It is necessary that natural gas be substituted for coal and oil as an energy source if the world is to have any chance of avoiding runaway greenhouse gas (“GHG”) emissions, particularly from the developing world.

At present, it is unrealistic to expect renewable energy sources (solar, wind and geothermal) to serve as a foundation for national energy policy. In the United States, even with the best use of conservation, energy efficiency and renewables, the combination of these various “alternatives” will not become a substitute for fossil fuels for a very long time.

In a thoughtful article in the New York Law Journal on January 2, 2014, titled  “Countries Approach Fracking With Interest and Caution,” Stephen L. Kass, makes the case that natural gas from hydraulic fracturing should be an important component of a comprehensive energy strategy, both in the United States and abroad.  According to Kass, fracking is attractive to: (1) economists seeking to stimulate development; (2) national security officials seeking independence from unreliable oil suppliers; and (3) environmentalists who seek to avoid runaway GHG emissions, particularly from developing countries.

In the United States, fracking now accounts for a staggering 25% of domestic natural gas (a figure expected to rise to 50% by 2035). In addition to lowering energy costs, according to Kass, fracking is widely credited with reducing U.S. “carbon intensity” and GHG emissions.

Fracking places the environmental community between the proverbial rock and a hard place. On the one hand, environmentalists recognize that fracking offers enormous environmental benefits in terms of reduced GHGs. On the other hand, environmentalists continue to be concerned that fracking fluids may contaminate precious water sheds.

Therefore, it is the goal of the environmental community that the amount of water used in fracking be minimized through recycling, that double-walled drill shafts and other controls be effectively utilized to minimize fugitive methane releases, and that waste fluids be adequately treated on-site before being recycled, discharged to water treatment plants or re-injected. The oil and gas industry’s refusal to disclose the composition of its fracking fluids has become an unnecessary distraction from these key environmental concerns.

In the long run, environmental concerns are likely to be largely addressed by increased and moreeffective regulation and by self-policing by industry. From the standpoint of providing an inexpensive fuel to tens of millions of American homeowners, the stakes are simply too high for environmentalists, who support fracking with these reservations, to concede defeat. As industry continues to demonstrate that fracking can be performed in a safe and environmentally sound manner, opposition to the practice will most likely diminish.

This blog was originally posted on January 24, 2014, on the Toxic Tort Litigation Blog by Bill Ruskin. Click here to read the original entry. 

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Posted on March 13, 2014 03:01 by Steve Crislip

What does weather have to do with the practice of law? It is the term now used to identify web-based storage of a lawyer’s files and records instead of the usual paper files and firm server, backed up on local electronics.  It is called Software as a Service (SaaS), or on-demand software.  Technology as it has evolved is universally viewed as a requirement for modern lawyers. Clients expect it, but do not expect to pay for it.  So, to avoid the high costs of servers, back-ups, installation, maintenance and support, some are turning to subscription services for a fixed fee (example, Dropbox and many others).  Of course, the advantage is the management of a cost and then the accessibility of data at any time over a range of devices.

Wonderful:  What could go wrong with that?  If it can, it will and there have been a number of breaches individually of the lawyer, and the firms as well as the service providers.  What then is a prudent lawyer or firm to do?  

Like so many things in the law, this area is evolving and starting to gain traction.  The ABA 2013 Legal Technology Survey Report looked at this in depth and noted a big jump in use (50% increase from 2012 to 2013) now amounting to about 30% of the respondents reporting its use.  Individuals and small firms, along with the West Coast (used to tech businesses) and southern (result of Katrina) lawyers, were the biggest users.  A Lexis Nexis study says 2014 is poised to be the year of the cloud in “small law”.

Recognizing our duties to clients to protect their data and confidential communications, “big law” is slower to come over to this so-called cloud storage.  As a group, lawyers are slow to accept changes anyway.  Bar groups have started to examine the ethics of cloud storage and at last count, 17 jurisdictions have all agreed that cloud computing is ethical. (See, e.g., New York City Bar Report December 2013).  A trend is developing toward acceptance, it seems.  I suspect we shall see more use there, and more gradual acceptance, particularly where clients want it for their use.

Bear in mind that the professional rules still apply. The holdings stress all the same duties as before and therefore put the lawyer in a real due diligence situation before using.  Lawyers’ actions with regard to safekeeping fall into the reasonable conduct standard, and not strict liability or as a guarantor of confidentiality.

The lawyer or firm needs to be able to document each step they took to select a provider and to produce it all later to show they acted reasonably.  The vendor’s reputation will matter, their track record, their service agreement, their coverage (cyber insurance) and yours.  You will really need to review their written terms and make sure they have the same duties you have.  Cyber insurance issues, if you have acquired such coverage, need to be reviewed and compared so there are no gaps.

Sure there will be risks to balance against any convenience, affordability, or increased production.  While most lawyers do not want to be out on the “bleeding edge” of new things, this may quickly evolve into an accepted method for law firms to store data.  There was always an old school risk of server damage and physical loss to your files, so any cloud based use will be a balancing of that new risk as more Bars approve the process.  At one point we were told not to use cell technology for client issues.  Like that example, technology evolves and lawyers have to adapt to meet needs of clients and their expectations.

This blog was originally posted on Lawyering for Lawyers on March 8. Click here to read the original post. 

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Is There A Doctor in the House?

Posted on March 7, 2014 03:41 by Patrick J. Kearns

The Patient Protection and Affordable Care Act, often referred to as the “Affordable Care Act” (ACA), or perhaps more commonly “Obama Care,” has had no shortage of media coverage and controversy since it was signed into law nearly four years ago (Yes, it has been 4 years! President Obama signed the Act into law on March 23, 2010).  Several aspects of the ACA have been, for better or worse, more “visible” than others; such as the heavy focus on the “individual mandate,” i.e. the requirement that uninsured citizens obtain health insurance or pay a penalty; the impact on employers and small businesses; and the more recent website debacle where many people seeking to sign up for health insurance on the newly created exchanges were unable to do so due to technical issues with the ACA’s website. 

One of the less discussed issues with the ACA however, is the potential for a massive provider shortage.  At its basic level, one of the primary purposes of the ACA is to increase the number of insured Americans. Indeed, according to various estimates, the implementation of the ACA is anticipated to provide insurance to 25-30 million additional individuals who would otherwise not be insured: “[T]he Affordable Care Act will also ensure that every American can access high-quality, affordable coverage, providing health insurance to nearly 30 million Americans who would otherwise be uninsured.” (Quoted from 2014 Funding Highlights bulletin published on Coupled with provisions providing for free or reduced cost annual exams; greater Medicare coverage; increased coverage for younger adults; and increased coverage for preventative care and testing such as mammograms and colonoscopies; that means more insured people utilizing more health care services. Consequently, the question arises of whether we have enough physicians and providers to administer the increased health care demands?  

The Obama administration has acknowledged this potential and recently proposed a Fiscal Year 2015 Budget for the Department of Health and Human Services which attempts to address this contingency, at least in part. According to the HHS’s “Fiscal Year 2015 Budget in Brief” “[t]he Budget makes new and strategic investments in our nation’s health care workforce to ensure rural communities and other underserved populations have access to doctors and other providers. In total, $14.6 billion will be invested in three key initiatives: $4 billion in expanded funding for the National Health Service Corps, $5.2 billion for a new Targeted Support for Graduate Medical Education program, and $5.4 billion for enhanced Medicaid reimbursements for primary care. (U.S. Dept. of HHS “Fiscal Year 2015 Budget in Brief”;

While the long-term idea behind the ACA may be to reduce health care costs and the need for excessive or increasing health care services (i.e. an insured population is presumably healthier and will therefore require less health care), will we have enough physicians, nurses, and other providers necessary to get us healthier in the short term? 

The full impact of the Affordable Care Act, positive or negative, remains to be seen. You can learn a great deal more about the Affordable Care Act, the difficulties with its implementation, and its impact on you and your practice, at DRI’s 2014 Medical Liability & Health Care Law Seminar, taking place in Las Vegas on March 20–21, 2014 at the Cosmopolitan Hotel.  Among many top-notch presentations at this year’s seminar you will not want to miss Kimber Lantry, Executive Vice President for AXIS Insurance’s Health Care Unit, give a fascinating presentation on “The Unintended Consequences of the Affordable Care Act.”

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Two recent district court decisions emphasize that food labeling class action defendants must carefully review complaints to identify what each named plaintiff contends it reviewed and whether the allegedly deceptive statements even affected the named plaintiff’s decision to purchase a product. These plaintiffs often string together unrelated allegations that have nothing to do with their purchases.  If a defendant connects the dots and shows just how unrelated those allegations are, you have a much better chance of succeeding early in the case.      

The first case involves five gallon bottled water that is municipal tap water that the seller put through a purification process.  In the Chicago Faucet Shoppe, Inc. v. Nestle Waters North America, Inc., No. 12 C 08119 (N.D. Ill. 2/11/14), the plaintiff alleged that the defendant failed to disclose that the water is municipal tap water and not natural spring water.  After buying the bottles for years, that plaintiff realized it was simply purchasing municipal tap water that underwent a purification process.  That defendant apparently referred to “spring water” on its website, invoices, and panels on its delivery trucks. Importantly, it did not include that statement on its labels.  That was crucial for purposes of the defendant’s preemption argument. Federal regulations exempt “purified water” from disclosing if the water comes from a community water system.  21 C.F.R. § 165.110(a)(3)(ii) & (a)(2)(iv).  In fact, the FDA considered but rejected requiring disclosure for purified water, concluding that consumers purchasing it were more concerned with purity and not the source.
This plaintiff knew it couldn’t force the defendant to add more to its label than federal law required. Instead, it argued that it only wanted the defendant to disclose the source in marketing materials and on invoices. But marketing really is no different than labeling. The federal Food Drug & Cosmetic Act prohibits states from imposing any food labeling that is not identical to a federal standard.  Because the federal regulations do not require “purified water” to disclose if it came from a municipal water source, federal law preempted this plaintiff’s claims even though it framed the targeted materials as marketing materials rather than labeling.  
You may wonder why the plaintiff did not allege affirmative fraud based on statements on the website and invoices referring to Ice Mountain “spring water.”  Indeed, the court wondered the same thing, so it analyzed (and rejected) an affirmative misrepresentation claim even though the plaintiff did not plead it.  Of course, the most likely reason that the plaintiff did not pursue an affirmative misrepresentation claim is the near impossibility of getting such a class certified.  The court did not touch on that issue, but anyone familiar with consumer fraud class actions certainly recognizes it.  If the plaintiff built its case on specific statements on the website or on invoices, it would have to explain how the court could certify a class without getting mired in individual issues of who saw the website, who relied on it, and what other sources of information they possessed.  That is why these types of food labeling claims tend to rely entirely on the product labeling as opposed to occasional statements on websites or other places.  
The next case is Kane v. Chobani, Inc., No. 12-CV-02425-LHK (N.D. Cal. 2/20/14).  This case is familiar to people following food labeling class actions and began in May 2012.  Since then, the court has granted various motions to dismiss but allowed that plaintiff more opportunities to plead cognizable claims. At this point, the plaintiff was on her fourth attempt and, thankfully, it is the last one.  This case is a little more typical because it is in the Northern District of California and relies on California consumer protection laws.  This plaintiff has been pursuing claims falling into two categories.  The first relates to Evaporated Cane Juice (“ECJ”); she alleges that ECJ is nothing more than sugar or dried can syrup, so referring to ECJ on the label is misleading and violates federal regulations requiring manufacturers to refer to ingredients by their common and usual names.  The second class of claims are “all natural” claims.  She alleges that using fruit and vegetable juice and turmeric for color was false and misleading because those are not “all natural.”
One of the most useful portions of this order is its discussion of California UCL claims under that statute’s “unlawful” prong.  Some plaintiffs have successfully argued that they need not rely on a labeling statement that is “unlawful”; rather, they only need to plead that it is plausible that a defendant broke a law (typically, a federal food labeling requirement).  In fact, a handful of other courts in the Northern District of California have accepted that rationale.  But Judge Lucy Koh was having none of it.  She reasoned that any UCL named plaintiff must allege that they relied on the offending statement or conduct, even under the “unlawful” prong.  This will be a developing area under California consumer fraud law.  At some point, the California Supreme Court or the Ninth Circuit will resolve this growing split among lower courts interpreting allegations of “unlawful” conduct and UCL claims.  For now, unfortunately, the outcome in such cases may turn on which judge handles a particular case.  
The court then analyzed whether this plaintiff actually relied on the alleged misstatements. This really is an interesting portion of the opinion, particularly considering how Judge Koh evaluated the plaintiff’s changing allegations over the course of the case.  As to ECJ, the plaintiff initially contended she did not realize that ECJ was just another sweetener.  But in other portions of the amended pleading, the plaintiff repeatedly referred to sugar and dried cane syrup interchangeably.  Judge Koh did not believe it was plausible that the plaintiff could realize that “dried cane syrup” was a form of sugar, but that “evaporated cane juice” was not.  Similarly, the plaintiff earlier sought a preliminary injunction (perhaps an unwise move) and submitted a declaration indicating she would not have purchased the product if she knew it contained “dried cane syrup”; again, this showed she knew that dried cane syrup was the same as sugar.  And despite the court’s earlier rulings, this latest pleading failed to explain how the plaintiff could understand that dried cane syrup was a form of sugar but was oblivious to that fact regarding ECJ, particularly considering that she purported to read and rely on the label.  
Perhaps showing some desperation, the plaintiff and her counsel suggested that the “cane” in ECJ could have referred to some other type of cane, such as bamboo cane or sorghum cane.  But during the hearing on the plaintiff’s preliminary injunction motion (again, probably not a good idea), the plaintiff’s counsel admitted that he does not know what people might think when they see ECJ on a label or whether they may believe it is something other than sugar cane.  It was too much for Judge Koh, who found the “which cane is it” argument to be nonsensical.    

The plaintiff also tripped over her own allegations because she acknowledged that “fruit juice concentrate” is a well-known added sugar.  In light of that admission, it was implausible that the plaintiff thought “evaporated cane juice” was something healthful when she admittedly knew that “fruit juice concentrate” was little more than sugar.  Juice was juice from the court’s perspective.
The court then turned to the “all natural” claims that relied on Chobani using fruit or vegetable juice concentrate as coloring.  The defendant’s labeling explicitly disclosed that it adds fruit or vegetable juice for color, and the plaintiff purported to read the label.  Hoping to salvage this claim, the plaintiff now alleged that the juices added were actually processed, unnatural substances. The court was not impressed.  In three prior complaints and several hearings, the plaintiff never before disclosed a theory that the juice concentrate used for coloring somehow was not “natural” due to some unidentified aspect of its processing.  It was not enough that the plaintiff alleged the juices were “highly processed unnatural substances far removed from the fruits or vegetables they were supposedly derived from”; that was nothing more than a conclusory statement without any factual support.  Judge Koh wanted to know how or why the juices were not natural, and this plaintiff never answered that question despite several opportunities.
Some take away points from Chicago Faucet Shoppe and Kane to consider:
  • In terms of substantive law, reliance and the “unlawful” prong of California’s UCL needs clarifying.  The Northern District of California likely is the federal court with the greatest volume of such claims, and some of its judges are split on whether a named plaintiff must have relied on the allegedly-unlawful statement.  
  • Dissect the plaintiff’s allegations and take the court step-by-step to identify: (1) what the plaintiffs actually saw or relied on; (2) what they included in the complaint as “fluff” (e.g., perceived bad facts that didn’t play a role in their purchase); (3) how their allegations may disprove their claims (e.g., they admit elsewhere that a listed ingredient is known to be “unnatural”); (4) conclusory assertions about ingredients that lack factual bases (e.g., something is “unnatural,” but the plaintiff doesn’t describe how or why); and (5) implausible assertions—courts are slowly showing more willingness to recognize that a label didn’t deceive a plaintiff merely because he or she alleged as much.      
Food labeling cases continue to be a favorite among the plaintiffs’ class action bar.  No doubt, the initial success in surviving motions to dismiss—often followed by quick class-wide settlements—encouraged them. Many courts, however, seem to be taking a closer and more skeptical view of these claims.
James Smith is a member of the Bryan Cave Food and Beverage Team and of the Class and Derivative Action Client Service Group.  He is a partner in the firm’s Phoenix office.     

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A lawyer has an ever evolving duty to safeguard confidential client information. We don’t just lock our doors and keep our voices down—we encrypt our files, we scrub our metadata—and now, we tackle the issue of how we safeguard our communications with foreign clients. 

The 2008 amendments to the Foreign Intelligence Surveillance Act permit the Director of National Intelligence and the Attorney General to jointly authorize warrantless electronic surveillance, for one-year periods, targeted at a foreigner who is abroad. There is limited, if any, protection for foreigners engaged in communications with American attorneys. Communications that American lawyers take for granted—our phone calls and e-mails with client—may be subject to interception when they involve a foreign client. 

The Edward Snowden scandal brought apparent legitimacy to this previously hypothetical concern. The documents already “disclosed” through the Snowden affair reveal N.S.A. actions in the foreign monitoring of communications between an American Law Firm and its foreign client. As explained in a recent New York Times Article, Spying by N.S.A. Ally Entangled U.S. Law Firm by James Risen and Laura Poitras, the Snowden documents reveal that the American firm was monitored while representing a foreign government in a trade dispute with the United States. Although the surveillance was conducted by the government of Australia, the documents demonstrate apparent acquiescence, approval, and use by the United States government - notwithstanding the very trade dispute at issue. 

If you think the Supreme Court would not stand for this, it appears five justices might disagree. When the ACLU challenged the 2008 amendments in Clapper v. Amnesty International, lawyers raised the concern that their communications would be targeted and intercepted as part of the Act. The Court dismissed these concerns as “speculative,” and declined to provide protection.  It is unclear whether that position would remain the same in this post-Snowden era. Nevertheless, the best way to safeguard foreign client information may be the oldest: face-to-face. On the bright side, if your client is in a tropical paradise, perhaps you finally have that excuse to expense your long awaited client visit. 

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Mediation – Past is Prologue

Posted on February 28, 2014 03:08 by Joseph A. Kaufman

Contemporary mediation defined by Black’s Law Dictionary as “a method of nonbinding dispute resolution involving a neutral third party who tries to help the disputing parties reach a mutually agreeable solution,” can trace its roots back to ancient civilizations.  As a method of dispute resolution mediation has been used in a variety of cultures for more than 3,000 years. The historical record includes references to the use of mediators in commercial cases in Phoenicia and Babylon, and ancient Greek and Roman civilizations were known to resolve disputes through mediation as well.  

Mediation can be thought of as an innately human activity that civilizes us and keeps the peace.  In a deeper sense, forms of mediation can be found in religions across the globe.  In that religious context, Paul directed the Corinthians to appoint people from their own community for the purpose of resolving disputes rather than submitting disputes to the court for resolution. (I Corinthians 6:1-4). Buddha encouraged adoption of the middle way or middle path as the means to achieve calm, vision, insight and, indeed, enlightenment. Additionally, Native Americans employed their own non-violent dispute resolution techniques long before the arrival of Europeans on the Continent.  Some similar dispute resolution processes can still be observed today in the tribal councils in the Pashtun areas of Afghanistan and Pakistan.  

Recognizing the long historical use of mediation as a means of peacefully resolving disputes is worth remembering the next time you find yourself mediating a case.  The historical roots of mediation are also worth acknowledging as societies continue to embrace new technologies that can potentially change the way contemporary civil disputes are resolved.  

Contemporary mediation has its roots in dissatisfaction with the civil litigation process.  In addition to sometimes being less than civil, litigation can be and often is extremely expensive, both to the parties and the state.  Supreme Court Chief Justice Warren Burger remarked upon the problem: “We may well be on our way to a society overrun by hordes of lawyers, hungry as locusts, and brigades of judges in numbers never before contemplated. We have reached the point where our systems of justice—both state and federal—may literally break down before the end of the century.”  Remarks at the American Bar Association Minor Disputes Resolution Conference (May 27, 1977).  “For many [civil] claims, trial by adversarial contest must go the way of ancient trial by battle and blood…”  Warren E. Burger, 70 A.B.A.J. 62, 66 (1984).  In light of the inherent burdens litigation places upon those involved, in 1976 Chief Justice Warren Burger invited Professor Frank E. A. Sander of Harvard Law School to present a paper at the Roscoe Pound Conference of 1976.  This historic gathering of legal scholars and jurists discussed ways to address dissatisfaction with the American legal system and to reform the administration and delivery of justice.

Professor Sander’s paper Perspectives on Justice in the Future urged a widespread adoption of non-litigious forms of dispute resolution, not least of which was mediation.  State legislatures took up the call and became focused on the development of mediation, and law and business schools joined in the research.  In 1979, the CPR (Conflict Prevention and Resolution) Institute was founded, backed by companies and professional firms, and began to explain the idea of mediation.  Getting To Yes by Harvard Law School Professors Roger Fisher and William Ury was published in 1981.  In 1983, Harvard Law School, MIT and Tufts founded the Program on Negotiation.  Two years later came Pepperdine’s Straus Institute for Dispute Resolution.  By the late 1980s, the Association for Conflict Resolution and the ABA Section of Dispute Resolution were established. Mediation rules were then codified and amended throughout the United States.  Consequently, mediation as an integral part of the civil litigation process developed and virtually all litigators are now as familiar with mediations as they are the court room.    

Over the years, lawyers and non-lawyers have found numerous benefits to mediation over trial.  First and foremost for the non-lawyers is the cost.  While mediators and mediation facilities charge fees (in addition to the fees charged by the lawyers for each party), the mediation process is generally much quicker and much less expensive than litigating a case through trial. Perhaps most importantly is the fact that mediations are completely confidential.  This confidentiality allows parties to discuss the true strengths and weaknesses of their respective cases in a truly open and honest manner without the risk of educating the other side.  Another benefit is control.  A party can mediate and control the outcome or go to trial and give control to 12 complete strangers – who can never truly know as much about the case as do the parties – and who certainly do not care about the outcome of the case (at least not to the degree as do the parties).  

As the development of mediation and other forms of alternative dispute resolution has changed the way cases are litigated and resolved, technological advances may now bring changes to the way we mediate those cases.  Online Dispute Resolution (ODR) is a form of alternative dispute resolution which brings technology to the table to facilitate the resolution of disputes between parties.  Moving the mediations online and with the assistance of software developed specifically for the purpose can potentially change the way mediations are conducted in the future. Processes that were once assisted by the Court or third parties can now be moved online, from the initial filing of a claim, the appointment of a neutral, the sharing of evidence, to real time hearings and the ultimate resolution of a matter.     

ODR has the potential to take the human element out of the process with technologies like automated negotiation and blind bidding.  Parties can submit several offers and if the bids of both parties come within a predetermined range or dollar amount, then the technology automatically settles the dispute in the midpoint of the offers. Using technology to settle the case encourages the parties to reveal their bottom line offers and demands, splitting the difference when the amounts are close.  In addition to letting the technology work for you, ODR mediations can be mediator assisted. As these technologies are embraced and the number of ODR companies offering these services continues to grow, it is possible that mediations of the future will look quite different than mediations of today.  Even so, the end result - the peaceable resolution of disputed claims – will remain the same.   

DRI’s ADR Committee is devoted to addressing issues of interest to ADR professionals, attorneys and their clients. The ADR Committee explores the practical implications of using arbitration, mediation and negotiation as cost effective and time-saving alternatives to litigation, and is a key resource on staying up to date with the latest trends and developments in the field of ADR.  For continued information on ADR, please consider joining the ADR Committee.   

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Posted on February 27, 2014 03:15 by Steve Crislip

You take comfort when you walk on to a plane that the flight crew always runs a printed checklist on every aspect of the flight and that most systems on the aircraft are duplicated.  If you were awake, you might have heard the scrub or circulating nurse doing a sponge and instrument count before and after your surgery. These are routine and fundamental procedures in these professions.  

With the number of claims and their severity on the rise against legal professionals, you might just wonder why we do so little check-listing.  I often remind younger lawyers that spell-checking is not proofreading. Double-checking legal documents by proofreading seems to be a dying art.

A successful major insurer of law firms (Attorneys Liability Assurance Society, or ALAS) recently put on a training program featuring an engineer who was a pilot, and later became a medical doctor who then became an astronaut.  Having retired from NASA, he does quality control for a large metropolitan hospital.  His point was that we lawyers can control mistakes to a greater degree than other professional errors, and should utilize basic safety type checklists with the fundamental communication read back. Every new pilot learns quickly to read back the controller’s direction to take heading 240° at 10,000 feet to avoid that simple little avoidable mistake of running into another aircraft at the wrong altitude and heading.  The same basics apply to an itemized list of procedures, which as the surgeon Atul Gawande wrote, can “hold the odds of doing harm low enough for the odds of doing good to prevail.”

In a recent WSJ column, Jason Zweig argued that intelligent investors should consider doing the same standardization for basic investment decisions, and thereby reduce the risk of costly errors you have learned by past mistakes.  He argues the biggest investment flaw comes from inconsistency which can be smoothed out to avoid making the same mistake again.

So, think with me here as to our profession.  Would not real estate title research and opinions, business closings, legal research and litigation filings, estate planning and many other aspects of the practice make logical checklist items?  My argument is that we can take control of the mill run mistake and narrow its occurrence by a simple read back of all essential and required steps on a checklist to get repeat legal tasks done. 
Roger that.

This blog was originally posted on February 4 on “Lawyering for Lawyers.” Click here to read the original post. 

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Amendments to FRCP 45 Enacted

Posted on February 25, 2014 03:00 by Michael P. Lowry

On December 1, 2013 an amended FRCP 45 went into effect.  Why did it require amendment?  “Current Rule 45 creates what the Advisory Committee came to call a ‘three-ring circus’ of challenges for the lawyer seeking to use a subpoena.”  Report of the Civil Rules Advisory Committee, May 8, 2012 (page 80 of the link).  Those with federal cases need to be aware of the changes this post attempts to address.  As always, I encourage you to actually read the rule yourself.

To help put these changes in context, consider this hypothetical.  Assume I am defending a car manufacturer against a product case involving one of their fine automobiles cars.  The case is venued in the District of Nevada.  I want to inspect what remains of the car; envision the car inspection scene from Fight Club.  The purportedly defective car, however, is at a junk yard, partially covered by a tattered blue tarp storage facility, where it is protected from the elements, located in the Eastern District of Michigan.  The storage facility hates lawyers will not permit an inspection without a subpoena.

Which Court Issues the Subpoena?

Under the old rule, the court that could issue the subpoena varied.  A subpoena to appear for a hearing or trial issued from the court where the trial was to occur, but a deposition subpoena issued from the court for the district that encompassed the deposition location and a subpoena just for production or inspection was issued from the court for the district where that production or inspection was to occur.  FRCP 45(a)(2)(A)-(C) (2012).  Applied here, the trial would be in Nevada, but requires an inspection in the Eastern District of Michigan and, for good measure, a deposition in the Northern District of Texas.  Each would require a subpoena from a different court.  Fun times.

The new rule eliminates this game.  “A subpoena must issue from the court where the action is pending.”  FRCP 45(a)(2)(A) (2013).  Applied to the car inspection, the District of Nevada issues the subpoena.  This change spawned many others.

What Does the Caption Look Like?

The old rule permitted multiple courts to issue subpoenas in a case, although only one was actually hearing the case.  Therefore the subpoena needed to state not only the court that issued it, but also the court where the case was actually pending.  FRCP 45(a)(1)(a)(i)-(ii) (2012).  Under the old rule, my subpoena to the storage facility would have been issued from the Eastern District of Michigan, but would have included a slew of information about the case in the District of Nevada.

As the new rule authorizes only the court hearing the case to issue subpoenas, FRCP 45(a)(1)(a)(i)-(ii) were revised to simply require the subpoena identify the issuing court, the caption and case number.  Applied to my car inspection, the same caption I am using for other documents should be sufficient for the subpoena.

Which Attorney May Issue a Subpoena?

Given the possibility of multiple courts in different districts issuing subpoenas, the old rule permitted attorneys to issue subpoenas if the attorney is admitted to practice before the issuing court, wherever that might be.  FRCP 45(a)(3)(A)-(B) (2012).  For my car inspection, if I could not get the clerk to issue the subpoena, the old rule meant I would need an attorney admitted to practice in the Eastern District of Michigan to sign it.

Again, given that now only the court where the action is pending may issue the subpoena, this requirement was also modified.  “An attorney also may issue and sign a subpoena if the attorney is authorized to practice in the issuing court.”  FRCP 45(a)(3) (2013).  Now I can issue the subpoena through the District of Nevada and, since I am admitted to practice there, I can sign it.

Who Gets Notice of the Subpoena?

In Nevada state courts, there are frequently problems where a party issues a subpoena but does not provide notice of that subpoena to the other parties.  This is apparently not an isolated problem.

As it examined Rule 45 issues, the Committee was repeatedly informed that this notice provision is frequently not obeyed. Parties often obtain documents by subpoena without notifying other parties that the subpoena has been served. The result can be that there are serious problems at or before trial when “surprise” documents emerge and arguments may be made that they should not be admissible or that further discovery is warranted.

Report of the Civil Rules Advisory Committee, May 8, 2012 (page 83 of the link).  The committee considered it such a problem that it amended the rule.

The notice provision was previously buried in FRCP 45(b)(1) (2012).  “If the subpoena commands the production of documents, electronically stored information, or tangible things or the inspection of premises before trial, then before it is served, a notice must be served on each party.”  The committee elected to emphasize this requirement by relocating and slightly modifying it.  “If the subpoena commands the production of documents, electronically stored information, or tangible things or the inspection of premises before trial, then before it is served on the person to whom it is directed, a notice and a copy of the subpoena must be served on each party.”  FRCP 45(a)(4) (2013). Before serving a federal subpoena, a notice containing a copy of the subpoena must be itself served on the parties.  This gives them an opportunity to potentially object or serve their own subpoenas.

How does this impact my site inspection hypothetical?  I must give notice to the other parties of the subpoena before I serve it on the storage facility.  How much notice is open to interpretation depending upon the circumstances.

Where Can I Serve a Subpoena?

The old rule imposed a variety of potential geographic restrictions upon serving a subpoena and litigation about whether a person was more than 100 miles from the courthouse.  The fix?  “A subpoena may be served at any place within the United States.”  FRCP 45(b)(2) (2013).  This means I can issue the subpoena from the District of Nevada for a site inspection to occur in the Eastern District of Michigan and then serve that subpoena in the Eastern District of Michigan.

Location of Compliance

The old rule had various, scattered restrictions as to the location the subpoena could specify for compliance.  The committee was also concerned because some courts had determined a subpoena could still compel a person to attend trial even when the subpoena violated the geographic limits in effect.  See In re Vioxx Products Liability Litigation, 438 F.Supp.2d 664 (E.D. La. 2006).

The fix was to create FRCP 45(c).  “It collects the various provisions on where compliance can be required and simplifies them.”  Committee Notes on Rules – 2013 Amendment.  The committee also explicitly rejected In re Vioxx Products Liability Litigation’s interpretation of the geographic restrictions.  In other words, a subpoena can be served anywhere, but it does not mean it is enforceable if it requires compliance beyond the geographic limits of FRCP 45(c).

This change has little impact upon my hypothetical because the subpoena is being issued for a site inspection.  The changes primarily affect subpoenas for other discovery or trial purposes.  I could not, for example, serve a subpoena on a witness in Michigan to attend a trial in Nevada.

Which Court Enforces the Subpoena?

If the storage facility balks at the subpoena, where do I file the motion to compel?  The old rule required the motion to quash to be heard in the district for compliance, here the Eastern District of Michigan.  The advisory committee acknowledged authority holding there are some instances where it might be better for the court hearing the case (Nevada) to hear the motion to quash than the enforcing court (Michigan).  Why?  The issuing court is hearing the whole case and may have a better handle on the situation.

The committee decided to create FRCP 45(f) to address this scenario.  Applied to my hypothetical, the Eastern District of Michigan “may transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances.”  Id.  The drafter’s notes make quite clear, however, that the protection of the person subject to subpoena is to be given significant consideration.

Who Can Hold the Person Subject to Subpoena in Contempt?

FRCP 45(e) formerly stated contempt power for compliance was only vested in the court that issued the subpoena.  The new rule permits transfer of subpoena related motions, so FRCP 45(g) specifies both the issuing and enforcing court possess contempt power.  Under my hypothetical, if the storage facility fails to comply with the subpoena, both the Eastern District of Michigan and the District of Nevada possess contempt power.

This blog was originally posted on Posted on January 6, 2014 on Michael P. Lowry's "Compelling Discovery" blog. Click here to read the original entry. 

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A recent decision from the Northern District of California provides defendants with reason for cautious optimism regarding food labeling class actions.  In Sethavanish v. ZonePerfect Nutrition Co., No. 12-20907-SC (N.D. Cal. Feb. 13, 2014), the court denied the plaintiff’s motion for class certification. That plaintiff alleged that the “all natural” representations on ZonePerfect bars were false and misleading because the bars contain at least one of ten specified non-natural ingredients.  The plaintiff alleged that she regularly purchased those bars for her then-fiancé, who was an active-duty Marine who eventually deployed overseas.  The plaintiff alleged that she and her fiancé relied on those representations and paid more for the ZonePerfect bars than she would have paid for other bars that were not all natural.  She alternatively alleged that she would have purchased another brand of nutrition bar that truly was all natural.

In ruling on class certification, the court first addressed whether the plaintiff had standing to bring her claims.  While the court’s ruling in this regard is not helpful to defendants, it is also not surprising.  The defendant argued that the plaintiff did not suffer any injury because its bars are less expensive than the Pure Protein bars that the plaintiff now purchases.  The defendant also noted that the plaintiff admitted that she and her fiancé were willing to purchase non-natural nutrition bars so long as they were less expensive than “all natural” alternatives.  Plaintiff also admitted that she has always been willing to eat foods with artificial and synthetic ingredients.  While the court saw some tension among the plaintiff’s declaration, her pleadings, and her deposition testimony, that tension was not enough to eliminate standing.  From the court’s perspective, “[i]t is enough that she has asserted that she would not have purchased the product but for Defendant’s alleged misrepresentation.  She bargained for a nutrition bar that was all natural, and she allegedly received one that was not.”  Again, the standing threshold is not a terribly difficult one to overcome, so this ruling is not too surprising.  
More helpful for defendants, however, is the court’s ruling on ascertainability.  The court agreed with the defendant that the plaintiff could not define an objectively ascertainable class.  The defendant overwhelmingly sells to retailers, and not directly to consumers.  Records could only identify a very small fraction of consumers who purchased ZonePerfect bars in the last several years.  Thus, no method existed to identify the members of the class.  
The district court noted that courts in the Ninth Circuit are split on the issue.  It cited Xavier v. Philip Morris USA, Inc., 787 F. Supp. 2d 1075 (N.D. Cal. 2011), as an example of a case concluding a class could not be certified when there is no way to ascertain class membership.  That court declined to rely on affidavits from potential class members, reasoning that such a procedure could invite fraudulent or inaccurate claims.  In that respect, the Third Circuit’s opinion in Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), also was instructive.  There, the Third Circuit found that retailer records were not sufficiently thorough or accurate to identify class members.  In addition, the Carrera court “held that fraudulent or inaccurate claims could dilute the recovery of absent class members, and, as a result, absent class members could argue that they were not bound by a judgment because the named plaintiff did not adequately represent them.”  The court also pointed to Ries v. AriZona Beverages USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012), as an example of a court rejecting a defendant’s ascertainability argument when dealing with “all natural” claims.  Nonetheless, this court found the reasoning in Xavier and Carrera more persuasive.  While those cases may restrict types of consumer class actions that may be certified, they do not bar such classes altogether.  Because this plaintiff did not identify any method to determine class membership, let alone an administratively feasible method, the court denied class certification without prejudice.  
One effect of such decisions may be to encourage class counsel to try to certify narrower classes.  For example, if a manufacturer sells directly to consumers through its website, a class action plaintiff may contend that a court could certify a class of those consumers.  Of course, that assumes that the manufacturer maintains adequate records of such customers.  Similarly, class representatives may argue that the court may certify a class of consumers who purchased the products at retail locations with robust consumer loyalty programs.  Those types of programs often track individual customer’s purchases, though the extent of data maintained varies considerably. This is not to say that such narrowed classes would be appropriate.  They would bring a host of other difficult issues.  Nonetheless, it would not be surprising to see plaintiffs resort to that tactic in hopes convincing a court to certify a class.  Such class certification would, of course, provide the type of leverage that class counsel seek to negotiate a broader settlement.  

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We should approach this with much trepidation.  It is quite the treacherous path.  It has been coming for a long, long time.

While our Georgia appellate courts have been busily working on the usual array of tax, condemnation and immunity issues, the rumble on the distant horizon is not coming from Atlanta.  It is coming from Washington, D.C.  It is coming from Everytown, U.S.A.

The Actual Controversy

Actually, it is coming from the Town of Greece, New York, population 100,000; which, were its Northern border not Lake Ontario, would be connected to Canada.  With an elected 5-person Board governing things, the monthly Town Board Meetings mirror most of our very own Georgia town and city council meetings – opening the monthly sessions with the Pledge of Allegiance, followed by prayer delivered by a Christian clergy member (usually, at the invitation of an elected official or officials).  Sounds a good deal like Georgia to me.  The Town consistently listed the prayers in the official minutes.

The Town never adopted a formal policy regarding the process for inviting prayer-givers, the permissible content of prayers, or any other aspect of its prayer practice for that matter.  Roughly two-thirds of the prayers over an 8-9 year period of time contained references to “Jesus Christ,” “Jesus,” Your Son,” or the “Holy Spirit.”  The list of Christian references goes on as you might expect. Two citizens sued to stop the accurately alleged overtly Christian references.

The Crossroads

The law governing the issue is and has been anything but clear.  Let’s take a look at a bit at some not-too-distant history:

The United States Supreme Court held in Marsh v. Chambers (1983) that the utilization of a chaplain to start the Nebraska State Legislature did not offend the Establishment Clause of the First Amendment to the Constitution.  The Establishment Clause says, “Congress shall make no law respecting the establishment of religion.”  By way of background, when the 14th Amendment was passed in 1868, the Clause then became applicable to state and local governments, and not just Congress.

The Supremes held this was okay in large part because we have been doing so since the first Continental Congress. The Court held that the lengthy history of the practice of legislative prayer had “become part of the fabric of our society.”  Though far more detailed and complicated than just that, the ruling more than implied that the Court should be concerned only with the content of the prayers, to ensure the practice does not attempt to persuade people to join a religion, or to disparage others.

Then along came the Christmas Crèche (nativity scene) case, County of Allegheny v. ACLU (1989).  There, the Supremes seemingly backpedaled a bit, declaring that the display of the Christmas Crèche on the main staircase of the Allegheny County Courthouse was a no-no.  At the same time, however, the Court did permit a different display outside the very same building featuring both a Hanukah Menorah and a Christmas tree.  This because they were both “part of the same winter-holiday season” and is set forth in an “overall holiday setting”.

The tangible tension between the Marsh and County of Allegheny holdings meant that at some point things were going to come to a head.  And, well, here we are.

And, Well, Here We Are

The transcript of the November 6, 2013 argument at the Supreme Court in Town of Greece v. Galloway, can be found at the Supreme Court of the United States (SCOTUS) Blog: It is probably easier to simply Google “Town of Greece transcript,” where, at press time, the transcript is first on the list.  This is where you want to go, and, get going, it does in a hurry.  

The Supreme Court session opened, like every other, with the usual “God save the United State and this honorable Court.”  Then, the attorneys sworn into the Supreme Court stand and pledged to do so – “So help me God.”

The lawyer for the Plaintiffs went first, only getting two sentences into his argument when Justice Helena Kagan jumped in with a hypothetical concerning the start of the day’s proceedings.  She asked whether it would be constitutionally permissible for the Chief Justice to call a minister to the front of the courtroom where the minister asks the lawyers, the parties, even the spectators to rise, bow their heads, acknowledge Christ as the savior, drawing strength from the resurrection – the prayer ending with all the justices making the sign of the cross.  The biting, but very direct question set the tone for the entire oral argument, the Justices and lawyers struggling mightily to find the right questions, the right answers, the right parameters; the Justices themselves being asked to answer some of the most difficult questions they may ever face. 

Much of the argument surrounded the very nature of one’s appearing before the Town Hall as a citizen.  Asked in the most poignant of ways, Justice Elena Kagen summed up the dilemma:

“Here a citizen is going to a local community board, supposed to be the most responsive institution of government that exists, and is immediately being forced to identify whether she believes in the things that most of the people in the room believe in – whether she belongs to the same religious team as most of the people in the room.”

Justice Kagen’s (and other Justices’) worry being the possibility of religious coercion taking place.  This is different than the Nebraska Legislature case, the reasoning goes, because there is little to no worry about coercion due to the nature of the proceedings.

Predicting the outcome here is beyond my pay-grade as a columnist.  That’s easy, because as a columnist, I have no pay-grade.  What I can say is that we are at a crossroads, and the members of the Court are both very sensitive to our heritage and history, while also being fiercely devoted to making sure the First Amendment means what it says—whatever that is.

We will see….

(Phil Friduss is a local government attorney in Woodstock, practicing in the law firm of Landrum, Friduss & Ash.  He lives there with his wife Sabrina, and boys Jakob and Wesley.)

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