Los Angeles Times covers growing calls for greater accountability by federal judges accused of misconduct

Springboarding off a litany of criticisms directed at federal District Court Judge Manuel L. Real, the Los Angeles Times reported on comments by a judicial misconduct scholar that asked whether any misconduct by a federal Judge was sufficient to rise to the level of "willful misconduct."  Carol J. Williams, Critics want to bench Judge Manuel L. Real (August 16, 2009) www.latimes.com.  It's worth a read, if only to threaten that last little spark of faith in the system.

Browsers and The Complex Litigator on SquareSpace

A reader alerted me to an issue that I had not thought to examine after moving from hosting on TypePad to hosting here on SquareSpace.  There appears to be one major browser variant that cannot correctly render this blog.  Care to guess which browser and version?

After utilizing a very handy tool from Adobe called BrowserLab, it appears that Internet Explorer 6 and earlier versions of IE break this blog.  After looking at the way in which the page breaks in IE 6, and having experimented with building a personal website that was "standards compliant," I saw at least one source of the trouble.  At this point, if you are not an aspiring techie, please put your fingers in your ears and say, "La, la, la, la, I'm not listening to you."  IE 6 does not handle padding in the same manner as all other browsers.  Padding is a measure of the space around content that is inside an html container (margins are a measure of space outside an element).  Because IE 6 adds up padding measurements differently, when content is spaced with padding inside fixed outer containers (like a page with a set width), stuff breaks.

SquareSpace no longer supports IE 6 (and earlier).  If you happen to be working somewhere that still requires you to use IE 6, talk to the IT people.  At least move up to IE 7.  You might also give Firefox or Google's Chrome a try.  They are standards compliant and render this blog correctly.  If some other browser is breaking the layout (overlapping the columns or other obviously unintended results), use the contact form to send me a message about it, and I will put the excellence of the SquareSpace support team to the test.

California Supreme Court activity for the week of August 17, 2009

The California Supreme Court held its (usually) weekly conference today. Notable results include:

  • A transfer Order issued in Pfizer, Inc. v. Superior Court (Galfano) following the decision in the lead case, In re Tobacco II Cases, 46 Cal. 4th 298 (2009).  See also, additional comments in this post at The UCL Practitioner.
  • A transfer Order issued in McAdams v. Monier following the decision in the lead case, In re Tobacco II Cases, 46 Cal. 4th 298 (2009).
  • A Petition for Review was denied in Olvera v. El Pollo Loco (arbitration agreement found unconscionable; no lucky for clucky).

 

Meza v. H. Muehlstein & Co., et al. reinforces "common interest" doctrine that protects work product shared by parties with partially aligned goals

Class actions quite frequently involve multiple defendants.  In consumer class actions, manufacturers and distributors may both be named.  In employment law class actions, successor entity employers may share time with a former employer.  In such cases, it is often the case that the goal of beating back the plaintiff unifies defendants with divergent interests.  Efforts to drive a wedge between allies of convenience can involve attempts to discover information that is shared between defendants.  But California recognizes the "common interest" doctrine, which allows defendants' counsel to share information that relates to advancing their common goals in the litigation without waving the attorney work product "privilege."  In Meza v. H. Muehlstein & Co., et al. (August 18, 2009), the Court of Appeal (Second Appellate District, Division Three) provided additional guidance as to the application of that doctrine.

In Meza, a personal injury action, the "common interest" doctrine was implicated when an attorney for one of many defendants was later hired by plaintiff's firm:

[D]efendant and respondent Lucent Polymers, Inc. (Lucent) moved to disqualify the Metzger Law Group (the Metzger firm) from representing plaintiff and appellant Teresa Meza. Lucent and other joining defendants argued that the Metzger firm should be disqualified because it hired Bret Drouet, an attorney who previously represented one of the defendants and who participated in meetings in which defense counsel disclosed privileged work product.

Slip op., at 2.  The opinion reviews the basics of disqualification and the work product doctrine/privilege (the Court observes an issue about nomenclature that I have also noticed - the protection of work product is referred to as both a privilege and a doctrine - but offers only that the distinction is irrelevant because the protection is statutory).  The part of the opinion that may be particularly relevant in class actiosn concerns the "common interest" doctrine.  An extended excerpt is repeated here:

The protection offered by the attorney work product privilege can be waived if work product is disclosed to third parties. (OXY Resources California LLC v. Superior Court (2004) 115 Cal.App.4th 874, 891 (OXY).) However, “work product protection „is not waived except by a disclosure wholly inconsistent with the purpose of the privilege, which is to safeguard the attorney‟s work product and trial preparation.‟ ” (Ibid.)

Under the common interest doctrine, an attorney can disclose work product to an attorney representing a separate client without waiving the attorney work product privilege if (1) the disclosure relates to a common interest of the attorneys‟ respective clients; (2) the disclosing attorney has a reasonable expectation that the other attorney will preserve confidentiality; and (3) the disclosure is reasonably necessary for the accomplishment of the purpose for which the disclosing attorney was consulted. (See OXY, supra, 115 Cal.App.4th at p. 891.)

The common interest doctrine does not create a new privilege or extend an existing one. “Rather, the common interest doctrine is more appropriately characterized under California law as a nonwaiver doctrine, analyzed under standard waiver principles applicable to the attorney-client privilege and the work product doctrine.” (OXY, supra, 115 Cal.App.4th at p. 889.)

Meza does not dispute that California recognizes the common interest doctrine. She instead argues that under the facts of this case, the common interest doctrine does not apply.

Meza contends that because defendants had separate, dissimilar and at times adverse interests, defendants‟ attorneys could not disclose work product to each other without waiving the attorney work product privilege. This is incorrect. It is true that a defendant‟s attorney‟s disclosure of work product relating to the defendants‟ adverse interests results in a waiver of the attorney work product privilege. However, the disclosure of work product relating to the defendants‟ common interests does not result in a waiver so long as the second and third elements of the common interest doctrine are satisfied.

In this case, while all defendants had different and potentially adverse interests, they also indisputably had common interests. All defendants, for example, had common interests in Meza‟s medical condition, alleged discrepancies in her claims, and her presentation as a witness. Likewise, all defendants had common interests in anticipating and analyzing Meza‟s litigation strategies and in retaining joint defense consultants and experts. Furthermore, it is undisputed that defendants‟ attorneys disclosed work product to each other relating to the defendants‟ common interests.  Accordingly, the first element of the common interest doctrine is satisfied with respect to all such disclosures.

Meza contends that defendants failed to submit any evidence establishing the second element of the common interest doctrine—defense counsel‟s reasonable expectation of confidentiality. We reject this argument because the trial court‟s CMC order expressly authorized defendants‟ attorneys to disclose to each other attorney work product relating to issues of common interest without fear of waiver. In light of the CMC order, defendants‟ attorneys reasonably expected that counsel for co-defendants would preserve the confidentiality of attorney work product disclosed in communications regarding common interests. The second element of the common interest doctrine is thus satisfied.

With respect to the third element, Meza argues that although the sharing of work product among defense counsel may have made the litigation more efficient, it was not reasonably necessary. Meza is again incorrect.

Substantial evidence supports the trial court's finding that communications among defense counsel were “reasonably necessary” for the accomplishment of the purpose for which defense counsel were retained. It is clear from the declarations submitted by defendants that defense counsel shared their confidential ideas about the case with each other in order to better prepare for trial.  Accordingly, under the common interest doctrine, the attorney work product privilege was not waived.

Slip op, at 11-13 (footnotes omitted).  The Court of Appeal also reviewd sealed documents that the trial court examined in camera; the Court of Appeal concluded that they supported the trial court's order of disqualification.

I've tried breaking past the "common interest" doctrine in the past, with no success.  Meza confirms that I should keep my expectations of future success in this area on the low side.

Two recent class action lawsuits against AT&T and Apple raise interesting questions about adequate disclosures

Two class action lawsuits have been filed against AT&T and Apple over the current lack of MMS (multimedia messaging) support for the iPhone 3G and 3GS.  But first, some basic technical background information is in order.  MMS permits the transmission of pictures, video and other media over an extension to the SMS standard (text messaging system).

"The first lawsuit, filed in the Southern District of Illinois by Tim Meeker, claims that Apple and AT&T misrepresented material facts about the iPhone's support of MMS. Meeker claims that he went to buy an iPhone 3G in March at an AT&T store. When he asked about MMS support, he was told that it would be added in a forthcoming update to the iPhone OS in June."  Chris Foresman, Tired of waiting for AT&T to enable MMS on iPhone? Sue! (August 15, 2009) arstechnica.com. The other case, filed in the Eastern District of Louisiana by Christopher Carbine, Ryan Casey, and Lisa Maurer, has almost identical language to the lawsuit filed in Illinois by Meeker."  Id.

When Apple announced the iPhone 3GS and its 3.0 Operating System in June, at the WWDC, Apple indicated that MMS functionality was built into the operating system but would not be available in the United States until later in the year.  This raised an interesting question about these class action lawsuits.  When are representations imputed to customers?  The WWDC announcement received widespread coverage in the tech media.  I watched live blogging of the event on gizmodo.com (wait, I was working then, so nevermind).  But most consumers probably don't watch coverage of WWDC.  Let's assume that AT&T stores were promising MMS functionality was coming in June, before the WWDC announcements.  That situation is easier to analyze, since there is no conflicting information.

But what happens when that same AT&T store is silent about the absence of MMS functionality after the June WWDC event.  Does it have a duty to tell consumers about the lack of MMS?  Is MMS functionality even material?  (Parenthetically, I can e-mail pictures to an AT&T phone's e-mail address and get around this limitation, but I don't know how many people are aware of that option.)  Does a consumer need to ask about MMS to indicate that it is material?  Is the WWDC announcement and related converage sufficient to put consumers on notice about the delay in MMS functionality?  What about fine print on AT&T's website?

I'm not offering answers to these questions, but the questions are of interest to me and I thought I'd share them.

Never say never: even CJAC's counsel agrees that sometimes unfair competition class actions are a viable tool for obtaining justice

The Civil Justice Association of California ("CJAC") is demonstrating that the "justice" isn't in their name for show.  Fred Hiestand, general counsel for CJAC, wants justice, and he's willing to file a class action against the City of Sacramento and allege unfair competition in violation of Business and Professions Code section 17200 to get that justice.  Dave Gilson, Tort Reformer Wants His Day in Court (August 14, 2009) www.motherjones.com.  According to Legal Pad, CJAC's President, John Sullivan, lamented Hiestand's suit, saying, "Fred has been fighting against frivolous lawsuits for decades, and like a doctor fighting malaria, he’s become infected himself — and with the worse strain of the disease — class actions."  Cheryl Miller, Tort Reform Leader Brings Class Action 'Cause His Car Got Towed (August 14, 2009) legalpad.typepad.com.

In all seriousness, it is outrageous that a city would tow a car for parking in a no parking zone.  Those no parking zones are for special people, like lawyers, that are important and have important things to do, like eat dinner.  Those signs really mean no parking for regular people.  Why do lawyers have to put up with abuse like this?  I'm so angry I could just spit nails.  Sorry I can't blog more, but I need to run out to the street and tell that parking enforcement officer that the red stripe on the curb means "Reserved for The Complex Litigator!"  He has malaria, people - back off.

 

In Gordon v. Virtumundo, Inc., Ninth Circuit engages in pioneering analysis of standing to sue under CAN-SPAM Act

"The CAN-SPAM Act became effective on January 1, 2004, and was enacted in response to mounting concerns associated with the rapid growth of spam e-mails."  Gordon v. Virtumundo, Inc. (9th Cir. August 6, 2009), at 10,491.  In Gordon, the Ninth Circuit was called upon, in a case of first impression amongst the Circuits, to determine when a private plaintiff possesses standing to sue under the CAN-SPAM Act.  In doing so, the Ninth Circuit attempted, at least in part, to thoroughly examine the standing issue:

As recognized by several courts, the case law regarding the relevant legal standards under the CAN-SPAM Act is “scant,” ASIS Internet Servs. v. Optin Global, Inc., No. 05-05124, 2008 WL 1902217, at *15 (N.D. Cal. Apr. 29, 2008), and few courts have construed the standing provision, ASIS Internet Servs. v. Active Response Group, No. 07-6211, 2008 WL 2952809, at *2 (N.D. Cal. July 30, 2008). Neither we nor any of our sister circuits have comprehensively addressed this issue. We endeavor to do so here, at least in part.

Slip op., at 10,494.  One important question in Gordon was whether the plaintiff, who provided e-mail addresses to some friends and family members through a domain housed on leased server space.  The Ninth Circuit described the basic standing inquiry:

We begin by acknowledging that the CAN-SPAM standing inquiry involves two general components: (1) whether the plaintiff is an “Internet access service” provider (“IAS provider”), and (2) whether the plaintiff was “adversely affected by” statutory violations. See, e.g., Brosnan v. Alki Mortgage, LLC, No. 07-4339, 2008 WL 413732, at *1-*2 (N.D. Cal. Feb. 13, 2008).  Beyond that, however, the statutory standing provision read as a whole is ambiguous—a point upon which all parties agree. We therefore employ familiar techniques of statutory construction to evaluate Congress’s intent with regard to both components and their relation to one another.

Slip op., at 10,494.  The Ninth Circuit then noted that the standing conferred by the Act was narrowly tailored by Congress:

Congress conferred standing only on a narrow group of possible plaintiffs: the Federal Trade Commission, certain state and federal agencies, state attorneys general, and IAS providers adversely affected by violations of the CANSPAM Act. See 15 U.S.C. § 7706(a), (b), (f), (g). The decision to restrict the right of action does not reflect an indifference or insensitivity to the effects of spam on consumers. The contrary is true. The CAN-SPAM Act’s express findings and legislative history are littered with references to the burdens shouldered by individuals, businesses, and other institutions.  The Act itself recognizes the “costs to recipients . . . for the storage of [unsolicited commercial e-mail], or for the time spent accessing, reviewing, and discarding such mail, or both.” 15 U.S.C. § 7701(a)(3). We surmise that Congress’s intent was to limit enforcement actions to those best suited to detect, investigate, and, if appropriate, prosecute violations of the CAN-SPAM Act—those well-equipped to efficiently and effectively pursue legal actions against persons engaged in unlawful practices and enforce federal law for the benefit of all consumers.

Slip op., at 10,496.  Then Ninth Circuit then had to address whether Gordon was, in fact, an IAS provider.  Struggling somewhat with that question, the Court said:

There may well be a technical or hardware component implicit in the definition. But, we find the parties’ briefing on the topic inadequate to reach an informed decision here. Because it is not necessary to our holding, we decline this opportunity to set forth a general test or define the outer bounds of what it means to be a provider of “Internet access service.”

Slip op., at 10,500.  Despite passing on the opportunity to define the outer bounds of IAS provision, the Ninth Circuit concluded that Gordon, who gave e-mail addresses to a few friends and family members, didn't meet any reasonable definition of IAS provider.

At this point, Gordon loses, because he lacks standing.  But the Ninth Circuit went on to address whether he had been adversely affected by the spam received in the various e-mail accounts he created.  That analysis, too, didn't favor plaintiff.

I was particularly interested in this decision because I, like Gordon, have a domain through which I provide a number of e-mail addresses to family.  Had things broken Gordon's way, I'd be an IAS provider right now.  But since I'm not, I'll also conclude that we won't see the CAN-SPAM Act in a class action unless a major provider like a cable or phone company decides to use the CAN-SPAM Act in some crazy way and allege a defendant class of spammers blasting their network.

The Ninth Circuit concluded its opinion with a thorough analysis of pre-emption, holding that the CAN-SPAM Act pre-empts all state efforts to regulate spam, save those predicated upon traditional tort theories related to fraud and deceit.  In case you were holding your breath, spam isn't going anywhere any time soon.

Momentary hysteria follows from i4i's patent suit victory over Microsoft

As one of the legal professions most proficient masters of Microsoft Word (so I say, and I have references), I was surprised to learn that some Canadian company I've never heard of convinced a District Court Judge in the Eastern District of Texas to enjoin Microsoft from selling versions of Microsoft Word in 60 days.  Ashby Jones, Microsoft Word-less? (August 12, 2009) http://blogs.wsj.com/law/.  The patent at issue concerns Microsoft's use of custom XML in newer versions of Microsoft Word.  What's that you ask?  The simple version requires understanding what is meant by XML.  XML refers to Extensible Markup Language.  This language allows a structured document to be marked with tags that describe the type of content in various sections.  This markup allows data to be pulled from the document, along with the tags that describe the type of data.  If you know the purpose of each part of a document, different programs can make use of the document in different ways that are all consistent with the markup.

Essentially, Microsoft took the open XML standard and added some custom tags to the base standard, creating its own flavor of XML that is unique to Microsoft Word.  i4i alleges that is holds a patent on the use of custom XML.  The end result of this debacle will be reversal at the appellate level, a settlement between the companies, or a patch that simply switches off the use of custom XML in Word versions.  Such a patch would have no effect on documents saved in the older DOC format.

Bank of America continues to feel the pain of acquiring Countrywide

Bank of America has agreed to pay $55 million to former Countrywide Financial Corp. employees who claimed that Countrywide mismanaged their retirement funds.  E. Scott Reckard, Bank of America agrees to pay $55 million to Countrywide ex-employees (August 11, 2009) www.latimes.com.  Bank of America, through a spokesperson, said that the bank wanted to avoid the time and expense of litigation.  It turns out that you can afford to litigate for a long time for a lot less than $55 million, which makes one wonder if Countrywide really blew it.  A fairness hearing is scheduled for August 24, 2009.

Seventh Circuit provides sharply defined view on class member standing in Kohen, et al. v. Pacific Investment Management Company LLC, et al.

I don't follow the Seventh Circuit's decisions closely.  It's a bit outside my regular commute.  But it has served up an educational opinion about class member standing that is too intriguing to pass up without comment.

Kohen v. Pacific Investment Management Co. (7th Cir. Jul. 7, 2009) follows from a successful Rule 23(f) petition by defendants for permission to appeal a District Court's order certifying a class.  The suit, based on section 22(a) of the Commodity Exchange Act, 7 U.S.C. § 25(a), accuses the defendants (referred to in the appeal as “PIMCO”) of having violated section 9(a) of the Act, 7 U.S.C. § 13(a), by cornering a futures market.  What's a cornered futures market?  Glad you asked.  Circuit Judge Posner explains in a very educational discussion that breaks down how a short seller can monopolize a futures market:

Changes in the demand for or the supply of the underlying commodity will make the price of a futures contract change over the period in which the contract is in force. If the price rises, the “long” (the buyer) benefits, as in our example, and if it falls the “short” (the seller) benefits. But a buyer may be able to force up the price by “cornering” the market—in this case by buying so many June contracts for 10-year Treasury notes that sellers can fulfill their contractual obligations only by dealing with that buyer.

Slip op. at 4.  But defendants were trying to corner financial commodities, and you can't corner the money supply...except in one particular instance involving Treasury notes:

Board of Trade v. SEC, supra, 187 F.3d at 725, remarks that since the possibility of manipulation “comes from the potential imbalance between the deliverable supply and investors’ contract rights near the expiration date[,] . . . [f]inancial futures contracts, which are settled in cash, have no ‘deliverable supply’; there can never be a mismatch between demand and supply near the expiration, or at any other time.” But while it is correct that most financial futures contracts are settled in cash, CFTC v. Zelener, 373 F.3d 861, 865 (7th Cir. 2004); Kolb, supra, at 16, and that if a cash option exists there is no market to corner (no one can corner the U.S. money supply!), futures contracts traded on the Chicago Board of Trade for ten-year U.S. Treasury notes are an exception; they are not “cash settled.” Short sellers who make delivery must do so with approved U.S. Treasury notes; otherwise they must execute offsetting futures contracts.

Slip op. at 5.  The class certified by the district court consisted of all persons who between May 9 and June 30, 2005, bought a June Contract in order to close out a short position.  PIMCO challenged the definition on the ground that it includes persons who lack “standing” to sue because they did not lose money in their speculation on the June Contract.  For example, some of the class members might have taken both short and long positions (in order to hedge—that is, to limit their potential losses) and made more money in the long positions by virtue of PIMCO’s alleged cornering of the market than they lost in their short positions. The plaintiffs acknowledged this possibility but argued that its significance was best determined at the damages stage of the litigation.  The Court rejected PIMCO's contention:

PIMCO argues that before certifying a class the district judge was required to determine which class members had suffered damages. But putting the cart before the horse in that way would vitiate the economies of class action procedure; in effect the trial would precede the certification. It is true that injury is a prerequisite to standing. But as long as one member of a certified class has a plausible claim to have suffered damages, the requirement of standing is satisfied. United States Parole Commission v. Geraghty, 445 U.S. 388, 404 (1980); Wiesmueller v. Kosobucki, 513 F.3d 784, 785-86 (7th Cir. 2008).  This is true even  if the named plaintiff (the class representative) lacks standing, provided that he can be replaced by a class member who has standing. “The named plaintiff who no longer has a stake may not be a suitable class representative, but that is not a matter of jurisdiction and would not disqualify him from continuing as class representative until a more suitable member of the class was found to replace him.” Id. at 786.

Slip op. at 7.  Thus far, the Court has stated little more than settled principles about the ability to substitute class representatives after certification.  But the Court also commented on pre-certification standing:

Before a class is certified, it is true, the named plaintiff must have standing, because at that stage no one else has a legally protected interest in maintaining the suit. Id.; Sosna v. Iowa, 419 U.S. 393, 402 (1975); Walters v. Edgar, 163 F.3d 430, 432-33 (7th Cir. 1998); Murray v. Auslander, 244 F.3d 807, 810 (11th Cir. 2001). And while ordinarily an unchallenged allegation of standing suffices, a colorable challenge requires the plaintiff to meet it rather than stand mute. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). PIMCO tried to show in the district court that two of the named plaintiffs could not have been injured by the alleged corner. We need not decide whether it succeeded in doing so, because even if it did, that left one named plaintiff with standing, and one is all that is necessary.

Slip op. at 7-8.  The Court then explained that it is unnecessary to know whether all class members have standing to bring claims prior to certification:

What is true is that a class will often include persons who have not been injured by the defendant’s conduct; indeed this is almost inevitable because at the outset of the case many of the members of the class may be unknown, or if they are known still the facts bearing on their claims may be unknown. Such a possibility or indeed inevitability does not preclude class certification, Carnegie v. Household Int’lsupra, 376 F.3d at 661; 1 Alba Conte & Herbert Newberg, Newberg on Class Actions § 2:4, pp. 73-75 (4th ed. 2002), despite statements in some cases that it must be reasonably clear at the outset that all class members were injured by the defendant’s conduct. Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980); Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006). Those cases focus on the class definition; if the definition is so broad that it sweeps within it persons who could not have been injured by the defendant’s conduct, it is too broad.

Slip op. at 9-10.  Later, California authority received a nod from the Court:

At argument PIMCO’s lawyer told us that he could obtain names of class members. If so, he can, as in Bell v. Farmers Ins. Exchage, 9 Cal. Rptr. 3d 544, 550-51, 568, 571 (Cal. App. 2004), and Long v. Trans World Airlines, Inc., 1988 WL 87051, at *1 (N.D. Ill. Aug. 18, 1988), depose a random sample of class members to determine how many were net gainers from the alleged manipulation and therefore were not injured, and if it turns out to be a high percentage he could urge the district court to revisit its decision to certify the class. Cf. Hilao v. Estate of Marcos, 103 F.3d 767, 782-84 (9th Cir. 1996); Long v. Trans World Airlines, Inc., 761 F. Supp. 1320, 1325-30 (N.D. Ill. 1991); Marisol A. v. Giuliani, 1997 WL 630183, at *1 (S.D.N.Y. Oct. 10, 1997). PIMCO has not done this; should it take the hint and try to do so now, this will be an issue for consideration by the district judge.

Slip op. at 13.  The Opinion finishes with a sharp kick to the shins: "PIMCO’s attempt to derail this suit at the outset is ill timed, ill conceived, and must fail. The district court’s class certification is AFFIRMED."  Slip op. at 15.  Nothing like an educational and blunt opinion to keep legal discourse interesting.

My thanks to Kimberly Kralowec for the mention at UCL Practitioner.  And thanks to some guy whose name sounds like "I am - saw the end" for directing me to the case.