How Much is too Much? Counsel’s Active Conduct in Asbestos Suit Results in Forfeiture of Jurisdictional Defense

Since the jurisdictionU.S. Supreme Court handed down Daimler AG v. Bauman 134 S.Ct. 746 (2014), personal jurisdiction defenses have experienced a renaissance in asbestos litigation.  Defendants that wish to win such arguments, however, are well advised to heed a recent ruling by Judge Gibney, who presides over Rhode Island’s state court asbestos docket.  In Bazor v. Abex Corporation et al., C.A. No. PC-10-3965 (R.I. Super. May 2, 2016), Judge Gibney issued a ruling that is instructive on what a defendant must do to preserve its right to contest jurisdiction, holding that a defense counsel’s “active conduct constitute[d] forfeiture of the defense of lack of personal jurisdiction.”  The court referred to “forfeiture” as opposed to “waiver” because the defendant had properly asserted the lack of personal jurisdiction as a special defense.

In this instance, the “active participation” included the following conduct during the two years and nine months between the filing of an answer and the motion to dismiss: filing an objection to the trial date, attending a plaintiff’s deposition, requesting and participating in the reopening of that deposition, participating in the deposition of the plaintiffs’ expert, objecting to the expert’s deposition on non-jurisdictional grounds, disclosing eight  expert witnesses, filing 15 motions in limine, supplementing its expert witness disclosure, producing two expert witnesses for depositions, responding to discovery (without preserving the defense of lack of personal jurisdiction), supplementing its expert discovery, moving to compel the production of the plaintiffs’ bankruptcy trust documents, and participating in at least ten status/settlement conferences.  In short, defense counsel’s very active participation in the litigation was so active so as to constitute “forfeiture” of a claim of lack of personal jurisdiction.

Looking to federal jurisprudence for guidance, the court focused on defense counsel’s litany of activity over several years.  Synthesizing federal decisions, the court identified two  principal elements to weigh to determine whether a defense of personal jurisdiction is forfeited: (a) the delay in asserting the defense; and (b) the “nature and extent” of the defendant’s involvement in the case.  The court noted that the first factor could be met by as little as four months’ delay; but reasoned that the second factor weighed more heavily than the mere passage of time.  With regard to the second factor, the court cited defendant’s filing of an appearance, participation in discovery, attending and taking depositions, and filing and opposing motions as evidence of active participation.  Notably, the court found that the defendant had created “substantial delay” without “a sufficiently meritorious reason” for failing to assert its defense for two years and nine months after the filing of its answer.  The level of participation appears to have been the deciding factor; with special attention brought to “the fifteen motions in limine [defendant] filed which sought merits-based rulings” and the failure to continually assert the defense throughout the course of litigation.  However, of concern is that the ruling did nothing to establish a “bright line” rule of precisely how much participation is “too much” so as to result in a forfeiture of a jurisdictional defense.

It is unclear where this decision leaves litigants who need to participate in early discovery and who also want to preserve their jurisdictional defenses.  Defendants who wish to maintain their defenses are faced with choosing from various interpretations of the Bazor decision, focusing on the assertion of their rights and carefully monitoring the level of their participation.  The decision could reasonably be read to indicate that a party may participate in discovery, but only if they continue to maintain and pursue their jurisdictional defense.  Alternatively, some parties may refuse to participate in non-jurisdictional discovery for fear of inadvertent forfeiture. This may create friction with plaintiff’s counsel when their clients are in poor health, which frequently occurs in asbestos cases across the country.  Ultimately, the lesson of Bazor may be that safest resolution for defense counsel will be to file and pursue dispositive jurisdictional motions as early in the case as possible.  At the very least, defense counsel should raise the defense in pleadings and discovery which precede the filing of the motion to dismiss on jurisdictional grounds and/or reach some sort of agreement with opposing counsel to prevent forfeiture despite some level of active participation in the case. For example, defense counsel in the asbestos litigation should obtain a stipulation that attendance at an exigent deposition does not constitute a waiver of personal jurisdiction arguments; and that stipulation should be placed on the record.

How Environmental Lawyers Can Avoid Getting Sued For Legal Malpractice?

No matter how conscientious, environmental lawyers, like other attorneys, are regularly sued for legal malpractice.  It is not difficult to imagine some of the dicey situations where the environmental practitioner may fall prey to such claims:

(1) a municipality sues its lawyer after the municipality defaults on its bonds because of an unforeseen environmental problem that prevented the subject property from being developed. The lawyer is accused of not having described the risks inherent in the property’s development and for not conducting a proper environmental investigation;

(2) a landfill developer sues its lawyer after failing to obtain a landfill expansion permit because the lawyer failed to provide legal notice of the proposed expansion to adjacent landowners;

(3) the purchaser of commercial property sues its lawyer after discovering contamination on its recently obtained property, claiming that the lawyer never informed it of the existence of prior environmental violations or the consequences of an “as is” clause in the purchase agreement;

(4) a New Jersey seller of an industrial parcel sues its lawyer after discovering that it retained significant post-closing environmental liability under the ISRA statute; and finally,

(5)  a cost recovery plaintiff sues its lawyer for failing to pursue all relevant parties in a cost recovery litigation.

Is there a strategy for the environmental practitioner to defend these claims, or to prevent them from being brought in the first instance?  Michael L. Shakman, Diane F. Klotnia, and Edward W. Feldman, partners at Miller Shakman & Beem LLP in Chicago, have written an excellent article titled, “Why Do Environmental Lawyers Get Sued for Malpractice? What Can They Do to Avoid a Malpractice Claim?”  that appeared in the Bloomberg BNA Toxics Law Reporter, 28 TXLR 1285, on November 21, 2013.

The primary takeaway of Shakman et al.is that it is imperative to document in writing precisely what the scope of the retention will be and the tasks to be undertaken pursuant to that retention, and what it won’t be– those tasks that are NOT included in the retention.

In the scenarios described above, some of which are reported by the authors, there is often stark disagreement between lawyer and client concerning either the scope of the retention or the tasks to be performed. Sometime the dispute is over when the retention ended.  Here, then, is the authors’ advice (both quoted and paraphrased:)

(1) Eliminate uncertainty at the outset of the representation by clearly and explicitly delineating the scope of the engagement in a written engagement letter. Spell out the tasks the lawyer has agreed to undertake and make clear that unless the scope of work is altered by agreement in writing, the lawyer is not responsible for any other tasks. The lawyer may also want to specify examples of the tasks for which he or she is not responsible, although admittedly this may be the last thing on a lawyer’s mind after winning a new client engagement;

(2) If the engagement letter provides for a formal method for documenting changes to the lawyer’s scope of work – and if the lawyer adheres to this practice during the course of the retention, the lawyer is more likely to be protected against after-the-fact assertions the lawyer was supposed to take on tasks not described.

Thus, in one case discussed by Shakman et al., which involved the lawyer’s role in assisting the municipality in a bond offering, the lawyer successfully defended the claim by relying on his engagement letter, which made clear that the retention did not include a review of the Phase I Environmental Site Assessment.

(3) At times there may be some activity that the lawyer might perform, in the interest of being exhaustive, but does not perform because the client did not want to incur the additional cost. However, if it turns out in hindsight  that relevant information was overlooked because of cost limitations, the lawyer will likely be blamed anyway. Again, “papering the file” is the best means for protection against Monday morning quarterbacking.   If the lawyer discussed with the client the pros and cons of expending additional time, and incurring significant fees, on potentially useful but discretionary discovery on investigation, that consultation – and the conclusion reached – should be confirmed in writing to the client.

In small to medium-size real estate transactions, there are countless instances where the client has been advised that it would be prudent to spend several thousand dollars to perform additional investigation to identify the presence of what might possibly be, for example, an old underground storage tanks on the subject property only for the practitioner to be instructed that the client that is well aware of the risk but does  not want to incur additional costs? 

Hopefully, all of those memos to the file  (in the early years) and emails (in the latter years) have been preserved against a future day when, at one or more of those sites, a nasty, leaking UST is uncovered and the client demands to know why the environmental lawyer didn’t undertake additional precautionary steps at the time.

All of the admonitions addressed to environmental lawyers apply equally to environmental consultants, who are also often unfairly taken to task for not performing work, or providing advice, outside their written scope of work.

 

How You Draft A Liability Disclaimer Really Matters

Contract negotiations involving limitations on liability and disclaimers of damages for breach of contract and tort claims can have significant ramifications for the contracting parties if the business relationship falls apart and litigation results. Under New York law, how the parties negotiate the allocation of risk of loss is enormously important.

This lesson was brought home in a noteworthy New York Court of Appeals decision in Abacus Federal Savings Bank v. ADT Security Services, Inc. et al., 18 N.Y.3d 675, 944 N.Y.S.2d 443 (N.Y. 2012). In that case, Abacus Federal Savings Bank (“Abacus”) brought an action against two firms that provide security services, ADT Security Services (“ADT”) and Diebold, Inc. (“Diebold”) to recover damages under tort and contract theories for losses incurred during a burglary at the bank.

Prior to the burglary, ADT contracted with Abacus to install and maintain a 24 hour industry-certified central security station to protect the branch premises and the vault. The ADT system was replete with motion and smoke detectors, and an alarm system. Abacus contracted with Diebold to provide a backup alarm system that included central system monitoring and “signal monitoring” which would activate an alarm if ADT’s alarm system failed to operate. The gravamen of plaintiff’s complaint was that neither security system worked appropriately during a burglary.

To cut to the chase, the Court of Appeals upheld the dismissal of all of plaintiff’s claims against Diebold, but permitted plaintiff’s breach of contract claim against ADT to proceed. Why was one defendant successful and the other not?

A good analysis of the case is contained in an article titled, “Think Twice About that Liability Disclaimer Carveout,” authored by Adam Chernichaw and Caitlin Johnston of White & Case, which appeared in Law360 on December 19, 2013.

Chernichaw and Johnston observe that the contracts between Abacus and ADT, and between Abacus and Diebold, both limited each security company’s liability to $250. However, the Abacus-Diebold contract expressly required Abacus to ensure against losses in the event of theft and to “look solely to its insurer for recovery of its loss… [and waive] any and all claims for such loss against Diebold.” The contract further required Abacus to obtain a policy that expressly allowed such a waiver. In contrast, the Abacus-ADT contract stated only that “insurance, if any, covering [loss] was Abacus’ responsibility.”

Chernichaw and Johnston note that, citing a public policy exception, the court allowed Abacus to proceed in its case for damages based on allegations of ADT’s gross negligence despite the contract’s limitation of liability. With respect to Abacus’ claims against Diebold, however, the Court of Appeals upheld the granting of Diebold’s motion to dismiss.

The key distinction made by the court was that one contract provision sought to exculpate the defendant from liability but that the other “simply require[d] one of the parties… to provide insurance for all of the parties.” The latter provision withstands even allegations of gross negligence. Thus, the Abacus-Diebold contract was clearly more effective in shielding Diebold for liability for its own gross negligence.

What is the takeaway for lawyers negotiating contractual limitations of liability? New York courts will generally allow a party to insulate itself from liability resulting from its own negligence by way of an exculpatory clause. Similarly, a party may protect itself by limited liability to a nominal sum. However, the same is not true for exculpatory clauses that seek to prevent the imposition of damages for “grossly negligent conduct.”  Additionally, liquidated damages provisions are not enforceable against allegations of gross negligence.

In contrast to an exculpatory clause, indemnification provisions are unenforceable on public policy grounds only “to the extent that they purport to indemnify a party for damages flowing from the intentional causation of injury.”

Lawyers drafting their clients’ complaints in these cases should be mindful that the court will closely examine whether the facts alleged in the pleading support an assertion of gross negligence as opposed to garden variety negligence.  It is not sufficient to merely allege gross neglience and hope to escape the effect of an exculpatory clause in the client’s contract with the defendant.  In Abacus, the court found sufficient evidence of gross negligence in the bank’s allegation that defendants had been aware for months prior to the burglary that the securitiy system had been malfunctioning and had neither investigated the reason for the malfunction nor placed the bank of notice of a problem. 

 

Plaintiffs’ Bar Embraces Reptile Strategy And Defense Bar Responds

Reptile strategy has taken the plaintiffs’ bar by storm. The Reptile theory asserts that you can prevail at trial by speaking to, and scaring, the primitive part of jurors’ brains, the part of the brain they share with reptiles.  The Reptile strategy purports to provide a blueprint to succeeding at trial by applying advanced neuroscientific techniques to pretrial discovery and trial.

The fundamental concept is that the reptile brain is conditioned to favor safety and survival. Therefore, if plaintiff’s’ counsel can reach the reptilian portion of the jurors’ brains, they can influence their decisions; the jurors will instinctively choose to protect their families and community from danger through their verdict.  Thus,  the focus of the plaintiff’s case is on the conduct of the defendant, not the injuries of the plaintiff. The jurors are not interested in plaintiff’s injury, even when severe, according to the theory. Rather, the only truly effective  way to engage jurors is to demonstrate how the defendant’s conduct endangers the jurors and their families. 

The gurus of Reptilian trial strategy are David Ball and Don Keenan, whose book, “Reptile: The 2009 Manual of the Plaintiff’s Revolution”  purportedly gives its adherents a significant edge over the defense in jury trials.  Several prominent lawyers on the plaintiff’s side have cited this book as the new bible of advocacy.  The Seattle Zen Legal Blog authored by plaintiff lawyer Pat Trudell extols the theory in an article titled "Beyond the Reptilian Brain" and recites the mantra of the true believers, "The Reptile Always Wins". But do they?

Even as this new doctrine is gaining popularity in the plaintiff bar, the defense bar is mounting a counter-attack.  An excellent article concerning the Reptile strategy and the defense response is titled, “Make Boots Out of That Lizard – Defense Strategies to Beat the Reptile,” authored by Minton Mayer, of Wiseman Ashworth Law Group in Tennessee (DRI, The Voice, 9/25/13). Mayer provides good tips for defusing the subliminal codes plaintiffs seek to embed in the jury’s psyche.

In the April 2013 edition of For The Defense, David C. Marshall, a lawyer with Turner Padget Graham & Laney PA in Columbia, South Carolina, provides an in-depth discussion of new trial strategy in "Lizards and Snakes in the Courtroom".  According to Marshall,  using the "reptile" successfully "requires creating safety rules and demonstrating that a defendant violated the rules, subjecting a plaintiff and the surrounding community to needless danger….  Thus, in closing, the lawyer using this strategy must show a jury how the dangers presented by a defendant extend beyond the facts of a case and affect the surrounding community so the entire case boils down to community safety versus danger."  Marshall  provides useful  litigation tips for keeping the reptile at bay during  trial.

Similarly, Kathy Cochran, a defense lawyer with Wilson Smith Cochran Dickerson in Seattle, WA, cautioned in  the dri today blog in 2010, "As defense lawyers, we need to recognize this [Reptile strategy]  for what it is. It is an attempt to resurrect Golden Rule arguments, which are usually impermissible. Jurors are not to be asked to put themselves in the place of a party and make a judgment based on that virtual reality. Ball and Keene provide advice to their readers on how to circumvent this evidentiary rule. "  

Cochran cautions, "we will now see plaintiffs emphasizing ‘safety rules’ and trying to gain admissions from defense experts that such rules are important for the safety of the community. "Never separate a rule from the danger it was designed to prevent. … The greater the danger, the more the Reptile [juror] cares." 

In an article titled, “Atticus Finch Would Not Approve: Why a Courtroom Full of Reptiles is a Bad Idea,” (American Society of Trial Consultants, May 2010), authors Stephanie West Allen, Jeffrey M. Schwartz and Diane Wyzga provide a scathing critique of reptile theory and suggest that an effective alternative is providing jurors with a persuasive narrative at trial. According to the authors, reptile strategy “disrespects” jurors and could result in juror backlash. Fear-based tactics direct attention in an uncertain and unpredictable manner; in contrast, thoughtful narrative directs attention toward action grounded in the reflective mind. According to the authors, “narrative shines the mental flashlight of attention which can refigure the brain and change behavior.”

In summary, whether you conclude that  reptile tactics have validity or not, it makes sense for defense counsel to become familiar with them. If plaintiff’s counsel is going to use the defendant’s deposition to lay the framework for the use of a reptile strategy at trial, defense counsel had better prepare his client for the questions that will undoubtedly be asked during that deposition.
 

Adding Primary Jurisdiction To The Defense Lawyer’s Toolbox

When the preemption defense is not available, it may still be possible to effectively dismiss a plaintiff’s claim by arguing that the court should consider primary jurisdiction. Primary jurisdiction is a judicially created doctrine that addresses the proper relationship between court and administrative agencies. 

Raising primary jurisdiction may be particularly helpful to food and cosmetics manufacturers where a plaintiff’s particular deceptive trade practice allegations may not be specifically addressed by FDA (or Nutrition Labeling and Education Act , "NLEA" ) regulation. A case in point is Astiana v. Hain Celestial Group, Inc., a putative class action in which plaintiffs alleged that the defendant’s claims of "all natural" and "pure, natural & organic" were false and misleading under California law.  In dismissing the case, the California court agreed that the FDA, rather than the court, should evaluate plaintiffs’ claims in an administrative setting in light of the complexity of the issues presented and the agency’s expertise in the subject matter. 

An excellent explanation of primary jurisdiction is found in a decision by U.S. District Court Judge Susan R. Nelson in Taradejna v. General Mills, Inc., 909 F.Supp.2d 1128 (D.Minn. 2012):

Primary jurisdiction is a common-law doctrine that is utilized to coordinate judicial and administrative decision making. Although there is no fixed formula for deciding whether to apply the doctrine, the doctrine applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body. Agency expertise is the most common reason that courts apply the doctrine of primary jurisdiction. In addition, courts apply the doctrine to promote uniformity and consistency within the particular field of regulation. . . . When the primary jurisdiction doctrine applies, the district court has discretion either to stay the case and retain jurisdiction or, if the parties would not be unfairly disadvantaged, to dismiss the case without prejudice. Id. at 1134

In Taradejna, the Minnesota court applied primary jurisdiction to dismiss a plaintiff’s case relating to the advertising and selling of "Yoplait Greek" yogurt.  As discussed in the Product Liability Monitor, Lisa Sokolowski of Weil, Gotshal & Manges LLP concludes her thoughtful discussion of the decision commenting that "Judge Nelson ultimately found that the ambiguity and murky regulatory history surrounding the FDA’s “standard of identity” for yogurt meant that the U.S. Food and Drug Administration (“FDA”) should decide whether defendants’ actions violated the law."

In addition to Ms. Sokolowski, some astute commentators have weighed in on the preemption/primary jurisdiction distinction in recent months.  James A. Becker of Reed Smith authored a well-written discussion in Drug and Device Law (11/28/12) titled "Primary Jurisdiction: A Natural Alternative to Preemption".  Glenn Pogust and Michael Gruver at Kaye Scholer authored an article titled "Preemption and Jurisdiction Defenses in Caffeine Litigation", which appeared in the New York Law Journal on July 11, 2013.  Reading these authors should provide defense counsel with a road map concerning the kinds of cases in which primary jurisdiction arguments may succeed.

Securitizing Litigation Claims for Fun and Profit

Call me old fashioned, but I am uncomfortable with the growing industry involving third-party financing of commercial claims in litigation. In the not-too-distant future, it may well be that commercial litigations will be “bundled” and traded as securities on financial exchanges, not unlike the exchanges that trade in soybean or coffee futures.

However, lawyers are not agricultural growers, but professionals who have been trained to serve as both officers of the courts in which they are admitted and skilled advisors to the clients by whom they are retained. In the absence of regulatory safeguards and rigorous judicial oversight, traditional litigation practice is at risk of being turned on its head.

As a counterweight to my negative views on the subject,Aaron Katz, a principal at Parabellum Capital, LLC, and Steven Schoenfeld, a partner at Robinson & Cole, LLP, have written an excellent article titled, “Third-party Litigation Financing: Commercial claims as an Asset Class,” which appears in Practical Law The Journal, July/August 2013. Katz and Schoenfeld offer a compelling argument on behalf of an industry that is estimated to exceed $1,000,000,000 in the United Kingdom and United States combined.

Third-party litigation financing is a mechanism by which a party not affiliated with a certain lawsuit pays for another party’s (usually a plaintiff’s) legal fees to pursue the lawsuit, in exchange for a portion of the proceeds recovered by settlement or judgment. As the authors discuss, third-party litigation financing arrangements are complex transactions that need to be negotiated and structured carefully to address the unique needs of the specific investment.

Katz and Schoenfeld are sensitive to the legal issues inherent in third-party litigation financing, including champerty and maintenance; the duty of confidentiality and the related attorney-client privilege; and litigation counsel’s duties of loyalty and independence.

Litigation counsel owes a duty of loyalty to a client. This duty requires litigation counsel to act in the client’s best interests and give the client independent legal advice without interference from third parties, even if a third party pays the attorney. The authors point out that a third-party funder who controls the litigation may run afoul of litigation counsel’s ethical duties of loyalty and independence in addition to champerty laws. Therefore, it is not advisable for third party funders to not hire or terminate litigation counsel; direct litigation strategy; or make settlement decisions.

Of course, these ethical precautions may be difficult to observe in the heat of battle with millions of dollars of potential fees at stake. The housing crash and the severe recession that followed was, in part, due to the excesses of Wall Street and the development of unusual, difficult-to-comprehend financial products. Does any attorney really look forward to the day when your commercial litigation, rated Triple-A by a third-party litigation financing company, has been bundled into other purportedly Triple-A litigations and sold to investors?

One previously Triple-A rated commercial litigation was recently downgraded and assigned a “junk” rating. CNNMoney reported on January 10, 2013 that Burford Capital, a $300 million publicly-traded fund that invests in lawsuits, accused representatives of the Ecuadorians, who are suing Chevron in Lago Agrio, Ecuador, of having defrauded the firm into investing in their case two years ago. It was reported that, on October 31, 2010, Burford gave the plaintiffs $4,000,000 in financing as the first tranche in what was planned to become a $15,000,000 investment. In exchange, it received a 1.5% stake of any recovery, which was to rise to a 5.5% stake upon full funding. Burford accused plaintiffs’ counsel of being “willing to do and say anything to attract new funding.”

Remarkably, Burford was able to recover its full investment by selling a $4,000,000 “participation” to another investor, while retaining an upside interest in the case. The new investor reportedly also owns a minority stake in the Brooklyn Bridge.
 

When Should Data Underlying Scientific Studies Be Discoverable?

There is significant tension between the goals of scientific research and the demands of litigation. For scientific researchers, the amount of time required to respond to discovery takes away valuable time that might be otherwise devoted to research. Injustice and unfairness may result when a scientist, who has taken no part in a litigation, is served with a lengthy subpoena requiring him to devote large chunks of time to produce the required information. 

In an article published in the journal Neurology by Brad A. Racette, MD; Ann Bradley, JD; Carrie A. Wrisberg, JD; and Joel S. Perlmutter, MD, titled “The Impact of Litigation on Neurologic Research,” Neurology 67(12):2124 (Dec. 2006), the authors complain about the burden of time responding to discovery demands:  

"Any hint of scientific data that support such a cause and effect relationship often encourages plaintiffs’ attorneys to file suits against corporations alleging harm to their clients forcing corporations and employers to defend themselves. Both plaintiff and defendant teams hire expert witnesses who are frequently active investigators in relevant fields to bolster their positions. These legal proceedings can influence investigators and hamper research. Interactions with researchers can lead to personal financial or career gain that may bias research findings or impugn other investigators. Even researchers who have not been retained by either side of a legal dispute may be forced to respond to subpoenas for research data causing a substantial loss of research time for investigators and financial burdens on universities. Courts may require release of research records containing personal health information that could sully the trust research participants have in investigators. Litigation and its peripheral effects may bias investigators, impede research efforts, and harm research participants, thereby undermining efforts to understand the cause of neurologic disease."

In a rejoinder to this article, defendant’s counsel in the Welding Fume  Products Liability Litigation, Nathan A. Schachtman, wrote in a reply titled, “Response: The Impact of Litigation on Neurologic Research,Neurology 69(5):495 (Apr. 2007), that the Racette article offered a one-sided, incomplete picture of the interaction between scientific research and the law. 

Schachtman observes that the authors failed to disclose that the welder screenings for their study were funded by plaintiffs as part of an effort to solicit personal injury clients. Defendants served subpoenas to obtain the study’s underlying data only after plaintiffs’ counsel heavily relied on the authors’ study. Thus, Schachtman argues, the authors were not disinterested researchers inadvertently caught up in litigation. He states, “the authors collaborated with plaintiffs’ counsel so closely that counsel invoked litigation privileges to cloak the work in secrecy.” 

 In what might be characterized as a sur-reply, Dr. Racette responded that his early collaboration with the plaintiffs had been greatly overstated.  Perhaps the best advice, albeit cynical,  to scientific researchers may be to steer completely clear of lawyers at all costs and to avoid the temptation to be "helpful" to lawyers involved in litigation. Of course, the legal profession is the worse off if the best scientists are fearful of becoming involved in the judicial system. 

How then  is a court to balance the competing needs for transparency in litigation and permitting scientific researchers, often unrepresented by counsel, with the peace and tranquility necessary to perform their research?  As the court observed in In Re Welding Fume Products Liability Litigation, 534 F.Supp.2d 761 (2008), Dr. Racette had performed some assessments for plaintiffs’ counsel during the nascent stages of the MDL, but later severed his ties with plaintiffs and took no more payments from them. Under these circumstances, the MDL court opted in favor of disclosure. The MDL court reasoned that where an author publishes an article with a view toward litigation, a probability of bias exists which undermines the logic supporting the admission of this material through the “learned treatise” exception to the hearsay rule. In some cases, the “learned treatise” is excluded from evidence due to the taint of suspected bias. On other occasions, the treatise is admitted but subject to impeachment on cross-examination. 

The difficulty arises when a party’s expert reaches his expert opinions by relying on a study performed by a scientific researcher who is completely disinterested in the litigation. In this instance, what intrusion into this scientist’s life will be permitted? Merely because an author has reached a conclusion that dissatisfies one side or the other in litigation should not make that scientific researcher a “target” of a burdensome subpoena.

Pursuant to a very different set of facts, the Appellate Division, First Department, recently ruled in Weitz & Luxenberg v. Georgia-Pacific LLC, 2013 N.Y. Slip.Op. 04127 (6/6/13), that Georgia-Pacific must turn over for in camera review by the Court internal communications related to scientific studies it commissioned into the safety of its products. This discovery dispute arose in the context of the Weitz & Luxenberg  New York City Asbestos Litigation (“NYCAL”) cases in which Georgia-Pacific is a defendant. 

In 2005, Georgia-Pacific funded eight published research studies to aid in its defense of asbestos-related litigation. To facilitate this endeavor, Georgia-Pacific entered into a special employment relationship with Stewart Holm, its Director of Toxicology and Chemical Management, to perform expert consulting services under the auspices of in-house counsel, whom the Court found was significantly involved in the pre-publication process. 

The studies at issue were designed to cast doubt on the capability of chrysotile asbestos to cause cancer. The Court observed that despite the extensive participation of in-house counsel, none of the articles disclosed in-house counsel’s involvement. Citing the In Re Welding Fume Products Liability Litigation,  the Appellate Division determined that, “large corporations often invest strategically in research agendas whose objective is to develop a body of scientific knowledge favorable to a particular economic interest or useful for defending against particular claims of legal liability.” 

In determining that the studies and related documents should be subject to in camera scrutiny, the Court stated that the trial court was rightfully wary of prejudicing plaintiffs by permitting the sudden introduction of the studies or experts on the eve of trial, or in the many other pending asbestos cases. Therefore, the principles of fairness, as well as the spirit of the Case Management Order, required more complete disclosure. The Court held that it would be inappropriate to permit Georgia-Pacific to use its expert’s conclusions as a sword by seeding the scientific literature with Georgia-Pacific-funded studies, while at the same time using the privilege as a shield, by withholding the underlying raw data that might be prone to scrutiny by the opposing party which may affect the veracity of its expert’s conclusions. In its in camera review, the court will evaluate whether the crime-fraud exception to the attorney-client privilege applies to certain of the client communications in dispute. 

In high stakes toxic tort litigation, such as the NYCAL or Welding Fume litigations, it is not unusual for both well-heeled plaintiffs and defendants to fund studies to support their positions in litigation. In such instances, most courts will require extensive disclosure of the data underlying these studies’ findings. 

However, this is very different from the situation  where an independent scientist, who is uninvolved in any litigation, finds that his scientific research and underlying data is the subject of litigation scrutiny. Although some discovery may be appropriate in these instances, forcing scientific researchers to devote an inordinate amount of their time complying with litigation requests may have a chilling effect on the research community’s willingness to take on scientific challenges relating to important public health issues. 

Does Wireless Internet In Courthouse Exacerbate Lawyer Abuse?

Yesterday, we published an article titled  ‘Lawyers’ Use Of Internet To Influence Jurors’  raising the concern that the fairness of jury trials may be jeopardized if jurors can surf the Internet and read misleading or self-serving messages by trial counsel that have been deposited where straying jurors can find them. 

Even if a prospective juror (not yet selected to sit on a particular case) or a sitting juror does not read about the facts underlying a specific case, he or she can still peruse biographical information about the lawyers, their firm’s specialties, featured clients and "war stories," crusades or victories they describe.  For example, if a plaintiff  law firm’s website states that the firm is "dedicated to protecting innocent American consumers from the catastrophic injuries caused by unfeeling, profit-driven drug companies", that is probably not information that a pharmaceutical company defendant in a product liability case would want distributed among its jurors.  Judges need to be particularly diligent that juors do not have access to this kind of extraneous information.

Could the courts do more to prevent this kind of Internet abuse?   "N.M."  wrote me the following  after yesterday’s article appeared:

Definitely a timely topic – I had to go to Essex Co (NJ Superior Ct)  jury selection recently and quite a few potential jurors brought their laptops with them – in fact, wi-fi is offered for those waiting to be sent to court rooms. Very tempting in the midst of voir dire, after the facts of the case have been discussed by the judge, to check the internet during a break to see what information might be available.

Should laptops, iPhones and iPads be permitted in courthouses?  If the courts cannot control what jurors do when they go home for the evening should they at least attempt to prevent jurors from going on-line during jury selection or whenever there is a break in the action during trial?  Internet use by jurors is an enormous potential problem; there needs to be a concerted effort by our judiciary to address it!

Lawyers’ Use Of Internet To Influence Jurors

In an earlier article, we discussed the danger posed to an impartial jury system by the “Googling Juror.” In his article titled “Lawyers’ Use of Internet to Influence Jurors” (New York Law Journal, 6/12/12), Michael Hoenig cautions that “the danger to fair trials posed by Internet-surfing jurors is exacerbated by lawyer ‘advertising’ of their prowess or success on websites, by publishing case-specific information on firm sites or blogs or other Internet outlets, and by skillfully weaving inaccurate, misleading or self-serving messages, and ‘depositing’ them where straying jurors can ‘find’ them.” 

Hoenig concludes that these can be purposeful stratagems or innocent puffing. He points out that despite First Amendment protections, courts can and should restrict prejudicial speech by attorneys. He cautions that lawyers must be diligent in reviewing whether their adversaries (or agents) might be depositing messages about case facts or party litigants, or extraneous, non-admissible information on websites, blogs or other internet locations with the expectation that a straying juror would find the information. Even if the specific facts of a case at trial are not discussed, prospective or sitting jurors can still peruse the attorney’s website, noting biographical information, the firm’s specialties, featured clients and the “war stories,” crusades or victories many firms describe. Hoenig believes that this information likely will be passed to other jurors.

Lawyers do have First Amendment rights to a wide range of speech but they are also subject to reasonable restrictions as officers of the court. Further, lawyers are bound by ethical rules. Rule 3.6 of the Model Rules of Professional Conduct prohibits an attorney from making an “extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.” Rule 8.4 prohibits “conduct involving dishonesty, fraud, deceit or misrepresentation” and also states, “a lawyer or law firm shall not: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce to do so, or do so through the acts of another.”   The article discusses the facts of some of the cases that are emerging in this important area of the law

Thus, it is essential that trial counsel perform their own internet investigation concerning both the subject matter of their upcoming trials, and their adversaries’ internet materials, to determine whether prejudicial information available to prospective jurors has been posted.

 

Losing The “Empty Chair” At Trial

It has become common practice in multi-party toxic tort litigation for co-defendants to avoid taking potshots at each other during discovery or at trial. Pursuant to this reasoning, if the defendants point fingers at each other, it will only inure to plaintiff’s benefit. Therefore, it may be preferable for co-defendants to settle any differences they may have in private and present a unified front in the courtroom. This is a particularly helpful startegy when plaintiff is expected to have difficulty proving causation. Why make the plaintiff’s job any easier?

Consistent with this strategy, toxic tort defendants would rather target culpable non-parties who are not represented by counsel at trial and may not even appear as witnesses, colloquially referred to as “empty chair” defendants. It becomes the burden of the attorney representing the plaintiff to defend these “empty chairs” in order to obtain a full recovery for his client. Otherwise, plaintiff runs the risk that any verdict will be diminished by the empty chair’s proportion of fault. If one or more defendants obtains a dismissal prior to trial, the absent parties are subject to attack as “empty chair” defendants at trial by their former co-defendants.

 
There is emerging case law in New York that may force defendants to reassess the strategy of how “empty chair” defendants are pursued. In an article titled, “Recent Decisions on Empty Chair Defendants,” which appeared in the New York Law Journal on April 3, 2012, plaintiff trial lawyers, Thomas A. Moore and Matthew Gaier, discuss a recent First Department case,Carmona v. Mathisson, 92 A.D.3d 492 (1st Dep’t 2012), which held that the remaining defendants at trial were precluded from blaming the dismissed defendant under the “law of the case” doctrine. As Mssrs. Moore and Gaier discuss, the plaintiff in Carmona was injured during cataract surgery in which a machine was used to assist in the removal of the lens with the cataract. 

The plaintiff brought suit against the surgeon, the hospital where the procedure was performed, and the manufacturer of the machine. The manufacturer obtained partial summary judgment prior to trial pursuant to which the claims for negligent failure to warn and breach of warranty were dismissed. On appeal, the Appellate Division, First Department, dismissed the remaining counts for strict liability and negligence based upon manufacturing and design defects. See 54 A.D.3d 633 (1st Dep’t 2008). The treating physicians and the hospital vigorously opposed the manufacturers’ efforts to extricate itself from the case at every step along the way.

Later, at trial, the treating physicians and the hospital were permitted to elicit testimony that the machine malfunctioned and/or contained a design defect. The trial court included the manufacturer on the jury’s verdict sheet for the purpose of apportioning liability. Article 16 of the CPLR, not only imposes limitations on joint and several liability, but permits the culpable conduct of non-parties to be considered in apportioning a defendant’s fault for the purposes of such liability. No longer in the case to defend itself, the treating physicians went after the manufacturer at trial with guns blazing.
After the jury returned a defense verdict on behalf of the defendants, the plaintiff appealed. The Appellate Division reversed, holding that it was error for the trial court to permit evidence that the machine was defective and to include the manufacturer on the verdict sheet.

The Appellate Division held that its prior decision on the summary judgment appeal constituted “law of the case,” which was binding on the trial court and operated to foreclose any re-examination of the question absent a showing of subsequent evidence or change of law. The Court also held that on retrial the treating physicians would not be precluded from presenting a defense based on a claim of unexpected malfunction of the machine. The Court observed that the summary judgment decision found that the machine complied with design and manufacturing standards, but did not rule out that the machine could have malfunctioned for some other reason. Based upon the evidence at trial, the court observed, a jury could determine that the machine could malfunction even absent a defect. Therefore, the court left open a narrow window for the physicians and the hospital to still go after the empty chair.

In a medical malpractice action in which a medical device manufacturer is thrown into the defendant mix of physician and hospital defendants, it is perhaps not unusual that the physician defendants aggressively pursue the manufacturer. This scenario may play out differently in a toxic tort case where more cooperation among defendants is anticipated. The take-away from Carmona is that toxic tort defense counsel can no longer assume that any dismissed defendant becomes an easy “empty chair” to attack at trial.

One first has to determine how the “empty chair” arrives at the courtroom – through inattention of plaintiff; settlement prior to trial; or as a result of summary judgment. The answer to that inquiry may have a significant impact on the remaining defendants’ case evaluation and the extent to which an “empty chair” strategy can be successfully pursued.