The Bright Line Business Law Blog

Trolling for clients on the internet

A recent 9^th circuit case, Barton v District Court, 2005 DJDAR 6720, held that attorneys trolling for clients on the internet by having individuals fill out questionnaires can protect the questionnaires from discovery by relying on the attorney client privilege. I think the Ninth circuit is wrong. There are special problems with mass tort, multiple plaintiff cases and form inquiries. These should be discoverable.

The Barton case arises from Paxil litigation in which large numbers of plaintiffs are suing SmithCline, Paxil’s manufacturer, claiming Paxil caused injuries. According to the Ninth circuit, instead of the “traditional” way of contacting lawyers by walking into their offices, these plaintiffs filled out Internet questionnaires.

This characterization of how clients are obtained is not “traditional,” it’s naïve to suggest that was ever the method in mass tort cases. Attorney websites for ever imaginable mass tort situation abound. Here are two typical examples.  The Internet is full of them.

The Ninth Circuit correctly referred to the practice of “trolling for clients on the internet.” Some clients do meet their lawyers on the Internet and some come in to the office. In both cases, there is a period of time where, even if the attorney does not accept the case, confidential information is disclosed. Information conveyed during that period of time should be protected. However, that time should begin some time after intentionally ambiguous questionnaires are filled out.

A following post will develop the problems inherent in mass tort questionnaires and why they should not be privileged.

"Aye" says the parrot, "Always tell the truth, argh!"

In admiralty law there is an ancient doctrine called “uberimae fidae.” Under this doctrine, the applicant for marine hull insurance has the obligation of “uttermost good faith” to disclose to the insurer any matter that may possibly affect the risk of loss. This obligation extends to all material information, whether asked for or not. The requirement arose from the recognition that ships were usually well over the horizon when applications for insurance would be made and information about the ship’s current condition was usually sparse and unevenly distributed. Often, neither the shipowner nor the potential insurer could know whether the ship was above or below the water at the time the application was made. It was not unheard of, in the days of sailing ships, for unscrupulous owners, upon learning by messenger pigeon of their vessel’s sinking, to obtain marine insurance “after the fact” before the loss was officially reported. Lesser misdeeds included obtaining insurance just before the arrival of typhoons or even pirates at a far off location where the ship happened to be. The doctrine of uberrimae fidae arose to prevent these greater and lesser attempts to obtain marine insurance by taking advantage of an owner’s greater knowledge of potential risks. In California, the uberriame fidae doctrine is codified at California Insurance Code §1900:

1900. In marine insurance each party is bound to communicate, in addition to what is required in the case of other insurance:

(a) All the information which he possesses and which is material to the risk, except such as is exempt from such communication in the case of other insurance.

(b) The exact and whole truth in relation to all matters that he represents or, upon inquiry assumes to disclose.

In light of the things that can actually go wrong with a ship at sea, the nature of relevant information that must be disclosed to the insurer could be very broad. The traditional marine insurance perils clause is a delight to read:

"Touching the adventures and perils we the assurers are contended to bear and to take upon us in this voyage: they are of the seas, men-of-war, fire, enemies, pirates, rovers, thieves, jettisons, letters of marque and countermarque, reprisals, takings at sea, arrests, restraints, and detainments of all kings, princes and people, of what nation, condition or quality soever, barratry of the master and mariners, and of all other perils, losses, and misfortunes, that have or shall come to the hurt, detriment or damage of the said goods and merchandises, and ship, &c., or any part thereof. "

Just compare that to the language in your standard CGL policy!

A recent California case makes the point that, even for landlubbers, the obligation to disclose all relevant information is very high indeed, if not to the level of “uberrimae fidae.” In Mitchell v United National Insurance Co., (2005) 127 Cal.App4th 457, 25 Cal.Rptr.3d 627, the court held that material misrepresentations of fact on the application for insurance permit the insurance company to cancel the policy even after a loss and even if the misrepresentations were not intentional. The insurer has no obligation to independently verify the accuracy of the representations.

On April 11, 2000, Mitchell applied for fire insurance on a recently purchased building. On the application he told the insurer that the building was a 3420 square feet commercial building used as a video production studio and he had a $20,000 payroll with $300,000 in receipts. He also represented that the building met city code requirements and there was no other insurance. In fact, the building was only 2000 square feet, was used only to film a single music video for two days and was then leased to a tenant who operated a garment manufacturing business and the building was subject tot a city abatement order and could not be occupied until certain repairs were undertaken. In November of 2000 a prospective buyer set fire to the building and died in the blaze. When Mitchell made a claim under the policy, the carrier, then examined the inaccurate application, noticed the discrepancies and rescinded the policy.

Predictably, Mitchell sued the carrier, but the court held that the insurer was entitled to rescind the policy. The application contained several inaccuracies. The insurer pointed out that owner-occupied business of a certain size and location were important factors in setting premiums. Mitchell claimed that at the time he submitted the application, he intended to use the building for music video productions but this never came to pass, essentially arguing that the inaccuracies either were minor or unintentional.

The court of appeals properly relied on Insurance code sections 331 and 359 in holding that the insurer can rescind for any material misrepresentation. A material representation in one that would cause to the insurer to either decline the application, amend the terms or change the premiums. If the insurer asks for information on the policy it’s pretty safe to conclude that the information is “material” to the insurer. The insurer's questions regarding the building's size use and codition were all "material" and inaccurate answers were given in reponse. Therefore, the insurer did not have to pay for the fire loss.

It is essential to be fully truthful in filling out applications for insurance. There are specific statutes governing most types of insurance in California that may limit the insurer’s right to rescind, but generally the insurer can rescind the policy even after a loss if an unintentional material misrepresentation was made in the application for the policy. Even if you don’t intend to run afoul of pirates, practice uberrimae fidae in all insurance applications, to be safe.

Small Business Scam

A small business client of our firm received an “official notification” that his corporate formalities are not being observed. If he immediately sends in $175 before it’s too late, he can avoid sanctions “including audits, lawsuits and summons.” If that wasn’t enogh to generate a little anxiety, there is a “Personal Liability” section, in bold type, stressing that failure to follow corporate formalities will expose shareholders to personal liability.

The form then emphasizes that  action must be completed within 20 days to ensure “timely processing” of the corporate miunutes.  Upon receipt, miuntes and resolutions will be prepared just in the nick of time, before anything bad happens. There is no justification for the urgency set out in the form, or why “timely processing” is so important. Our firm’s turnaround time on the same documents is less than one day.

I think this mailing is deceptive advertising. Don’t fall for it. It implies there is an impending emergency and the corporation is actually out of compliance.  Why else would a company get a mailing from “Board of Minutes and Resolutions/ Compliance division in Sacramento?

Oh, and the “real address of the sender is a UPS STORE

915 L ST # C

SACRAMENTO, CA 95814-3707

You can verify that by calling 916-444-3214.

It appears to be deceptive advertising under the California False Advertising Act, California Business and Professions Code § 17500 et seq., and the Unfair Business Practices Act Business and Professions Code § 17200 for at least following reasons:

1. The form is intended to be confused with official state government correspondence.
2. The language pressures the recipient into acting quickly because of an assumed violation of law.

3. The corporate ID number gives the impression the form is government generated
4. The apparent Sacramento location indicates a government office when a post office drop is actually used.

5. The use of the terms “compliance division,”  “notice date,” and “enforcing” infer that the recipient is under official investigation.

If you are a small business corporation, made a point to have your attorney review corporate minutes and resolutions and ensure formalities are observed. Often there are significant matters that should be in the minutes, yet this solicitaiton makes no effort to ensure the preparation of accurate and legally effective minutes. Many law firms provide this minutes and resolutions  as a maintenance service at minimal charge, and others include this service in a package annual legal checkup provided to small businesses.  Most attorneys wouldn’t charge $175 for a simple review of and preparation of routine small business annual minutes.

Thanks to our client for the heads up.  And see them for all your yachting needs.

 

That'd be me

Blog 702 notes that two attorneys will be indexing and reporting on Daubert issues for the blog.  One of those mystery attorneys is me. We tentatively plan on getting all current California appellate expert witness cases (Daubert or not) to the 702 Blog. As cases get depublished, we'll track that, too. Any help or suggestions to make the worthy project more helpful to academics and practictioners would be gratefully appreciated.

In case you haven't checked it out, you are missing a unique web resource. Blog 702 is one of the great benefits of the internet with a very comprehensive data bank of expert witness cases indexed by area of expertise, state and by federal circuit. The case reporting and tracking is neutral and comprehensive.  They have done great work in the finest tradition of the legal profession. I'm honored to be able to make a contribution to part of the project.

Common Good: Common Good's Second Annual Gatekeeper Awards

Common Good: Common Good's Second Annual Gatekeeper Awards.

Common Good has announced the winners of its second annual Gatekeeper Awards. The Awards highlight the appropriate role of judges in determining who can sue for what. They honor judges whose decisions eliminate frivolous lawsuits.

The First Annual awards are here.

Via Overlawyered

Congratulations and a sincere thanks to all the winners.

Anti-Evolution Stickers invalidated

I wrote about the Cobb County evolution creation trial a few months ago. The Georgia District Court’s opinion is here.

The case arises from a decision by the school board to place a sticker in the front of biology textbooks that says:

“This textbook contains material on evolution. Evolution is a theory, not a fact, regarding the origin of living things. This material should be approached with a n open mind, studied carefully, and critically considered.”

The plaintiffs, parents of children in the school district, claimed that the sticker violated the First Amendment’s Establishment Clause.  The trial court held correctly but unfortunately, that there is no bright line for evaluating establishment clause claims.”  Although I am generally in favor of such bright line evaluations, in this case, I can’t think of a workable bright line Establishment Clause test.

The test the Court used was set out by the Supreme Court in Lemon v Kurtzman 403 U.S. 602. In Lemon, the Court held that a government sponsored message such as the sticker in this case violates the establishment clause if it fails one of these three prongs:

1.      It does not have a secular purpose.

2.      It’s principal or primary effect advances or inhibits religion.

3.      It creates excessive entanglement with religion.

In applying the first of the Lemon prongs, the court held that the sticker had a secular purpose—in fact two of them.  First, the school board intended to encourage student critical thinking. Second, the school board wanted to reduce offense to those whose personal religious beliefs might conflict with the teaching of evolution.

The court noted that the school district had refused to teach evolution for many years and was updating its biology curriculum in 1999.  Knowing there would be a significant objection from many families the school board sought to soften the blow by including the sticker. The court found that this was the main purpose of the sticker.

In applying the second Lemon prong, the court considered whether a disinterested reasonable person would conclude that the sticker contained an endorsement of religion.  This fortunately, is usually a legal question based more or less on judicial interpretation of social facts, and here the court concluded that a reasonable person would conclude the sticker conveyed and endorsement of a certain form of religion,  and that such persons were favored members of the political community so as to require a sticker to assuage their more privileged concerns.

The court did examone the social and historical background of the evolution creation conflicts routinely occrruing in public schools.  It also focused on the wording of the sticker itself “Evolution is a theory, not a fact.”  This language tqken directy from many religious creationist claims is essentially a “code phrase” routinely used by creationists opposed to evolution. Its use displays either a religious intent or a fundamental ignorance of science and the history surrounding the debate.  The court did not find the school board members to be ignorant and noted the historically loaded connotation of the “evolution is a theory not a fact” phrase. As the court observed, The Establishment Clause, at the very least, prohibits government from appearing to take a position on questions of religious belief and this is exactly what the School Board appears to have done.

            Although the governmental action is invalidated if any Lemon prong is violated, the court went on to hold that the school board had effectively entangled itself with religion by taking a position that agrees with and endorses fundamentalists and creationists but not necessarily all other religious beliefs. 

Faulty Expert Testimony Results in Reversal of Conviction

Link: The Globe and Mail: Texas mother's conviction overturned.

Coincidentally after my last post, this sad case of Andrea Yates made the news.  Andrea Yates was the Texas mother who drowned her five children.  At trial she relied on the insanity defense, but he state's expert testified that she was not insane and had likely gotten the idea from a recent episode of the TV series Law and Order (she was apparently a big fan). It turns out that there was no such episode.

The case underscores the importance of the trial court's duties to ensure that expert testimony is reliable.  There are grave consequences for the legal system if improper opinions are admitted based on some claim that they are "expert" testimony. The trial judges really are the "gatekeepers" here.

Update:  Blog 702 has pertinent observations here.

Federal Science Reference Manual

Quite often, expert opinions can verge on the outlandish.  I’m sure there’s some reason to have expert testimony on UFO abductions, ESP and spirit channeling for some particular court cases. In my experience, the expert testimony is not so fanciful, but there will be attempt to dress up the expert’s purchased "junk science" opinion as based on some science, when in fact, it doens't qulaify as science. 

A quick review of how state courts handle expert opinion testimony is in order. In most cases, a witness can only testify on matters within the witness’s personal knowledge. Evidence Code § 702. Generally, a witness can only testify as a “percipient” witness.  “Perceive” means to acquire knowledge through the senses.  Evidence Code § 170. Such witnesses testify only about facts, not opinions, in court.  There are some matters in which such witnesses can express opinions, but those are limited. Evidence Code §800. Evidence Code § 813 permits a property owner to offer an opinion on the property’s value, for example. And if you are an “intimate acquaintance of a person, you my render an opinion as to that person’s sanity without any medical qualifications. (This bit of legal trivia comes in handy at cocktail parties!) Evidence Code § 870. Also, if you are familiar with the handwriting of another you can express an opinion on whether a document is in that person’s handwriting.  Evidence Code § 1416. (I’ll leave aside the sometimes difficult question of distinguishing between “facts” and “opinions.”)

Nevertheless, the general rule is that only experts can provide opinion testimony at trial. Opinions are limited to those sufficiently outside common experience that they would be useful to the trier of fact.  They must also be based on the expert’s qualifications, including special knowledge, skill, experience and training. Quite often the expert’s opinions will sound scientific but will not be.  It will be up to the attorney to prevent unqualified “junk science” from coming into evidence.

There are two sections of the evidence code that provide for this procedure.  First, Evidence Code § 802 permits an expert to be examined on the basis for the opinions by the opposing party before being permitted to express the opinions.  The preliminary facts, such as the qualifications of the expert and whether the opinion will help the trier of fact at all, or is merely “junk science,” can be determined by the court outside the presence of the jury in a hearing conducted under Evidence Code § 402.  Often this issue is raised in a pretrial motion in limine.

Challenging junk science opinions should begin by defining “science” to the court.  Here, the Federal Judicial Center has been particularly helpful by publishing its “Reference Manual On Scientific Evidence.”  As this is from a neutral and scholarly source heavily relied upon by federal judges, it should be persuasive to state judges as well.  This document is lengthy but should be reviewed before the deposition of any dubious experts in a particular case so that the questions relating to the science can track the manual and provide later support for the motion in limine, or questioning at a 402 hearing or at voir dire at trial. There is no question that a lot of junk science testimony gets into the courtroom becasue it is not challenged by the opposing side.  This Manual provides the general informaiton needed to challenge a "junk science" expert.

It is important that the expert you have hired understands the legal rules regarding experts and the necessity to be able to back up the opinions expressed.  If you are faced with an opposing expert who is professing some form of junk science, then the Reference Manual should be reviewed prior to that expert’s deposition so that the answers to deposition questions can be used as a basis to exclude the expert’s junk science opinions on a motion in limine, at a 402 hearing or during trial when the expert can be cross examined on voir dire.

I will analyze California’s legal standard regarding admissibility of expert testimony and compare it with the federal standard in a later article.

Circuit Court of Appeals Blogger

Seventh Circuit Court of Appeals Judge Richard Posner is "guest blogging" at the Leiter Reports. There are several great entries on Judge Posner's theories on natural law, appellate jurisprudence, free will and punishment, faith based morality and precedential authority of foreign courts decisions.  I found all of the articles and comments to be very thoughtful, and well done to Brian Leiter, Professor of Law, University of Texas, wholse blog is often provocative yet thoughtful.  Through January 2.

Mold Junk Science Information

Check here for  Junk Science Mold Info. Most of the mold litigation I've been involved with seems to involve junk science. I'm open to persuasion, but after attending a number of depositions of "mold experts," I put mold into the "junk science" category.  I'm glad to see that others agree.