What to do if your company gets a deposition notice?

Read Be Prepared to Deal With Deposition Notices and get ready to call your lawyer:

Your company has just been served with a 30(b)(6) deposition notice under the Federal Rules of Civil Procedure, and it is your job to respond to the notice and determine who will testify on behalf of the corporation. Is there anything you can do to ensure that your company puts its best foot forward at the deposition? The answer is yes: There are numerous strategies for selecting and preparing witnesses to participate in these depositions.

A 30(b)(6) deposition is a widely used litigation tool that requires a corporation to appear at a deposition and respond to questions regarding a specific list of topics contained in the notice. Since these depositions make it easier to depose the right corporate officers and managers on the right topics, as in-house counsel you need to be aware of how to avoid the many potential pitfalls of 30(b)(6).

Take a good look at the list of topics in the notice. Once you fully comprehend the crucial points involved, you need to identify the right witness or witnesses to speak on behalf of your company. Balance the number of witnesses against cost and time constraints.

The scope of a 30(b)(6) deposition is broad: A company can proffer as many witnesses as it needs to cover all areas of inquiry. A corporation may prefer to respond to a particular topic of inquiry covered in a plaintiff's notice by designating several corporate representatives. But doing so may unnecessarily subject the corporation to many hours of deposition testimony that an opposing party otherwise might not have the ability to take. And that isn't necessarily an outcome that you want to encourage.

Oh, if you think just because it says "federal" that this may not apply to you, then think again. Indiana's trial rules have a similar rule for our state courts:

(6) A party may in his notice name as the deponent an organization, including without limitation a governmental organization, or a partnership and designate with reasonable particularity the matters on which examination is requested. The organization so named shall designate one or more officers, directors, or managing agents, executive officers, or other persons duly authorized and consenting to testify on its behalf. The persons so designated shall testify as to matters known or available to the organization. This subdivision (B)(6) does not preclude taking a deposition by any other procedure authorized in these rules.

Update on Realnetworks Trial - Trade Secrets

How trade secrets get dealt with in trial.

First Day of DVD Trial Features Closed-Door Testimony - Digits - WSJ

Tech geeks hoping for juicy details from a closely watched trial involving RealNetworks are likely to find Friday’s proceedings a bit disappointing. U.S. District Judge Marilyn Patel closed much of the first day’s action to the public after an attorney for the DVD Copy Control Association said questioning would reveal too many trade secrets.

The witness with the top-secret information was Dr. John Kelly, of Kelly Technology Group, a consultancy in Santa Barbara, Calif. that specializes in computers and intellectual property. Some of his testimony early in the day was public, but when it got down to meaty questions about the specifications of DVD copy protection, courtroom bystanders got the heave-ho. That includes reporters from CNET, the Associated Press, the Daily Journal, Wired, and the local ABC affiliate.

Judge seals courtroom in MPAA DVD-copying case | Politics and Law - CNET News

"I find that this does meet the requirements for a trade secret," Patel said. "We're going to protect what needs to be protected. I'm ordering everyone not signed off on a confidentiality agreement to leave the courtroom."

"The MPAA is trying to seal proprietary specifications," said DVD-CCA attorney Reginald Steer. He added: "This is critical to our presentation."

Steer said the trade secrets related to licensing technology and CSS, or Content Scrambling System, which is an algorithm used to encrypt DVDs. DVD-CCA once filed a lawsuit against programmer Jon Johansen, who wrote a DVD-descrambling utility that circumvented CSS--a suit that had the unintended consequence of publicizing the code widely, including on ties, T-shirts, and at least one haiku poem.

Corynne McSherry, an attorney at the Electronic Frontier Foundation who has been following this case and was in the courtroom, said Patel chose an unfortunate procedure when barring the public from the room on Friday.

"She implied that we should have filed a motion preemptively," McSherry said. "If that's true, the public shouldn't have to go to court to make the courtroom stay open...Presumably the plaintiffs had known for months that they were planning to close this hearing. This is not the right way to do it."

Ah, The Vagaries of Litigation

Read Trade Secret Jury Verdict : Redwood Health Services v. Clifford Der, dba Benefit Brokerage Services from The Trade Secrets Vault Blog to understand what I mean by vagary.

Verdict-Defendant : The jury found in favor of the plaintiff on the counts of breach of fiduciary duty and interference of contract, and awarded it $59,780. The jury found for Der on the counts of breach of contract and common counts, and awarded him $135,291.

I see here a good example of why cases settle rather than going to a jury and leaves me with questions of evidence.

New Court of Appeals Case on Crime Victim's Statute, Mortgage Foreclosure and Fidicuiary Duty

And discovery sanctions and attorney fees and garnishment orders. At sixty-seven pages, I still have not fully digested Prime Mortgage USA, Inc. v. Nichols (PDF format) beyond recognizing that this looks like a bombshell of a case. The Court of Appeals describes the issues as follows:

Issues

1. Whether Nichols's claim under Indiana Code section 34-24-3-1 (the "Crime Victims Statute") is barred by the statute of limitations;

2. Whether the Defendants were entitled to a jury trial on the amount of damages under the Crime Victims Statute:

3. Whether the trial court abused its discretion in ordering default judgments as a sanction for discovery violations:

4. Whether the trial court's award of damages was proper and supported by the evidence;

5. Whether sufficient evidence existed to hold the Defendants liable under the Crime Victims Statute;

6. Whether the trial court's award of attorney's fees was improper:

7. Whether the trial court improperly determined that Nichols's unpaid compensation constituted "wages" under Indiana Code sections 22-2-5-1 and -2:

8. Whether Nichols's claims are barred by the doctrine of unclean hands: and

9. Whether the trial court's garnishment order was improper under either Indiana Code section 27-1-12-14(e) or Indiana Code section 27-I-I 2-17.1(1).

That list excludes one important issue and why I fully expect a petition to transfer to the Indiana Supreme Court is being contemplated by the appellant: "The trial court held a hearing on damages. and awarded roughly eight million dollars to Nichols."

I plan on breaking the case down by topic in separate posts rather than one big post. Stay tuned.

Civil Suits - What Happens After Getting A Summons

Or, When Do I Go to Trial?

I get asked that question too often and I thought an outline of what happens in a case as the defendant might make some good reading. I do need to say this outline applies only to cases that are not small claims cases.

You have a summons and a Complaint stuck in your door or handed to you or sent by certified mail. You have been served (think tennis for half a second here) and you are now a defendant in a civil suit. The Indiana Trial Rules have several rules on process and summonses beginning with Rule 4 and going to Rule 4.17. and What happens next?

Well, you can do nothing. Then after twenty or twenty-three days, the Plaintiff (the person suing you) can ask for a default judgment. Take a look at Indiana Consumer Lawyer Blog's very good post on default judgments Default Judgments in Indiana for more detail.

What should have been done is get a lawyer. If you did the case will go generally like this:

1. File an Answer or a motion to dismiss. No Answer can lead to a default judgment, again. If the motion to dismiss is granted, then the case is over. Here is the first method the system has for getting rid of lawsuit. You can file a counterclaim, which is a suit by the defendant against the plaintiff. Once the parties file their Answer, any counterclaims, and any replies to a counterclaim, the next step is discovery.
2. Discovery. The Complaint only gives you an outline of why you are being sued and not the facts behind the allegations. Discovery exists to get at those facts. I think discovery is probably the most expensive phase of a case. Lawyers want to know everything there is before we start a trial and we will do our best to get at that information. We can use depositions (Trial Rules 27 to 32), Interrogatories, Motion to Produce Documents, the physical and/or mental examination of persons, and requests for admissions.
3. As soon as we can all see the other side's cards, we make a decision if there is a dispute of fact and of law or only of law. If there is a dispute only of law, then a Motion for Summary Judgment gets filed which allows a judge to decide not on the facts but only on the law. Summary judgment motions are the second means of winnowing out weak cases. If the judge does not grant a Motion for Summary, then it is time for trial.
   
4. If a dispute of fact and of law exists and no settlement, then we go off for trial.

Thoughts on Business Litigation and Attorney Fees

I had a rather unpleasant conversation with a now former client this morning. Looking back at the conversation as charitably as possible, I am again surprised by how some business clients do not realize that lawyers also are running a business.

When a client does not pay on time or not at all, this affects service to all clients. That is as true for my business as for my business clients.

Oddly enough, the conversation did not begin about fees and what turned the conversation about fees was something I said about if the client wanted to continue pursuing the matter. I mentioned a cost-benefit analysis, was shouted down and the telephone conference went downhill from there.

I believe that every client needs a cost-benefit analysis of any lawsuit. The client should know the costs that will come from the litigation and then decide if the benefits make the litigation worthwhile. Attorney fees make up only a part of those costs:

1. The time spent producing documents, answering Interrogatories, and attending depositions.
2. The upfront costs of our own depositions and paying for copies of depositions taken by the other side.
3. The time spent in court and hanging around a courthouse instead of at the business.

On an hourly basis, the attorney fees could easily exceed $6,000.00 for a simple trial that lasted only one day. The client then would need to decide if the costs were worth paying to defend a $25,000.00 claim or making a settlement offer to get rid of the nuisance.

Take a look at Two lawyers walk into a bar . . . from The Chicago Tribune for a bit more of an insight into attorney fees and law practices.

Evidence - The Dangers of Digital Photos

Maybe you knew about metadata (that is, data on data) with digital pictures but I did not. Not until I read Beware of hidden digital camera metadata from Canadian Privacy Law Blog and Authenticating Digital Photographs as Evidence: A Practice Approach Using JPEG Metadata from Law Practice Today. This paragraph from Canadian Privacy Law Blog sets up the problem nicely:

There is no better illustration of the problem than the website created by Tonu Samuel. His site pulls images off the 'net then shows the original thumbnail and the modified image. One image generated by Samuel's site is a very vivid demonstration of why this is an issue: Hidden EXIF thumbnail security problem (may not be safe for work - it shows a young woman in a bikini whose face was obscured but is clearly identifiable in the thumbnail).

In short: Be very careful when you distribute modified digital images.

So what? Think about this scenario: digital photos come into evidence and then the metadata shows the photo's alteration. I will bet the party putting that photo into evidence gets chewed up and spat out.

Statute Limitations Do Not Bar a Lawsuit, but Here is What Does

A statute setting the time limit for filing a lawsuit bars a claim after that date. That kind of statute is not a statute of limitations.

Attorneys call a statute of limitations an affirmative defense. Defendant has the job of pleading the defense and proving it. The plaintiff wins if defendant either does not plead or pleads but does not prove. (See Indiana Trial Rule 8(c)).

JOHN R. SAND & GRAVEL CO. v. UNITED STATES (html format) gives us the example of a statute creating a deadline for filing a lawsuit against the federal government. The following paragraphs from the United States' Supreme Court opinion contain the facts:

The Government initially asserted that petitioner's several claims were all untimely in light of the statute providing that "[e]very claim of which the United States Court of Federal Claims has jurisdiction shall be barred unless the petition thereon is filed within six years after such claim first accrues." 28 U. S. C. §2501. Later, however, the Government effectively conceded that certain claims were timely. See App. 37a-39a (Government's pretrial brief). The Government subsequently won on the merits. See 62 Fed. Cl. 556, 589 (2004).

Petitioner appealed the adverse judgment to the Court of Appeals for the Federal Circuit. See 457 F. 3d 1345, 1346 (2006). The Government's brief said nothing about the statute of limitations, but an amicus brief called the issue to the court's attention. See id., at 1352. The court considered itself obliged to address the limitations issue, and it held that the action was untimely. Id., at 1353-1360. We subsequently agreed to consider whether the Court of Appeals was right to ignore the Government's waiver and to decide the timeliness question. 550 U. S. ___ (2007).

The court cannot raise the issue of an affirmative defense but it can always raise the issue of having jurisdiction over a case. Justice Breyer explains the legal differences here:

Most statutes of limitations seek primarily to protect defendants against stale or unduly delayed claims. See, e.g., United States v. Kubrick, 444 U. S. 111, 117 (1979). Thus, the law typically treats a limitations defense as an affirmative defense that the defendant must raise at the pleadings stage and that is subject to rules of forfeiture and waiver. See Fed. Rules Civ. Proc. 8(c)(1), 12(b), 15(a); Day v. McDonough, 547 U. S. 198, 202 (2006); Zipes v. Trans World Airlines, Inc., 455 U. S. 385, 393 (1982). Such statutes also typically permit courts to toll the limitations period in light of special equitable considerations. See, e.g., Rotella v. Wood, 528 U. S. 549, 560-561 (2000); Zipes, supra, at 393; see also Cada v. Baxter Healthcare Corp., 920 F. 2d 446, 450-453 (CA7 1990).

Some statutes of limitations, however, seek not so much to protect a defendant's case-specific interest in timeliness as to achieve a broader system-related goal, such as facilitating the administration of claims, see, e.g., United States v. Brockamp, 519 U. S. 347, 352-353 (1997), limiting the scope of a governmental waiver of sovereign immunity, see, e.g., United States v. Dalm, 494 U. S. 596, 609-610 (1990), or promoting judicial efficiency, see, e.g., Bowles v. Russell, 551 U. S. ___ , ___-___ (2007) (slip op., at 7-8). The Court has often read the time limits of these statutes as more absolute, say as requiring a court to decide a timeliness question despite a waiver, or as forbidding a court to consider whether certain equitable considerations warrant extending a limitations period. See, e.g., ibid.; see also Arbaugh v. Y & H Corp., 546 U. S. 500, 514 (2006). As convenient shorthand, the Court has sometimes referred to the time limits in such statutes as "jurisdictional." See, e.g., Bowles, supra, at ___ (slip op., at 5).

You can find most of Indiana's statute of limitations by following this link here.

Take a look at Court Imposes Strict Deadline in Lawsuit, if you want to read more about JOHN R. SAND & GRAVEL CO. v. UNITED STATES.

Civil Suits and Collections

Between a telephone call last evening to reading After losing lawsuit, practice may dissolve this morning, I decided a quick post was needed.

After graduating from last school, I worked for a local collections attorney for about a year. I had no idea that a lawyer could have a practice just collecting money. Law school taught us to know the elements of case, write an appellate brief, and argue a case. Among the many things not taught us was that a plaintiff (the person suing) in a contracts or torts case wants money.

For the non-lawyers reading this, the law requires a showing of injury that can be quantified into dollars. We call that damages. There are other elements, too. In a contracts case, those other elements are duty and breach.

I break collections into two categories. First, Those cases having a fight and the question will be if we when where does the money come from? One can win the battles but lose the war. History is full of examples of this: Germany in World War I, Germany in Word War II until 1941, the American Revolution and an ancient Greek general who gave his name to Pyrrhic victory. The case reported by the Indianapolis Star sounds like one of these:

A Marion County jury awarded Pollack $480,853 in damages after a 21/2-day trial. With interest dating to 1996, when Pollack left the practice, the claim could top $1 million.

An attorney for the 17- employee practice, based on the Northeastside, has proposed to creditors that the practice close its doors and liquidate its assets, which it estimates are worth about $300,000, according to a letter Pollack received from his attorney.

Under the plan, Pollack would collect just $219,000 of his judgment paid over 10 years. Pollack, as a result of his civil damage award, is the practice's largest creditor.

An attorney for Cardiac & Vascular, Michael McCrory, said, "I am not prepared to make a comment" on the likelihood the practice will close and liquidate its assets. The practice was closed for business Monday and Tuesday, and its administrator, Tim Hare, did not return a call seeking comment.

My experience doing collections and bankruptcy work makes me ask about assets and collecting the judgment. I still get people offering me these great cases where I will make a lot of money except that the cases disappear so quickly when I start asking how we will collect that money.

The other type of collection cases pose no great issues of liability (the opposing party's) or damages, but only on how to get the money. I spent a good deal of time the other night explaining how these cases work to a potential client: mostly likely we will get a default judgment and then I will spend a very long time trying to get the money as the defendant had a history of switching jobs. I suspect she operated under the illusion of many that all I had to was get a judgment and the money would appear on her doorstep. Because of people quitting jobs as soon as a garnishment order arrives, a collections practice requires volume for success.

James Bond and Copyright

Got your attention? What could James Bond have to do with copyright? Actually, a bit of an interesting story. Which the London Times brought back to light in The battle for the soul of Thunderball.

For the Bond fans out there - especially those who read the books - they may know that Thunderball had a question of paternity. I remember reading the outline of the story when Connery came back to do Never Say Never. The excerpt from The Battle for Bond published by The Times covers that part as well as the plagiarism trial.

Other than learning that Thunderball was the most successful of the early Connery films (I thought Goldfinger would cop that honor) and Richard Burton was slated to be the first film Bond (no, no, no), I found a great description of the triumvirate of civil litiation. What makes up this triumvirate of civil litigation? People, money, and law.

On November 20, 1963, the Thunderball trial began in earnest. Could McClory prove that his copyright in the Thunderball story had been infringed by Fleming’s novel? Much was riding on the outcome, because, with the release of Dr No and From Russia with Love, starring Sean Connery, Bond was now a cinematic success. There was a lot of money, and some hefty reputations, at stake.

One must not underestimate the personal enmity between Fleming and McClory, clearly shown for the first time in the letters. Neither liked the other during the time they worked together, and they clashed frequently. In one correspondence, Fleming admitted: “I don’t particularly like Kevin personally, because I have never particularly liked Irish blarney.” The letters also reveal that Fleming was plotting behind McClory’s back to remove him from the Bond project. As for McClory, he labelled Fleming “cynical” and “a snob”. One suspects that half of McClory’s motive for his court battle was to put one over on the English Establishment, epitomised by Fleming.

The following paragraphs reminded me of a case I settled a few years back for similar reasons - a question of the client's health being able to endure an extended trial.

All the more strange, then, was what happened on the trial’s ninth day. McClory had just taken the stand when the hearing was unexpectedly and dramatically adjourned: Fleming had decided to settle. But why?

As Fleming had already suffered one serious heart attack, Bryce was worried about the effect the trial was having on his friend. What has not previously been revealed is that Fleming experienced two heart attacks during the case itself. So, after days of wrestling with his conscience, Bryce persuaded his friend to settle, rather than watch him endure the days to come. Fleming’s wife, Ann, was incensed, scrawling in her husband’s copy of Diamonds Are Forever, which had a dedication to Bryce, the words: “The man who betrayed Ian in the Thunderball case.” Fleming, too, was later to bitterly denounce Bryce’s actions. Yet, as Bryce was bank-rolling the defence, the decision was his to make.

Trade Secrets - Computers and Computer Forensics

Thanks to the Trade Secrets Blog for the link to In Search Of Lost Assets: Using Computer Forensics In Intellectual Property and Trade Secret Theft Investigations on The Metropolitan Corporate Counsel page.

"With the significant role that computers often play in intellectual property and trade secret thefts, computer forensics has become a critical component in piecing together the facts needed for a successful investigation or potential litigation. When a company suspects that its intellectual property or trade secrets have been stolen, the primary concern should be ensuring proper collection and preservation of evidence. In such situations, companies need to retain a computer forensic specialist familiar with the latest techniques used to analyze digital evidence and experienced in providing expert testimony."

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When entering into an intellectual property or trade secret theft investigation, counsel should be prepared that the investigation will often start with a single computer or device, but will likely escalate into a situation where multiple computers and/or devices must be analyzed to tie all of the relevant evidence together to prove the case. More importantly, there are many techniques that perpetrators will use in an attempt to cover their tracks. Although these investigations can be time and labor intensive, by taking action companies can recoup potential losses and further protect their intellectual capital.

Another view on Minnesota downloading case

I mentioned this case in Why juries make lawyers nervous.

The IP ADR Blog also wrote on this case under "B" is for Bully: Jean Valjean at the Music Store. In my earlier post, I used the case to show some of the vagaries of juries.

"A woman facing a $222,000 music-sharing verdict asked a judge Monday to overturn it.

Jurors in a case that six record companies brought against Jammie Thomas found that she violated the companies' copyrights by offering 24 songs over the Kazaa file-sharing network. They ordered Thomas, a mother of two who makes $36,000 a year, to pay the companies $222,000.

In a motion filed Monday, Thomas' attorney, Brian Toder, did not argue that she hadn't violated the copyrights. Instead, he said that because the songs could have been purchased online for about $24, the $222,000 verdict was disproportionate and amounted to punitive damages.

IPR ADR Blog summarizes some facts which some interest besides and beyond the point I made earlier. However, this post does make the point made in my earlier post:

Why the Jury Likely Made the Thomas Award So High

If you've been following this story, you don't have to do much guess work to believe the jury was likely punishing the defendant for lying to them on the witness stand. Although the defendant denied file-sharing on direct examination, documents produced at trial pretty well demonstrated that she was not telling the truth.

Steps in a lawsuit - from service to filing an Answer

I thought a series of posts about the steps in a lawsuit might be useful. This will be the first part of a series about the general procedure in civil lawsuits. Small claims have a wholly different procedure and I suggest you look at the small claims rules if you are looking for information on small claims cases. I am not going into all the nooks and crannies of civil procedure but just the broad generalities.

After filing the Complaint and Summons with the County Clerk, serving the defendant is the next step. In some counties the person serving the Complaint is a Sheriff's deputy and in others it is a bailiff.

By the way, Indiana's Trial Rules have eighteen rules solely about service. See Indiana Trial Rule 4 to 4.17.

If the defendant cannot be served personally, then there is service by certified mail and by publication. The case cannot go forward if the defendant cannot be served. Service is part of the constitutional right of due process.

The defendant then has a certain amount of time for responding to the Complaint depending on the type of service. The response is called an Answer. For personal service, the time is 20 days. Expect that to be extended by the defendant. Usually, the extension runs another 30 days. That is if the defendant gets an attorney or knows the Indiana Trial Rules.

If the defendant does nothing by the 20th day, the rules allow for a default judgment. Just as if it were a ball game, one wins if the other side does not show up.

I wrote the defendant must file an Answer. This is not precisely true. The defendant may file a Motion to Dismiss, or an Answer. If the defendant files a Motion to Dismiss, the judge must rule on the motion before the case can continue. If the judge denied the defendant's motion, then the defendant must file an Answer. If the judge grants the motion, the Plaintiff may have be out of a case or find a way to get back in.

What comes after the Defendant files an Answer? Not trial, but what we call discovery. That is for another post.

News - Confidentiality Agreement Goes Sour

From Globe St.com:

SACRAMENTO-Locally headquartered Peter P. Bollinger Investment Co. has filed a lawsuit against Westfield Corporations Inc. seeking damages that it says could be in excess of $60 million. The litigation is related to Fountains, Bollinger’s planned retail development across from Westfield’s Galleria at Roseville Mall, construction for which is set to begin later this spring.

Bollinger alleges that after entering into confidentiality agreements in 2005 so that the two might further discuss a possible joint venture to develop Fountains, Westfield misused the detailed, proprietary information it was provided regarding Bollinger’s prospective tenants, rental rates, construction costs and the like. The lawsuit was filed late last week in Placer County Superior Court.

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Filed March 9, Bollinger's suit alleges breach of agreement, misappropriation of trade secrets, unfair competition, unjust enrichment, interference with prospective economic advantage, fraud, and breach of covenant of good faith and fair dealing. A Westfield spokesperson tells GlobeSt.com the company “does not comment on matters under litigation.”

Prevention does not always work but no prevention means disaster.

What To Do If a Trade Secrets Problem Goes to Court?

I have written quite a bit about trying to prevent a trade secrets problem but little on what to do if the problem becomes a lawsuit. The law allows for the trade secrets to be kept private by sealing the record. Here is an example of where sealing the record might have gone a bit too far:

Pro, who took on the case less than a month ago after U.S. District Judge Larry Hicks recused himself, heard arguments from lawyers for Montgomery and eTreppid in federal court in Reno on Thursday along with Cook.

"I was initially struck by the number of things sealed -- the wholesale sealing of things filed," Pro said.

The judge said he understands the need to seal certain things "where there are assertions of trade secrets and the specter of state secrets, classified information potentially..." But he said there's no reason for entire documents to be kept under seal when they don't directly relate to those areas of concern.

"My expectation is in the future we can try to reduce that, so we don't have to deal with wholesale sealing of documents," Pro said. He indicated he may rule on unsealing some documents as early as next week.

Montgomery's lawyers maintain the source codes and their purpose are trade secrets and in some cases state secrets, but that many of the legal filings -- such as the reasons the government gave for obtaining the search warrant for Montgomery's home -- should be unsealed.

Michael Flynn of Boston, one of Montgomery's lawyers, indicated after the hearing Thursday he was optimistic that would happen.

"We are hugely encouraged by the diligence, caution, deliberations and judicial insight of both Judges Cook and Pro," Flynn told reporters.

Lawyers for eTreppid have resisted unsealing the documents and complained about leaks that led to publicity of Cook's ruling on the search of Montgomery's home.