from was Brannon “CroWe,” and it couldn’t be his because he didn’t have a capital “W” in his last name.

At the deposition, Crowe also said that he no longer had an account after the previous October, and his response to a discovery request for the contents of his account was that, in addition to such a request being vague, overbroad and unduly burdensome, he didn’t presently have a Facebook account. The court ordered Crowe to provide the contents of his account for the court to review in camera to determine if the contents of the account should indeed be discoverable. Later, however, Crowe’s counsel submitted to the court 4,000 pages of Facebook account information from the Brannon CroWe account, with an interesting wrinkle – the records of the account indicate that the account was deactivated – not deleted – four days after the discovery request for the account’s contents.

The court was understandably unamused, and suggested that the in camera review of 4,000 pages of Facebook account information would be a waste of time since this account information should have been produced earlier in response to Marquette’s request. The contradiction with Crowe’s testimony alone was enough to render the account information discoverable. Rather than review the documents fully in camera, the court ordered Crowe to turn over every single page of the Facebook account history to Marquette, as well as any login information for any Facebook accounts Crowe had at that time or in the past, and Crowe was ordered to consent to any authorization for Marquette to subpoena his Facebook information.

In effect, Crowe made the contents of the account discoverable through his attempts to keep it from being discovered, and that made the court’s decision on the issue clear. Luckily for Crowe, he only deactivated the account rather than deleted it, since he had a duty to preserve evidence in litigation. Spoliation of evidence is the negligent or intentional destruction or alteration of evidence that may be required in a lawsuit. Even though the evidence doesn’t look good for Crowe in the present case, had he deleted the account entirely, he would have been subject to the spoliation inference, which is a negative evidentiary inference in favor of the opposing party. A showing that a party has destroyed relevant evidence can lead to punitive sanctions against him as well.

Social media provides an abundant resource of data about a litigant, and both employers and employees alike should be a wary of even private messages sent to others in that context. When employees raise issues against employers in a legal setting, their interactions with coworkers on social media may be discoverable. This case also raises questions about how far those involved in legal proceedings can or should go to protect themselves with regard to their social media accounts. As courts become increasingly comfortable with the legal implications of social media and technology, issues such as evidence spoliation through deactivation and deletion will become more and more prominent as a trap for the unwary.

ARTICLE BY Brittany Blackburn Koch of McBrayer, McGinnis, Leslie and Kirkland, PLLC

Home Depot Moves to Dismiss Consumer Data Breach Claims for Lack of Standing

Home Depot has staked its defense of consumer claims arising from the 2014 theft of payment card data from the home improvement retailer on the asserted absence of injuries sufficient to confer standing to sue. Because consumers rarely sustain out-of-pocket losses when their payment card numbers are stolen, lack of standing is typically the primary ground for seeking dismissal of consumer data breach claims. While many courts have been receptive to arguments seeking dismissal of consumer data breach claims for lack of standing, decisions in recent cases – including, most significantly, the Target data breach case – have found that non-pecuniary harms constitute sufficient injury to confer standing. The survival of the consumer claims will depend on which line of precedent the Home Depot court follows.

Arguments as to standing are grounded in Article III, Section 2 of the United States Constitution, which limits the jurisdiction of federal courts to “cases” or “controversies.” To constitute a case or controversy, a claim cannot arise from a speculative or potential harm, but rather must concern an actual or imminent injury. Thus, in Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013), the Supreme Court ruled that mere interception of private data – in that case, by the National Security Agency, through its wiretaps of telephone and email communications – did not confer standing to sue. Clapper held that speculation that intercepted data might be misused did not confer Article III standing; actual use or misuse of the intercepted information was required. Defendants in privacy cases, citing Clapper, have succeeded in dismissing data breach claims for lack of standing where data breach plaintiffs have not alleged actual misuse of their data. See, e.g., Polanco v. Omnicell, Inc., 988 F. Supp. 2d 451 (D.N.J. 2013); In re Barnes & Noble Pin Pad Litig., No. 12-8617, 2013 WL 4759588 (N.D. Ill. Sep. 3, 2013); Yunker v. Pandora Media, Inc., No. 11-3113, 2013 WL 1282980 (N.D. Cal. Mar. 26, 2013).

Home Depot’s brief in support of its motion to dismiss relies heavily on Clapper to support its argument that none of the named plaintiffs have suffered actionable injuries. Home Depot contends that consumers could not have been injured when card issuers hold consumers harmless for fraudulent charges and Home Depot offered free credit monitoring to affected customers. The Home Depot brief dismisses plaintiffs’ attempts to plead non-monetary harms, alleging that none of the alleged harms constitute injuries that are cognizable under Article III. For example, some plaintiffs alleged that they suffered inconvenience and embarrassment as a result of temporarily frozen bank accounts. According to Home Depot, in the absence of any out-of-pocket losses such alleged harms are not actionable injuries. Some plaintiffs incurred out-of-pocket credit monitoring costs, but Home Depot takes the position that doing so was gratuitous in light of the free services offered by Home Depot. Some plaintiffs also alleged out-of-pocket costs associated with fraudulent charges on their payment cards, but Home Depot contends that such injuries are not fairly traceable to Home Depot because such charges should have been covered by the card issuers.

There are also plaintiffs who alleged that they suffered identity theft. Home Depot argues that such allegations should be rejected as implausible because, based on plaintiffs’ own allegations, the data theft did not result in the theft of social security numbers or date of birth information, both of which would be required to successfully steal an identity was not compromised in the HD data breach.

Although Home Depot makes strong arguments why plaintiffs lack standing, it is constrained to admit in its brief that the court hearing the Target data breach cases rejected an identical standing argument that and been advanced by Target. In the opinion denying Target’s motion to dismiss, the court gave Target’s standing arguments cursory treatment, finding that “Plaintiffs have alleged injury” in the form of “unlawful charges, restricted or blocked access to bank accounts, inability to pay other bills, and late payment charges or new card fees.” Although Target, like Home Depot, contended that such alleged injuries are insufficient to confer standing because “Plaintiffs do not allege that their expenses were unreimbursed or say whether they or their bank closed their accounts . . . ,” the court rejected this argument, stating that Target had “set a too-high standard for Plaintiffs to meet at the motion-to-dismiss stage.”

Home Depot characterizes the Target decision as an outlier that offers no support for its rejection of Target’s standing arguments. Further, the Target decision did not rule out the possibility injuries alleged would not be fairly traceable to Target’s conduct, stating that, “[s]hould discovery fail to bear out Plaintiffs’ allegations, Target may move for summary judgment on the issue.” Although the settlement of Target’s consumer claims means that the proposition will not be tested in that case, the Target court’s recognition that injury matters for standing purposes provides some support for Home Depot’s position that the Target decision should be disregarded if it is apparent at the pleading stage that no injury has occurred.

ARTICLE BY Kevin M. McGinty of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Due Process Requires Proper Service: Federal Rules of Civil Procedure

Among the Federal Rules of Civil Procedure is Rule 12(b)(5) which permits a defendant to file a motion to dismiss a case for insufficient service of process. Most states have a similar rule for their own courts.

This rule arises from Constitutional requirements of due process. To commence a lawsuit and change the legal position of parties, due process requires that proper notice be given. This is a fundamental proposition and failure to serve notice violates due process. Even actual notice of a lawuit may not suffice if service of process requirements have not been met. Typically, this involves service by a sheriff, constable, marshal or other person duly appointed to serve process, who then makes a proper affidavit of service.

Recently, a case has become notorious because the Plaintiff’s attorney opted to name the Tor Project as a defendant simply because an offending website used Tor. Tor is a system by which anonymous internet use is facilitated; it can be used for good and for ill. The Tor Project likely enjoys complete immunity under Section 230 of the Communications Decency Act. However, I observed another flaw.

The chief defendant, a website, has faced litigation from this attorney before. As an obvious joke, they listed a colleague of his as the attorney to whom complaints should be addressed. Yet, the Plaintiff’s attorney chose to attempt to effect service on the defendant website at his colleague’s office. I observed that due process would not be met and the service defective. Moreover, it might constitute a fraud on the court since the attorney apparently knowingly attested to the court that service upon the colleague would be good service.

Techdirt, which is an online magazine addressing interesting technological developments, cited to my comments approvingly in a follow-up piece. Even if the purpose of the litigation is good, one should not violate a defendant’s right to due process to accomplish those ends.

Article By:

Jay Marshall Wolman

Of:

Raymond Law Group LLC

Intervening Rights Can Apply to an Original Claim Based on Arguments Made During Reexamination

Recently posted in the National Law Review an article by Cynthia Chen, Ph.D. of McDermott Will & Emery regarding the U.S. Court of Appeals for the Federal Circuit’s decision to grant injunction and reasonable royalty damages for patent infringement:

In reversing and vacating a district court’s decision to grant injunction and reasonable royalty damages for patent infringement, the U.S. Court of Appeals for the Federal Circuit held that intervening rights can apply to an original claim based on arguments made by the patentee during reexamination. Marine Polymer Technologies, Inc. v. HemCon, Inc., Case No. 10-1548 (Fed. Cir., Sept. 26, 2011) (Dyk, J.) (Lourie, J., dissenting). Intervening rights typically occur where the scope of coverage of a patent changes during reexamination.

Marine Polymer sued HemCon for infringing its patent claiming a biocompatible polymer. In the ensuing litigation, the district court construed the term “biocompatible” as meaning polymers “with no detectable biological reactivity as determined by biocompatibility tests.” Meanwhile, in the parallel reexamination proceeding, the examiner construed the term “biocompatible” as meaning polymers with “little or no detectable reactivity” reasoning that certain dependent claims recited a biocompatibility test score that is greater than zero. Marine Polymer urged the examiner to adopt the district court’s claim construction and canceled all dependent claims reciting a biocompatibility test score greater than zero. In view of the cancellation of those dependent claims, the examiner adopted the district court’s claim construction, and the remaining claims were issued.

In this appeal from the district court (where HemCon was subjected to a $29 million dollar damages award against it), HemCon argued that it was entitled to intervening rights because Marine Polymer changed the scope of the claims of the asserted patent during reexamination. Marine Polymer, contended that intervening rights cannot apply because the actual language of the asserted claims was not amended during reexamination.

The Federal Circuit agreed with HemCon and held that Marine Polymer indeed narrowed the scope of the claims by “argument rather than changing the language of the claims to preserve otherwise invalid claims.” Noting that intervening rights are available if the original claims have been “substantively changed,” the Court emphasized that “in determining whether substantive changes have been made, we must discern whether the scope of the claims [has changed], not merely whether different words are used.” In particular, those dependent claims that were canceled during reexamination indicated that “the term ‘biocompatible’ must include slight or mild biological reactivity.” As such, the district court’s claim construction, which required that the polymer show “no detectable biological reactivity,” imposed a new claim limitation that narrowed the scope of the claims. Therefore, intervening rights did apply in this case, as “argument to PTO on reexamination constituted disavowal of claim scope even though ‘no amendments were made.’”

Judge Lourie dissented and argued that the majority went beyond the statutory rules for intervening rights under 35 U.S.C. §§ 307(b) and 316(b). Judge Lourie believes that, according to the language of the statute, intervening rights should only apply to “amended or new claims.”

Practice Note: Post-grant proceedings could be a pitfall for patentees seeking to enforce their patents. A patentee should consider whether it would be better off filing a continuing application before grant of the original patent to leave a vehicle to present new or amended claims.

Behavior Modification: Trial Lawyer's Edition

Posted in the National Law Review on September 22, 2011 an article regarding a lawyer that was defending himself, pro se by Kendall M. Gray of Andrews Kurth LLP:

Just about the time you think there is nothing new under the sun or nothing interesting to blog about, the legal profession continues to astound and amaze.

More specifically, trial lawyers will never let you down.

On Monday I was trolling my usual blog buffet and I saw this item on the ABA Blogabout a lawyer that was defending himself, pro se, in his own criminal trial.

You know the old saying, a lawyer who represents himself has a fool for a client. But this guy took it to a whole new level. He was essentially appearing in court with the human equivalent of a canine shock collar:

Four U.S. marshals will be in the courtroom as attorney Paul Bergrin goes on trial in federal court in Newark, N.J., next month in a racketeering case in which he is accused of operating his law firm as a criminal enterprise and conspiring with another New Jersey lawyer to murder government witnesses.

But that’s not not enough security, court officials apparently have decided. Bergrin, who is defending himself pro se, will also wear a hidden ankle bracelet. If he moves too far from his assigned area of the courtroom and violates rules against approaching the bench or the jury, he could get a jolting electric shock from the marshals, via the bracelet, . . . .

A jolting, electric shock for trial counsel who neglects to seek permission before approaching the bench?

Now this could come in handy. Really, really handy . . . .

Of course, my first thought was that the Supreme Court of Texas might find such a device useful for all of those trial lawyers who handle their own appeals when they are prone to wander from the podium in order to re-deliver their closing argument:

But do you give the button to Chief Justice Jefferson? He might be too restrained, nice guy that he is.
One button to each member of court? That could be dangerous, especially if all nine are fighting to get their questions answered. That gives new meaning to the words “hot bench.”
Maybe just give “the button” to Justice Hecht as the senior justice empowered to act on behalf of the court?

I’m probably just a bad and vindictive person, but I began to daydream about all the other habits of trial lawyers that such a device might plausibly correct. The list began to expand rapidly with everything from pet peeves that make my head explode to matters of real substance.

But before I publish my own list, I want to hear from you:

What are the things that other lawyers do that drive you crazy or make it harder to successfully do your job in representing the client?
What behaviors would you change if you could?
And in particular, what do lawyers do, often without thinking, for which you might give them a zap?
And what about you judges out there? Be anonymous if you need to, but what lawyer conduct do wish was Taze-worthy?

Use the comments. Weigh in. Speak out.

Or else.

Tag: Civil Procedure

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