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ACTUALSERVICETHROUGH AVIRTUALCOMMUNITY

Trends in Service of Processby Social Media

How a Few Words Can TriggerMillions More in Insurance Coverage

The Legal ChallengesFacing the NCAA

How the Long Island Rail Road CouldBe a Model for All Employers

WHATHAPPENSWHEN YOUFINALLYREACHMILLIONAIREACRES

FULL-COURT PRESS

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Table ofContents

The articles contained herein are for informational purposes only and are not intended to be the basis for decisions in specific situations nora substitute for legal counsel. Copyright © 2014 USLAW NETWORK, Inc. All rights reserved.

From the Incoming Chair's Desk Page 1

FEATURES:What Happens When You Finally Reach Millionaire Acres – How a Few Words Can Trigger Millions More in Insurance Coverage – William J. Mitchell • Ahmuty, Demers & McManus Page 2

Pending U.S. Trade Issues – Robert L. Brown • Bingham Greenebaum Doll LLP Page 4

Fighting Disability Fraud – How the Long Island Rail Road Could Be a Model for All EmployersDamon M. Gruber, Todd M. Jones, and Paul J. Kilminster • Goldberg Segalla LLP Page 6

Think None of Your Cases Are eDiscovery Cases? Think Again.Brandon J. Hechtman • Wicker Smith O’Hara McCoy & Ford P.A. and Dennis Kiker • Granite Legal Systems Page 8

Can’t You Hear the Whistle Blowing – Are Your Employees Now Protected Under the Sarbanes-Oxley Whistleblower Provisions? – Joshua F. Silk • Hall Booth Smith, P.C. Page 10

Full-Court Press – The Legal Challenges Facing the NCAAKevin Nelson and Alex Greenberg • Huddleston Bolen LLP Page 12

Revising Employment Agreements and Computer Policies to Protect Confidential/Proprietary Information Under The Computer Fraud and Abuse Act – Peter Gleekel, Larson • King, LLP Page 14

The Science & Necessity of Risk Management – Ron Kurzman • Magna Legal Services, LLC Page 16

Recalculating the Risk of Intellectual Property Litigation – The U.S. Supreme Court Lowers the Threshold for Awarding Attorneys’ Fees in Patent LitigationRichard M. Carter and Adam J. Eckstein • Martin, Tate, Morrow & Marston, P.C. Page 18

Does the Patient Protection and Affordable Care Act End Life Care Plans as We Know Them?Jerry Green and Amy Neathery • Pierce Couch Hendrickson Baysinger & Green, L.L.P. Page 20

It’s Not Over – New Mortgage Forms Required in 2015 Christopher K. Loftus • Simmons Perrine Moyer Bergman PLC Page 22

In Defense of Using a Claimant’s Attorney in FINRA ArbitrationsPatrick Lubenow • SmithAmundsen LLC and Robert Usinger • Everest National Insurance Company Page 24

Guidelines and Standards and Rules, Oh My! Standard of Care Under the ACAMartin S. Driggers, Jr. and Richard E. McLawhorn, Jr. • Sweeny, Wingate & Barrow, P.A. Page 26

Actual Service Through a Virtual Community – Trends in Service of Process by Social MediaJennifer Lewkowski • Traub Lieberman Straus & Shrewsberry LLP Page 28

How to Be Secure in an Unsecure World – Karen Painter Randall and Steven A. Kroll • Connell Foley LLP Page 30

Will Proposed Changes to the Federal Rules Decrease the Costs of Civil Discovery?Keely E. Duke and Kevin A. Griffiths • Duke Scanlan & Hall, PLLC Page 32

Union “Ambush” Elections – Be Prepared or Be Unionized Matthew D. Austin • Roetzel & Andress, LPA Page 34

New Legislation May Prohibit Sending Commercial Electronic Messages to CanadiansVictor Dudas • Clark Wilson LLP Page 35

Purchasing a Business in Canada? Understand the Key Assets: Your New EmployeesAndrea Raso • Clark Wilson LLP and Sean Bawden • Kelly Santini LLP and Ralph D. Farley • Therrien Couture lawyers L.L.P. and Veronique Poirier • Therrien Couture lawyers L.L.P. Page 36

Brazilian Internet Law – The New Legal Panorama to Consider When Conducting Business on the Web or Providing Internet Services to Brazilian UsersTomás Filipe Schoeller Paiva • Mundie e Advogados Page 38

Reform of Challenges to English Government Decisions – Jeremy Lederman • Wedlake Bell LLP Page 40

Data Privacy and Data Retention in Europe Rainer Kaspar and Hermann Hansmann • PHH Prochaska Havranek Rechtsanwälte GmbH Page 42

TELFA Continues European Expansion Page 44

USLAW Showcases Network with a Heart Supporting Champions in Communities and in Sport Page 51

DEPARTMENTS:Successful Recent USLAW Law Firm Verdicts / Transactions Page 46Firms On the Move Page 49USLAW NETWORK Client Services and Products Page 57Spotlight on Partners Page 59

About USLAW Page 542014 Membership Roster Page 56

Lee Ann WatsonSenior VP Sales & Marketing

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U S L A W www.uslaw.org 1

F R O M T H E Incoming Chair’s Desk

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NOBLE F. ALLENHinckley, Allen &

Snyder LLPHartford, CT

NICHOLAS E. CHRISTINWicker Smith O'Hara

McCoy & Ford P.A.Miami, FL

JOHN D. CROMIEConnell Foley LLP

Roseland, NJ

KEVIN L. FRITZLashly & Baer, P.C.

St. Louis, MO

NICOLÁS JACA OTAÑORattagan, Macchiavello,

Arocena & Peña RobirosaBuenos Aires, Argentina

J. MICHAEL KUNSCHSweeney & Sheehan, PC

Philadelphia, PA

SHAWN M. RAITERLarson King, LLP

St. Paul, MN

FRIEDRICH W. SEITZMurchison &

Cumming, LLPLos Angeles, CA

MICHAEL P. SHARPFee, Smith, Sharp &

Vitullo, L.L.P.Dallas, TX

RICHARD K. TRAUBTraub Lieberman Straus &

Shrewsberry LLPHawthorne, NY

ROGER M. YAFFE, CHIEF EXECUTIVE [email protected], (800) 231-9110, ext. 1

JULES MILLION, DIRECTOR OF EVENT [email protected], (800) 231-9110, ext. 2

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5905 NW 54th Circle • Coral Springs, FL 33067Phone/Fax (800) 231-9110

In 2001, a few attorneys had an idea to create a net-work of independent firms that had the capability torespond quickly, efficiently and economically to clientneeds, while delivering excellent client service. Theyshared a vision of a national network of attorneys, builtupon lasting professional relationships and friendship.

Where you need us to be with a home field advantage. Today that ideastands stronger than ever as USLAW NETWORK, and we are proud toshowcase more than 100 law firms and more than 7,000 attorneys fromvirtually everywhere in the United States, coast-to-coast in Canada, inArgentina, Brazil, China and all across Europe through our partnershipwith TELFA and in Africa through our ALN connection. This includesthe most recent additions to USLAW, and on behalf of the Board ofDirectors and the entire membership, I’d like to welcome AxleyBrynelson, LLP, founded in 1885 in Madison, Wisconsin, and DysartTaylor Cotter McMonigle & Montemore, P.C., founded in 1934 inKansas City, Missouri, to the USLAW family.

Active participation. Through our vast network, jurisdictional knowledgebase and the 18 substantive practice areas, we are able to deliver a varietyof insight, products, services and events that assist legal decisions makersand other business executives in their workplace. From monthly webi-nars and newsletters to a semi-annual magazine, USLAW receptions inconjunction with DRI, RIMS, TIDA and AGC events, semi-annual clientconferences and periodic regional symposiums, USLAW provides awealth of formal and informal education and networking opportunities.Active participation and diverse voices benefit everyone, and we hopethat your schedule permits you to join us in the months ahead.

Standing at the ready. We have an exhilarating year ahead. We knowthe legal landscape is changing – new and different technologies, in-creased pressure to provider greater value, growing complexity and in-ternationalization in regulation and business, and more – and we arechanging with it. We are working together as a network to ensure thatwe continue to meet the needs of our clients while reducing and miti-gating their operational risks. We have hosted several managing partnerforums and receive valuable feedback from the Client LeadershipCouncil as part of our information sharing to make sure that our mem-bers and our network stay as competitive as possible. With ever-chang-ing business environments, building, maintaining, nurturing andgrowing relationships remain at the core of USLAW, and through opendialogue we will continue to innovate for our clients’ legal needs.

Service supports success. As I begin my term as our chair, I would liketo particularly thank our founders, Board members, practice area andevent chairs, and professional staff for your service. Your dedication andcommitment to USLAW exemplifies the best of what our organizationhas become. We would not be here today without all of your combinedefforts. Thank you for giving us this opportunity, enabling us to con-tinue delivering the highest quality legal representation and seamlesscross-jurisdictional service to our clients and communities.

Please be in touch. Let me know how we are doing. In the meantime,please enjoy the latest edition of USLAW Magazine which covers a broadrange of topics from eDiscovery to cyber security, ObamaCare, disabilityfraud, anti-SPAM legislation and so much more.

C. Erik GustafsonLeClairRyan • Richmond, VA

Publisher ROGER M. YAFFE

Editor CONNIE WILSON

Art Director JEFF FREIBERT • COMPASS CREATIVE

BOARD OF DIRECTORS

BRADLEY A. WRIGHT, CHAIRRoetzel & Andress • Cleveland, OH

C. ERIK GUSTAFSON, VICE CHAIRLeClairRyan • Alexandria, VA

LEW R. C. BRICKER, SECRETARY-TREASURERSmithAmundsen LLC • Chicago, IL

JILL ROBB ACKERMAN, ASSISTANT TREASURERBaird Holm LLP • Omaha, NE

AMI C. DWYER, CLIENT LIAISON DIRECTORFranklin & Prokopik, PC • Baltimore, MD

NEIL A. GOLDBERG, FIRM MANAGEMENT DIRECTORGoldberg Segalla LLP • Buffalo, NY

THOMAS L. OLIVER, II, PRACTICE GROUP DIRECTORCarr Allison • Birmingham, AL

EDWARD G. HOCHULI, IMMEDIATE PAST CHAIRJones, Skelton & Hochuli, P.L.C. • Phoenix, AZ

JOHN E. HALL, JR., CHAIR EMERITUSHall Booth Smith, P.C. • Atlanta, GA

MICHAEL R. SISTRUNK, CHAIR EMERITUSMcCranie, Sistrunk, Anzelmo, Hardy, McDaniel &

Welch, PC • New Orleans, LA

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SHERYL J. WILLERT, CHAIR EMERITUSWilliams Kastner • Seattle, WA

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2 www.uslaw.org U S L A W

In 1860, MiltonBradley originally intro-duced The Game of Life.Players moved around a board,hoping to someday reach“Millionaire Acres.” Of course,back then, a million dollars meantmuch more than it does today. In the more serious game of risktransfer, it has been quite common for ageneral liability policy to have a damageslimit of $1 million. Like dollar figures every-where, those limits have been creeping upby the millions. And above that, an excesslayer or two of coverage is not uncommon. On the other side of the coin, an in-sured’s business contracts have changed aswell. Parties seeking additional insured sta-tus demand higher and higher limits, and

often the ques-tion of “how

much coveragedid the insured

agree to provide?”can no longer be an-

swered “the contract requiresa million dollars in coverage.”

Aside from specifying outright higherlimits like “$2 million” or “$3 million” ingeneral liability coverage, a few simple wordscan potentially multiply a $1 million limitinto something much more. These phrasesappear in the insured’s contracts with thirdparties, in that part of the contract that re-quires additional insured status for anotherparty. They are simple prefaces like “atleast,” “no less than,” or “a minimum of” (forpurposes of this article, we’ll call these terms

the “escalating phrases”). As a result, acontractual requirement to procure “a

minimum of $1 million in liability coverage”– while technically satisfied by a $1 millionpolicy – could present additional exposureon policies with higher limits. In an industry accustomed to thephrase “a million dollars in coverage,” theaddition of these words can be a pitfall forthe unwary. While it may be common to ig-nore these escalating phrases, several courtshave not.

THE POLICY LANGUAGE COMPAREDTO THE INSURED’S CONTRACT Generally speaking, an insurance pol-icy is a stand-alone contract between the in-surer and the insured. But a commonexception exists in instances where the in-

William J. Mitchell Ahmuty, Demers & McManus

WHAT HAPPENSWHEN YOU FINALLY REACH

MILLIONAIRE ACRESHOW A FEW WORDS CAN TRIGGER

MILLIONS MORE IN INSURANCE COVERAGE



surance policy incorporates another docu-ment, such as another contract entered intoby the insured, by reference to it. Many additional insured endorse-ments simply add insureds where requiredby contract. Other endorsements have thesame language, but go further to add thatthe coverage provided will be capped at ei-ther the policy limits or by the amount re-quired by the insured’s contract. Clearly,the intent is to limit additional insured cov-erage to the amount the insured agreed toprovide in its contract. At first blush, thiswould appear to neutralize the escalatingphrases, but upon further review, this con-dition generally does not. The courts have found that these esca-lating phrases expose the insurer for the en-tire policy. In one example, an appellateNew York court compared a contract thatrequired “minimum general liability limitsof $500,000” to such an additional insuredendorsement. The additional insured ar-gued that the plain language requiring “aminimum” of $500,000 also triggers any cov-erage above that, in this instance a $1 mil-lion general liability policy. The carrierargued that the figure that appeared in thecontract was $500,000, and that the addi-tional insured endorsement capped the lim-its for additional insureds to the coverageamount required by the contract. The courtfound the terms were clear; but at worst, thelimitation was ambiguous and thus inter-preted in the insured’s favor. As a result,what may have looked like a $500,000 insur-ance requirement turned into a $1 millionrequirement. In a similar example, a California courtreviewed a subcontract that required thegeneral contractor to have additional in-sured coverage “of not less than $300,000”per occurrence. The carrier argued that“not less than” meant that a coverage limitbelow that was unacceptable, but that$300,000 satisfied the subcontract. Thecourt disagreed, finding that the subcon-tract language did not support a restrictionon the terms of the policy, because “the sub-contract only sets a floor, not a ceiling, forcoverage.” Under this interpretation, whenthe subcontract set forth a “minimum” limit,the endorsement that agreed to provide thatlimit really doesn’t have a limit at all. The 2013 standard additional insuredendorsements introduced by InsuranceServices Office, Inc. (ISO) place some limi-tations on additional insured coverage. Oneof the new limitations is that the insuranceafforded to the additional insured will notbe broader than that required by the con-tract or agreement. That’s fine, as long asthe contract or agreement specifies a cer-

tain sum. Otherwise, the new endorsementis still susceptible to the same argument. It would appear that absent a specific,stated policy limit for additional insureds,that any policy endorsement, by its plainlanguage, would support this interpretationthat exposes the policy limits for additionalinsureds. In that regard, even language thatlimits coverage to whatever is required bycontract, where the contract contains esca-lating phrases, only sets a minimum floorfor the coverage limit.

WHAT ABOUT EXCESS POLICIES? When you think about it, if a contractsets a minimum for coverage, the argumentcould be made that if no limit applies at all,then coverage is triggered up through anyapplicable excess policies. Here, the courtsgenerally agree, but are not unanimous. One court heard the same argumentson a contract requiring “at least $250,000in coverage,” but with a twist. One carrierissued a general liability with a $1 millionlimit, as well as an umbrella policy with alimit of $5 million. The certificate of insur-ance listed the additional insured party “asan additional insured as their interests mayappear.” The carrier included an argumentthat this limitation supported a $250,000cap. Like the other courts, the Illinois courtfound no limitation on coverage, and inthis instance, the “policies themselves pro-vided up to $6 million in coverage, andcontained no language limiting coveragefor additional insureds.” There, the addi-tion of the simple words “at least” in the in-sured’s contract resulted in the significantmovement of the coverage limit from$250,000 to $6 million. Similarly, another court looked at acontract that required “at least $4 millionper occurrence” and contained the com-mon proviso that “this limit may be pro-vided by a combination of primary andumbrella/excess policies.” The underlyingpolicy provided $1 million in coverage, butthe excess policy had a $9 million limit.Although the court recognized that otherprimary policies would be triggered priorto the excess policy, the excess policy wasstill triggered for its entire limit; whether ornot that limit would be reached was an-other story. On a slightly different issue, a subcon-tractor was required to include the generalcontractor as an additional insured, with alimit of $2 million per occurrence, with noescalating phrases. The underlying carrier’spolicy set a $1 million limit, which appliedfirst. So far, so good. The excess carrier ar-gued that its contribution was limited to an-other $1 million, for a total of $2 million, in

accordance with the contract; in otherwords, the excess carrier's obligation wouldbe offset by the underlying carrier’s contri-bution. But the excess policy indicated thatit provided “the minimum limits of insur-ance required in the contract or agree-ment.” By the plain language, the terms ofthe excess policy agreed to provide a mini-mum of $2 million, which was the amountrequired by the contract. The court heldthat “the average insured could reasonablyexpect $2 million in coverage” under the ex-cess policy, ruling against the excess carrier. But at least one court has ruled that theunderlying policy fulfills the contractual ob-ligation. There, a drilling contractor was re-quired to procure liability coverage “withlimits of not less than $100,000,” and that“no other insurance shall be carried at theexpense of the joint account.” The drillingcontractor purchased a number of policies,including a $1 million general liability pol-icy and a $1 million excess policy. A largeloss occurred, and the owner sought addi-tional insured status. The Texas court foundthat the first policy must provide coverageup to its $1 million limit, but that the excesspolicy was not reached. They reasoned thatthe excess policy added insured “only to theextent of” the contractual obligations, andthat the contract did not require “excess” in-surance. Moreover, the underlying policy“wholly fulfilled” the contractual obligationto procure insurance. Nevertheless, thecourt appears to have glossed over the “notless than” language.

CONCLUSION Overall, there appear to be several rea-sonable arguments that an additional in-sured can make to increase availableinsurance coverage, if the magic escalatingphrases appear in the contract. It may bethat the value of these little words is oftenoverlooked, but a sampling of the case lawon the subject suggests that this is an argu-ment well worth pursuing by the additionalinsured.

William J. Mitchell is amember of Ahmuty, Demers& McManus in New York,where he chairs the firm’sInsurance Coverage Group.His practice focuses on in-surance coverage litigation,for both policy holders and

insurers. Bill currently serves as Secretary of theUSLAW Insurance & Risk ManagementServices Practice Group.He may be reached [email protected].



Of the major trade policy concerns fac-ing the United States today, there are four ex-port-related issues that are especiallysignificant:• U.S. Export-Import Bank Reauthorization

(Ex-Im Bank)• Trade Promotion Authority (TPA)• Trans-Pacific Partnership (TPP)• Transatlantic Trade and Investment

Partnership (TTIP)

Each has a direct impact on U.S. busi-nesses and their ability to compete in theglobal marketplace – which comprises 95percent of all consumers and 80 percent ofthe world’s purchasing power. U.S. economic growth and job creationdepends upon the expansion of foreign tradeand investment opportunities for U.S. compa-nies and workers. In 2011, more than 38 mil-lion U.S. jobs (about 20 percent) depended onU.S. exports and imports. This represents 24million more trade-related U.S. jobs than twodecades ago, before the U.S. implemented aseries of bilateral, regional and multilateraltrade agreements. U.S. Free Trade Agreements(FTAs) in effect in 2008 generated more than$300 billion in U.S. output (2.1 percent of U.S.gross domestic product), expanded U.S. ex-ports of goods and services by more than $460billion and supported more than five millionU.S. jobs. U.S. exports have helped drive theU.S. economy and its recovery in recent years,positively contributing to U.S. economicgrowth every year since 2010.

U.S. EXPORT-IMPORT BANK REAUTHORIZATION The Export-Import Bank of the UnitedStates (Ex-Im Bank) is an independent fed-eral agency that supplements private exportfinancing for U.S. exporters. The Bank pro-vides a variety of financing mechanisms, in-cluding working-capital guarantees, exportcredit insurance and financing to help for-eign buyers purchase domestic goods andservices. It also assumes credit and countryrisks that private sector banks are unable orunwilling to accept and levels the playingfield for U.S. exporters by matching com-petitive foreign export financing. Since Ex-Im Bank is profitable, there isno cost to U.S. taxpayers. In 2012, it actuallycontributed $1.1 billion to the U.S. Treasury.

BENEFITS In FY 2013, Ex-Im Bank approved morethan $27 billion in total authorizations to sup-port an estimated $37.4 billion in U.S. exportsales and approximately 205,000 Americanjobs in communities across the country. The Ex-Im Bank offers financial re-sources that are especially critical for smallbusinesses, providing credit insurance tosmall business exporters that might other-wise be unavailable through private sectorbanks for sales by U.S. exporters to foreignbuyers with insufficient credit history. Lastyear, the Bank approved a record 3,413 trans-actions – or 89 percent – for small-businesses.

STATUS U.S. Congress is considering The Export-Import Bank Reauthorization Act of 2012,which would extend the Bank’s authority andincrease its portfolio cap up to $140 billion.

TRADE PROMOTION AUTHORITY Trade Promotion Authority (TPA) is astrategic working relationship between thePresident and Congress for the negotiationand implementation of U.S. trade agree-ments. This partnership consists of legisla-tion that: (1) sets the parameters for theUnited States in various international tradenegotiations; (2) establishes a frameworkfor Congress and the Executive Branch towork together in pursuing trade agree-ments and enacting bills implementingsuch agreements into law; and (3) includesa set of legislative procedures that allows thePresident to submit to Congress bills imple-menting trade agreements for an up-or-down vote within a set period of time,without amendments.

HISTORY Every President from the 1930s until2007 has been granted the authority in oneform or another to negotiate market-open-ing trade agreements in consultation withCongress. The most recent TPA was grantedin 2002 but lapsed in 2007 without a renewal.Since that time, negotiation and approval ofU.S. trade agreements has languished.

Robert L. Brown Bingham Greenebaum Doll LLP

Pending U.S. Trade Issues



BENEFITS Trade negotiations are of vital impor-tance to the U.S. economy. Nearly half of allU.S. goods exports now go to the nation’s20 free trade agreement (FTA) partners,which generated a roughly $58 billion man-ufactured goods trade surplus in 2012. By renewing TPA with updated negotiat-ing objectives, Congress can strategically ad-dress issues pertaining to current U.S. tradenegotiations, including the Trans PacificPartnership (TPP), the Transatlantic Tradeand Investment Partnership (TTIP), the Tradein Services Agreement (TISA) and an updatedInformation Technology Agreement (ITA).

STATUS On July 30, 2013, the currentAdministration requested that Congressreauthorize TPA. On Jan. 9, 2014, legisla-tion to renew TPA – the BipartisanCongressional Trade Priorities Act of 2014– was introduced in the House (HR. 3830)and in the Senate (S. 1900). This legislationwould reauthorize TPA for four years withthe possibility of a three-year extension.

TRANS-PACIFIC PARTNERSHIP The Trans-Pacific Partnership (TPP) isa landmark, 21st-century trade agreementthat could set a new standard for globaltrade and incorporate next-generation is-sues that may boost the global economiccompetitiveness of the TPP countries. Itsfeatures include:• Comprehensive market access that will

eliminate tariffs and other barriers togoods and services trade and investment;

• A fully regional agreement that will facil-itate the development of production andsupply chains among the TPP countries;and

• A focus on cross-cutting trade issues suchas regulatory coherence, competitivenessand business facilitation, market accessand trade benefits for small and mediumenterprises (SMEs), trade in services, in-tellectual property protection and eco-nomic development.

The TPP is being negotiated as a singleundertaking that covers all key trade andtrade-related areas. In addition to updatingtraditional approaches to issues covered byprevious free trade agreements, the TPP in-cludes new and emerging trade issues. Morethan 20 negotiating groups have met to de-velop the legal texts of the agreement, andthe specific market access commitments theTPP countries will make to open their mar-kets to each other’s goods, services and gov-ernment procurement.

HISTORY The United States is currently negotiat-ing the TPP with 11 other countries(Australia, Brunei Darussalam, Canada,Chile, Japan, Malaysia, Mexico, New Zealand,Peru, Singapore and Vietnam). It is hopedthat over time the TPP will include additionalcountries in the Asia-Pacific region. If final-ized, TPP would be the most comprehensivetrade agreement in the Asia-Pacific region.

BENEFITS The Asia-Pacific region accounts forhalf of the world’s population and boastsmany of its fastest growing economies. Twobillion Asians joined the middle class in thelast 20 years. The International MonetaryFund (IMF) estimates that nearly half of theworld’s economic growth over the next fiveyears will occur in Asia. The TPP countriesare the largest goods and services exportmarket for the United States. U.S. goods ex-ports to the broader Asia-Pacific totaled$942 billion in 2012, representing 61 per-cent of total U.S. goods exports.

STATUS After 19 rounds, the 12 TPP countrieshave made significant progress and the ne-gotiations are moving toward the conclusionof a comprehensive agreement. However,some doubt that it will be adopted beforethe next presidential election in 2016.

TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP (TTIP) The Transatlantic Trade and InvestmentPartnership (TTIP) is a comprehensive tradeand investment agreement between theUnited States and the European Union (EU)that is in the preliminary stages of negotia-tion. TTIP would remove trade barriers in awide range of economic sectors to make iteasier to buy and sell goods and services be-tween the U.S. and the EU, and make it easierfor U.S. and EU companies to invest in eachother’s economy. Specifically, this agreementwill reduce and remove tariffs and trade bar-riers on manufactured goods, services andagricultural products; liberalize investmentregimes; increase access to government pro-curement; and protect intellectual property.

HISTORY In 2011, the U.S. and the EU set up aHigh Level Working Group on Jobs andGrowth (HLWG) to investigate what kind oftrade and investment agreement between thetwo economic powers might be developed.The HLWG concluded that a wide-rangingtrade and investment agreement between theworld’s two largest economies presented thebest opportunity for advancing economicgrowth and jobs on both sides of the Atlantic.

BENEFITS More than $1.5 trillion in goods, serv-ices and income receipts flow between theUnited States and the EU annually. Togetherthe U.S. and EU represent 60 percent ofglobal gross domestic product, 33 percent ofworld trade in goods and 42 percent of worldtrade in services. U.S. firms have direct in-vestments of nearly $2 trillion in the EU,which is 20 times greater than what they haveinvested in China. These European invest-ments generate some $3 trillion in annualrevenues for American companies. While European and U.S. tariffs areoften low, the sheer volume of trans-Atlanticcommerce is so large that one-third of all tar-iffs on U.S. exports are paid to the EU. It isestimated that eliminating trans-Atlantic tar-iffs will increase U.S.-EU trade by more than$120 billion within five years. It will also gen-erate GDP gains of $180 billion—a budget-neutral gain for the U.S. and EU economies. In addition to eliminating tariffs, two ofthe greatest benefits of TTIP will be the im-provement in compatibility of the U.S. andEU regulatory regimes and the liberalizationof investment, services and procurement.

STATUS EU and U.S. negotiators held a fifthround of trade talks in Arlington, Virginia,from May 19-23, 2014. However, as withTPP, there is some risk of delay.

CONCLUSION Foreign trade means increased sales,and increased sales mean more jobs.Therefore, the expansion of foreign tradeopportunities for U.S. businesses are an ab-solutely crucial function for the U.S. govern-ment. U.S. foreign trade policy, such as thefour initiatives outlined above, couldachieve these twin goals of increased salesand jobs. For this reason, U.S. foreign poli-cymakers must prioritize the enhancementof foreign trade opportunities for the ben-efit of U.S. businesses and workers.

Robert L. Brown is a memberof the Bingham GreenebaumDoll LLP Corporate andTransactional practicegroup. Robert serves on thesteering committee of the U.S.Department of CommerceNational District Export

Council and is chair of the Kentucky DistrictExport Council. He also serves on the board andexecutive committee of Global Ties, which man-ages U.S. State Department visitors program. Hepreviously was chair of the World Trade CenterKentucky.



Disability benefit recipients playinggolf or working on their bench press at thegym? Such images of fraud may not be allthat uncommon to seasoned employers, butin the case of the Long Island Rail Road, itoccurred on an uncommonly massive scale.The railroad’s response to the widespreaddisability retirement scandal that firstemerged in 2008 was equally monumental,resulting in more than 30 arrests and mak-ing a bold statement in its lasting effects: Ayear after the initial arrests, disability appli-cations at the LIRR were down almost 50percent. Further, 600-700 retirees who hadpreviously been collecting $2 million inbenefits per month had their benefits sus-pended and were forced to reapply.1 The investigation and prosecution ofthis fraud scheme provides a template foranalyzing similar disability and pension sys-tems, such as workers’ compensation, whereattempts at fraud by employees, health careproviders, and even employers are frequent.According to the Insurance InformationInstitute, the exact amount of insurancefraud is difficult to determine, but healthcare, workers’ compensation, and auto in-surance are believed to be the most vulner-able lines of insurance.2 Questionableinsurance claims rose by 16 percent in 2011from 100,201 to 116,171, according to theNational Insurance Crime Bureau (NICB).3 With the frequency and cost of such

claims on the rise, identifying and deterringfraud may be more important than ever.

THE INCENTIVE AND THEINVESTIGATION According to the criminal complaintfiled in the U.S. District Court inManhattan, hundreds of LIRR employeesfalsely alleged disabilities to collect morepension money from ages 50 to 65, whenthey would otherwise qualify for full bene-fits.4 The incentive to commit fraud was aconsequence of the railroad’s contract withits employees’ union. The contract permit-ted retirement at age 50 so long as the re-tiree had at least 20 years of service. TheLIRR, which transports passengers to pointsbetween Manhattan and Long Island, is theonly railroad in the country that has suchan arrangement with its workers. The investigation itself was prompted, inpart, by statistical evidence showing that thevast majority of Long Island Rail Road work-ers who retired in their 50s had done so dueto an “occupational disability” despite theLIRR’s impressive workplace safety record.5Further, Long Island Rail Road workers ap-plied for occupational disability benefits at arate 12 times higher than workers of MetroNorth Rail Road, a comparable railroad thatservices New York’s northern suburbs.6 Thisdissonance prompted federal agents andprosecutors to initiate a painstaking investi-

gation spanning several years and involvingan extensive analysis of disability applications,medical records, employee data, and covertsurveillance of benefit recipients.

THE DOCTORS At the center of the government’s in-vestigation were a handful of physicians.According to a press release from theDepartment of Justice, between the late1990s and 2008, one particular doctor rec-ommended that at least 734 retiring LIRRemployees receive disability benefits andwas responsible for treating nearly half of allLIRR employees who retired and receiveddisability benefits in one four-year period.In effect, this doctor siphoned millions ofdollars from stakeholders through his oper-ation of a “disability mill” where prospectiveretirees could go to receive a medical nar-rative in support of their disability applica-tions in exchange for cash. In January 2013, that doctor pleadguilty to one count of conspiracy to commitmail fraud, wire fraud, and health carefraud, and one count of health care fraud,which resulted in an eight-year prison sen-tence.7 Later that year, after a three-weekjury trial, a second doctor was convicted onall 10 counts with which he was charged. Hewas sentenced to three years of supervisedrelease and ordered to forfeit $70,947,699and pay $70,632,900 in restitution.

FIGHTING DISABILITY FRAUDHOW THE LONG ISLAND RAIL ROAD COULD BE

A MODEL FOR ALL EMPLOYERS

FIGHTING DISABILITY FRAUDHOW THE LONG ISLAND RAIL ROAD COULD BE

A MODEL FOR ALL EMPLOYERS

Damon M. Gruber, Todd M. Jones, and Paul J. Kilminster Goldberg Segalla LLP



THE RAILROAD WORKERS The New York Times instigated the fed-eral investigation with a 2008 article thatbegan with the image of dozens of formerrailroad employees playing golf every day.The description of the scene made it clearthat this was an open secret. The complaint noted that there weretwo types of disability annuities provided bythe Railroad Retirement Board (RRB). Thefirst used standards similar to the SocialSecurity Disability application process. Thesecond was an “occupational disability” stan-dard that determined whether an employeecould perform their own job descriptionwith the railroad. Despite complaints that in-cluded inabilities to grasp with strength, sit,stand, walk, or even bathe, the federal inves-tigation of the pensioners revealed that a sig-nificant number of defendant pensionerswere engaged in daily activities completelyinconsistent with those complaints, includ-ing golf, tennis, intense gym activity, shovel-ing snow, and being a volunteer firefighter. For many, the disability benefits re-ceived by former employees were calculatedusing earnings from five years prior to theirretirement. In the case of the Long IslandRail Road, days worked are often measuredby union rules pertaining to the duties andprojects completed, not time actually spentworking. A common thread in the casesbrought against former employees was aconcerted effort to increase productivity de-spite the fact that these workers were goingto claim a developing inability to do thework. The complaints against former em-ployees often laid out a timeline for fraudthat started months – or even years – beforethe claim for disability retirement was made.

LESSONS LEARNED Not every business has access to the in-vestigative resources of state and federalagencies, but the Long Island Rail Roadcase serves as a model for larger businessesand organizations to help identify indica-tors for fraud. The human resources departments oflarger organizations often have to deal withthe implications of systems like workers’compensation, collectively bargained stan-dards for disability leave or retirement, theFamily Medical Leave Act, and short-termdisability. It then often falls to someonewithin that organization to navigate the

standards and guidelines put forth by mul-tiple jurisdictions to determine whether thefacts of a particular case would meet thestandards or guidelines for fraud.Understanding the ins and outs of each sys-tem and the statutes that govern them isprobably an unrealistic expectation.Instead, it might be worthwhile to contem-plate utilizing an analysis that targets redflags and allows an organization to identifymetrics and landmarks for a faulty process. The lessons of the LIRR fraud schemelie in the patterns that emerged and the ac-tivities of its central figures, all of whomwere in a position to spur along a multitudeof claims. One defendant was a formermember of the RRB who began advising ex-workers on their disability applications.Another was a former union chief who alsoset out to advise applicants for profit. Thedoctors facilitated the application processof thousands by failing to scrutinize theclaims made by their patients. In the com-plaint, it was reported that one doctor hadnoted he thought he may have signed off on100 percent of his patients’ complaints, hav-ing no reason to question their integrity. In the end, the LIRR system providedincentive for the perversion of its intendedpurpose, and plenty of actors were willing tomanipulate that system for monetary gain.

WHAT SHOULD YOU LOOK FOR? A single disability allegation may resultin numerous proceedings across a numberof venues. A workers’ compensation claim,for instance, may also include questions re-garding a collective bargaining agreement,an application for social security disability,and potentially retirement benefits.Knowing to ask how these benefits would po-tentially interplay is itself an invaluable assetto analyzing whether a warped incentive hasbeen created, inadvertently or otherwise. It turns out that the Long Island RailRoad, in many cases, could have predictedwhen a claimant would retire with a disabil-ity based upon the increases in productivitythat preceded many of the disability retire-ment applications. Hindsight is 20/20, butmaintenance of the records later helped in-vestigators put together timelines that wereuseful. A common refrain for any legal actionis that “every case is different.” That said,the Long Island Rail Road scandal turned

on four key players: two doctors, a formerunion chief, and a former RRB insider. Indealing with your own claims, you maybegin to notice the same doctor, the samelawyer, or similar fact patterns starting toemerge. While that is not determinative offraud, it is certainly the sort of indicator thatshould warrant further scrutiny. When people are committing fraud ofthis variety, it is often due to the prospect ofcontinued and significant income in combi-nation with absolving themselves of the bur-dens of a work schedule. As noted in thehistory of the Long Island Rail Road disabil-ity scheme, most of the eventual defendantscould be found in broad daylight engagingin activity that highlighted the fraud.

CONCLUSION Circumstances are going to be differentas organizations, jurisdictions, agreements,and workforces differ. The LIRR scandal is in-structive, however, because it demonstratesthat patterns tend to emerge – and that tak-ing action to stop fraud makes a powerfulstatement to would-be abusers. If you are ableto recognize a fraudulent pattern and its im-plications, the ability to assemble a frameworkand strategy to address that pattern may helpreduce such activity in the future.

Damon M. Gruber is apartner in GoldbergSegalla’s Buffalo office andChair of its Workers’Compensation PracticeGroup. He advises on allaspects of claims and hasextensive appellate experi-

ence in cases involving hearing loss, psycholog-ical stress, insurance coverage, and other issues.

Todd M. Jones is an attorneyin the firm’s Workers’Compensation PracticeGroup. His experience in-cludes accidental, occupa-tional, and death claims atall stages of litigation, includ-ing trials, depositions of med-ical experts, and appeals.

Paul J. Kilminster, also amember of the firm’sWorkers’ Compensationteam, is experienced in awide variety of cases involv-ing accidental injuries andoccupational diseases, in-cluding occupational hear-ing loss, repetitive stress

injuries, heart attack cases, and claims for as-bestos-related injuries and death benefits.

1 http://www.huffingtonpost.com/2013/07/02/lirr-fraud-scandal-retirees-disability-benefits_n_3534620.html2 http://www.iii.org/fact-statistic/fraud3 Id.4 http://www.post-gazette.com/news/nation/2011/10/28/Rail-workers-in-NYC-linked-to-1-billion-disability-

fraud/stories/2011102801735 http://www.justice.gov/usao/nys/pressreleases/pcremarks/lirrremarks.html6 Id.7 Id.



Think about it. Where did you get theinformation that you have acted on today?How much of it came from a book or letter?How much came from your computer,tablet, or phone? The odds are great thatthe vast majority of the information that youwork with every day comes from a com-puter. Yet it is remarkable how often attor-neys say that their cases are not eDiscoverycases. The truth is that the overwhelmingmajority of business information is createdand maintained on computer systems, in-cluding mobile devices. Whether a case isan eDiscovery case is not a question of howlarge the case is. It is a question of where theinformation is. And more often than notthat information is on a computer or otherdevice. In other words, it is virtually impos-sible to complete discovery without the “e”anymore. Indeed, there are serious legal,ethical and practical concerns with actingon the misconception that your case is notan eDiscovery case. Simply ignoringeDiscovery may be illegal, unethical, andplace you and your client at a strategic dis-advantage. If that sounds a bit overstated toyou then read on.

LEGAL OBLIGATIONS Legally, eDiscovery is an integral partof the discovery process. Attorneys havelegal obligations to ensure that electronicdata is collected and preserved. Althoughmany of the Federal Rules of CivilProcedure referencing eDiscovery are per-missive in nature, several are not. Considerthe following:• FRCP 16(b) – The pretrial scheduling

order “may provide for disclosure or dis-covery of electronically stored informa-tion.” Do you want it to? If not, is thatbecause you do not want to put unduepressure on the opposing party, or be-cause you do not want that pressure onyour client? Does this decision complywith your district’s local rules?

• FRCP 26(a) – Required disclosures in-clude “electronically stored informa-tion…that the disclosing party has in itspossession, custody, or control and mayuse to support its claims or defenses.” Youmight imagine that you are not planningto use any electronically stored informa-tion (“ESI”) to support your claims or de-fenses, but you would probably be wrong.Remember: where does your client keep

all its business information? In boxes, oron computers or in the cloud?

• FRCP 26(b) – “Parties may obtain discov-ery regarding any non-privileged matterthat is relevant to any party’s claim or de-fense.” At the risk of being redundant,the vast majority of the information thatwill be relevant to your case is stored oncomputers and is discoverable.

• FRCP 26(f) – Parties must “discuss any is-sues about preserving discoverable infor-mation,” and their discovery plan mustinclude “any issues about disclosure ordiscovery of electronically stored informa-tion.” This is one of the few clear man-dates in the Federal Rules. Are youdiscussing preservation of informationwith opposing parties? Do you includedisclosure and discovery of ESI in yourdiscovery plan? Have you considered howto preserve the data, including not onlylocally stored information, but data thatis in the cloud?

• FRCP 26(g) – Attorneys must certify that,“with respect to a disclosure, it is com-plete and correct” and “with respect to adiscovery…response…, it is consistentwith these rules.” Is it possible to comply

THINK NONE OF YOUR CASES AREEDISCOVERY CASES?

THINK AGAIN.Brandon J. Hechtman Wicker Smith O’Hara McCoy & Ford P.A.

Dennis Kiker Granite Legal Systems



with this rule without addressing ESI inyour disclosures and discovery responses?

• FRCP 34(a) – Parties may request ESI withinthe scope of Rule 26(b). Not only “may”they, but invariably they will. Just checkthe boilerplate definitions in the next RFPyou receive. The question is whether youare responding (see Rule 26(g) above).

• FRCP 37(e) – A court may not imposespoliation sanctions “for failing to provideelectronically stored information” only ifit is “lost as a result of the routine, goodfaith operation of an electronic informa-tion system.” If currently proposedamendments go into effect, a party willonly be sanctioned if it failed to take rea-sonable steps to preserve information. So,how good is your client’s legal holdprocess for ESI? Does it even have one?This is particularly concerning with re-gard to enterprise systems because usersmaintain data in different ways and maytransport it to different platforms (desk-top, laptop, tablet, and/or phone).Without a defined process to preserve thedata in each location you could be facedwith a spoliation problem.

Moreover, over the past 10 years, courtshave repeatedly reminded attorneys thatthey are responsible and accountable forproper identification, preservation and pro-duction of relevant ESI. From the seminalZubulake decisions (“[c]ounsel must take af-firmative steps to monitor compliance sothat all sources of discoverable informationare identified and searched”) to more re-cent decisions such as Procaps S.A. v. Patheon,Inc., Case No. 12-24356-CIV-GOODMAN(S.D. Fla. Feb. 28, 2014) (issuing sanctionsbecause outside counsel “permitted its clientto self-collect ESI and documents, allowedsome of its client’s executives to use a singlesearch term to collect e-mails, and failed torealize that its client never actually imple-mented the litigation hold”), judges have in-creasingly taken counsel – inside and out –to task for discovery failures committed bytheir clients. Note that an attorneys’ searchshould not end with consulting the IT de-partment. Usually, one should identify targetESI custodians (people who created, used,or viewed the information) and ask themhow they view and edit ESI. More often thannot, attorneys will find ESI stored locally onpersonal devices. Attorneys should also askwhether those people are communicatingon mobile devices; like e-mail, text messagescan be especially revealing.

ETHICAL OBLIGATIONS The ABA Model Rules of ProfessionalConduct include both explicit and implicit

requirements that attorneys be conversantwith eDiscovery: a) Rule 1.1 – The ABA revised the com-

mentary to Rule 1.1 in 2013 to statethat attorneys “should keep abreast ofchanges in the law and practice, includ-ing the benefits and risks associatedwith relevant technology” to remaincompetent.

b) Rule 1.5 – The rule on fees has notchanged. The standard is reasonable-ness. However, consider the implica-tions if leveraging eDiscovery couldactually reduce overall costs in a case?

c) Rule 1.6 – Confidentiality is the hall-mark of the attorney-client relation-ship. Maintaining that confidence canbe difficult in the modern world. Anumber of recent cases highlight therisk of inadvertent disclosure of privi-leged information in eDiscovery. See,e.g., First Tech. Capital, Inc. v.JPMorgan Chase N.A., No. 5:12-CV-289-KSF-REW, 2013 WL 7800409 (E.D.Ky. Dec. 10, 2013) (privileged waivedfor failure to take reasonable steps toprevent disclosure where the averagedocument was reviewed for only 9.84seconds).

d) Rule 3.4 – Did you know that you areethically required to “make reasonablydiligent effort to comply with a legallyproper discovery request by an oppos-ing party”? If you have not includedESI in your discovery response plan,where does that leave you?

The DC Bar has added to its compe-tency requirement that an attorney under-stand the risks/benefits of technology. TheCalifornia Bar explicitly includes eDiscoverywith regard to attorney competence and theduty of confidentiality. Other states are cer-tain to follow suit, as predicted in the ABACommission on Ethics 20/20 Resolution.

PRACTICAL CONSIDERATIONS The greatest surprise for many attor-neys is not that they are required to engagein eDiscovery; it is that they should want to.Why? Because:a) Most information is stored on computer

devices. If you are not identifying that in-formation, you simply do not know whatyou are missing. You only know this: youare missing most of the information, andthat can never be a good thing.

b) The information that you are missingcould be harmful, or helpful. In eithercase, you want to know. For every “smok-ing gun” e-mail, experience shows thatthere are a dozen innocuous or evenhelpful ones. You can be sure your op-

ponent will look for the smoking gun,but who will find the information thatsupports your case if you do not?

c) Cases are decided on the facts and thelaw. Generally counsel with a quickerand greater command of the facts hasa decided strategic advantage in postur-ing the case for settlement or prepar-ing for trial.

d) The most common fear associated witheDiscovery is cost. Of course, spoliationor just not knowing the facts can costyou dearly as well. But, eDiscovery costsneed not be a great concern.Technology has advanced significantlyover the past decade, and there are avariety of tools, including “predictivecoding,” that can help control, or evenreduce, the overall cost of eDiscovery.It is important that counsel consultwith those internally and externallythat can facilitate the efficient and eco-nomical collection and review of ESI.Further, it is incumbent upon attorneysto understand and leverage these toolsfor their clients’ benefit.

Like it or not, eDiscovery is a permanentpart of the litigation landscape. Attorneys thatembrace it will not only ensure compliancewith their legal and ethical obligations, theywill realize a significant strategic advantageover attorneys that do not. As for the latter,well, they can always hope those new-fangledcomputers are just a fad.

Brandon J. Hechtman is anassociate at Wicker SmithO’Hara McCoy & Ford P.A.in Coral Gables, FL.Brandon is admitted to prac-tice in Florida, the Southernand Middle U.S. DistrictCourts of Florida, and the

District of Columbia. He primarily practices com-mercial and probate litigation in federal andstate courts. He can be reached [email protected].

Dennis Kiker is a consultantat Granite Legal Systems inHouston, Texas, specializ-ing in eDiscovery consultingand technology. He is aMartindale-Hubbell AV-rated attorney and legal con-sultant working with law

firms and their clients to facilitate and improvediscovery response. He is a member of the StateBar of Arizona and the Virginia State Bar. Hecan be reached at [email protected] or713-652-0881.


1 0 www.uslaw.org U S L A W

In March 2014, the Supreme Court issued its decision in Lawson v.FMR LLC,1 which has the potential to greatly expand the number of em-ployees who may bring lawsuits under the “whistleblower” provision ofthe Sarbanes-Oxley Act. This decision is the first to interpret the whistle-blower provision of the Sarbanes-Oxley Act. In Lawson, the Court held bya 6-3 margin that Sarbanes-Oxley creates a cause of action not only foremployees of public companies, but also for employees of non-publiccompanies that perform work for public companies.

AN INTRODUCTION TO WHISTLEBLOWER PROTECTION In response to the catastrophic collapse of Enron Corp., Congresspassed the Sarbanes-Oxley Act of 2002, which included a provision pro-tecting whistleblowers who work for public companies, including lawfirms, accountants, and auditors. The law provides that:

No [public] company…, or any officer, employee, contractor, subcon-tractor, or agent of such company, may discharge, demote, suspend,threaten, harass, or in any other manner discriminate against an em-ployee in the terms and conditions of employment because of [whistle-blowing or other protected activity].2

The term “protected activity” is defined broadly to include reportsmade to federal regulatory and law enforcement agencies, Congress, anemployee’s supervisor, and internal corporate investigators. The em-ployee must be reporting alleged mail fraud, wire fraud, bank fraud, se-curities fraud, or a violation of any rule or regulation of the Securitiesand Exchange Commission, or any provision of Federal law relating tofraud against shareholders. Employees who prevail under this law may be entitled to reinstate-ment, back pay with interest, “make-whole” compensation (includingrestoration of seniority, vacation/sick leave), “special damages” for emo-tional distress and loss of professional reputation, attorney’s fees andcosts, and “affirmative relief” such as a letter of apology or formal postingof the decision. As a result, before a company delves into any factual allegations awhistleblowing employee might make, they could raise the defense thatthe employee is not covered by the whistleblower statute because the com-pany is not public.

THE SUPREME COURT’S RECENT DECISION INLAWSON V. FMR LLC In Lawson, the Plaintiffs were former employees of a private companythat contracted to advise publicly traded mutual funds. The Plaintiffs al-leged that their employer, FMR LLC, unlawfully terminated them for re-porting alleged shareholder fraud. Each employee sued FMR under theSarbanes-Oxley whistleblower provision.

CAN’T YOU HEARTHE WHISTLE

BLOWING

Joshua F. Silk Hall Booth Smith, P.C.


U S L A W www.uslaw.org 1 1

In a wide-ranging decision, theSupreme Court held that the Sarbanes-Oxley whistleblower provision does protectemployees of privately held companies thatare contractors or subcontractors who per-form work for public companies. The Courtreached this conclusion based on the textof the statute and the intent of Congress,which the majority explained was to “wardoff another Enron debacle.” Despite this,the Court did not limit whistleblower pro-tections to the kind of harm which led tothe Enron collapse. In short, the Court de-clined to define the scope of Sarbanes-Oxley’s whistleblower protection, whileexpanding the class of persons who wouldbe eligible for such protection. Writing for the dissent, Justice Sotomayor(joined by Justice Kennedy and Justice Alito)explained that the decision had far-reachingand potentially absurd results. JusticeSotomayor argued that the Court’s decisionwould now allow an employee of a small, pri-vately owned business that, for example, con-tracts to clean the local Starbucks, to sue thecompany if the employee is demoted or firedafter reporting that another client has mailedthe cleaning company a fraudulent invoice. Thus, under Lawson, the Sarbanes-Oxley whistleblower protections may nowextend to (1) employees of public compa-nies; (2) household employees of individu-als who work for public companies; (3) employees of private companies thatcontract with public companies; (4) em-ployees of any private company that subcon-tracts with a private company that contractswith a public company; and (5) employeesof any agent of a public company. The consequences for extendingwhistleblower protections may be severe.According to the Department of Labor’s sta-tistics from 2005, public companies hired 10million independent contractors and 11million contract workers, all of whom po-tentially could now fall within the protec-tion of Sarbanes-Oxley. Justice Sotomayor concluded by notingthat a flood of litigation could result fromthis decision, and that the whistleblowerprovision protects reporting not only of se-curities fraud, but also mail, wire, and bankfraud. By interpreting a statute that protectsan expansive class of conduct to now covera large and more expansive class of employ-ees, Justice Sotomayor concluded that“today’s opinion threatens to subject privatecompanies to a costly new front of employ-ment litigation.”

DECISIONS AFTER LAWSON While it is still too soon to tell whetherLawson will have the sweeping effects antic-ipated by the dissent, it has been applied inat least two cases since March. In Safarian v.American DG Energy, Inc.,3 the Defendant wasa publicly traded company in the utilitybusiness, and the Plaintiff was an engineerwho serviced and installed Defendant’s ma-chines. However, Plaintiff admitted that hewas not an employee of American DGEnergy, and instead he was an employee ofa company owned by DG Energy calledMultiservice. The Plaintiff was eventuallyterminated for disclosing and threateningto disclose alleged acts and omissions toDefendant’s employees and customers.Plaintiff repeatedly objected to what he per-ceived as overbilling, improper construc-tion, and a failure to obtain permits. As an initial matter, the District Courtfor the District of New Jersey concluded thatthe Plaintiff was an independent contractor,but based on Lawson, the court held that hisindependent contractor status did not barhim from bringing a whistleblower claimunder Sarbanes-Oxley. While the Court ul-timately concluded that Plaintiff had notstated a claim for protection under thoseacts, he was eligible for such under Lawsondespite his independent contractor status. Similarly, in Wiest v. Thomas J. Lynch,4

the Plaintiff sued Tyco ElectronicsCorporation and four individual defendantsunder the whistleblower protections inSarbanes-Oxley. Wiest worked for Tyco untilhis termination in 2010 after he began re-jecting and questioning certain expensesthat he believed violated accounting stan-dards or securities and tax laws. TheDefendants argued, among other things,that Mr. Wiest was not covered underSarbanes-Oxley because Tyco was a non-publicly traded subsidiary of TycoElectronics Limited. The District Court forthe Eastern District of Pennsylvania statedthat “[t]here is no reason to think that theSupreme Court’s holding in Lawson doesnot also apply, beyond contractors of publiccompanies, to agents of public companiesand those agents’ employees.” The courtwent further and explained that agencycould be established by the fact that Tycoperformed accounting and tax services forTyco Limited. The Court concluded that Mr.Wiest had established that Tyco acted as anagent for Tyco Limited, and under Lawson,his Sarbanes-Oxley claims could proceed. Wiest and Safarian illustrate that

Lawson has weakened or eliminated thisgatekeeping defense to whistleblowerclaims, with the result that courts will reachthe merits of many more such claims raisedby employees.

PRACTICE TIPS After Lawson it is clear that privatelyheld companies can no longer assume thatthey are immune from liability under theSarbanes-Oxley whistleblower provision.Directors of Human Resources and othercorporate officers should consider the fol-lowing steps: First, review your relationships withpublic companies. Consider whether yourprivate company contracts or subcontractswith a public company, whether any employ-ees may also work for public companies, orwhether any employees may also be agentsof public companies. Second, consider what activity is pro-tected under Sarbanes-Oxley. Train your su-pervisors and managerial employees tounderstand what activity is protected and toensure that they appropriately address con-duct that may be protected. Also considerinstituting internal procedures for employ-ees to complain about alleged violationswhich could be protected, and ensure thatsufficient procedures are in place to preventretaliatory conduct against such employees. Third, private companies now need toconsider revising or preparing policies thatprohibit retaliation to include the protectedactivities set forth in Sarbanes-Oxley. Finally, remain cautious in making ad-verse personnel decisions. Many companieshave problem employees, and the SupremeCourt may have opened the door for thoseemployees to claim whistleblower protec-tion. Take care to ensure that you under-stand whether these individuals are nowcovered under Sarbanes-Oxley, and that youare taking the necessary precautions to pre-vent retaliation for protected activity. Beproactive, and get ahead of this potentialflood of employment litigation.

Joshua Silk is an associatewith Hall Booth Smith, P.C.in Atlanta, Ga. He special-izes in healthcare litigationand employment law. He re-ceived his J.D. from theUniversity of Georgia Schoolof Law, magna cum laude,

served on The Georgia Law Review, and wasawarded the Order of the Coif.

1 Lawson v. FMR, LLC, 134 S. Ct. 1158, 188 L.Ed. 2d 158 (2014).2 18 U.S.C. § 1514A(a).3 2014 U.S. Dist. LEXIS 59684.4 2014 U.S. Dist. LEXIS 52472; 38 I.E.R. Cas. (BNA) 1.



“(n) Amateurism: the conviction thatpeople should participate in sports as ahobby (for the fun of it) rather than formoney.”1

Playing for the love of the game. It maybe why the American public fell in love withcollege sports. With professional athletesmaking millions of dollars from guaranteedsalaries and endorsement deals, there is anundeniable attraction to the purity of ama-teur athletics. But does the term ama-teurism still apply to the current state of“big time” college football and basketball? The National Collegiate AthleticAssociation (“NCAA”) continues to answerthis question affirmatively. It has long ar-gued that its amateurism rules protect com-petitive balance among schools andconferences and allow colleges to providescholarships across a spectrum of sports andsexes. It even invented the term “student-athlete” to combat the notion that colle-giate athletes should be rewarded for theirefforts on the field. But while colleges do not pay theirplayers, television contracts for collegesports have reached staggering heights,making NCAA executives and collegecoaches rich. Dr. Mark Emmert, Presidentof the NCAA, has a $1.7 million annualcompensation package. Some college

coaches are paid twice that amount.According to a 2013 study, in 40 differentstates the highest-paid state employee was a col-lege football or basketball coach.2

Not surprisingly, an increasing numberof players and former players are seeking apiece of the pie. The NCAA is facing attacksin courtrooms and before administrativebodies by those amateur athletes while, inthe court of public opinion, it is accused ofexploiting them. It is difficult for many tosee the NCAA’s position regarding compen-sation of players as anything other than anattempt to cling to 19th Century definitionsof amateurism while reaping thebenefits of 21st Centurymedia contracts. U n d o u b t e d l ythe NCAA is cor-rect that playersdo receivecompensa-tion fortheir ath-letic en-deavors

through their scholarships. The value ofthat education, however, so pales in compar-ison to the billions of dollars flowing to theNCAA and its members that it is no longereasy to perceive scholarships alone as ade-quate or just compensation. And even thatrecompense is questionable for the playerswho are in college simply because it is theonly viable avenue in the United States toprepare themselves for a career in profes-sional football or basketball. As a result ofthese legal assaults, the NCAA has beenforced to change, and likely will be required

to change again, how it admin-isters college sports.

FULL-COURT PRESS

Kevin Nelson and Alex Greenberg Huddleston Bolen LLP



In California, Ed O’Bannon (a formerUCLA basketball player) sued the NCAAand its corporate partners, EA Sports andthe Collegiate Licensing Company. Theclass action lawsuit sought an injunction toend the NCAA’s ban against paying collegeathletes for use of their names, images, andlikenesses (“NIL”). Prior to trial, theO’Bannon plaintiffs reached a $40 millionsettlement with EA Sports and CLC. Evenbefore the settlement, EA Sports discontin-ued production of its NCAA video games. After slogging its way through the legalsystem, the case proceeded to a three-weekbench trial. On August 8, 2014, U.S. DistrictCourt Judge Claudia Wilken found in favorof the O’Bannon plaintiffs and granted themtheir requested injunctive relief.3

Judge Wilken’s order provides for com-pensation to future athletes (those who en-roll in college on or after July 1, 2016) “inan amount of $5,000 per year or less” forthe licensing of Division I men’s basketballand Football Bowl Subdivision (“FBS”) foot-ball players’ NIL. The payments will be putinto a trust, payable upon graduation orwhen athletic eligibility is exhausted. JudgeWilken also prohibited the NCAA and itsmember schools from including the NILpayments in any calculation of the value ofan award of a full grant-in-aid. The O’Bannon decision, however, leavesmany issues with regard to NCAA athletesunresolved. There are other actions pend-ing in which current and former playersseek actual payment for their work, in otherwords direct “pay for play.” Additionally, be-cause O’Bannon applies solely to Division Ibasketball and FBS football players, therights of other college athletes to their NILare still undetermined. Similarly, the issueof how Title IX, which requires federally-funded universities to provide equal partic-ipatory opportunities to female athletes,applies to NIL payments is unresolved. If the O’Bannon decision stands (theNCAA has indicated that it will appeal andmay decide to take the fight in a different di-rection by seeking an anti-trust exemption),schools will have to offer the best high schoolrecruits the maximum value for their NILwhen recruiting. Emmert previously said thatan adverse ruling could lead to the “end ofcollege sports as we know it.”4 That is un-doubtedly true, but whether that “end” is un-desirable is a different question altogether. On the labor relations front, in March

2014 Peter Ohr, a regional director at theNational Labor Relations Board, deter-mined that Northwestern University foot-ball players were employees of theiruniversity. Ohr found that: (1) the athleteswere not primarily students; (2) their labor(playing football) did not connect meaning-fully to their studies; (3) academic facultydid not sponsor athletic endeavors; and (4)athletes’ scholarships were for playingsports, not academics. Under this decision football players areemployees and not merely student-athletes,contrary to the stance that the NCAA haslong maintained. Although an appeal is cur-rently pending before the full panel of theNLRB in Washington, the regional direc-tor’s ruling has opened the door for athletesat private institutions across the country toform collective bargaining units. If precedent is an indication,Northwestern’s players may have a toughbattle in front of the full NLRB. The NLRBdenied a previous effort to organize by grad-uate assistants at Brown University, findingthat the assistants were primarily students,not employees. Whether this same reason-ing applies to athletes remains unresolved.An even more interesting question, how-ever, is why an individual cannot be both astudent and an employee. While the Northwestern NLRB casemay yet be decided in favor of the NCAA(and, as a result, it may not have to bargainwith an organized labor force), theO’Bannon case seemingly had an impact onthe organization even before it was decided.A recent decision by the NCAA to allow forthe payment of stipends in addition to schol-arships may be its first move to attempt tohead off a full-scale revolt in its workforce. Just one day before the O’Bannon deci-sion was handed down, the NCAA Board ofDirectors approved a new model that givesthe nation’s five biggest conferences (theACC, Big Ten, Big 12, Pac-12, and SEC) theability to unilaterally change some basicrules governing college sports. The sixty-fiveuniversities that encompass the “Power 5”conferences have the financial resources toprovide more benefits to student-athletesthan the organization’s smaller members.In the past, the smaller conferences op-posed these benefits because their membersare unable to provide them and, therefore,to compete for the recruits that may be of-fered them.

Under this new system, the Power 5conferences have autonomy to regulate is-sues including stipends and medical cover-age for athletes, the amount ofcoaching/support staff, time demands, andpaying for athletes’ families to attendgames. As soon as they are allowed, thePower 5 schools will likely introduce newlegislation allowing schools to give a stipend(approximately $2,000 to $5,000 per yeardepending on the school) on top of an ath-lete’s scholarship to cover expenses beyondtuition, room, board, and books. Smaller conferences will have the abilityto adopt the same rules as the Power 5 but itis doubtful that they will be able to competedue to their financial constraints. Allowingthe bigger schools to offer these additionalfinancial enticements will likely cause amajor competitive gap between the teams inthe Power 5 conferences and the smallerconferences. This concern must be weighed,however, against the argument that it is un-fair for the smaller schools to prohibit theirwealthy brethren from implementingchanges that benefit student-athletes. The O’Bannon case, the potentialunionization of players, and public opinionhave combined to put the NCAA at a cross-roads.5 One fork takes the form of endlessappeals and seeking relief from rabidly in-terested politicians while repeating the twinmantras of "amateurism" and "student-ath-letes." The other, recently discovered, pathis to adopt policies that reflect a willingnessto consider the contributions that its mem-ber schools' athletes make to those institu-tions and their bottom lines. Which path itchooses will not likely determine whethercollege athletics will continue to change,but may decide whether the NCAA will con-tinue to play a role in that change.

Kevin Nelson is a partner and Alex Greenbergan associate in Huddleston Bolen LLP’sCharleston, West Virginia, office. They representnational and regional retail companies, man-ufacturers, financial institutions, and others inemployment matters. They also have active FirstAmendment practices representing parties indefamation and privacy cases with regard totraditional and web-based media.

1 http://wordnetweb.princeton.edu/perl/webwn?s=amateurism2 DEADSPIN.COM, Is Your State’s Highest-Paid Employee A Coach? (Probably), http://deadspin.com/infographic-

is-your-states-highest-paid-employee-a-co-489635228 (May 29, 2013).3 https://espn.go.com/pdf/2014/0808/espn_wilkindecision.pdf 4 http://www.nytimes.com/2014/06/09/sports/face-of-the-ncaa-battered-early-and-often.html5 While unaddressed in this article, the NCAA also faces the issue of whether it must provide future medical care to

athletes. If ultimately college athletes are found to be employees, a modified workers’ compensation system mayaddress those concerns.



Your client learns that a disgruntled em-ployee has accessed her company’s computersystem and pilfered proprietary business in-formation – valuable assets such as customerlists, pricing structures and distributor or sup-plier data. She contacts you, explains whathas occurred, instructs you to prepare a law-suit and get into court ASAP to enjoin use ofthe misappropriated information basedupon state trade secret law. Your responsemay not make her happy – that despite whather company has done to designate its infor-mation as confidential, she is not protectedunder state law. The reason: courts can besurprisingly restrictive in how they definetrade secrets, often rejecting an organiza-tion’s view as to what is, in fact, a secret.

But all is not lost. When state law failsto offer protection, Federal courts may offerremedy under the Computer Fraud andAbuse Act (CFAA) (18 U.S.C. § 1030). AFederal Statute Act, the CFAA was enactedin 1984 as a criminal statute to protect clas-sified information in government computersystems. A decade later, that protection –providing both compensatory damages andinjunctive relief – was extended to privatecivil matters (18 U.S.C. § 1030(g)) in whichcomputers are used for interstate or inter-national commerce or communication.While state courts considering trade secretissues focus on content, Federal courts con-sidering CFAA fact patterns focus on accessto content. As the use of computers by com-

panies of all sizes to both conduct andrecord business becomes universal, theCFAA has become a potentially effectivetool to protect the confidential and/or pro-prietary information of a business by clearlyrestricting employee access to computercontent in writing before proprietary infor-mation is breached. Afterwards, in absenceof written restrictions, court decisions showthat exploiting the CFAA is potentially effec-tive but more complex. The prima facie elements of a CFAAclaim under § 1030(a)(2) are: (1) inten-tional accessing of a computer; (2) access“without authorization” or that “exceeds au-thorized access”; (3) data taken from a pro-tected computer; and (4) data taken for

Peter Gleekel Larson • King, LLP

REVISING EMPLOYMENTAGREEMENTS AND

COMPUTER POLICIESTO PROTECT

CONFIDENTIAL/PROPRIETARYINFORMATION UNDERTHE COMPUTER FRAUD

AND ABUSE ACT



commercial advantage or private financialgain where the value of the information ob-tained exceeds $5,000. Section 1030(g), cre-ates a private right of action, provides a civilremedy to any person who suffers “damageor loss,” and provides for compensatorydamages, injunctive and other equitable re-lief. Section 1030(e)(8)(A) defines damageas “any impairment to the integrity or avail-ability of data, a program, a system or infor-mation” that causes a loss of at least $5,000in aggregate value during any one-year pe-riod. The statute of limitations is two yearsfrom the discovery of the damage. In considering strategies around theCFAA, it is vital to remember that its focusis access to – not necessarily use of – thebreached information. While Federal courtsare united in their understanding thatspammers, hackers, competitors and otheroutside infiltrators have no authority to ac-cess a company’s data, their view of an em-ployee’s rights differs by Circuit. At theheart of the legal interpretation is thephrase “exceeds authorized access,” which,according to the CFAA, means “to access acomputer with authorization and to usesuch access to obtain or alter information inthe computer that the accessor is not enti-tled to so obtain or alter.” 18 U.S.C.§ 1030(e)(6). The Fifth, Seventh and EleventhCircuit hold an expansive view of the phrase“exceeds authorized access” that takes intoaccount motivation and misuse in their de-cisions. Under this view, employees who oth-erwise are authorized to access a companycomputer can be liable for subsequent mis-use of the accessed information under gen-eral theories of agency law that recognizethat an employee has no authorization toaccess company files or information in amanner adverse to the company. Thesecases hold that defendants lost their author-ization to access their employer’s computerswhen they breached a duty of loyalty to theiremployer, even if the employer was unawareof the breach, by accessing information fora purpose contrary to the interests of the au-thorizing party. E.g: Int’l Airport Ctrs., LLC v.Citrin, 440 F.3d 418, 420-21 (7th Cir. 2006);Shurgard Storage Ctrs., Inc. v. Safeguard Self-Storage, Inc., 119 F. Supp.2d 1121, 1125(W.D. Wash. 2000); Citrin, 440 F.3d at 420;ViChip Corp. v. Lee, 438 F. Supp.2d 1087,1100 (N.D. Cal. 2006); NCMIC Finance Corp.v. Artino, 638 F. Supp.2d 1042, 1057 (S.D.Iowa 2009). A different view on issue of loyalty is atthe core of the more restrictive interpreta-tion of the phrase “exceeds authorized ac-cess” that has been adopted by the Fourthand Ninth Circuits, prohibiting CFAA liabil-

ity for employees who abuse otherwise legit-imate access to computerized company files.By this reasoning, an employee who copiesfiles and sends them to a competitor, for ex-ample, has not exceeded authorized accessand so, regardless of motivation or misuse,is not legally liable. These cases hold thatauthorized access to a computer systemdoes not “exceed authorized access” unlessthe authorization is actually revoked. E.g.,LVRC Holdings LLC v. Brekka, 581 F.3d 1127,1133-34 ( 9th Cir. 2009); Shamrock Foods Co.v. Gast, 535 F. Supp.2d 962, D. Ariz. 2008;B&B Microscopes v. Armogida, 532 F. Supp.2d744, W.D. Pa. 2007. In a potentially troubling trend for cor-porations, recent case law reflects this re-strictive thinking, increasingly rejecting theexpansive interpretation of “without author-ization.” The prevailing view holds that ifthe defendant had some authorization toaccess the computer at the time the com-puter was accessed, then, regardless of in-tent or misuse, the access was authorizedand not protected under the CFAA. Nor do most courts seem willing toallow for interpretation or inference in de-termining what constitutes unauthorized ac-cess. In United States v. Phillips (477 F.3d 215,219, 5th Cir. 2007), the court did allow roomfor reasonable expectations, asserting theneed to “analyze the scope of a user’s author-ization through access of protected com-puter on the basis of the expected norms ofintended use or the nature of the relation-ship established between the computerowner and the user.” However, the morecommon response is expressed in EF CulturalTravel BV v. Zefer Corp. (318 F.3d 58, 1st Cir.2003), which rejected a reasonable expecta-tions test for lack of authorization. Onlywhere authority is expressly limited by restric-tions memorialized in writing have mostcourts been willing to enforce the CFAA find-ing that authorized access has been ex-ceeded. E.g., Cont’l Group, Inc. v. KW Prop.Mgmt., LLC, 622 F. Supp. 2d 1357, S.D. Fla.2009; Modis Inc. v. Bardelli, 531 F. Supp.2d314, D. Conn. 2008; Hewlett-Packard v. Byd:Sign, Inc., 2007 WL 275476 at *13, E.D. Tex. In light of these restrictive rulings, thesoundest approach for an employer or or-ganization to ensure protection under theCFAA is to be able to prove limits to “autho-rized access.” To that end, a companyshould be prepared to present evidenceshowing (a) how an employee’s authority toobtain or alter information on the com-puter was limited, rather than absolute, and(b) how the employee exceeded the limita-tions in obtaining or altering the informa-tion. The most prudent manner in which todo so is to memorialize the restrictions in

writing, such as by a service contract, com-puter access policy, website notice, confi-dentiality agreement, employmentagreement or similar contract. Additionally,password protection is an implicit limit onaccess for otherwise authorized users whohave not been given the password. The importance of creating writtencomputer access policies with clearly articu-lated restrictions cannot be overstated.Consider the thinking of the Ninth CircuitCourt of Appeals, which was asked to exam-ine the issue of “exceeding authorized ac-cess” under CFAA in United States v. Nosal,642 F.3d 781 (9th Cir. 2011). After dis-cussing an earlier decision in Brekka that anemployee had not violated CFAA simply bymisusing accessed information since the ac-cess had not been explicitly revoked nor wasthe authority to access clearly limited, it de-termined that the Nosal employees had vio-lated CFAA. The difference: because Nosalhad clearly defined restrictions on access/use, its employees had knowingly exceededtheir authorized access. The take away for savvy employers is toleave nothing unstated, assume nothing isself-evident; just because an act of misappro-priation defies common sense doesn’t meanit defies the law. It’s critical to expressly pro-hibit any employee, independent contrac-tor or other individual who hasauthorization to access a computer for legit-imate business reasons from accessing thecomputer for any improper purpose.Clearly written and imparted instructionsthat computer access is granted, such as“strictly for business use” and “to be usedsolely for the organization’s business pur-poses,” or similar restrictive language pro-vide an organization with the bestevidentiary foundation to protect and en-join the use of its proprietary/confidentialinformation. That way, even if the propri-etary/confidential data is not officially atrade secret, the CFAA will make sure it’snobody else’s business.

Peter Gleekel is a commer-cial litigator at Larson •King, LLP with more than30 years of jury and benchtrial experience in federaland state courts throughoutthe nation. He serves aslead counsel and strategist

for international, national and local clients,with particular expertise in complex corporateownership and governance disputes, and intel-lectual property litigation.



A struggling economy, surge in distrustof corporations and a social media frenzythat makes it nearly impossible to controlwhat people are saying all add up to onething for businesses: they are being suedmore often, for more money. And it’s notonly the legal fees and potential settlement“payouts” that are affecting bottom lines.The impact of the consumer aftermath onprofits and the livelihood of the business

overall causes a huge worry for all types ofcompanies. In today’s highly litigious envi-ronment, it’s no wonder that companies areprimarily concerned with how generalcounsel manages the risk of litigation andhandles increased exposure. With so muchat stake, an entire science has evolvedaround helping businesses weigh every fac-tor and predict the effect of a jury trial vs.settlement… that is, risk management.

The science of risk management, natu-rally, leads to the image of the proverbial“men in lab coats,” the people taking thelead to research, analyze and make recom-mendations for the next course of action.The origins of corporate general counseldemonstrate how its role has come full circleas it now fills this critical role of “scientist” for

The Science & Necessity ofRisk Management

Ron Kurzman Magna Legal Services, LLC



businesses in the 21st century. In the 1920sand 1930s, general counsel were involved inmaking critical business decisions with themanagement of the company. However, withthe emergence of business schools from the1940s to the mid 1970s, business decisionswere taken away from lawyers and handedover to business school graduates. This leftgeneral counsel to act primarily as a legal ad-visor during the 1970s to the late 1990s,when there was an unparalleled growth ofregulatory agencies and corporate regula-tions. However, starting in late 1990s andcontinuing to present, general counsel hasreturned to more of its historical roots –being heavily involved in making critical busi-ness decisions as Legal Risk Managers. So, exactly what do they do? Generalcounsel’s role as legal risk manager encom-passes a wide array of responsibilities includ-ing identifying and analyzing risk,counseling senior management and theboard, and controlling costs.

WHAT IS RISK MANAGEMENT? The process of risk management con-sists of well-defined steps, which when takenin sequence, can be used to analyze expo-sure and determine how to best handlesuch exposure. When done with concentra-tion and skill, the benefits of risk manage-ment can be many, including:• Identifying risks and avoiding surprises• Developing a strategic plan for better cost

control• Enhancing shareholder value by minimiz-

ing losses and maximizing opportunities• Informing the CEO and the board of the

exposure to risk• Resolving lawsuits in a systematic, well-in-

formed and cost-effective method

Like any science, risk management isheavily dependent on research – discover-ing and uncovering key information. Uponentering into the research phase, there arelayers upon layers of risk connected withany given lawsuit. For example, legal risk,public perception risk and business risk arelayers that cannot be accurately identifiedwithout proper testing. Legal risk is the identified financial riskthat may result from the uncertainty of liti-gation, including: regulatory sanctions,shareholder lawsuits, and damages awardedby a jury. Public perception risk is the finan-cial risk to a company’s image due to the un-certainty of litigation, which includes:customer mistrust in a corporation’s prod-ucts or services, customer dissatisfactionwith the company’s management, and/orloss of stock value due to negative corporateimage. Business risk is the financial risk to

the company’s products and/or servicesthat may result from the uncertainty of liti-gation, including the potential loss of salesor intellectual property. Of course, each of these three risk cate-gories has its own myriad of tangential risksthat also must be uncovered. Moreover, thereare other possibilities, such as the risk of ad-ditional lawsuits spurred by the original. Juryresearch consultants are invaluable in assist-ing general counsel with identifying theserisks. By performing research on representa-tive populations, trial consultants can help acorporation uncover the true nature of therisk associated with a particular lawsuit.

PUTTING RESEARCH TO WORK The research and data uncovered havea great deal of potential power, but knowingis not enough to effectively manage thelegal risks and avoid unnecessary costs tothe corporation. The real power of thisknowledge is in its analysis. By performingstrategy development and testing research,or what is more commonly known as “focusgroup” research, the guessing game of riskanalysis is eliminated. Research providesgeneral counsel with a detailed report set-ting forth the identified risks, as well as pro-viding a breakdown of demographic and/orsocioeconomic trends. The job of analyzingthe risk is then turned over to the generalcounsel, who equipped with this research,now has a reliable basis upon which to eval-uate the identified risks of litigation. It’s important that the focus of theanalysis be on the cumulative effect that theidentified risk may have for the company.With a broad perspective of the risk and thecompany’s objectives in mind, general coun-sel will be able to better determine whetherthe company should defend litigation.

MORE SCIENCE NEEDED The data provided by research in andof itself is not enough to make a decisionabout going to trial. Even if initial researchand analysis points toward a jury trial, anddemonstrates confidence in a company pre-vailing at trial, there are many more consid-erations that can be revealed by furtherresearch and that are involved in risk man-agement. What will a public jury trial due tothe company’s image, even if the ruling isin its favor? What will the legal fees run tofor a relatively quick trial? For a lengthytrial? What are the potential damages costs? And then, there is a whole other set ofconsiderations put in motion by the powerof social media. With social media Internettraffic up 66% from just a year ago, jurorsand non-jurors alike have potential to betalking about a business’s pending trial, trial

or settlement decision. Therefore, morequestions need to be asked and added tothe analysis. What is the potential for “talk,”positive or negative before, during and afterthe trial? How long will the conversationscontinue and impact business post trial orsettlement? Does this one case have the po-tential of being re-visited every time thecompany announces a new product, serviceor structural change? Does the longevity ofthose conversations increase or decreasewith a settlement? A huge number of spokes feed into thehub where the decision is made to go to trialor to settle. Risk management requires givingeach the appropriate weight it deserves, andpainting the most comprehensive and accu-rate picture possible. The analytical processmay vary by type of case and among generalcounsel; however, the one thing that is forsure is that with the use of additional analyt-ical tools, companies can feel comfortablethat their general counsel have systematicmechanisms to measure the WHOLE risk.

MORE VALUE THAN “YES OR NO” Risk management is complex, intense,time-consuming and cost-incurring. But it’salso critical. Plus, it is an incredible asset inthat it offers more critical value beyond thedecision of whether or not to go to trial. Inthe event a company decides to proceedwith litigation, it will be ahead of the gamefor several reasons. First, the results from re-search can be used to identify the issues thatare most important to the jury. Second, oncethe case has been tested on a venue-specificpool of surrogate jurors, the trial consultantwill work with outside counsel to developrecommendations and trial strategy. Next,research can inform the development of in-formational and persuasive graphics forpresentation at trial. Finally, the research re-sults can be used to assist in jury selectionand witness preparation. If the decision is tonot go to trial, the corporation can still shareits newly found knowledge and strategieswith other counsel who are facing similarcases. The company also has a solid ground-work and best practices for the future.

Ron Kurzman, Esq., found-ing Partner and LitigationConsultant at MagnaLegal Services, LLC, is oneof the leading experts in be-havioral research and juryanalysis. He assists counselin the development of win-

ning trial strategies for complex commercialmatters, and works with top law firms and cor-porations nationwide.



On April 29, 2014, the U.S. SupremeCourt issued two opinions that substantiallyrelaxed the standard for awarding attor-neys’ fees in patent infringement litigation.The opinions likely will relax the standardfor awarding attorneys’ fees in trademarkand copyright cases, too. Take note, becausethe benchmarks for assessing the risk of in-tellectual property litigation just moved.

THE COST OF INTELLECTUALPROPERTY LITIGATION Intellectual property litigation is acostly endeavor. The American IntellectualProperty Law Association’s 2013 Report ofthe Economic Survey provided the mediancost of litigating a patent infringement,trademark infringement, and copyright in-fringement suit through trial based on the

amount at risk. The findings are reflectedin the chart below.1

On average, a litigant incurs betweenfifty and sixty percent of these fees throughthe end of discovery.2 The cost of litigationcan be a substantial fraction of, or in somecases exceed, the potential monetary award.Consequently, the standard governing theaward of attorneys’ fees is critically impor-tant to both plaintiffs and defendants. Federal law authorizes the court in in-tellectual property cases to grant attorneys’fees to the prevailing party if the court findsthe case “exceptional.” Prior to April 29,2014, the U.S. Courts of Appeals had devel-oped standards for determining when acase was “exceptional” and warranted attor-neys’ fees. For patent litigation, the U.S.Court of Appeals for the Federal Circuit,

which hears all patent-related appeals, heldthat a prevailing party could recover its at-torneys’ fees if it showed by clear and convinc-ing evidence that the losing party committedsome “material inappropriate conduct” orbrought the litigation “in subjective badfaith” and the litigation was “objectivelybaseless.”3 This was a very difficult burdenof proof. Thus, awards of attorneys’ feeswere the exception, not the rule.

“EXCEPTIONAL” NOW MEANS EXCEPTIONAL In Octane Fitness v. Icon Health & Fitness,Inc., the U.S. Supreme Court called “[t]heframework established by the FederalCircuit…unduly rigid.” The SupremeCourt observed that the statute on attor-neys’ fees states a court “may award reason-

RECALCULATINGTHE RISK OF

INTELLECTUAL PROPERTYLITIGATION

THE U.S. SUPREME COURT LOWERS THE THRESHOLDFOR AWARDING ATTORNEYS’ FEES IN PATENT LITIGATION

Richard M. Carter and Adam J. Eckstein Martin, Tate, Morrow & Marston, P.C.

AMOUNT AT RISK PATENT INFRINGEMENT TRADEMARK COPYRIGHT

Less than $1 mil. $700,000 $300,000 $300,000

$1 mil. to $10 mil. $2 mil. $550,000 $563,000

$10 mil. to $25 mil. $3.325 mil. $1 mil. $1 mil.

More than $25 mil. $5.5 mil. $1.5 mil. $1.625 mil.



able fees to the prevailing party” in “excep-tional cases,” and held, “This text ispatently clear. It imposes one and only oneconstraint on district courts’ discretion toaward attorneys’ fees in patent litigation:The power is reserved for ‘exceptional’cases.”4 An exceptional case, the Courtstated, “is simply one that stands out fromothers with respect to the substantivestrength of a party’s litigating position (con-sidering both the governing law and thefacts of the case) or the unreasonable man-ner in which the case was litigated.” TheCourt observed that trial courts may con-sider “frivolousness, motivation, objectiveunreasonableness (both in the factual andlegal components of the case) and the needin particular circumstances to advance con-siderations of compensation and deter-rence” when determining whether to awardattorneys’ fees.5

The holding of Octane Fitness tends tolevel the field in litigation by making itmore likely that the prevailing party may re-cover its fees and expenses. This potentialcost shifting will force both plaintiffs and de-fendants early in the case to assess thestrength of their case more carefully. In apatent case, a plaintiff seeking $1 million inactual damages will have the potential up-side of recovering that plus its $700,000 inattorneys’ fees if it wins, but the downsiderisk of having to pay the defendant’s$700,000 in attorneys’ fees if it loses.Likewise, the prevailing defendant underOctane Fitness more likely could recover itsattorneys’ fees but, in the event of a loss,more likely would face judgment of $1 mil-lion plus plaintiffs’ $700,000 in attorneys’fees. Octane Fitness, therefore, dramaticallychanges the risk assessment for litigation. Moreover, a district court’s award of at-torneys’ fees is unlikely to be reversed on ap-peal. In Highmark Inc. v. Allcare HealthManagement System, Inc., also issued on April29, 2014, the Supreme Court held that, be-cause the statutes authorize a trial court to useits discretion when awarding attorneys’ feesin exceptional cases, an appeals court shouldreverse the trial court’s decision only whenthe trial court abused its discretion. An ap-peals court will reverse an award of attorneys’fees only if the trial court based its ruling “onan erroneous view of the law or on a clearlyerroneous assessment of the evidence.”6

RECALCULATING THE RISK The Supreme Court’s ruling on attor-neys’ fees should cause intellectual propertylitigants to consider the following: Know your case. Review claims and de-fenses with a dispassionate and critical eye.Being able to survive a motion to dismiss ora sanctions motion does not preclude thecourt from awarding attorneys’ fees to theother party. A weak claim or defense that re-quires the opposing party to expend sub-stantial attorneys’ fees more likely will resultin an award of attorneys’ fees against theproponent of the claim or defense. Courtswill have more authority to shift costs ifthere is evidence of willful infringement orof fraud or inequitable conduct in obtain-ing the patent, trademark, or copyright. Bethe first to know if the court may have justi-fication to award the opposing party fees. Venue matters. The law is uniform, butapplication of the law to your case will de-pend on whether the judge finds the case“exceptional.” In the next few years, beforethe U.S. Courts of Appeals have an oppor-tunity to construe the Supreme Court’s def-inition of “exceptional,” judges will rely ontheir experience with past or concurrentcases to determine if attorneys’ fees shouldbe awarded. For patent infringement suits, be awarethat since 2011 fourteen federal districtcourts have been participating in a ten-yearpilot program: the Eastern and SouthernDistricts of New York, the Western District ofPennsylvania, the District of New Jersey, theDistrict of Maryland, the Northern Districtof Illinois, the Southern District of Florida,the District of Nevada, the Eastern andNorthern Districts of Texas, the WesternDistrict of Tennessee, and the Central,Northern, and Southern Districts ofCalifornia. In these districts, patent cases areassigned to judges who requested to hearpatent cases and who, in all likelihood, havea depth of experience in the area. These dis-tricts also have adopted local rules for patentcases. These jurisdictions are venues wherea litigant can expect an experienced hand atthe till of the patent case.7 Local counsel matters. If the lead attor-ney is out-of-state or unfamiliar with thejudge who will be presiding over the lawsuit,obtain local counsel who knows the judgeand the court’s tendencies. The factors thecourt considers are subjective.

Frivolousness, for example, may be in theeye of the beholder (the judge), as canwhether particular circumstances exist inwhich a judge feels the need to deter othersfrom similar actions. Experienced localcounsel should act in concert with leadcounsel and assist the litigant in accuratelyevaluating the risks throughout the case. Keep the case unexceptional. TheRules of Civil Procedure, Rules of Evidence,and Local Rules of Practice establish a scripta court expects all cases to follow; followthem. Do not play fast and loose with discov-ery. File motions only when a good basis ex-ists for the court to grant the motion, andoppose motions only when no good basisexists for the relief requested. Be courteousto the opposing party in all communica-tions. Intellectual property disputes oftenare fought against a business competitor forwhom no love is lost, and forcing a competi-tor to expend attorneys’ fees now may beuseful business strategy. But trial courtslikely will award attorneys’ fees to a prevail-ing party when pursuit of the case appearsunrelated to the goal of vindicating intellec-tual property rights. Know that, cumula-tively, petty trial disputes may havesubstantial monetary ramifications. Employee emails can become exhibits.A few emails indicating litigation is for animproper purpose or has an improper ef-fect could serve as a basis for the court toaward attorneys’ fees. In Octane Fitness, forexample, an executive responded to thecomment, “I heard we are suing Octane!”by emailing “Yes – old patent we had for along time that was sitting on the shelf. Theyare just looking for royalties.”8 Remind em-ployees to communicate about the litigationas though the court is reading their corre-spondence; it may be.

Richard M. Carter is a di-rector of Martin, Tate,Morrow & Marston, P.C.,and head of its LitigationDepartment. Mr. Carterhas more than 30 years ofexperience in litigation andmore than 15 years of expe-

rience litigating patent and other intellectualproperty cases.

Adam J. Eckstein is a seniorassociate with Martin,Tate, Morrow & Marston,P.C. who primarily practicesin the areas of intellectualproperty and commercial lit-igation.

1 American Intellectual Property Law Association, Report of the Economic Survey, pp.34-36 (July 2013).2 Id.3 Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (2005).4 Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. __, 134 S.Ct. 1749, 1755-56 (2014).5 Id., 134 S.Ct. at 1756 & n.6.6 Highmark Inc. v. Allcare Health Management System, Inc., 572 U.S. __, 134 S.Ct. 1744, 1748-49 & n.2 (2014).7 The Third Branch News, District Courts Selected for Patent Pilot Program (June 7, 2011), available at http://www.uscourts.

gov/news/newsview/11-06-07/District_Courts_Selected_for_Patent_Pilot_Program.aspx, last visited July 3, 2014.8 Octane Fitness, 134 S.Ct. at 1755 n.5.



In order to ensure those with cata-strophic or life-long injuries are fairly com-pensated, personal injury attorneys oftensecure a life care plan that projects antici-pated future health care costs allegedly ne-cessitated by the tort. These life care planshave been a necessary, appropriate, andcostly part of injury cases for much of therecent history of tort litigation. Lifetimecosts of medications, doctor’s appoint-ments, and therapies quickly drive life careplan totals into the millions. An argumentcan be made that as a consequence of thePatient Protection and Affordable Care Act(“ACA”), these projections no longer accu-rately reflect the measure of damages,which allows respondents (whether insurersor defendants) to attack supporting expertreports as unreliable. Damages in tort cases are designed toprovide compensation for the injury caused– no more, no less. As such, Courts recog-nize that an injured person has a duty tomitigate his/her damages, and Courts gen-erally will not allow an injured claimant torecover medical expense damages that ex-ceed amounts actually incurred or that rea-sonably will be incurred.

The ACA contains several key provi-sions which are now effective and work intandem to fundamentally alter how medicalservices are accessed and compensated.These provisions should operate to limit theinjured person’s recoverable damages forfuture medical care. First, the act containsan “individual mandate,” (26 U.S.C.A. §5000A; “Requirement to maintain mini-mum essential coverage”) imposing a“penalty” on those who fail to conform. Inessence, as law abiding United States citi-zens, the injured party must now obtainhealth insurance. Second, the ACA contains a provisiontitled “Prohibition of preexisting conditionexclusions or other discrimination based onhealth status.” 42 U.S.C.A. § 300gg-3. This

provision means that insurers cannot turnaway any individual because of the injurieshe has suffered, even when they know withreasonable certainty that the individual’sclaim costs will far exceed his/her premi-ums paid. Prior to the ACA, an injuredclaimant could argue that the life care plansrepresented actual costs because the injuryrendered him/her uninsurable. Now, evenin cases involving lost limbs, severe burns,or traumatic brain injury, an individual willstill be able to obtain and maintain healthinsurance benefits.

DOES THE PATIENT PROTECTIONAND AFFORDABLE CARE ACT

END LIFE CARE PLANS ASWE KNOW THEM?

Jerry Green and Amy Neathery Pierce Couch Hendrickson Baysinger & Green, L.L.P.



Third, the ACA sets forth yearly out-of-pocket maximum limits. Under 42 U.S.C.A.§ 18022(c)(1), the sum of an individual’sdeductible and out-of-pocket expenses shallnot exceed $5,000 (exclusive of the cost ofpremiums, which average $348 per month).This sum includes those medical servicescaused by the incident and those that arenot. For 2015 and later, this cap will be ad-justed as determined by the Secretary of theDepartment of Health and Human Services.42 U.S.C.A. § 18022(c)(1)(B). However, theadjusted maximum will not ever approachthe actual cost of services such as surgery orintense physical and occupational therapy. Expert reports supporting life careplans are not yet taking into account the sav-ings available under the ACA. This omissionis substantial in terms of the actual value ofany future medical expense needs andmakes the reports unreliable under thestandards set forth by Fed. R. Evid. §§ 401,402 and Daubert v. Merrell DowPharmaceuticals, Inc., 509 U.S. 579 (1993)and its progeny. In their current format,most life care plans presume that injuredparties will violate the “individual mandate”imposed by law. Further, by not taking ad-vantage of the ACA and the yearly out-of-pocket limits it offers, the plans assume afailure of the duty to mitigate damages. Theduty to mitigate damages does not requirean injured person to do what is unreason-able or impracticable. However, buyinghealth insurance to cover preexisting con-ditions is no longer unreasonable or im-practicable. Indeed, it is now required byfederal law and available to everyone. Claimants have asserted two primaryarguments against consideration of theACA in computing future damages. Thefirst argument is that the insurance ob-tained under the ACA is a collateral source.The policy behind the collateral source ruleis that the respondent should not benefitfrom reduced exposure because the injuredperson had his own health insurance.Although states are increasingly abolishingthe collateral source rule and limiting theintroduction of evidence of incurred med-

ical expense amounts (not what was writtenoff by providers under agreements withhealth insurance companies, Medicaid, orworkers’ compensation schedules), reducedfuture damages under the ACA arguably arenot a collateral source. In analyzing the rea-sonableness of future medical costs, the re-spondent has the right to expect that theinjured person will take the steps legallyavailable (and indeed required) to mitigatehis/her expenses1. Moreover, if part of thedamages awarded or paid includes the an-nual policy premiums, the respondentfunds the policy, and it is not a collateralsource. The second argument against the ACAis that following a future election, the ACAwill be repealed. This article is not a forumfor political debate, but given the millionsof Americans who are benefiting from theACA, a repeal may not be as likely as somethink. Regardless, the ACA is the law now,and the ACA should be considered and fol-lowed as long as it remains operational law. The 2014 provisions of ACA are intheir infancy and too new for any bindingprecedent regarding application in thesecircumstances. However, in trying to estab-lish precedent and convince Courts to ac-cept the applicability of the ACA incomputing future medical costs, there arethree primary arguments to urge. First, tak-ing advantage of the ACA falls within aclaimant’s duty to mitigate his/her dam-ages. Second, the ACA is not a collateralsource, particularly if the respondent isfunding premiums as an element of dam-ages. Third, experts who do not considerthe ACA in their life care plans do not meetDaubert standards for reliability because inorder to conform to the tort system’s man-date of providing compensatory rather thanwindfall damages, assumptions made abouta plaintiff’s future ability to receive caremust also change with this fundamentalshift in federal law; the plans that do not doso are not reliable. Application of the ACA can provide sig-nificant settlement savings or reduce the fu-ture damage claims presented to juries. For

example, most, if not all components, of a$3 million, 20-year life care plan could befully satisfied with 20 years of premium pay-ments (average rate of $348 per month fora total of $83,520) and 20 years of yearly outof pocket maximum (currently $5,000, fora total of $100,000), a total payment of$183,520 and a savings of over $2.8 million2.Even on smaller cases such as a spinal fusionor bilateral knee replacement, an award of$50,000 for surgery and $10,000 of physicaltherapy is not justified. The claimant wouldbe compensated with 1-2 years of ACA cov-erage ($9,176-$18,352). If presented to thejury, applying the benefits of compliancewith the ACA supports arguments that (1)the plaintiff is not prevented from receivingall of the medical treatment his/her physi-cians claim will be needed, and (2) theplaintiff is actually obtaining an extra bene-fit because not only are injury-related futuremedical expenses covered, but the awardedpremiums will provide coverage for otherhealth ailments (e.g., flu, diabetes, or al-lergy shots) not related to the incident. When examining life care plans (or anylarge future damage claim), the ACAshould be considered and strongly argued.There is no harm to the claimant – he/shereceives compensation for all claimed med-ical expenses – but the savings for the re-spondent are significant.

Jerry Green is a senior part-ner with Pierce CouchHendrickson Baysinger &Green, L.L.P. After attend-ing the U.S. Air ForceAcademy and obtaining aBachelor’s from theUniversity of Oklahoma,

Jerry received his J.D. from the University ofOklahoma in 1976. His litigation practicelargely focuses on insurance, environmentaland energy, and professional liability litigation.

Amy Neathery is a senior as-sociate with Pierce CouchHendrickson Baysinger &Green, L.L.P. She gradu-ated summa cum laudefrom the University of Texasat Dallas, and in 2004, ob-tained an M.P.A. and J.D.

with distinction from the University ofOklahoma. Amy’s practice focuses on insurancebad faith litigation and coverage opinions.

1 The purchase of post-loss insurance to mitigate future losses is recognized by the Courts as part of the duty to mit-igate. See, e.g., In Pattee v. Georgia Ports Authority (S.D.Ga. 2007) 512 F.Supp.2d 1372, 1381-2; Maere v. Churchill 452N.E.2d 694, 699?700 (Ill.Ct.App. 1983) (plaintiffs refusal to purchase title insurance policy barred measure of dam-ages that would have been recoverable); Brzoska v. Olson, 668 A.2d 1355, 1367 (Del. 1995) (evidence that free HIVtesting was available presented a jury question as to whether plaintiff improperly failed to mitigate damages by in-curring the expense of private HIV testing); Sanford Bros. Boats, Inc. v. Vidrine 412 F.2d 958, 973?974 (5th Cir. 1969)(seaman’s failure to accept free medical services available at a nearby Marine Hospital barred him from recoveringthe cost of private medical care); Fariss v. Lynchburg Foundry, 769 F.2d 958, 965-66 (4th Cir. 1985) (“Nor is it sufficientto respond that an employer who discriminates in violation of the ADEA deserves to bear such a sizable and unan-ticipated penalty, for in most instances, the employee can easily avoid the risk of being uninsured by purchasingan individual policy of comparable value”).

2 Obviously, there are going to premium and out-of-pocket limit increases, which will be hard to estimate. But, ifdamages are reduced to present value, then an economist should be able to estimate the amount needed to coversuch increases.



January 2014 marked a new day formortgage lenders as most of the ConsumerFinancial Protection Bureau’s (“CFPB”)new mortgage rules under the Dodd-FrankWall Street Reform and ConsumerProtection Act (“Dodd-Frank”) were imple-mented. The CFPB introduced new regula-tions changing the way financial institutionsunderwrite, disclose and service their con-sumer mortgages. While financial institu-tions are wiping their brows in exhaustionfollowing months of implementing newpolicies and procedures to keep up withthese regulations, their rest will be brief asthe CFPB has more to come in 2015. Effective for most closed-end consumermortgage applications received after August1, 2015, lenders will be required to use twodisclosure forms: (1) the Loan Estimate and

(2) the Closing Disclosure. These twoforms, part of the CFPB’s “Know Before YouOwe” campaign, are easy-to-read and easy-to-understand forms that replace the fourexisting disclosures (i.e., Good FaithEstimate (“GFE”), HUD-1 and the twoTruth-in-Lending forms) currently used bylenders. The CFPB found that the currentforms were difficult for consumers to under-stand and contained redundant informa-tion. Based upon its extensive research, theCFPB believes these new forms will makethe terms of the mortgage easier for theconsumer to understand, and less burden-some for lenders and settlement agents toprovide and explain to the consumer. While most closed-end mortgages se-cured by a dwelling are included in this newrule, the rule does exempt home equity

lines of credit (“HELOCs”), reverse mort-gages or mortgages that are not secured byproperty attached to land. Further, lendersshould take note that the new disclosuresare required for mortgage applications re-ceived on or after August 1, 2015. Theremay be an overlap period where lenders willbe using both the old disclosures (i.e., forapplications submitted before August 1,2015, but for which the closing occurs afterAugust 1, 2015) and the new disclosures(i.e., for applications submitted on or afterAugust 1, 2015) during the application andclosing process.

LOAN ESTIMATE The first form that is part of the new“Know Before You Owe” campaign is theLoan Estimate form. The Loan Estimate is a

IT’S NOT OVERNEW MORTGAGE FORMS

REQUIRED IN 2015

Christopher K. Loftus Simmons Perrine Moyer Bergman PLC



three-page document that consolidates andreplaces the GFE and the initial Truth-in-Lending form (“Initial TIL”) for coveredtransactions. The Loan Estimate must be de-livered or mailed to the consumer withinthree business days on receipt of a loan ap-plication. If there is a change to the LoanEstimate, the lender must deliver a revisedestimate to the consumer within three busi-ness days of the change and no later thanseven business days prior to consummation.1 The CFPB consolidated the GFE andInitial TIL into one form and placed whatit deems to be the most pertinent loan in-formation at the beginning of the form.The first page of the Loan Estimate pro-vides the consumer with the essential infor-mation in regard to the mortgage (e.g., loanamount, interest rate, monthly principaland interest, estimated closing costs, etc.),which previously was disclosed in the firstpages of the GFE and Initial TIL. Similar tothe GFE, the first page also highlights lessdesirable loan terms such as a prepaymentpenalty and/or balloon payment, andwhether the loan amount, interest rate, ormonthly principal and interest may changefollowing consummation. The first page contains a section de-signed to assist the consumer in under-standing the total amount of their projectedloan payments. Here, the lender will haveto disclose the principal and interest, mort-gage insurance, estimated escrow, estimatedmonthly payment, taxes, insurance and as-sessments. If the periodic payment maychange over the life of the loan due to cer-tain events (e.g., negative amortization, in-terest only payments or a balloon payment),the lender will have to disclose what the pe-riodic payment will be following the trigger-ing event. For adjustable rate mortgages(“ARMs”), the lender must disclose whatthe maximum payment could be, assumingthe interest rate will rise as rapidly as possi-ble under the terms of the loan. The second page of the Loan Estimatedetails the projected costs associated withthe loan, similar to the information previ-ously found on the second page of the GFE.Here, the consumer receives a breakdownof the projected costs, including: a good-faith itemization of the loan costs; a tablecalculating the amount of cash needed toclose; and a table for loans with adjustablepayments or interest payments containingrelevant information as to how the monthlypayment or interest rate will change. Loancosts are broken into three separate cate-gories: origination charges; services for

which the consumer cannot shop; and serv-ices for which the consumer can shop. Foreach category, the lender will disclose theindividual fees and charges for various serv-ices (e.g., appraisals, credit reports, closingagent fee, etc.). The total from all three cat-egories will be added up and listed for theconsumer as the “Total Loan Costs.” Afourth table, entitled “Other Costs,” detailsother associated costs to be paid by the con-sumer at consummation, including transfertaxes and government fees, pre-paids (e.g.,insurance premiums and property taxes)and the initial escrow payment. The third page provides the consumerwith helpful information to consider priorto closing on the loan. For example, thelender must provide the consumer with theestimated amount of principal paid off, as-suming the consumer makes his/her mort-gage payment (i.e., principal, interest,mortgage insurance and loan costs) for fiveconsecutive years. The lender must also dis-close the annual percentage rate (“APR”)(i.e., the costs over the loan term, expressedas a rate); the total interest percentage(“TIP”) (i.e., the total amount of interestpaid over the loan term, expressed as a per-centage); and whether the lender will beservicing the loan or transferring its servicerights to a third party. Lastly, the lenderand/or mortgage broker must provide theconsumer with sufficient information toidentify and contact the agent (i.e., NMLSID, email and phone number). The con-sumer is not required to sign the LoanEstimate; however, the lender may add a sig-nature block for the consumer’s signatureto acknowledge receipt of the document.

CLOSING DISCLOSURE The second form that is part of the new“Know Before You Owe” campaign is theClosing Disclosure form. The ClosingDisclosure is a five-page document that re-places the HUD-1 and final TIL disclosure(“Final TIL”) by combining the two docu-ments into one form. For any federally re-lated mortgage loan subject to Real EstateSettlement Procedures Act (“RESPA”),lenders must use the Closing Disclosureform issued by the CFPB. In contrast, forloans subject to RESPA that are not feder-ally related mortgage loans, lenders do nothave to use the Closing Disclosure, but theclosing document must include the sameheadings, format, and information. The Closing Disclosure must be pro-vided to the consumer at least three busi-ness days before consummation. While

lenders may rely upon the settlement agentto deliver the disclosure to the consumer,the lender is ultimately responsible for anyerrors or defects within the document. The first page of the Closing Disclosuremirrors the first page of the Loan Estimateallowing the consumer to do a side-by-sidecomparison of the two documents. Withinthe Closing Disclosure, the creditor must dis-close the actual terms and costs of the trans-action (e.g., taxes and fees), disclosures thatcurrently are included in the HUD-1. If theterms change after the Closing Disclosure isdelivered to the consumer, a new disclosuremust be provided. A new three-business-daywaiting period will be required for allchanges (1) to the loan’s APR, (2) to theloan product or (3) that result in the addi-tion of a prepayment penalty to the loan. Forall other changes, creditors must ensure thatthe consumer receives a new disclosure at orbefore consummation. Furthermore, in in-stances where the amounts change for eventsthat occur post-consummation (e.g., record-ing fees), a creditor will be required to pro-vide the consumer with a revised disclosurereflecting the changed amount followingconsummation. Additionally, the new regulations im-pose restrictions upon creditors with re-spect to certain fees they charge in relationto the loan. For example, creditors may notimpose fees for the application, appraisaland underwriting until the borrower has in-dicated an intent to proceed with the loan.However, the lender may impose a fee forobtaining the consumer’s credit report. While much of the content of these dis-closures is already contained within the cur-rent closing documents, the formsthemselves are quite different and will re-quire updates to a lender’s policies and pro-cedures and training to staff prior to theAugust 1, 2015, deadline. The CFPB haspublished guides, instruction manuals andexamples, as well as the new disclosuresthemselves, on its website to assist lendersahead of this transition.

Additional Resources: www.consumerfinance.gov/regulatory-implementation

Christopher K. Loftus is anattorney at SimmonsPerrine Moyer BergmanPLC in Cedar Rapids,Iowa. He is engaged prima-rily in finance and finan-cial institutions, bankinglitigation and bankruptcy

law. Prior to joining the firm, Mr. Loftus servedas associate general counsel for the MinnesotaCredit Union Network.

1 Lenders should take note that the new regulations set the deadlines around the date of “consummation.” Whilegenerally the same date, consummation is not considered the date of closing or settlement; rather, “consummation”is defined by the CFPB as the date when the consumer becomes contractually obligated to the seller under thetransaction.



In addition to prosecuting claims forclients and in the process, ideally makingthem whole, plaintiffs attorneys should, intheory, serve a gatekeeper role for cullingout claims that are frivolous. When aprospective client approaches a plaintiff’sattorney, a business decision has to be madeby that attorney. It would be irrational for aplaintiff’s attorney to take on cases that can-not be won at trial or settled for less thanthe cost of prosecuting the lawsuit. Experienced plaintiffs attorneys knowwhich cases are potentially lucrative andwhich are not. In the process they preventutterly baseless claims from being pursued.

If no attorney will take the case, a plaintiffcan note that there is a very strong chancethe case is frivolous. However, the FinancialIndustry Regulatory Authority (FINRA)rules permit a party to an arbitration to berepresented by a non-lawyer. This allowanceseems to promote litigation that nevershould have been filed. This article dis-cusses one recent example of how this prac-tice can be harmful to both respondents aswell as claimants. Certain organizations staffed by non-lawyers, such as Stock Market RecoveryConsultants Inc., advertise for and repre-sent claimants in FINRA arbitrations in

some jurisdictions already. At other times anon-lawyer will take a flier on representingclaimants in a FINRA arbitration. In theFINRA context, this person is often an ac-countant or another financial representa-tive acting as a non-lawyer representative ofclaimants in front of FINRA. Take, as an example, a recent case in-volving a married couple who filed a claimagainst a financial advisor they became un-happy with. In this matter, the claimantshad a 10-year relationship with the respon-dent financial advisor. They invested$450,000 with two of the respondents andinvested an additional $300,000 with them

IN DEFENSE OFUSING A

CLAIMANT’SATTORNEY IN

FINRAARBITRATIONS

Patrick Lubenow SmithAmundsen LLCRobert Usinger Everest National Insurance Company



over that 10-year period. In the 10-year pe-riod, which spanned the recession of 2002and the great recession of 2008, financialadvisors grew the claimants’ account by$168,000. In 2010, the claimants movedtheir money to another financial advisor. In 2011, one of the claimants attendeda lecture at a local community college in-volving financial investing. After the lecture,the claimant spoke with the lecturer and ex-plained to her that he was confused by someinvestments that had been made by two ofthe respondents who had been his financialadvisors over the last decade. This conversa-tion eventually led to the lecturer recom-mending that the claimants file a FINRAcomplaint against their two financial advi-sors, the advisors’ supervisor, another re-spondent who only met with the claimantsonce to answer certain questions abouttheir accounts and the broker dealer inSeptember 2011. The lecturer would laterbecome the claimants’ expert witness,(herein referred to as “Expert Witness”). During the discovery phase of theFINRA case, Expert Witness appeared tele-phonically with the claimants and spoke ontheir behalf. At that point, the respondentsall believed that Expert Witness was repre-senting the claimants in the proceedings.Several times during the discovery process,which occurred over a one and a half yearperiod, the respondents approached ExpertWitness and asked if she and the claimantswould agree to attend mediation with aFINRA mediator. The respondents’ attor-neys explained to Expert Witness that theywould pay the mediation expenses and thatthe claimants were not obligated to resolvetheir claim at mediation. The respondents,their counsel and insurance carrier knewthat the claimants were not properly analyz-ing damages and felt strongly that if a me-diator became involved, he/she couldexplain to the claimants the mistakes theywere making in calculating damages andend the wasteful litigation costs of defend-ing this frivolous action. It never happened.Each time she was approached, ExpertWitness stated that the claimants were notinterested in mediation or attempts to set-tle. It was clear to the respondents thatExpert Witness did not properly understandthe legal process as there was no downsidefor the claimants to proceed to a mediationwhere the respondents would pay the ex-penses. After the arbitration award in favorof the respondents, it was learned from theclaimants that Expert Witness had even rec-ommended against mediation to them. At the arbitration hearing, ExpertWitness explained to the arbitrators that shewas not representing the claimants and was

not being paid, but that she was only speak-ing on their behalf because the claimantswere not capable of presenting their sidewithout assistance.

The arbitrators entered an award infavor of the respondents and found “the ev-idence admitted at hearing demonstratedthat respondents did not violate any statute,rule or duty owed to claimants, andclaimants knew that their claims were com-pletely without merit in that they sufferedno economic loss attributable to the behav-ior of respondents in managing their ac-counts, but in fact realized substantial gainsin their accounts during the time periodcovered by their claims.” The arbitratorsawarded $75,000 in attorney fees to be paidby the claimants as well as all of the arbitra-tion costs.

The claimants never consulted with anattorney but instead relied on the advice ofExpert Witness. After the award, one of theclaimants stated that if anyone ever thinksabout proceeding to a FINRA arbitrationwithout consulting an attorney that her nameand contact information should be given tothat person so that she could communicatewhat a poor decision that would be. The presentation of evidence at an ar-bitration is uniquely a skill reserved for anattorney and in the minds of the authorsconstitutes the practice of law. In this mat-ter, the fault does lay with FINRA alone. Theeasiest way to end the practice of non-attor-neys representing clients in FINRA wouldclearly be for FINRA to amend its rules.Representing claimants in FINRA arbitra-tions requires a lawyer that has experiencein litigation. At a time when FINRA is em-barking on new reforms in other areas, thisis an area that should also be addressed. Anattorney familiar with litigation would haveconcluded that the claimants did not sus-tain damages even if they could have some-how proven liability. The claimants wouldhave saved $75,000 plus the cost of the arbi-tration hearing in addition to the anxiety ofgoing through the arbitration hearing. Wecan only speculate on what motivatedExpert Witness in this matter, but peoplelike Expert Witness, who have no legal train-ing or litigation skills should not be allowedto lead financial investors into a forum thatcould become very costly to them. Similarly,the respondents who, with their insurancecarriers, collectively spent hundreds ofthousands of dollars defending these mer-itless claims, and who had to proceed topost-arbitration court proceedings to havethese claims expunged from their CRD,would be spared and time and FINRA re-sources would be saved.

Patrick Lubenow is the man-aging partner for theMilwaukee office ofSmithAmundsen LLC. Hedevotes a substantialamount of his practice to de-fending professionals includ-ing financial advisors and

financial institutions in FINRA arbitrations.

Robert Usinger is a Directorfor Everest NationalInsurance Company, wherehis primary focus is onclaims involving financialinstitutions, includingFINRA arbitrations.

The presentation of

evidence at an

arbitration is uniquely

a skill reserved for

an attorney

and...constitutes

the practice of law.

In this matter,

the fault does lay with

FINRA alone.

The easiest way to

end the practice of

non-attorneys

representing clients

in FINRA would clearly

be for FINRA

to amend its rules.



With the implementation of theAffordable Care Act (“ACA”) and thechanges it has and will continue to make inthe medical field, hospitals, doctors, nurses,and risk managers are worried about howthe ACA will affect the standard of care inmalpractice lawsuits. While the ACA doesnot specifically address medical malpracticetort reform, the act will significantly affectmedical malpractice cases across the coun-try by potentially creating a de facto federalstandard of care for many, if not all, mal-practice claims.

THE ACA AND MEDICARE PAYMENTPROVISIONS The ACA expands Medicare andMedicaid’s current uses of Quality Measuresby developing additional measures and link-ing the use of those measures with medicalproviders’ reimbursements. While the ACAdid not create the idea of creating QualityMeasures, in linking Quality Measures withphysician reimbursement, it, in effect, cre-ates a standard of care.

1. QUALITY MEASURES Most physicians who treat Medicareand Medicaid patients are familiar with thePhysician Quality Reporting System(“PQRS”). The PQRS uses incentive pay-

ments, and will begin to use payment adjust-ments in 2015, to encourage eligible healthcare professionals (“Providers”) to reporton specific “Quality Measures.” A QualityMeasure is a Centers for Medicare andMedicaid (“CMS”) created best practiceslist. It covers everything from how to treatindividual conditions to the prevention oftransmission of hospital acquired diseases. For example, 2014 PQRS QualityMeasure 65, titled “Appropriate Treatmentfor Children with Upper RespiratoryInfection (“URI”)” provides incentives andwill adjust payments for the treatment ofthat condition based on the percentage ofchildren three months to 18 years of age di-agnosed with URI but not dispensed an an-tibiotic prescription on or three days afterthe episode.1 This Quality Measure is de-signed to steer Providers to prescribe antibi-otics within three days to childrendiagnosed with URIs.

2. VALUE BASED PAYMENT MODIFIER The Value Based Payment Modifier(“VBM”) creates differential payment to in-dividual Providers or groups of Providersunder the Medicare Physician Fee Schedulebased on the quality of care and cost duringa performance period. Each Provider groupreceives two composite scores (quality and

cost), based on how far the Provider is fromthe national mean.2 Beginning in 2015, the VBM will affectMedicare payments to Providers in groupsof 100 or more Providers based on 2013performance on quality and cost measures.In 2016, the VBM will apply to physicians ingroups of 10 or more Providers based on2014 performance. In 2017, the VBM willapply to all Providers based on 2015 per-formance.3 The ACA uses Quality Measures to de-termine the quality of care score of the VBMformula. In registering for the VBM,Providers must select at least one QualityMeasure area for evaluation. In addition,CMS will also evaluate group Providers onthree outcome Quality Measures under theadministrative claims option. “These in-clude: 1) an all cause readmission measure;2) an acute preventive quality indicatorcomposite; and 3) a chronic preventivequality indicator composite.”4

In addition to the Quality Measurecomposite score, the VBM creates a costcomposite score based on: 1) a total percapita cost measure; and 2) total per capitacost measures for beneficiaries with fourchronic conditions (chronic obstructivepulmonary disease, heart failure, coronaryartery disease, and diabetes). The payment

GUIDELINES AND STANDARDS AND RULES, OH MY!

Standard of CareUnder the ACAMartin S. Driggers, Jr. and Richard E. McLawhorn, Jr. Sweeny, Wingate & Barrow, P.A.



adjustments are determined by a combina-tion of the Quality Score and the Cost score.For example, a high-quality, low cost scorewould result in a 2% increase in Medicarereimbursements while a low quality, highcost score would result in a 1% reduction inMedicare reimbursements.5

3. QUALITY MEASURES, VBM ANDCHANGING STANDARD OF CARE The current standard of care in mal-practice cases is how a similarly qualifiedpractitioner would have performed underthe same or similar circumstances. Moststates require practitioners to adhere to a na-tional standard. However, in 21 states thestandard of care requires the practitioner tohave a reasonable caliber of skill and knowl-edge possessed by practitioners in the localitywhere he or she practices. Therefore, de-pending on where a doctor or other medicalprovider practices, he or she may be held toa national standard or a local standard. The ACA’s changes to the standard ofcare will affect Providers in both nationaland local standard states. As Providers in-crease compliance with the QualityMeasures to receive payment increasesthrough the VBM, the Quality Measures willbecome the standard practice. Rather thana direct assault on the Standard of Carethrough direct legislation, the ACA moresubtly alters the Standard of Care throughthe use of the Federal government’s spend-ing powers. Additionally, as more Providers arepulled into the PQRS and VBM systems, itwill become increasingly difficult forProviders in locality standard states to arguetheir locality has a different standard of carethan the national standard. Providers in lo-cality standard states will be following thesame Quality Measures that are followedacross the country. Concern over this fun-damental alteration of the standard of carehas led to several attempts to curb the PQRSand VBM’s impact.

ATTEMPTS TO CURB THE ACA’SALTERATIONS OF THE STANDARDOF CARE Georgia recently adopted a law basedon model legislation drafted by theAmerican Medical Association (“AMA”), al-

though similar legislation has been pro-posed on the federal level. Georgia HouseBill 499 states payment standards like theVBM cannot establish a standard of carewithout competent expert testimony estab-lishing the appropriate standard of care.The proposed federal law, H.R. 1473, con-tains similar language, but has not beenpassed into law. The Georgia statute and Federal pro-posal are limited in their scope and are un-likely to significantly stem the changes inthe Standard of Care. In any medical mal-practice case, the standard of care can onlybe established through expert testimony.These laws only require that any party wish-ing to use the Quality Measures or VBM toestablish the standard of care do so throughexpert testimony. Neither the Georgia law nor Federalproposal will curb the underlying risk ofQuality Measures becoming a de facto stan-dard of care. As more Providers participatein the VBM, they will not be able to arguethey are unfamiliar with the QualityMeasures or that the Quality Measures arenot used in their locality. These laws onlyeliminate the possibility of Quality Measuresbeing able to be introduced as Standard ofCare without expert testimony.

WHAT ARE RISK MANAGERS,PRACTITIONERS, AND DEFENSECOUNSEL TO DO? Those concerned about the QualityMeasures changing the standards of care intheir field can be comforted in three argu-ments: 1) the Quality Measures are writtenwith the understanding that they will notapply in every case; 2) Quality Measures canactually bolster a defense in a medical mal-practice suit; 3) physicians treat individuals. First, as more Quality Measures arecreated, it is likely that a Provider will oftenprescribe treatment that does not complywith the Quality Measures. In fact, somelevel of noncompliance seems to be pre-sumed. The Quality Measures only look atpercentages of compliance and do not re-quire that the Quality Measure be met inevery individual case. Secondly, the use of Quality Measuresas a standard of care can, in some instances,be used to bolster a physician’s defense.

There will be cases where defendantproviders complied with the QualityMeasures and yet the patient had a bad out-come. Providers who met the QualityMeasure can argue that their compliancewith the Quality Measure means they metthe standard of care. Concerns about physi-cians making this argument led to Georgia’sstandard of care law to include language in-dicating compliance with the QualityMeasures does not, by itself, prove compli-ance with the Standard of Care. Providers instates other than Georgia could argue thatcompliance with a Quality Measure is evi-dence of compliance with Standard of Care. Finally, when faced with a Plaintiff alleg-ing failure to comply with a Quality Measurewas a violation of the Standard of Care,providers should be sure to point out thateach patient is treated as an individual andthat each patient’s treatment is tailored tothat patient’s needs. Providers treat patientsbased on the provider’s training and experi-ence. If a provider does not follow a QualityMeasure, he or she will need to ensure thather deviation from the Quality Measure isbased on their training and experience andthe individual patient’s conditions.

Martin Driggers is the man-aging shareholder ofSweeny, Wingate &Barrow’s Pee Dee Region of-fice in Hartsville, SouthCarolina. His practice fo-cuses on civil litigation,with an emphasis on de-

fending clients involved in professional mal-practice and business disputes. He is licensed topractice law in both North and South Carolinaand is a member of the bar associations of bothstates. Martin joined the firm in 1999, follow-ing a two year judicial clerkship under theHonorable Henry M. Herlong, Jr., UnitedStates District Judge for the District of SouthCarolina.

Richard McLawhorn joinedSweeny, Wingate &Barrow, P.A. in June,2012. He is a 2005 gradu-ate of North GreenvilleUniversity and a 2011graduate of the Universityof Alabama School of Law.

His areas of practice include MedicalMalpractice Defense, Health and Healthcare,and Professional Malpractice.

1 Centers for Medicare and Medicaid, 2014 Physicians Quality Reporting System (PQRS) Measures List (January 23,, 2014).2 American Osteopathic Association, Physician Value-Based Payment Modifier, How Will the VBM Affect Your Practice,

http://www.osteopathic.org/inside-aoa/advocacy/regulatory-issues/Documents/value-based-modifier-policies-faq.pdf (last visited July 3, 2014).

3 Providers that refuse to participate could face penalties up to a 2.5% reduction in Medicare reimbursement. Id. 4 Heart Rhythm Society, Physician Value-Based Payment Modifier: Transforming Medicare From a Passive Payer to an Active

Purchaser of Higher Quality, More Efficient Healthcare, http://www.hrsonline.org/content/download/11418/513930/file/VBM_Analysis_2013.pdf (last visited on July 3, 2014).

5 Id.



In today’s world, everyone seems tohave an online presence. E-mail has largelyreplaced regular mail. Courts have em-braced e-filing. Social media continues toincrease in popularity, with Facebook aloneboasting over one billion users. As a resultof this increasing reliance on social mediato communicate and conduct business, it isoften easier to locate someone onlinerather than in person or by mail. In addi-tion, as newspaper readership declines, serv-ice by publication is becoming outdated.Social media offers a cost effective and, inmany instances, more reliable means toserve process than traditional methods.Accordingly, courts are increasingly permit-ting the use of social media to serve process.

THE INTERNATIONAL APPROACH Courts in Australia and the UnitedKingdom have led the way in permittingservice by social media, although they havelimited its use. Service by social media is notviewed as a viable option until either: (1)traditional methods have failed or (2) thedefendant cannot be physically located. Forexample, a court in the United Kingdompermitted service of an injunction byTwitter, where an unknown person imper-sonated a blogger utilizing a Twitter ac-count which included the blogger’sphotograph and linked to the real blog.Because the plaintiff did not know the de-fendant’s identity and could not physicallylocate him, the court permitted service viaTwitter. The court reasoned that the evi-

dence showed that the Twitter account be-longed to the defendant, that the defendantused it regularly and that it was possible toconfirm receipt through Twitter. Blaney v.Persons Unknown (unreported). Therefore,service by social media was the only methodwhich could reasonably be expected to ap-prise the defendant of the injunction. Because courts are concerned with thereliability of service by social media, the abil-ity to confirm receipt of a message sent viasocial media is another consideration. AnAustralian court held that service was prop-erly accomplished by messaging the defen-dant on Facebook where the plaintiffshowed electronic confirmation that themessage was delivered, and the defendantremoved his Facebook page not long after

ACTUAL SERVICE THROUGHA VIRTUAL COMMUNITY

TRENDS IN SERVICE OF PROCESS BY SOCIAL MEDIA

Jennifer Lewkowski Traub Lieberman Straus & Shrewsberry LLP



its receipt. Accordingly, the court could rea-sonably infer that service was effectuated.Byrne & Howard, ([2010] FMCAfam 509). Courts also seek to ensure that the so-cial media account actually belongs to thedefendant. Therefore, a second Australiancourt permitted service by social media ona couple who could not be physically lo-cated, but were active social media userswhose Facebook pages listed their dates ofbirth, e-mail addresses and personal detailsknown to the plaintiff. This convinced thecourt that the accounts belonged to the de-fendants, and the court permitted servicevia Facebook. MKM Capital Pty. v. Corbo, No.SC 608 of 2008 (Aust. Cap. Terr. Sup. Ct.).However, courts have not permitted thismethod of service if the plaintiff cannotshow that the account belongs to the defen-dant. See Citigroup Pty Ltd. v. Weerakoon,2008 QDC 174 (April 16, 2008).

SERVICE BY SOCIAL MEDIA INUNITED STATES COURTS Courts in the United States have notbeen as quick to embrace service by socialmedia, although this is changing. In general,United States courts have been more willingto permit service by social media where thedefendant is located outside the country. The Federal Rules of Civil Proceduredistinguish between service of an individualin the United States and abroad. As such, theRules permit service of process on an indi-vidual defendant in the United States pur-suant to either: (1) the law of the state wherethe district court is located or (2) where serv-ice is made. Fed. R. Civ. Pro. 4(e)(1). Thus,if state law permits service of process by socialmedia, service can be accomplished in thismanner in federal court. The Federal Rulesdo not include a specific provision permit-ting service of process via social media. As to foreign defendants, service is per-mitted, inter alia, by any means permitted bylaw in the foreign country where service isto be effectuated. Fed. R. Civ. Pro. 4(f)(1).This means that service by social media ispermissible in a country which has recog-nized it as a valid method of service. In ad-dition, the Federal Rules include a provisionpermitting service “by any other means notprohibited by international agreement,” ifordered by the court. Fed. R. Civ. Pro.4(f)(3). Thus, the Federal Rules recognizethe difficulty in serving foreign defendants,and permit courts to direct an alternatemeans of service, such as social media. Federal courts have permitted service ofprocess via social media in certain limited in-stances. For example, a district court inVirginia recently permitted a plaintiff to servea summons via Facebook, LinkedIn and e-

mail. See WhosHere, Inc. v. Orun, 1:13-CV-00526 (E.D. Va. Feb. 20, 2014). The defen-dant, who resided in Turkey, had respondedto e-mail communications from the plaintiffin the past, but ceased doing so. He had pro-vided the plaintiff with his two e-mail ad-dresses and referred the plaintiff to his socialmedia profiles, which were regularly viewedand maintained. Therefore, the court foundthat service by e-mail and social media wasreasonably calculated to provide defendantwith notice of the pending litigation. However, not all United States courtshave been persuaded that social media pro-vides a reasonable alternative method ofservice. In Fortunato v. Chase Bank USA, 11CIV. 6608 (S.D.N.Y. June 7, 2012), ChaseBank sought leave to serve a third-partycomplaint via social media on a defendantwho could not be physically located, but hada Facebook profile. The court denied the re-quest on the basis that Chase Bank did notarticulate any evidence that the Facebookpage was operated and maintained by thethird-party defendant. Although the courtdenied this particular application, it left thedoor open for similar applications wherethe plaintiff can demonstrate that the pagebelongs to the defendant. At least one state court has permittedservice by social media. In an unpublished de-cision, a Minnesota court permitted serviceby social media where the respondent couldnot be located, noting that “service is critical,and technology provides a cheaper and hope-fully more effective way of finding [him].” SeeMpafe v. Mpafe, 27-FA-11 (May 10, 2011). Similarly, House Bill 1989, introducedin the Texas legislature in 2013, would per-mit substituted service via social media if thecourt determines that: (1) the defendanthas a social media page on the website atissue, (2) the account belongs to the defen-dant, (3) the defendant regularly utilizesthe social media account and (4) the defen-dant could reasonably be expected to re-ceive notice if served through the socialmedia account. If this bill passes, otherstates will likely follow.

FACTORS As the foregoing examples show, courtsboth in the United States and abroad exam-ine several factors in determining whetherto permit service of process via social media.The primary concern is whether or not serv-ice by social media is reasonably expected toapprise the defendant of a pending lawsuit. Because courts still prefer traditionalmethods of service, the plaintiff must showthat these avenues would be impossible orunsuccessful before a court will permit serv-ice by social media. If the defendant cannot

be physically located but has a verifiable so-cial media presence, the court is more likelyto permit service by social media. Courts have also sought evidence thatthe Facebook page or social media accountat issue actually belongs to the defendant.Due to the ease of creating a social mediaprofile and the fact that people with thesame name have social media accounts,courts want to ensure that the account be-longs to the defendant. Courts consider whether the defendantactively utilizes the social media account. Ifa Facebook account exists but the defendanthas not posted on it for several months,courts are more likely to deny an applicationfor service by social media. The frequencyof posts and when the account was last ac-cessed are relevant to this analysis. When permitting service by socialmedia, courts also consider privacy issues,such as whether the social media page orprofile is public or private. Courts permit-ting service by Facebook have evidenced apreference for service via private Facebookmessage, rather than posting on the defen-dant’s “wall,” where others can view the mes-sage. See MKM Capital Pty. v. Corbo, supra. The final factor is cost. Service by othermethods, such as print publication, is costlyand increasingly unlikely to provide effec-tive notice, especially when the plaintiff isunsure where the defendant is located. Incontrast, service by social media is targetedspecifically toward the defendant and ismore cost effective.

CONCLUSION Courts are increasingly permitting serv-ice by social media when traditional meth-ods have been exhausted or are impossible.Moreover, as social media becomes moreubiquitous, service by social media is be-coming more likely to apprise a defendantof a pending action than traditional means,such as print publication. Thus, when tradi-tional methods are unsuccessful, practition-ers should consider seeking leave for serviceby social media.

Jennifer Lewkowski holds aJ.D. from GeorgetownUniversity and is a litiga-tion attorney at TraubLieberman Straus &Shrewsberry LLP inHawthorne, N.Y. She han-dles general liability, prem-

ises liability and construction cases. Ms.Lewkowski can be reached [email protected].



HOW TO BE SECUREIN AN UNSECURE WORLD

Whether you are a Fortune 500 com-pany or a law firm no organization today isimmune from the threat of a costly data se-curity breach. Between 2011 and 2012, se-curity breaches were seen across variousindustries from retailers such as Amazon’sZappos to marketing firms such as Epsilon,to defense contractors such as LockheedMartin. Perhaps the most publicized breachtook place in 2013, when hackers stole datafrom up to 40 million credit and debit cardsof Target shoppers who visited its stores dur-ing the first three weeks of the holiday sea-son. It was reported as the second-largestsuch breach involving a U.S. retailer. Thesesecurity thefts have led to the filing of nu-merous lawsuits, including class actions,across the country. The threat posed by criminal hackerswho use networks of secretly hijacked com-puters has substantially increased over thepast several years, and hackers are now cre-ating networks known as “botnets.” It hastaken an international effort to stop one bot-net in particular called “Gameover Zeus.”Specifically, once a computer is infected byGameover Zeus, often after its user clickedon a malicious link or email attachment, itbecomes a “bot” and started communicatingwith other infected computers, creating anetwork of similarly afflicted machines.While communicating with each other, thebots also pass along stolen banking informa-tion to servers that relayed that data to thehackers. The hackers commit their cyberburglary by exploiting the security holebored by Gameover Zeus. In the electronic age of convenience, ahacker requires very little information tosteal personal identification and health in-formation, obtain credit cards in another’sname, or do a host of other damage.Breaches are caused not only by hackers butrogue employees and loss/theft of equip-ment. Because organizations have becomeincreasingly reliant on digital technology intheir operations, the potential for damagesfrom a cyber-attack continues to rise.

TYPES OF EXPOSURE In the wake of data breaches across thecountry that have seen hackers obtain thepersonal information of individuals, busi-nesses and law firms alike have been makingsignificant investments in network hardwareand software to protect confidential data.The financial exposure associated with adata breach can be quite substantial as stud-ies show that the average cost of a breach iswell over five million dollars. The amount ofdamages can also be quite significant. By wayof example, the U.S. Court of Appeals forthe Sixth Circuit recently held in RetailVentures, Inc. v. National Union Fire InsuranceCompany of Pittsburgh, PA, 691 F. 3d 821 (6thCir. 2012), that DSW, Inc., DSW ShoeWarehouse, Inc., and Retail Ventures, Inc.were entitled to coverage under a commer-cial crime policy for a $6.8 million loss re-sulting from a data breach. Moreover, inZurich American Insurance Co. v. Sony Corp. ofAmerican, et al., Index No. 651982/11 (N.Y.Sup. Ct.) while granting summary judgmentin favor of Zurich in a coverage dispute,Sony alleged in its Court papers that a databreach stemming from the hacking of theirPlayStation online services had exposed per-sonal information of tens of millions ofusers, and Sony’s losses were reportedly esti-mated to be as high as $2 billion.Furthermore, the stopping of the botnetGameover Zeus did not occur until after in-fecting between 500,000 and 1 million com-puters worldwide and inflicting more than$100 million in losses. As a result, the poten-tial for damages in the event of a data breachcan be astronomical, and, in some cases,cause a company to go out of business. A cyber breach can also cause substantialand long term damage in other ways such asloss of productivity, loss of data and intellec-tual property, business interruption, and, per-haps, most importantly, injury to reputationand loss of client goodwill. Furthermore, nowmore than ever, regulators such as the FederalTrade Commission and state AttorneyGeneral offices are getting involved and im-posing fines and penalties on businesses for

failing to protect data or provide timely noticeof a breach. Moreover, even non-governmententities, such as the Payment Card IndustrySecurity Standards Council, have establishedBest Practice standards.

DIRECTOR AND OFFICER LIABILITYFOR DATA BREACHES Besides the corporation itself being atrisk for litigation, individual directors andofficers can also be exposed to liability forbreach of a fiduciary duty in failing to prop-erly oversee cyber security. With so much atstake in protecting personal identifiable in-formation, it is not enough for a directorand officer of a company to simply delegateresponsibility for protecting such confiden-tial information to their IT staff. The Division of Corporation Financeof the SEC recently issued a ‘DisclosureGuidance’, which recommends that mate-rial information regarding cyber-securityrisks and cyber incidents should be dis-closed in order to make other required dis-closures, in light of the circumstances underwhich they are made, not misleading.Moreover, information is considered mate-rial if there is a substantial likelihood that areasonable investor would consider it im-portant in making an investment decisionor if the information would significantlyalter the total mix of information madeavailable. While this is merely a recommen-dation by the SEC, not a rule or regulation,non-compliance is risky. Furthermore, al-though these recommendations are only di-rected at public companies under the SEC’sjurisdictions, other businesses would be pru-dent to heed the same advice. As a result,directors and officers must be attuned tonew regulations to protect themselvesagainst the impact of cyber risks and costsin the larger context of their company’s dis-closure obligations to investors. Shareholder lawsuits have alreadybegun to be filed across the country againstcompanies like Target and WyndhamWorldwide Corp. that have fallen prey todata breaches. In addition to these lawsuits,

Karen Painter Randall and Steven A. Kroll Connell Foley LLP



directors and officers face other concerns.For example, a proxy adviser, InstitutionalShareholders Inc., recommended thatTarget stockholders vote against seven often directors because they failed to managecyber risks. This is the first time that therehas been an effort to unseat board membersbecause of a cyber breach. In the Wyndhamcase, director and officer litigation followedan enforcement action by the Federal TradeCommission sending a clear message thatregulators are going to be more active inthese claims. Today, some regulatory settle-ments require that the business agree to aComprehensive Written InformationSecurity Program, which mandates periodicaudits over a period of years and includesfines and penalties along with the cost of im-plementing the program. Thus, given theincreased prevalence and effectiveness ofcyber-attacks and breaches, and in light ofthe Disclosure Guidance, it would be diffi-cult to justify why proper protective meas-ures, including sufficient cyber insurance,were not implemented, and why the riskswere not disclosed to the investing public.

DATA BREACHES INVOLVING LAW FIRMS In a profession based upon traditionand precedent, the practice of law is alsonot immune from data breaches as manylaw firms today rely upon digital technologyincluding the use of mobile devices, laptopsand email to be in constant communicationwith their clients. Moreover, as law firms are“going green” confidential documents con-taining a client’s personal information areoften scanned into and maintained on acomputer network or a company’s Cloudsusceptible to hackers. Pursuant to American Bar AssociationModel Rules of Professional Conduct1.6(a), a lawyer shall not reveal confidentialinformation. Thus, attorneys have a duty totake reasonable steps in communicatingwith their client in a manner that protectsthe confidential information received. As aresult, law firms, like many other businesses,are making significant investments in net-work hardware and software to protect sen-sitive and confidential client data. However,the question becomes what exactly should alaw firm, or any other business for that mat-ter, do to protect against a data breach?

MITIGATION STRATEGY First and foremost, preparation is vitalto preventing any sort of data breach. Thus,consider creating a committee, which in-cludes members of its IT department, to de-velop and implement a risk managementplan for preventing a data breach. Once acommittee has been established, there

should be policies in place regarding theprivacy and security of business data, whichincludes the use of encryption, remote ac-cess, mobile devices, laptops, email ac-counts, and social networking sites. Inaddition, conduct an inventory of the soft-ware systems and data, and assign owner-ship and categorization of risk; the higherthe sensitivity of the information, thestronger the security protections and accesscontrol must be. Furthermore, the IT de-partment should conduct third-party vul-nerability scans, penetration tests, andmalware scans to protect against potentialdata breaches. Most importantly train em-ployees so that they are aware of the com-pany’s security protocol in place, andprotected against the potential for acciden-tally exposing a client’s personal, confiden-tial information with the click of a button. Unfortunately, in the evolving techno-logical world even the best security can bepenetrated by skilled hackers from aroundthe world. Thus, besides having policies andprocedures in place to prevent a databreach, it is critical that a company also im-plements a Rapid Response Plan to reactquickly to a cyber-attack. Once a potentialdata breach has been identified, a companyshould determine what type of informationwas exposed, as well as consider reportingthe incident to the law enforcement author-ities for investigation. It should be notedthat each state has its own notification lawsregarding reporting a data breach, thus,one should be familiar with same. A corporation also has an obligation toinform its clients of any potential compro-mise of personally identifiable and confiden-tial information. Thus, it is imperative thateither a timely letter or personal telephonecall be made to each client advising of thedata breach so that the client can take reason-able steps to protect themselves from any vul-nerabilities that could potentially result inhaving their personal information out in theopen. Many companies also include in theletters to affected customers a telephonenumber to a call center that will provide in-formation about the extent of the breach, thecompany’s response, or next steps. Moreover,many times as a courtesy to the client, and inorder to gain back their trust, a company paysfor credit and identity monitoring.Furthermore, many companies are engagingan external public relations firm that special-izes in damage control to help mitigate harmto its reputation caused by a data breach. Lastly, due to the potential for signifi-cant damages, companies should considerpurchasing cyber insurance to cover thecosts of a breach and claim against them.Although companies may have a CGL orprofessional liability insurance policy, they

should retain a specialized insurance brokerto make sure that any policy in place coversthe type of loss associated with a cyberbreach. As referenced earlier in the Zurichmatter, the Court held that action taken bya third party hacker was not covered underSony’s CGL policy. Conversely, in HartfordCasualty Insurance Co. v. Corcino & Associates,et al., the U.S. District Court for the CentralDistrict of California ruled that there wascoverage under a CGL policy for a databreach involving hospital records. Thus, inorder to avoid a potential coverage dispute,a company should contact an insurance bro-ker well-versed in cyber coverage to ensurethat they have the necessary coverages inplace in the event of a cyber breach.

CONCLUSION Overall, companies, including lawfirms, are becoming increasingly dependentupon technology to run their business. As aresult, all organizations need to become fa-miliar with the risks associated with a databreach, and have policies and proceduresin place to not only prevent such attacks,but provide a quick response plan in theevent of a breach. Being prepared for a po-tential cyber-attack will protect a businessfrom significant financial exposure.

Karen Painter Randall is aComplex Litigation Partnerwith Connell Foley LLP inRoseland, NJ, and Chair ofthe firm’s ProfessionalLiability and Director andOfficer Practice Groups. Sheprovides representation and

advocacy services to professionals and busi-nesses in a wide variety of complex litigationmatters and is a veteran trial attorney in stateand federal courts. Ms. Randall, a formerChair of USLAW’s Professional LiabilityGroup, is designated a Certified Civil TrialAttorney by the Supreme Court of New Jersey.

Steven A. Kroll is anAssociate with Connell FoleyLLP in Roseland, NJ. Inaddition to representing pro-fessionals in various areas,Mr. Kroll concentrates hispractice in the areas of pro-fessional liability, general

insurance litigation and employment law han-dling matters in both New Jersey and New York.Mr. Kroll received his J.D. from Rutgers-NewarkSchool of Law in 2009, cum laude, and re-ceived the distinguished award of Order of theCoif.



INTRODUCTION As anyone who has been involved incivil litigation knows, or quickly learns, oneof the most costly and time-consuming as-pects of a civil suit is discovery. This is par-ticularly true in today’s increasinglypaperless office environment, where thebulk of business and communications areconducted through electronic means, cre-ating a vast and, in some instances, difficultto manage electronic footprint. The resultof these developments is that the costs ofdiscovery in civil litigation, including man-agement and financing of the preservationof electronically stored information (“ESI”),sometimes dwarfs the potential value of theclaims asserted, leading plaintiffs to forgoclaims and defendants to reach early settle-ments. Some proposed changes to theFederal Rules of Civil Procedure that at-tempt to address this problem by changingthe scope of discovery and the role of attor-neys and judges in active discovery manage-ment are working their way through therule adoption process. As the drafters of theproposed changes note, however, the poten-

tial success will ultimately depend on the ac-tions of the legal community.

THE DUKE CONFERENCE AND THEPROPOSED AMENDMENTS The centerpiece of the proposed discov-ery amendments is focused on what is knownas a proportionality standard. The propor-tionality standard and accompanying rulechanges are based on a set of proposals de-veloped during the 2010 Conference on CivilLitigation held at Duke University (“DukeConference”). At the Duke Conference,some 200 practitioners met to discuss ways todeal with the expense of discovery and its im-pact on civil litigation. The key change pro-posed by the Duke Conference and thelater-established conference Subcommittee(“Subcommittee”) is a new version of Rule26(b), along with revisions to associated rulesconcerning discovery and litigation manage-ment. These proposed revisions place agreater focus on assessing the stakes of thelitigation in question to determine the nec-essary scope of discovery in a given case. Under revised Rule 26(b)(1), the basic

scope of discovery remains unchanged, al-lowing the parties to “obtain discovery re-garding any nonprivileged matter that isrelevant to any party’s claim or defense.”1

The key change comes in language con-cerning the breadth of discovery requests.The language of the current rule providesthat the discovery sought need not be ad-missible at trial so long as the request is “rea-sonably calculated to lead to the discoveryof admissible evidence.”2 Based on a generalconsensus at the Duke Conference that theparties had placed too much emphasis onthis provision, the proposed amendment re-places it with a proportionality standard.Although proportionality language cur-rently appears in Rule 26(b)(2)(iii), theSubcommittee found it was little used or re-lied upon and, thus, moved the proportion-ality standard to the scope provision of Rule26.3 The Subcommittee determined, aftercomment, that it would change the order ofthe factors to be considered in applying theproportionality standard to demonstratethat the issue of primary importance in de-termining whether discovery was warranted

WILL PROPOSEDCHANGES TO THEFEDERAL RULESDECREASE

THE COSTSOF CIVILDISCOVERY?

Keely E. Duke and Kevin A. GriffithsDuke Scanlan & Hall, PLLC



should be the importance of issues at stakein the litigation. Proposed Rule 26(b)(1) re-quires that discovery be proportional to theneeds of the case by considering a numberof factors: [P]roportional to the needs of the case,

considering the importance of the is-sues at stake in the action, the amountin controversy, the parties’ relative ac-cess to relevant information, the parties’resources, the importance of the discov-ery in resolving the issues, and whetherthe burden or expense of the proposeddiscovery outweighs its likely benefit.4

This proposed scope change is accom-panied by several associated rule changesthat according to their drafters, were de-signed to advance cooperation among theparties, proportionality in the use of availableprocedures, and promote early and active ju-dicial case management.5 The accompanyingchanges include modifications to Rule 1(adding language encouraging increased co-operation among the parties), Rule 16 (im-posing stricter time limits for holding thescheduling conference at the outset of litiga-tion and increasing the number of topics dis-cussed therein and adding an increasedfocus to the need for greater judicial inter-vention and management of pre-trial mattersincluding discovery), Rule 34 (allowing earlyrequests for production and requiring certi-fication of whether a responsive documentexists upon objection), and Rule 37 (chang-ing the method of determining sanctions forfailure to preserve ESI).6 In an effort to address feedback re-ceived during the comment period, the pro-posed rule changes are accompanied byextensive commentary explaining thedrafter’s intent. The ultimate takeaway fromthe commentary is that the Subcommittee’svision is not to impose a new standard, butto simply redirect the legal community andthe judiciary back to the original focus ofRule 26, which was to ensure that the bur-dens imposed by discovery were proportion-ate to the stakes of the litigation at issue.The commentary notes that this focus wasderailed by improper emphasis on thephrase “reasonably calculated to lead to thediscovery of admissible evidence,” which the

Subcommittee indicates has been the driv-ing force behind many of the judicial deci-sions and litigants’ positions concerningdiscovery that gave rise to the need for dis-covery reform.7 The other takeaway from the proposedcommentary is that one of the key factorsnecessary for real discovery reform to occuris for the judiciary to take a more active rolein prelitigation planning and discoverymanagement (as indicated by the proposedamendments to Rule 16). This emphasis isshown in commentary noting that “[t]heparties and the court have a collective re-sponsibility to consider the proportionalityof all discovery and consider it in resolvingdiscovery disputes” and emphasizing thatthe “court’s responsibility, using all the in-formation provided by the parties, is to con-sider [proportionality] factors in reaching acase-specific determination of the appropri-ate scope of discovery.”8

ANTICIPATED IMPACT OF THE RULE While the proposal put forward by theDuke Conference and Subcommittee is cer-tainly a step in the right direction in an ef-fort to reign in the ever increasing costs ofdiscovery, its ultimate efficacy is dependenton the legal community; a fact which ismade prominent in the most recent versionof the Subcommittee’s proposed commen-tary. Specifically, the commentary notes thatprevious overhauls of the discovery rules in1983 and 1993 did not work because,among other things, the judiciary did notexercise the level of discovery oversight in-tended by the architects of the proposedrule changes.9 Given the current realities ofthe caseload of the federal judiciary andsubstantial roadblocks imposed on filling ju-dicial vacancies by congressional gridlock,increased judicial oversight seems unlikely.10

The plain fact is that many federal judgesare simply faced with such a heavy case loadthat increased judicial oversight of civil dis-covery is not feasible. As such, unless thereis a drastic change in political will concern-ing judicial confirmations, which seems un-likely, any measure that involves reliance onincreased judicial involvement and over-sight has little chance of producing mean-ingful change on a nationwide scale.

That said, however, the Subcommittee’scurrent proposal is a step in the right direc-tion. Increased emphasis on the proportion-ality standard and the guidance provided inthe commentary will help to generate prece-dent in those discovery disputes in which ju-dicial intervention is available, interpreting,and hopefully providing guidance for prac-tice under a proportionality standard. Thelanguage will also hopefully begin to affectsome change in the behavior of the bar, pro-viding pause before sending out boilerplatediscovery requests and engaging in costlydiscovery disputes.

CONCLUSION Ultimately, these changes to the discov-ery rules may address the current discoveryproblems in the federal system, but anychange will be slow. The proposed ruleamendments were approved by the UnitedStates Judicial Conference’s Committee onRules of Practice and Procedure in June2014. The rule changes will now be recom-mended to the United States SupremeCourt during the Judicial Conference’sSeptember 2014 meeting. If the SupremeCourt accepts the amendments and enactsthe rules, subject to any congressional mod-ification, they could take effect in someform as early as December 2015. Once therules take effect, precedent set by thosejudges and lawyers who fully engage withinthe spirit of the new rules could have a pos-itive impact on discovery as a whole.

Keely Duke is a foundingpartner of Duke Scanlan &Hall, PLLC in Boise,Idaho. Keely is AV ratedand is one of Idaho’s pre-mier trial lawyers. She hasdedicated her career to de-fending companies, employ-

ers, and individuals in complex businesslitigation and in medical malpractice, legalmalpractice, employment, insurance bad faith,and product liability/medical device litigation.Keely is currently the pesident of the Federal BarAssociation, Idaho Chapter.

Kevin Griffiths is an associ-ate attorney with DukeScanlan & Hall, PLLC, inBoise, Idaho. Kevin’s prac-tice is focused on insurancecoverage and bad faithclaims, professional liabil-ity, and product liability lit-

igation. Kevin was recently recognized byMountain State’s Super Lawyers as a RisingStar in the area of Insurance Coverage.

1 Advisory Committee on Civil Rules, Committee on Rules ofPractice and Procedure of the Judicial Conference of theUnited States, Report to the Standing Committee (2014)[hereinafter Committee Report], at 80, available athttp://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Agenda%20Books/Standing/ST2014-05.pdf#pagemode=bookmarks.

2 Fed. R. Civ. P. 26(b)(1). 3 Committee Report, supra note 1, at 70.4 Id. at 80. 5 Id. at 66. 6 Id. at 71-76.7 Id. at 81-85.

8 Id. at 84. 9 Id.10 See, e.g., Daniel O. Jamison, Our Courts Are in Crisis,

and Education is the Best Answer, BAKERSFIELDCALIFORNIAN, May 7, 2014, available at http://www.bakersfieldcalifornian.com/opinion/hot-topics/x1042370463/Our-courts-are-in-crisis-and-education-is-the-best-answer (“As of April 26, [2014], there were87 vacancies in the district and appellate courts, withover 70 of those in the district courts. Over 40 per-cent are judicial emergencies due to caseloads re-quiring many more judges.”)



HISTORY OF AMBUSH ELECTIONS An overly aggressive National LaborRelations Board, which exists solely to ad-minister the National Labor Relations Act,created law in 2011 by implementing newrules that dramatically assist labor unions inorganizing workers. Together, these rulesare commonly called “quickie” or “ambush”elections. Despite vigorous public outcry re-garding whether the Board could createrules (instead of simply administer the rulesalready in effect), the Board steadfastly im-plemented its ambush election rules. Immediately upon implementation,the U.S. Chamber of Commerce filed a law-suit alleging among other things that theBoard did not have a quorum to approvethe new rules. Specifically, the Board onlyhad three Members (instead of its usualfive) at the time it voted on these rules, andonly two of those three Members voted –two out of five is not a quorum. Incidentally,the two voting Board Members were bothattorneys for labor unions. The Chamberwon and the Board appealed. While on appeal, additional BoardMembers were appointed resulting in a fullyfunctioning Board consisting of three pro-union and two pro-business Members.Rather than wait for the appeal process toconclude, the Board withdrew its appealand re-issued the same ambush electionrules in early 2014. The three pro-unionMembers made a quorum and voted infavor of the rules.

DRASTICALLY DECREASEDCAMPAIGN PERIOD Overwhelming statistical evidenceproves that the longer an employer has tocampaign against a labor union the higherthe likelihood the company will prevail in aunion election. Historically, the time be-tween when a union files a petition with theNLRB seeking an election to the time whenthe election is held averages between 35-40days. Ambush elections will decrease thistime to as few as 11-15 days. This decreaseis a monumental hurdle employers mustovercome to remain union-free. Prudentemployers cannot wait until after receivingan election notice to establish positive em-ployee relations and regularly conductunion avoidance training.

PRE-ELECTION HEARINGS Pre-election hearings are held formany different reasons. One reason is thatthe bargaining unit proposed by the unionin its petition to the NLRB for an electionerroneously contains employees who arenot eligible to vote or does not contain em-ployees who should be eligible to vote in the

election. A hearing is held where both wit-nesses testify and evidence is introduced todetermine the scope of an appropriate bar-gaining unit, and thus who should vote.This hearing is usually held at a reasonabletime after the petition is filed and on a dateagreed to by all parties.

Ambush election rules require thathearings (except for those that define thescope of the bargaining unit) be held sevencalendar days after the petition is filed andany issue not presented at the election is for-ever barred from being litigated in the fu-ture. Shockingly, whether the proposedbargaining unit is appropriate is not liti-gated until after the election is held.Companies are thus left not knowing who islawfully eligible to vote in the upcomingelection and if they erroneously treat someworkers as supervisors (who are ineligible tovote) or wrongly treat supervisors as eligiblevoters, companies will unknowingly commitunfair labor practices.

Based on the seven-day timeline, a pe-tition could be filed on Friday at 6 p.m. Bythe time management learns about it onMonday morning, three of those seven dayshave passed. The Company calls me – itslabor attorney – on Tuesday and we meetthe next day. By now the Company and itscounsel only have one day to identify the is-sues, gather evidence, and prepare wit-nesses for an incredibly important hearing.

COMPULSORY DISCLOSURE OFPRIVATE E-MAIL AND PHONENUMBERS Currently, unions are entitled to thenames and home addresses of workers whowill vote in a union election. Ambush elec-tions mandate that unions will also receiveworkers’ private e-mail addresses and tele-phone numbers. No restrictions are placed on what aunion can do with employees’ personal in-formation, i.e. sell it to third-party market-ing companies or continuously leaveharassing messages for the recipients. Thereis also no relief for employers who providewrong e-mail addresses, even if employeesthemselves enter their addresses into thecompany’s Human Resource InformationSystem (HRIS) system. With current emailaddresses often containing strings of num-bers, nicknames, and odd word phrases, thelikelihood of errors and typos is high. Overall, ambush election rules erodeemployer rights and employee privacy inthe workplace. They steeply slant the play-ing field in favor of organized labor. I havewritten and spoken several times over thelast few years on these issues and how com-panies can get ahead of these changes. Ieven personally lobbied Congress to enactlegislation overruling ambush elections onbehalf of the Ohio Grocers Association.Unless an eleventh hour miracle happens,ambush election rules will become law laterthis year and unsuspecting employers willbecome unionized. Union-free companiesmust take the time now to prepare for theseimpending changes.

Mr. Austin is a labor lawyerat Roetzel & Andress LPAwho represents companiesagainst unions nationwide.He trains managers on thelatest, multi-faceted unionavoidance strategies andguides employers through

union campaigns, elections, negotiations, griev-ances, arbitrations, strikes, and the decertifica-tion and withdrawal of recognition processes. Mr.Austin can be reached at [email protected] or614-723-2010.

Matthew D. AustinRoetzel & Andress, LPA

UNION“AMBUSH”

ELECTIONSBE PREPARED OR

BE UNIONIZED



Effective July 1, 2014, Canada’s Anti-Spam Legislation (“CASL”) significantly af-fects companies’ ability to send electronicmessages to Canadians. CASL is one of thetoughest anti-spam laws in the world andfailure to comply with it can result in finesup to $10 million for an organization andup to $1 million for an individual. CASL regulates any commercial elec-tronic message or CEM accessed in Canada.Hence, a company located in the UnitedStates must comply with CASL if it sendsCEMs to Canadians. CASL defines CEM asany electronic message that has as one of itspurposes to promote commercial activity.There is a lot of uncertainty regarding CASLand it will be interesting to see how theCRTC, the governmental agency taskedwith enforcing CASL, and the courts in-terpret the definition of CEM. The biggest surprise for compa-nies accustomed to complying withU.S. anti-spam legislation, com-monly referred to as CAN-SPAM, isthe consent requirement of CASL.In general, CAN-SPAM allows com-panies to send emails unless the re-cipient has opted out. In otherwords, it does not limit the emailscompanies may send provided theyinclude an unsubscribe mechanism ineach email they send. In contrast, CASLrequires the sender to obtain the consentof the recipient prior to sending the email.That consent can be express or implied butit has to exist before the CEM is sent. The best option is to obtain the expressconsent of the recipient. The CRTC hasstated that users must take an affirmativestep, such as checking a box, in order toprovide their consent. The request for con-sent should not be tied to the use of theservice. For example, an online store shouldnot require the user to consent as part ofthe process of purchasing a product. Thereis also prescribed information you must pro-vide the user when asking for consent. Youshould ensure that the entity obtaining theconsent is the same entity that will send theCEM. You may need to include language toensure users consent to receive emails fromaffiliates. One difficulty in obtaining expressconsent is CASL deems a request for con-

sent to be a CEM and you must have the im-plied consent of the recipient in order tosend the request. One method by which youcan obtain express consent is to post a linkto a signup page on your Facebook orTwitter page as broadcast messages are notregulated by CASL. Express consents ob-tained prior to July 1, 2014, will be recog-nized as consent under CASL, providedthey were obtained in compliance with therelevant privacy legislation at the time theconsent was obtained.

CASL provides a few different ways acompany may have the implied consent ofthe recipient. The most useful way is com-panies have the implied consent of anyonewith whom they have an existing businessrelationship. Existing business relationshipis defined in CASL to include a person thathas, within the last two years: (a) purchasedor leased a product, good or service, (b) ac-cepted an investment or gaming opportu-nity; or (c) been party to a written contractwith the company. There is a transition pro-vision in CASL whereby you have the im-plied consent until July 1, 2017, for anyonewith whom you have had a business relation-ship at any point in the past if your relation-

ship with them includes sending electronicmessages. The onus is on the party sending aCEM to prove it had the consent of the re-cipient and it may be difficult to documenthaving implied consent for larger databases.CASL also provides rules relating to havingimplied consent from persons with whomyou have an existing non-business relation-ship and to persons that disclose or publishtheir email address. All companies should take steps to en-sure compliance with CASL but those stepsshould be tailored to the size of the com-pany. Each company that sends CEMsshould appoint someone to be in charge of

compliance with CASL and larger com-panies should consider establishing a

CASL compliance committee.Companies should establish formalpolicies and procedures and doc-ument all the steps they havetaken to comply with the legisla-tion, since there is a due dili-gence defense permitted underCASL. CASL also has prescribedcontent requirements that youmust include in the CEM, such as

providing the recipient with theability to unsubscribe.

Many believe that CASL goestoo far in regulating electronic mes-

sages. It requires companies to devotesignificant resources to ensure compliance

and companies are nervous about the max-imum fines permitted under CASL. While Ido not believe CASL will stop companiesfrom doing business in Canada, it does in-crease their costs of complying withCanadian regulations.

Victor Dudas is an associatewith Clark Wilson LLP’sCorporate Finance &Securities Group. He ad-vises public and privatecompanies on a variety ofU.S. and Canadian corpo-rate and securities law mat-

ters. He works with companies that are listed onstock exchanges in both Canada and the UnitedStates. He may be reached at [email protected].

Victor Dudas Clark Wilson LLP

NEW LEGISLATION MAY PROHIBITSENDING COMMERCIAL ELECTRONIC

MESSAGES TO CANADIANS



Purchasing a business in Canada often meansbecoming an employer of Canadian employees.Given the real potential of becoming liable for sev-erance payments after acquiring a business in Canada,potential buyers would be prudent to consider the waysby which they can mitigate their exposure to such costs.

CONTINUOUS EMPLOYMENT The first thing potential buyers need to be awareof is the deemed continuous employment provisionscontained in provincial employment standards leg-islation (or federal legislation for certain industriessuch as inter-provincial transportation and telecom-munications). Pursuant to that legislation, if an em-ployer sells the whole or a part of a business andthe buyer employs an employee of the seller, thenthe legislation imposes two important conse-quences. First, the employee’s employ-ment is deemed not to have beenterminated. Second, the law deemsthe employee’s employment historyand obligations with the seller to betransferred with the purchase whichwill impact any subsequent calculationof the employee’s length or period ofemployment. These legal conse-quences are important because it cansignificantly increase the amount ofseverance pay to which an employeecan become entitled to upon dismissal, as dis-cussed below.

INHERITING SEVERANCE OBLIGATIONS Unlike the United States, Canada does not have‘at will’ employment. Because the concept of at will employment isforeign to Canadian employment law, businesses with Canadian em-ployees must not include at will employment concepts intoCanadian employment agreements. In Canada, all employment con-ditions must comply with at least the minimum requirements pro-vided in employment standard legislation. Some contracts willprovide for severance entitlements which exceed the minimum ob-ligations, to provide something closer to common law notice (dis-cussed below). As a successor employer, the buyer should ensure

that individual employment contracts are care-fully reviewed well prior to closing in order to

be aware of the obligations that it will assume,particularly the obligations related to any future

terminations of employment.

REASONABLE NOTICEWhere, however, the seller’s employees have no

written contracts containing severance provisions (orwritten contracts which are void or unenforceablefor any of a number of reasons), employees inCanada (other than in the province of Quebec, asdiscussed below) are considered to have ‘commonlaw’ entitlements. Canadian common law presumesthat employment can only be terminated with ‘justcause’ (which is a high standard to meet, but atopic for another day) or upon the provision of‘reasonable notice’ (or pay in lieu of reasonable no-

tice). Reasonable notice is invariably greater thanapplicable provincial statutory minimums. What isreasonable is in the eyes of the judge, based on: thespecific employee’s age; length of service; nature ofemployment (i.e. skill level, managerial responsibili-ties, if any, and compensation); availability of alterna-tive employment given existing market conditions; andany other factor the Court considers relevant (such asrestrictive covenants which may hinder the employee’s

ability to readily secure comparable employment).Unfortunately there is no formula for determin-ing reasonable notice; as the judiciary puts it, de-termining reasonable notice “is an art, not a

science.” But more often than not, the Courts con-sider notice in terms of months, rather than weeks as used

in minimum standards legislation. It has not been unheard offor employees to be awarded 24 or more months of reasonable no-tice or pay in lieu thereof. In the province of Quebec, the law is based on civil law princi-ples (similar to the State of Louisiana) rather than the common law.Pursuant to the Civil Code of Quebec, with or without written con-tracts, the reasonable notice obligation applies. Even if a period ofnotice is provided in a contract, a civil court could decide otherwiseif it considers the notice to be “unreasonable” or insufficient in thecircumstances.

PURCHASING A BUSINESS IN CANADA?UNDERSTAND THE KEY ASSETS:

YOUR NEW EMPLOYEES Andrea Raso Clark Wilson LLP • Sean Bawden Kelly Santini LLP

Ralph D. Farley and Veronique Poirier Therrien Couture lawyers L.L.P.


In the rest of Canada, for buyers look-ing to limit this potential significant expo-sure, the positive news is that thepresumption of reasonable notice can be re-butted if the transferred employees signcontracts which may address the issue of no-tice. That said, a buyer must be carefulwhen taking on the seller’s employees tonot alter their existing terms and conditionsof employment; otherwise, the buyer risksconstructive dismissal claims.

CHANGING EMPLOYEES’ TERMS OFEMPLOYMENT A buyer must exercise care when plan-ning to change any of the employment con-ditions that employees enjoyed at the timeof purchase, including common law entitle-ments such as reasonable notice. The no-tion of constructive dismissal preventsemployers from imposing unilateral funda-mental changes to terms of employment insuch matters as salary, benefits, workinghours or relocation, without sufficient no-tice. For example, a reduction of 10% to20% of the annual compensation an em-ployee is entitled to will usually be consid-ered as a fundamental change compliant inconstructive dismissal. The buyer needs to provide adequatenotice for imposing a fundamental changeto the terms of employment of those em-ployees it takes over, or provide adequateconsideration (such as a signing bonus) be-fore instituting a change to a fundamentalterm or condition of employment.

OTHER OBLIGATIONS So far we have largely focused on thepurchaser’s obligations as they relate to no-tice or severance. Some other key obliga-tions that purchasers should consider are:1. Workers’ Compensation: Almost all

Canadian employers are obligated to payinto provincial government workers’ com-pensation schemes, regardless of whetherthey offer a similar private benefit;

2. Overtime pay: All employees are statuto-rily entitled to overtime pay, regardlessof whether they are paid hourly or bysalary (except in the province of Quebecwhere salaried employees are exempt),unless they fall into a specifically legis-lated exemption (such as the managerialexclusion);

3. Privacy rights: British Columbia, Albertaand Quebec have private-sector privacylegislation which protects the collection,use and disclosure of employees’ personalinformation, and which allow employeesto access any employer document whichcontains their personal information;

4. Leaves of Absence: Canadian mothers are

entitled to job-protected pregnancy leavefor up to 17 weeks and both mothers andfathers are entitled to up to 37 weeks ofjob-protected parental leave. Provinciallegislation also mandates other leaves,such as compassionate care leave, emer-gency leave and family responsibilityleave, to name a few.

5. Drug and Alcohol Testing: Employees aregenerally free from pre-employment test-ing and random testing, even in safety-sensitive work environments, unless theemployee or the workplace has a knowndrug or alcohol problem.

AVOIDING THE BAGGAGE For purchasers wary about the prospectof becoming an employer in Canada andbeing bound by the terms and conditions ofemployment enjoyed by employees with theseller, the buyer may try to insist that theseller either terminate the employment ofits existing staff pre-closing or agree to as-sume those costs associated with future ter-mination. This is easier said than done:most sellers will be reluctant to incur thecosts of terminating employees pre-closingonly to have the buyer immediately re-hirethem upon closing, particularly when thosecosts are contingent on terminations thatmay or may not happen at some time in thefuture.

BUYING A UNIONIZED WORK FORCE The rules are somewhat similar whenthe seller’s employees are unionized. Aprospective buyer must realize that in addi-tion to purchasing the assets or equity of thecompany, they will also inherit any union al-ready in place, as well as the existing certifi-cate giving recognition to the representativerights of the union, any proceedings beingundertaken by a union to become certified,any unfair labour practice complaints inprogress, and collective bargaining agree-ments in force between the parties. InCanada, this principle is known as the ‘suc-cessor rights provisions’ of the labour codesof every Canadian province. The purpose ofthese legislative rights is to prevent a buyerfrom refusing to recognize a union alreadyin place or a union in the process of apply-ing to become recognized. Often, working conditions stipulated ina collective bargaining agreement are over-looked during the negotiation process lead-ing up to the purchase of the business. Timeand again, a buyer only pays attention to in-herited working conditions of the collectiveagreement when it comes to starting to runthe acquired business. The buyer may thenbe in a for a number of surprises regardingthe costs attached to wage rates and upcom-

ing adjustments, benefit costs, or outstand-ing grievances that will have an impact onlabour costs and the running of the business. These unwelcome surprises can beavoided by the prospective buyer taking stepsduring the due diligence process to becomefully aware of the current situation. The timeto do so is before closure of the sale.

Sean Bawden is a labourand employment lawyerpracticing with KellySantini LLP in Ottawa,Ontario, Canada. He pro-vides advice to both employ-ers and employees on abroad range of employment

law issues. He is also the editor of the firm’s em-ployment law blog “Labour Pains.”

Ralph D. Farley, ofTherrien Couture lawyersL.L.P., concentrates hispractice in Labor andEmployment Law. He repre-sents companies in the fieldsof aeronautics, manufactur-ing and broadcasting. He

has pleaded before Labor Arbitrators in allCanadian provinces, before various courts andLabor Relation Boards. He also taught LaborLaw at the Faculty of Management of McGillUniversity and is a Trainer recognized by theQuebec Bar.

Veronique Poirier is a lawgraduate from McGillUniversity. She is part of theLabor and Employment Lawteam at Therrien Couturelawyers L.L.P. She providesadvice and services to em-ployers from different sectors

with respect to labor standards, health and safetyissues, employment contracts, internal policiesand employee manuals and interpretation oflaws, regulations and collective bargainingagreements.She represents employers before civiland administrative tribunals in Quebec.

Andrea Raso is Chair of theLabour & EmploymentGroup of Clark Wilson LLPin Vancouver, B.C.,Canada. Andrea acts foremployers in defence of civilclaims and tribunal pro-ceedings, and has appeared

at every level of Court including the SupremeCourt of Canada. Andrea routinely assists cor-porate counsel in managing employee issues inbusiness transactions.


Since 2010, Brazil has been discussingthe enactment of an Internet Law. In fact, in 2010, the Brazilian Ministryof Justice submitted a draft of Bill of Law forpublic consultation, so as to receive contri-butions on a proposal of a “civil framework”for the Internet. More than 2,000 contribu-tions were presented. Once the Ministryconsolidated a final text, the proposal wasforwarded to Brazilian President DilmaRousseff, who sent the Bill to the NationalCongress in August 2011. The main purpose of the proposal wasto create a legal framework for the use ofthe Internet in Brazil, providing users withspecific rights in cyberspace, and settingforth duties and responsibilities for all sortsof Internet players, such as ISPs and OTT(Over-the-Top) companies. From the very beginning, when firstdrafted by the Ministry of Justice, the Bill

turned out to be controversial, and numer-ous competing interests have made it diffi-cult to forge a consensus on the matter.That is the reason why the Bill was stalledin the House of Representative for at leasttwo years. After Edward Snowden’s NSA spyingrevelations broke, the Bill was resurrected,as President Rousseff engaged herself in ob-taining the political consensus needed topass the proposal. In fact, the BrazilianGovernment had stated that the approval ofthe Internet Bill of Law would be an ade-quate response to U.S. spying and surveil-lance policies. Going further on the issue,the Brazilian Government not only ap-proved the Bill as first proposed by theMinistry of Justice and sent to Congress bythe President, but also sponsored a newdraft, proposing a so-called “in-country datacenters” amendment.

Briefly, the Brazilian Government in-tended to require Internet players (such asGoogle, Facebook, Twitter and the like) tomaintain within the Brazilian territory anydata related to Brazilian users. TheBrazilian Government considered that thestorage of Brazilian users’ data in Brazilwould confer on the Brazilian Governmentmore control over Internet data in general,and would subject such data to Brazilianlaws and courts, thus allowing an easierpath for the issuance of orders and accessto that information. On Sept. 11, 2013, President DilmaRousseff published a note in the FederalGazette urging approval of the Bill. Underthe Brazilian Constitution, when thePresident asks for a fast track procedure(‘constitutional urgency’) for a Bill of Law,the House of Representative must take upthe given proposal within 45 days.

Brazilian Internet LawTHE NEW LEGAL PANORAMA TO CONSIDER WHEN CONDUCTING BUSINESS ON

THE WEB OR PROVIDING INTERNET SERVICES TO BRAZILIAN USERS

Tomás Filipe Schoeller Paiva Mundie e Advogados



Although processed on a constitutionalurgency basis, the Government was unableto overcome the political dispute over theBill, and to strike an agreement amongcompeting interest groups lobbying theissue, especially with respect to controversialtopics such as the “in-country data centers”language. On March 25, 2014, after disputes be-tween the Government and Congressmenfrom the Government’s major coalitionparty (PMDB) were resolved by mutual con-cessions, a final version of the Bill passed inthe House, without the controversial “in-country data centers” obligation. On April 24, 2014, the Federal Senatepassed the Internet Bill with no amend-ments. Even though the opposition high-lighted that more time was needed todiscuss the matter, a procedural maneuverby the Government allowed the tables to beturned, making the bill the highest priorityon the Congressional Agenda, as it was inthe Government interest to sign theInternet Law at the time of the NETMundial conference, that would take placein São Paulo on April 25, 2014. During the opening speech of the NETMundial conference, attended by represen-tatives from more than 80 countries,President Rousseff signed the Internet Bill,enacting Federal Law No. 12,965/2014. Federal Law No. 12,965/2014 sets forthseveral guidelines and rules to be observedin the use of the Internet in Brazil, amongwhich the protection of privacy, the protec-tion of personal data, and the preservationand guarantee of net neutrality. It also pro-vides for several rights of Internet users. According to Article 2 of the FederalLaw, the regulation of the use of theInternet in Brazil is grounded on respect forfreedom of speech, recognition of the net-work’s global scale, plurality and diversity,openness and collaboration on the web, aswell as on the free enterprise, free competi-tion and consumer protection. Article 3 defines the principles thatgovern the regulation on use of the Internetin Brazil, including protection of privacy,protection of personal data, and the guar-antee of net neutrality. As to the protection of personal dataprovisions – the most controversial aspect ofthe Law, together with the net neutralityissue – the Internet Law aims at covering agap in Brazilian legislation on the subject. Under the Law as approved, any oper-ation of gathering, use, storage, or treat-ment of personal data that takes place onthe Internet is subject to the express opt-inconsent of the user. The information gath-ered may only be used for the purposes that

justify its gathering, which shall be specifiedin the Internet service agreements or in theInternet application terms of service. BothBrazilian legislation and jurisdiction aredeemed applicable to the operation of gath-ering, storage, custody, and treatment oflogs and personal data on the Internet, evento operations performed by companiesbased abroad, as long as they offer theirservices to Brazilian users. Furthermore, as to specific addressees,such as Internet connection providers –meaning those who are responsible for theauthentication of terminals for sending andreceiving data packages through theInternet, by means of the attribution of anIP address – there is an obligation of storageof connection logs, which shall be main-tained in secured and controlled servers fora one-year period. Such log is made only ofmeta-data, i.e., only the IP address, the du-ration and the date/time of the connectionare required to be maintained by theprovider. There is no obligation to store thisinformation in Brazil. As to Internet application providers –meaning those that provide functionalitiesthat can be accessed by a terminal con-nected to the Internet – there is a similarobligation of storage, for a six-month term,of information referring to the date andtime of use of a specific Internet applicationgiven a certain IP address. Such obligationmust be complied with by any Internet ap-plication provider that is organized as alegal entity and that performs its activitiesin an organized and professional way, andfor financial purposes, even if such provideris based abroad, as long as it offers its serv-ices in Brazil. It is noteworthy that the provisions ofthe Brazilian Internet Law on data protec-tion are subject to an implementing Decree(executive order), to be enacted by theBrazilian President. Such Decree is stillunder discussion by the BrazilianGovernment. Thus, although the InternetLaw has already entered into force (on June23, 2014, 60 days after its publication in theFederal Gazette), there is some discussionon whether or not the provisions on privacyand data protection are enforceable, sincetheir enforceability would depend on theenactment of a Presidential Decree to reg-ulate the procedures for investigating the vi-olations of such rules. The second controversial aspect – netneutrality – was considered as a point of nocompromise by the Government, who man-aged to keep it in the draft approved by theCongress. Although rewritten, the provi-sions on the issue stress the importance ofthe principle, however postponing imple-

mentation until further regulation to be en-acted by the Brazilian President. The new Law imposes on all telecom-munication operators responsible for thetransmission, switching, or routing of datapackages a general obligation of equal treat-ment, without any distinction based on con-tent, origin, or destination, service,terminal, or application. It also forbidstelecommunication operators from block-ing, monitoring, filtering, or analyzing thedata-packages content. There are some exceptions to those ob-ligations, particularly those related to (i)technical requirements deemed necessaryfor the adequate provision of services andapplications, and (ii) prioritization of emer-gency services. In such cases, the operatormust act with proportionality, transparencyand isonomy, refraining from causing dam-age to users. According to Paragraph 1 of Article 9of the Internet Law Framework, traffic shap-ing or degradation will be regulated by aPresidential Decree, which shall only be en-acted after both the Brazilian InternetSteering Committee (Comitê Gestor daInternet) and the Brazilian NationalTelecommunications Authority (Anatel)have expressed their opinion. Besides the provisions on data protec-tion and net neutrality, the BrazilianInternet Law also provides several rulesabout the liability of content providers forcontent from third parties, confirming thegeneral understanding of Brazilian courtsthat (i) Internet connection providers maynot be considered liable for damagescaused by content generated by third par-ties and (ii) Internet application providers’liability shall only accrue in cases of non-compliance with a specific judicial order tomake the reputedly infringing content un-available. Considering how recent the Law is andthe fact that an implementing Decree hasyet to be enacted, there are several issuesthat remain dubious and will doubtless bethe subject of further discussions.

Tomás Filipe SchoellerPaiva is an associate attor-ney at Mundie eAdvogados. PhD candidatein Constitutional Law atboth the Universities of SãoPaulo, Brazil, and Paris,France. Main areas of work

are Internet, infrastructure and regulated in-dustries, and antitrust.



One of the main procedures by which deci-sions of English government may be challengedis known as Judicial Review. As the name suggeststhe challenge is through the Court. This also ap-plies to decisions of other entities carrying outpublic law functions. The procedure has grownup over a number of years. In addition, judicial review can sometimesbe the only way of making a challenge to legisla-tion made at the EU level, with a realisticprospect of success. With the growth of the powers of theExecutive and an increase in regulation, JudicialReview has increased in importance and the vol-ume of such claims has grown considerably. Thisamong other matters has led to calls for reform. It will be appreciated that often the subjectmatter of the decisions in question are of majoreffect and in some cases business critical. For ex-ample, the writer acted for a number ofclaimants regarding the EU REACH Regulationgoverning the regime for import, production,registration and distribution of chemicals withinthe EU. The clients included a U.S. corporationand a multinational. In brief, decisions can be challenged by wayof judicial review on the following grounds:• Irrationality: the decision was one that no rea-

sonable authority would have made (known asthe Wednesbury test following the case of thatname);

• Illegality: the decision was made by the exer-cise of a power wrongly or the decision wasultra vires (beyond the powers of the body);

• Procedural unfairness: the executive or bodydid not follow the correct procedure, for ex-ample failing to consult or give reasons; and

• That there was a legitimate expectation the ex-ecutive or entity would act in another way: itwould be unusual to rely on or succeed on thisbasis.

The claim for judicial review has to be is-sued at Court within a very short time period ofthe decision being made. The usual rule is thatthe Court proceedings are issued promptly andin any event within three months from when thegrounds of claim arose. The Court takes a strictapproach. There are cases in which the Courthas decided that issuing proceedings within thethree-month time period was too late. In 2013, the time limit was shortened forplanning matters to within six weeks. Claims re-garding procurement decisions follow a differ-ent procedure and have to be made within 30days. Once issued, Judicial Review claims can onlybe pursued with the permission of the Court.The first stage is that the Court considers if thereis an arguable case on the claim documents on

REFORM OFCHALLENGES TO

ENGLISHGOVERNMENT

DECISIONSJeremy Lederman Wedlake Bell LLP



their own. This is designed to filter out theweaker cases. If the Court does not give per-mission, a party can request a hearing to askthe Court for permission again. Once permission to pursue the claim isgranted, the case proceeds as normal withthe defendant being allowed to serve a de-fence and the parties serving such furtherdocuments and taking part in a substantivehearing as the Court directs. The Court re-tains a wide discretion as to how each caseis managed and for example may dispensewith disclosure of documents or limit it. The Government expressed unhappi-ness about the great increase in the numberof judicial review claims in recent years. Thegeneral consensus is that much of this in-crease was due to claims in connection withimmigration and those seeking asylum.Those claims are now dealt with in otherways including by other tribunals. Following a consultation process, theGovernment proposed further changes tothe judicial review procedure in its CriminalJustice and Courts Bill. The Bill also pro-poses a number of changes to the Britishjustice system not connected to JudicialReview. The Bill proposes changes to limitthe scope of judicial review including thefollowing:1. On an application for permission to pur-

sue judicial review proceedings, the Courtmust refuse permission if it appears“highly likely” that the outcome for theapplicant would not have been substan-tially different if the conduct complainedof had not occurred.

2. When dealing with the substantive judi-cial review application and decidingwhether any remedy should be granted,the Court should refuse to make an orderif it appears the outcome for the partymaking a claim would not have been sub-stantially different if the conduct com-plained of had not occurred.

The aim is to try and filter out claimswhere there was what might be regarded asa minor technical breach and to save costs. The proposals have attracted substan-tial criticism from a broad spectrum, includ-ing former leading judges and leadingQueens’ Counsel. It is feared that thechanges will encourage decision makers notto act fairly, reasonably or comply with therule of law. Further it allows the Court to im-pose its view on what would have been if theclaim had not arisen. This will necessarilyinvolve the Court in speculating on whatmight have happened. It is felt this will mean that parties will

make their Claim documents longer to tryand avoid any problem arising from theabove. This will add to the work and cost in-volved. A further proposed change is that aparty will not be able to apply for permis-sion for judicial review at a hearing, if onthe documents at the preliminary permis-sion stage the Court decides that the appli-cation is totally without merit. Other suggested measures include:1. Changing the current rules so that on a

second application for permission to pur-sue a claim at a hearing, a defendant canseek its costs of its defence.

2. Details of financial backers of claims areto be provided, so that the Court hasthese when deciding whether costs ordersshould be made.

3. Parties joining in others’ claims (quite afrequent occurrence) will not have theircosts paid by other parties and risk costsorders being made against them if theycause others to incur greater costs. It issuggested this will discourage a numberof smaller parties grouping together tochallenge a decision and affect the qual-ity of the process. Affected but more de-

tached parties (such as trade associa-tions) can often assist the Court, but it isfelt this step will discourage this.

4. A large increase in Court fees to com-mence judicial review claims (which hasalready been brought into effect);

As a result of the prior consultation theGovernment did not include in the Bill pro-posed changes to limit the judicial reviewprocedure to those who could show suffi-cient legal standing (i.e. that they were af-fected) as opposed to being part of acampaign, for example, in order to raisetheir profile. Amongst all the reform activity theGovernment did not take an opportunity toclarify one of the areas of uncertainty in thelaw, on when the time for bringing a claimstarts to run, which as mentioned above canbe very short. As at the end of July 2014 the Bill haspassed through the House of Commons un-changed in this respect. It has reached theHouse of Lords where there has been somedebate and detailed scrutiny has com-menced. A number of criticisms have beenmade by the House of Lords (including byformer Judges, now sitting as Lords). TheBill will undergo further detailed examina-tion by the House of Lords later this year. If the reforms are voted through, it issaid much will depend on how they are im-plemented in the Court rules and by theJudges themselves. However, from the aboveit will be seen that if the changes arebrought about, pursuing judicial reviewclaims will become difficult, more costly andexpose those bringing them to greater riskof a costs order being made against them ifthey are unsuccessful. This makes it more important forclients and advisers to continue to keepahead of relevant proposed decisions to betaken by public bodies or those exercising apublic function and devote greater inputinto consultations, as this is likely to be thebest way to avoid adverse decisions and haveaccount taken of their views.

Jeremy Lederman is a part-ner and head of theCommercial Litigation teamat London UK firmWedlake Bell LLPSolicitors. He and his teamact on judicial review andregulatory matters and have

a wide range of experience in this area.

...if the changes are

brought about,

pursuing judicial

review claims

will become

difficult, more

costly and expose

those bringing

them to greater

risk of a costs

order being made

against them

if they are

unsuccessful.


THE BEGINNING AND THE END The issuance of the EU Directive RL2006/24/EC (Directive) by the EU legislatorwas triggered, in addition to the 9/11 at-tacks, by the terrorist attacks in Madrid 2004and London 2005. The objective of the Directive was toimprove the fight against crime, in partic-

ular organized crime and terrorism. Withthe conflict between freedom and securityalways having stood at the heart of theDirective, the stringent and comprehen-sive rules of the Directive on data retentionwas from the outset heavily criticized andopposed.

With the Wikileaks and Snowden inci-dents having raised enormous public inter-est and opposition, it came as no realsurprise that the European Court of Justice(ECJ) struck down the Directive with its de-cision of April 8, 2014, on cases C-293/12and C-594/12, thus repealing the Directivewith retroactive effect.

DATAPRIVACY

AND DATA RETENTION IN EUROPE


Rainer Kaspar and Hermann Hansmann • PHH Prochaska Havranek Rechtsanwälte GmbH



WHAT DOES DATA RETENTION MEAN? Data Retention within the meaning ofthe Directive meant the storage of all calldata (communication data), and thus en-compassed for example the following: Whocalled whom for how long and from where?Who sent whom an e-mail? Which IP ad-dress was used for browsing the Internetand how long did that browsing take place?Retention of data was to be done withoutany particular cause, and thus “for reten-tion.” However, the content of the commu-nication was not retained. The required data was collected by pri-vate telecommunication companies, whichwere subjected by the Directive to a duty toretain. The data was to be kept available ontheir servers for a “second step,” the access bypublic authorities. However, such right of ac-cess was limited and only to be granted undercertain conditions, for example for the pur-pose of investigating criminal allegations. Nonetheless, in theory, the aggregatevolume of the information collected allowedvery accurate conclusions regarding the pri-vate life of persons whose data was retained,such as habits of daily life, preferred loca-tions and activities and social relationships.

IS THERE A DIFFERENCE BETWEEN EUDATA RETENTION RULES AND THEACTIVITIES OF THE NSA? It appears that the main difference isthat while in the case of European data re-tention where access through the public au-thorities took place only in a second step onthe basis of certain conditions being ful-filled, the activities of the U.S. authoritiesfocus(ed) from the outset on the collectionof data for direct access by public authori-ties. Further, data collected for purposes ofEuropean data retention was collected byprivate companies and encompassed “EU-domestic” data only. As was made clear frommedia reports, the NSA itself collects dataand (also) focuses on data from foreigncountries. In addition, the NSA allegedlysaves the content of the communicationand also specifically tapped the phone ofhigh-ranking foreign officials, such asGerman Chancellor Merkel. Thus, the NSA’s data collection pro-gram goes far beyond the European data re-tention according to the Directive.

WHY HAS THE ECJ STRUCK DOWNTHE DIRECTIVE? The ECJ held the Directive to infringeupon the fundamental rights of respect ofprivacy and protection of personal data.The Court has deemed the obligation to re-tain data to be a “particularly serious inter-

ference” with the mentioned fundamentalrights. The data collected enables the draw-ing of very accurate conclusions on citizens’habits of daily life. Among citizens, the dataretention may result in the feeling “thattheir private life is the object of permanentsupervision” because they are not given in-formation on the retention itself and in par-ticular on how the information retained willbe used.

REGARDING THE OBJECTIVE TO FIGHT SERIOUS CRIME AND TERRORISM The ECJ admitted on the one hand thatfighting serious crime, in particular organ-ized crime and terrorism, is of utmost impor-tance for warranting public safety and thatits effectiveness can to a high degree dependon the use of up-to-date investigation tech-niques. However, such objective serving thecommon well-being, can, fundamental as itmay be, in itself not justify the need for a re-tention policy – as was provided for by theDirective – serving to fight crime. Protecting the fundamental right of pri-vacy requires in any case constant decisionpractice of courts to the effect that excep-tions of protection of personal data and itslimits are restricted to the absolute mini-mum necessary. The Directive, however, cov-ered comprehensively all persons usingelectronic communication services, irrespec-tive of whether such persons were involvedin serious crime or not. Furthermore, theDirective did not provide for any exceptions

for persons with “privileged” communica-tion, as e.g. physicians or lawyers. The ECJ took this up and argued thatthe Directive was too far-reaching targetingalso people not even remotely connected tocrime and in particular had not providedfor any exceptions, so that it covered alsopersons whose communications are subjectto professional secrecy according to na-tional laws. This general failure to define restric-tions and exceptions resulted in the factthat in issuing the Directive EU legislationexceeded the admissible limits which it wasto comply with in order to ensure the prin-ciple of proportionality.

IS THERE A POSSIBILITY FOR A NEWEU DIRECTIVE ON DATA RETENTIONTO BE ISSUED? It may be the end of European data re-tention regulations for the time being, butnot necessarily forever as the ECJ did not de-clare data retention per se to be inadmissi-ble and rejected only the directive as it was.If future EU legislation took into accountthe legal prerequisites set forth in the deci-sion, the European legislator would be free,assuming respective political willingness, toissue a new regulation on data retention.However, as current public opinion stands,such new directive will likely not be on theimmediate to-do list of European legislators.

Rainer Kaspar, a graduateof University of MichiganLaw School, advises privateand corporate clients, pri-vate equity firms and finan-cial institutions in a widerange of matters. He partic-ularly focuses on cross-bor-

der M&A, Financing and Capital Marketstransactions. Rainer is a regular lecturer at sem-inars and conferences, including thoses spon-sored by the IBA and AIJA and speaks German,English and French.

Hermann Hansmann, agraduate of University ofVienna, works in the field ofpublic law, where he regu-larly advises clients regard-ing questions ofenvironmental and facilitylaw. He further focuses on

Life Sciences. Among his other areas of activityare Data Protection/IT, Energy, PPP,Environment and Public Procurements. Hespeaks German and English.

The data was to bekept available on

their servers for a“second step,” theaccess by public

authorities. However,such right of access

was limited andonly to be granted

under certainconditions, forexample for the

purpose ofinvestigating

criminal allegations.



TELFA CONTINUES EUROPEAN EXPANSION

Further to an extensive MembershipReview exercise TELFA is proud to an-nounce that three new firms have joinedthe network.

BUSE HEBERER FROMM, GERMANY Buse Heberer Fromm will be your part-ner for all kinds of litigious proceedings andfor commercial and tax law issues. As a “fullservice“ law firm with more than 100 special-ized attorneys, auditors and tax consultants,they can assist you in all court cases andtransactions as well as in day-to-day legal ad-visory work. With six offices in the majorGerman cities and eight foreign representa-tive offices, Buse Heberer Fromm providesoutstanding legal services, tailored individ-ually to your clients’ needs. For more de-tailed information: www.buse.de

DELSOL AVOCATS, FRANCE DELSOL Avocats is a law firm withlawyers practising at the French Bars ofParis and Lyon. Their aim is to meet their clients’ legalneeds relating to disputes and transactionalprojects. Driven by strong convictions, thefirm advises and defends a wide range ofclients, including industrial corporations,service companies, financial institutions,not-for-profit organisations, public bodiesand professional practices. The nine special-ist departments of DELSOL Avocats often

form multidisciplinary working parties tosee complex transactions through to a suc-cessful conclusion. For more detailed infor-mation: www.delsolavocats.com

PHH, AUSTRIA PHH Attorneys at Law is one of theleading commercial law firms in Austria andas such holds multiple international awards.They offer the highest level of comprehen-sive legal and economic services. This allowsthem to find solutions which are tailored totheir clients in content and structure. Indoing so, they are breaking new groundsand finding proactive responses.Committed, courageous, precise. Customer satisfaction is the highest pri-ority at PHH. Experts from a wide range ofspecialist areas are available to the clients.This team guarantees not only the highestlevels of comprehensive legal services, butalso flexibility and personal partner sup-port. Thus, their clients benefit from solu-tions which are tailored in content andstructure. For more detailed information:www.phh.at

These new memberships bring TELFA toa new dimension. TELFA now has very strongpartners in key European jurisdiction bringingthe total number of attorneys practicing inEurope to approximately 1,000 professionals.

TELFA also has more and more indi-viduals and firms recognized in the legalmarket (eg Dirkzwager recognized as beingthe third best firm in the Netherlands andUrmas Ustav, from Lextal, nominated thebest lawyer in Estonia). All this reflects a readiness to performto excellence and to service internationalclients to their best interests. TELFA is proud of all its members andit keeps on securing its position as the lead-ing legal Alliance in Europe. TELFA will hold its next GeneralMeeting in Berlin on 14-16 November 2014on which occasion its 25th anniversary willalso be celebrated.

ABOUT TELFA• Website: http://www.telfa.org• Tel. +32 (0)2 644 02 42• President of TELFA: Frans Knüppe,

Dirkzwager advocaten & notarissen,[email protected]

• Executive Consultant of TELFA:Giancarlo Agace, [email protected]



SuccessfulRecentUSLAW

Law FirmVerdicts

Bingham Greenebaum Doll LLP(Indianapolis, IN)In 2011, Heritage Recycling, LLC, entered anagreement to purchase two carpet recycling sys-tems and license technology related thereto for thepurpose of sublicensing it to third parties. The sys-tems never performed as promised, and Heritagelater learned that the seller did not own all of therights to the intellectual property at issue.Arbitration ensued, with Heritage seeking rescis-sion of the contract based on the seller’s breach ofits representations and warranties. The seller filedcounterclaims alleging breach of contract andother claims and seeking approximately $70 mil-lion in damages. Following a 6-day arbitration hear-ing in January 2014, the arbitrator issued an awardthat rescinded the contract, ordered the seller toreturn the purchase price for the systems ($3 mil-lion) to Heritage, and denied the seller’s counter-claims in full. The arbitrator also ordered the sellerto pay Heritage’s share of the arbitrator’s fee.Bingham Greenebaum Doll (Indiana) attorneys in-cluded Phil Fowler, Bri Clark and Ashley Paynter.

Duke Scanlan & Hall, PLLC (Boise, ID)Following a four-week federal antitrust trial, thelargest hospital system in Idaho was ordered to un-wind a transaction in which it had acquired thelargest independent physician practice group inIdaho. Over the past several years, St. Luke’sHealth System of Boise, Idaho, had acquired morethan 20 physician practices, five hospitals and fouroutpatient surgery centers. St. Luke’s was the dom-inant provider in several markets. In December2012, St. Luke’s acquired the Saltzer MedicalGroup, the largest independent multispecialtyphysician group in Idaho. Saltzer’s main office islocated in the city of Nampa, Idaho, and sits acrossthe street from a hospital operated by our client,Saint Alphonsus Health System. Saint Alphonsus and physician-ownedTreasure Valley Hospital filed a lawsuit as privateplaintiffs seeking to prevent the St. Luke’s/Saltzertransaction on grounds that the acquisition vio-lated state and federal antitrust laws. The FederalTrade Commission and the Idaho AttorneyGeneral’s Office later filed a similar lawsuit and thetwo cases were consolidated. The private and gov-ernment plaintiffs claimed that St. Luke’s actionsharmed competition, would increase health careprices, and would provide St. Luke’s with a domi-nant position in the Nampa market for adult pri-mary care physician services. St. Luke’s and Saltzer defended the acquisi-tion primarily on efficiency grounds, claiming thatthe transaction was a critical element of St. Luke’splan to create a clinically integrated health care de-livery system. The Defendants argued that the pur-pose of the transaction was to improve quality andimplement a reimbursement system that wouldcompensate medical providers based upon qualityoutcomes rather than volume of procedures per-formed. U.S. District Judge B. Lynn Winmill con-cluded that, while St. Luke’s and Saltzer may haveintended to improve patient outcomes, the trans-action created too great a risk of increasing costsand therefore violated antitrust laws. JudgeWinmill’s ruling said it appeared “highly likely”that the acquisition would allow St. Luke’s to “ne-gotiate higher reimbursement rates from health in-surance plans that will be passed on to theconsumer” and “raise rates for ancillary services(like x-rays) to the higher hospital-billing rates.”

The Court found that the acquisition violated § 7of the Clayton Act and the Idaho Competition Act,and permanently enjoined the transaction. St.Luke’s was ordered to fully divest itself of Saltzer’sphysicians and assets and to take any further actionneeded to unwind the acquisition. This matter is currently on appeal to the 9thCircuit. The Saint Alphonsus plaintiffs were repre-sented at trial by Keely Duke of Duke Scanlan &Hall (Boise, ID) and David Ettinger of HonigmanMiller Schwartz & Cohn (Detroit, MI).

Franklin & Prokopik (Wilmington, DE)William (“Skip”) Crawford and Krista Shevlin re-cently obtained a favorable damages verdict for thefirm’s client following a three-day jury trial in theSuperior Court, New Castle County, Delaware. Thecase involved a negligence claim filed by Plaintiff aris-ing out of a ‘chain-reaction’ rear end automobile ac-cident. Plaintiff was stopped in traffic with a secondvehicle stopped behind her (“the middle vehicle”).The firm’s client – an insured driver – was unable tostop his tractor-trailer before striking the middle ve-hicle, and forcing it into the rear of Plaintiff’s vehicle.Plaintiff was 25 weeks pregnant at the time of the ac-cident. Following depositions, firm’s client concededresponsibility for the accident. Plaintiff alleged $162,000 in special damages.Her treatment included two surgeries to address aherniated disc at C6-C7. The defense counteredthe allegations with the testimony from Dr. ScottRushton, a spinal surgeon, and Dr. Sandra Metzler,Ph.D., a biomechanical engineer. Defense expertsconceded the plaintiff sustained a cervicalsprain/strain in the accident and causally relatedapproximately $15,000 of medical bills to injuriesresultant from the accident. The defense expertsalso testified the spinal surgeries and extensivetreatment were not related to the accident. Prior to trial, plaintiff filed a Motion inLimine to exclude the testimony from the defensebiomechanical expert, Dr. Metzler. The Court helda hearing and denied the Motion in Limine. TheJudge advised the parties it was the first time a bio-mechanical engineer was permitted to testify in theState of Delaware. Plaintiff’s settlement demand was $400,000.Defendants countered with an Offer of Judgmentin the amount of $85,000. The offer was rejected. Following the three-day trial, the jury re-turned its verdict and only awarded plaintiff$48,000 in damages.

Goldberg Segalla (Syracuse, NY)Kenneth M. Alweis and Lisa M. Robinson, mem-bers of Goldberg Segalla’s Retail, Hospitality, andDevelopment and Product Liability PracticeGroups, obtained a defense verdict for a nationalretail sporting goods chain in a multimillion-dollarproduct liability trial involving an all-terrain vehi-cle/utility task vehicle (ATV/UTV) rollover. The 47-year-old plaintiff in this federal courtcase was driving a UTV on a public road with her10-year-old daughter as a passenger at the time ofthe incident. The plaintiff sustained a tibia/fibulafracture that required five surgeries. She broughta product liability action against the manufacturerof the UTV and the distributor, our client, assertingimproper and misleading instruction in the use ofthe product. After discovery, motions to preclude theplaintiff’s’ expert and motions for summary judg-ment were filed. The U.S. District Court for the



Northern District of New York granted the motionsto preclude the expert witness and dismissed all ofthe causes of action except the plaintiff’s failure-to-warn cause of action. The jury trial was held in Binghamton, NewYork. In his closing argument, the plaintiff’s coun-sel asked the jury for several millions of dollars indamages, as well as punitive damages. Following aseven-day trial, and after less than four hours of de-liberation, the jury returned a verdict of no causeagainst both defendants.

Huddleston Bolen (Huntington, WV)In a decision that has far-reaching implications forthe companies who publish Internet content, theU. S. Court of Appeals for the 6th Circuit over-turned a lower court ruling and found in favor ofHuddleston Bolen’s client, the operator of a pop-ular gossip website – TheDirty.com. The case, Jones v. Dirty World L.L.C., was a mat-ter of first impression for the Sixth Circuit. The ap-peal required the Court to analyze and construe animportant federal statute known as theCommunications Decency Act of 1996 (CDA),which was created to protect companies that pub-lish Internet content from legal actions resultingfrom content created by third parties. “The 6th Circuit’s decision protects theInternet as a medium to freely share information,”said Huddleston Bolen Partner, Alex Ward, whorepresented the website’s owner, Dirty World, andits founder Mr. Richie. “We rely on informationprovided by third parties to help us make informeddecisions when we make purchases and for infor-mation about our government officials and others.All of this was in peril with the lower court’s rul-ing,” Ward said. “We are pleased that the rights ofour client were upheld and that the right for all ofus to read and share legal content on the Internethas been preserved,” he said. In the case, Ms. Sarah Jones, a member of theCincinnati Bengals, BenGals, cheerleading squad,accused the firm’s client of defamation, libel, “falselight,” and intentional inflection of emotional dis-tress resulting from unflattering posts made by athird party to the website, thedirty.com. The three judge panel unanimously over-turned a lower court ruling in favor of Ms. Jones.In doing so, it affirmed the “material contributiontest” used by other Circuit Courts to determinewhether a website actually developed the impropercontent or simply published content created byothers.

Martin, Tate, Morrow & Marston, P.C.(Memphis, TN)On September 26, 2013, after a three-day trial, ajury in the U.S. District Court of the WesternDistrict of Tennessee rendered a verdict that defen-dant infringed plaintiff’s service mark in violationof the Lanham Act, 15 U.S.C. § 1125(a), and theTennessee Consumer Protection Act, Tenn. CodeAnn. § 47-18-109(a). Shea Sisk Wellford and AdamJ. Eckstein of Martin, Tate, Morrow & Marston, P.C.represented the plaintiff, an individual who ownedand operated a real estate brokerage firm for morethan 25 years. After plaintiff ceased her businessoperations and associated with another broker,plaintiff engaged Martin Tate to stop a real estateagent who had previously been associated withplaintiff’s brokerage firm from using plaintiff’s in-tellectual property, which consisted of, amongother things, the service mark that she used on herreal estate signs. Martin Tate obtained a temporary

restraining order and preliminary injunctionagainst the defendant enjoining him from using adesign on his real estate signs that was confusinglysimilar to plaintiff’s service mark. Martin Tate sub-sequently obtained an order of contempt againstthe defendant for violating the preliminary injunc-tion. The jury awarded plaintiff damages under theTennessee Consumer Protection Act. The Courtdoubled the award under the Tennessee ConsumerProtection Act and also awarded plaintiff damagesunder the Lanham Act, attorneys’ fees, and costs,for a total verdict in the amount of $371,752.01.Finally, the Court permanently enjoined the defen-dant from using the plaintiff’s intellectual propertyor anything likely to cause confusion with the plain-tiff’s intellectual property. Taylor v. Thomas, No.2:12-2309-JPM-cgc (W.D. Tenn. April 28, 2014).

McCranie Sistrunk Anzelmo HardyMcDaniel & Welch LLC (New Orleans, LA)Thomas Anzelmo, Kyle Kirsch, and Craig Canizaroobtained summary judgment on behalf ofCorrectHealth Jefferson, LLC and two of its nurses.Plaintiff brought claims of medical negligenceagainst the nurses and CorrectHealth arising outof the treatment he received following an allegedchemical exposure to his eye. Plaintiff developed acorneal ulcer that lead to a recommended cornealtransplant. The defense submitted evidence andexpert testimony that showed that CorrectHealthand its nurses did not breach the applicable stan-dard of care in their treatment of plaintiff’s eye,but instead responded appropriately to plaintiff’smedical complaints and condition. Additionally,the evidence established that plaintiff’s cornealulcer did not result from the treatment he receivedfrom CorrectHealth and its nurses. Accordingly,the Court granted summary judgment in favor ofthe defense, dismissing all of plaintiff’s claims.

Murchison & Cumming LLP (Los Angeles, CA)On March 19, 2014, William T. DelHagen ofMurchison & Cumming, LLP, received not just onebut six separate defense verdicts in a hotly con-tested battle between adjoining landowners in thepricey Los Angeles community of Bel Air. In 2009,British diamond heiress Zeta Graff filed suit againstUkranian-American businessman Alex Blyumkinand his construction contractor NewformConstruction over a series of alleged transgressionsduring the construction of the new Blyumkin resi-dence adjoining the Graff property. That case wassettled in 2011, with a modest payment, but withinfour months Graff filed the second suit that went totrial this year on multiple claims of breach of con-tract, false promises, intentional infliction of emo-tional distress, trespass, private and public nuisance,negligence, and a claim for punitive damages. At its core, plaintiff’s case contended that thedefendants had never intended to live up to theprior settlement agreement and had continuedwith construction in violation of that agreementand certain construction rules. During the 21-daytrial, Graff adorned her case with claims of obscenegestures, deliberate harassment, a trespassing mis-tress of one of the defendants, and claims ofRussian mafia death threats against her, her family,and her dogs. She claimed the actions by defen-dants had not only caused her severe post-trau-matic stress disorder, but had depressed the resalevalue of her award-winning house from $8 million

to only $3 million. Defendants contended (andproved) that plaintiff was just plain nuts, and thatthey had fully complied with all the constructionrequirements of L.A. City, and reasonable construc-tion practices. Plaintiff had once offered to settle for$950,000, but asked for over $9 million in damagesin final argument. After two days of deliberations,the jury rejected each of the six separate SpecialVerdicts request by plaintiff, as well as any claim forpunitive damages.

Pierce Couch Hendrickson Baysinger& Green, L.L.P. (Oklahoma City, OK)J. Chris Condren and Benjamin S. Saunier ofPierce Couch Hendrickson Baysinger & Green,L.L.P. in Oklahoma City, Okla., successfully de-fended an oilfield drilling rig moving company andgin pole truck driver in a significant injury accidentcase in Alva, Okla. After a three -day trial, the juryreturned a verdict awarding no damages to thePlaintiff who had suffered a below-the-knee ampu-tation of his leg in an accident which occurred at adrilling location in northwest Oklahoma. The Plaintiff had incurred $200,000 in out-of-pocket expenses including lost wages and medicalcare and treatment. Plaintiff also presented a life-care plan for prosthetic limb replacement costsand medical treatment exceeding $300,000.Plaintiff’s total economic losses presented at trialwere nearly $1,000,000. The case involved safety and industry practiceissues related to the tear down, transportation andrig up of land-based oil and gas drilling rigs. Thecase also involved issues of liability and immunitiesof multiple companies that are involved in the rigmoving process. The defense presented expert witness testi-mony as to oilfield practices and the necessity forworkers on the ground to stay clear of the blindspots of large trucking equipment that is used forthe purposes of moving the rig. The Plaintiff’s request to the jury was for$3,000,000. The jury deliberated approximatelytwo hours before arriving at its verdict denyingPlaintiff any recovery. The jury verdict assigned55% of the fault to the injured Plaintiff, 35% of thefault to the Plaintiff’s truck driver and 10% of thefault to the defendant driver represented by Mr.Condren and Mr. Saunier.

Sweeny, Wingate & Barrow, P.A.(Columbia, SC)Sweeny, Wingate & Barrow, P.A saved a client froma $3.5 million dollar verdict for bad faith. On May12, 2008, before a new business owner procured li-ability insurance, an employee killed an elderlywoman in an automobile accident. For several rea-sons, he should not have been driving. After thejury returned a verdict against the at-fault driver,the decedent’s personal representative brought anaction against an insurance carrier for bad faithfailure to pay pursuant to its insurance policy. In an abundance of caution, the insurancecompany initiated a declaratory action to establishthat the driver was not covered under the policy be-cause the driver was not an employee. The courtconsidered faxes from the local insurance agent tothe insurer’s agent stating that “[the named in-sured] is no longer the owner of this company,”and requesting coverage beginning May 23, 2008.The trial court held that the insurer was equitablyestopped – by its silence – from denying that thepolicy was transferred from the named insured to



the new proprietorship. This ruling was immedi-ately appealed. Mark Barrow presented oral argument beforethe Fourth Circuit Court of Appeals on behalf ofFirst Financial Insurance Company. ApplyingSouth Carolina law, the Appeals Court held in favorof the insurer, holding that the insurer could relyon the terms of its policy. Fourth Circuit OpinionNo.12-2452. The result is that estoppel cannot be used tocreate insurance coverage; equity was not served byrequiring the insurer to provide coverage whichwas not contemplated at the inception of the con-tract and for which no premium was paid; and thepersonal representative could not claim to havebeen misled because she and the agent had themeans to learn the truth. Thus, the verdict fromthe bad faith action could not be satisfied by theproceeds from the insurance policy.

Traub Lieberman Straus &Shrewsberry LLP (Hawthorne, NY)Signal International, LLC (“Signal”) owned dry-dock AFDB-5, located in Port Arthur, Texas. AfterAFDB-5 sank, Signal tendered claims to certain in-surers. The primary property insurer paid its$10,000,000 limit. TLSS’s client, Max SpecialtyInsurance Company (“MSIC”) paid the remaining$3,600,000 for the drydock’s represented value andfor lost rental equipment under an excess propertypolicy. Signal’s marine liability insurer commencedsuit seeking contribution from MSIC and Signal’spollution liability insurer for wreck removal costs.Signal filed a cross-claim against MSIC for allegedbusiness interruption losses. Discovery revealed that AFDB-5 was danger-

ously dilapidated. In its underwriting submission,Signal provided a property condition report indi-cating AFDB-5 was in good repair. There were mul-tiple withheld additional engineers’ reportsindicating that AFDB-5 faced catastrophic failureabsent extensive repairs. Upon learning the true condition of AFDB-5,

MSIC sought to void the policy ab initio based onSignal’s material misrepresentations and to recouppayments made. In an earlier ruling, the court heldthat maritime law did not apply to the MSIC policybecause AFDB-5 was not a “vessel.” MSIC’s rescissionclaim would thus be adjudicated under state law. Signal and MSIC filed summary judgmentmotions on MSIC’s rescission claim. Signal argued

that Texas law applied requiring the claim’s dis-missal because MSIC could not prove intentionalmisrepresentation. MSIC argued that Mississippilaw, which does not require intent, applied dictat-ing policy rescission. The court agreed with MSICand applied Mississippi law. The court held Signal’somissions material, given MSIC’s underwriter’s tes-timony that the policy would not have been issuedhad Signal disclosed the withheld information. Thecourt voided the policy ab initio and awarded MSICsummary judgment on its recoupment claim, total-ing approximately $4 million including interest.Fireman’s Fund Ins. Co. v. Great Am. Ins. Co., 2014U.S. Dist. LEXIS 45843.

Wicker Smith O’Hara McCoy & FordP.A. (Coral Gables, FL)Orlando Partner, Raymond E. Watts, Jr., andAssociate, Patrick L. Mixson, received a defenseverdict in the Marteny, Diane (E/O) v. Irma Alves,M.D. case. The Plaintiff contended that theDefendant hospitalist improperly ordered Lovenoxafter a renal biopsy, contingent upon approvalfrom interventional radiology, which performedthe biopsy. Lovenox was given contrary to the termsof the hospitalist’s order. Discovery revealed thatthe hospital pharmacist failed to accurately tran-scribe the medication order and that the nursesdid not identify the pharmacy error. TheDefendants obtained a directed verdict on Fabrenegligence as to the non-party hospital, but thejury returned a complete defense verdict.

Clark Wilson LLP (Vancouver, BC, Canada)Clark Wilson acted for Vancouver’s AnthemProperties Group in its recent acquisition of UnitedCommunities, a Calgary-based residential land de-veloper with operations in Calgary, Edmonton andSacramento, California, in a $200 million transac-tion. Alex Petrenko, James Speakman, Adam Dlinand Rachelle Mezzarobba acted in respect of thepurchase transactions, with David Kington,Rosemary John and Jyotika Reddy acting in respectof the transaction financing. Clark Wilson LLP acted for Pure Industrial

Real Estate Trust (PIRET) (TSX: AAR.UN) in clos-ing its public offering of 38,755,000 trust units, ona bought deal basis, at a price of $4.60 per trustunit for total gross proceeds of$178,273,000.Vikram Dhir, Victor Dudas and James

Speakman led the Clark Wilson deal team. DDS Wireless International Inc., a worldleader in providing wireless data solutions for fleetmanagement, announced the successful comple-tion of its going private transaction, pursuant towhich a company owned by Vari Ghai, the ChiefExecutive Officer and a director of the Company,acquired all of the outstanding securities of theCompany that the Purchaser and its affiliates didnot previously own by way of a plan of arrangement(the “Arrangement”). The Arrangement was com-pleted following the approval of the Supreme Courtof British Columbia and the satisfaction of variousconditions precedent to the Arrangement. Totalvalue of the transaction exceeded $30,000,000.Clark Wilson’s Bernard Pinsky and Stewart Muglichacted for Vari Ghai and his company to completethe transaction.

Quattlebaum, Grooms, Tull & BurrowPLLC (Little Rock, Ark.)Timothy W. Grooms served as local counsel forKfW IPEX-Bank Gmbh in connection with the sen-ior secured financing of Big River Steel LLC for theconstruction, start-up and operation and mainte-nance of a flat-rolled steel mini mill to be con-structed on land located in Osceola, MississippiCounty, Arkansas. The approximately $1.5 billionproject, which includes senior and mezzanineloans, equity investments, and direct loans, grantsand other incentives from the State of Arkansas,Mississippi County, Arkansas, and the City ofOsceola, Arkansas, will create more than 500 fulltime jobs, each with an average annual salary of$75,000. The Big River Steel project is expected tohave a tremendous economic impact on the Stateof Arkansas.

Stenger LLP (Germany) The solar park Jocksdorf qualifies as one of thelargest parks in Europe with a total capacity of 82megawatt and investments amounting to 120 mil-lion Euros. The investment house ABUnternehmensberatung und Beteiligungsgesellschaft purchased the solar park consisting ofthree legally and economically independent sub-projects during its deployment phase in the sum-mer of 2012. The entire park was connected to thegrid as early as in the end of 2012. UniCredit BankAG and Bayerische Landesbank provided the fund-ing for two subareas (with a total capacity of 55MW) with a volume of 70 million Euros runningfor a period of 18 Years. The banking consortium was extensively ad-vised by Stenger LLP. The firm executed not onlythe Legal Due Diligence but also negotiated theproject agreements and drafted and negotiated allfinancing agreements. Besides its sheer size, the transaction stood outespecially for its corporate complexity. Further chal-lenges were the significant regulatory changes in tar-iffs for solar power under the German RenewableEnergy Sources Act during the structuring phaseand the fact that the site is a former military airbasewith related pollution issues. Stenger’s energy team has advised marketparticipants on more than 100 renewable energyprojects with a total capacity exceeding 2,500 MWin Germany as well as in other European countries.For Stenger LLP the transaction was the most com-plex and prominent transaction in the renewablessector in Germany in 2013.

SuccessfulRecentUSLAW

Law FirmVerdicts

Continued


SuccessfulRecentUSLAWLaw FirmTransactions



Firmson theMove

Lea Richmond, IV, a shareholder in Carr Allison’sBirmingham, Alabama, office has been appointedto the Alabama Pattern Jury Instructions Committee– Civil for a three-year term. This committee ischarged with drafting the language of the patternjury instructions that are used across the state ofAlabama in all state courts. Richmond was selectedby the Alabama Supreme Court in recognition of hissuperior skills and intellect in his legal practice.

OTC Markets Group Inc. (the “OTC Group”) hasappointed Clark Wilson LLP it as the firstCanadian Designated Advisor for Disclosure(“DAD”) for companies incorporated in theUnited States, and a Principal American Liaison(“PAL”) for companies incorporated outside of theUnited States. Until this appointment, the OTCGroup had only appointed DAD/PALs if they weredomiciled in the United States.

In April 2014, Lyall D. Knott, Q.C. of Clark WilsonLLP was appointed as a Member of the AdvisoryBoard to the Canada Institute of The WoodrowWilson International Center for Scholars. TheInstitute is dedicated exclusively to exploring emerg-ing policy issues between Canada and the U.S. TheWilson Center was chartered by Congress as the of-ficial memorial to President Woodrow Wilson.

Karen Painter Randall, a Connell Foley partner,has been appointed by the Supreme Court of NewJersey to serve on the Board on AttorneyCertification for a three-year term starting January1, 2014 through December 31, 2016.

Jesse Barba, an attorney for Cox SmithMatthews Inc., in McAllen, Texas, was one ofGov. Rick Perry’s four appointees to the TexasAppraiser Licensing and Certification Board forterms to expire on Jan. 31, 2016.

Goldberg Segalla’s Workers’ CompensationPractice Group launched the Workers’ CompensationQuarterly newsletter to provide news and analysis re-garding workers’ compensation litigation acrossNew York and other states. Each issue includestimely summaries of the latest decisions, along withfeatured articles, to provide practical takeawaysfrom each decision, insight on the impact ofemerging trends, examination of changes in inter-pretive language used by the courts, and more. Tolearn more and to subscribe, visit www.goldbergsegalla.com/resources/newsletters.

Brad Carver, a partner at Hall Booth Smith, P.C.,has been appointed to the Atlanta Commission onVeteran Affairs by the Atlanta City CouncilPresident Ceasar C. Mitchell. During his active dutymilitary career, Mr. Carver deployed to Bosnia,Kuwait, Iraq, Afghanistan and was awarded theBronze Star Medal for exceptionally meritoriousservice during combat operations in Afghanistanand Iraq during Operations Enduring Freedomand Iraqi Freedom. He actively continues to servein the U.S. Army Reserves in the rank of Major asthe Senior Legal Opinions Attorney for the 213thLegal Support Organization headquartered inDecatur, Georgia.

Angela Konrad, a partner at Huddleston BolenLLP, the West Virginia member of the USLAWNetwork, was named president of the NationalAssociation of Railroad Trial Counsel on July 28,2014. She will serve in this role for a one-year term.The National Association of Railroad Trial Counselis a 60-year-old organization made up of approxi-mately 1,100 outstanding railroad trial attorneys

from across the United States and Canada who de-fend railroads in litigation. Throughout her legal ca-reer, Ms. Konrad has been a tireless advocate for herclients and the railroad industry. She has successfullydefended clients in personal injury cases resultingfrom automobile/train collisions, cumulative traumadisorders, occupational disease and emotional dis-tress claims, as well as cases involving property dam-age, premises liability, and natural resource law.

At a meeting of its Board of Trustees today in LosAngeles, the State Bar of California electedKlinedinst PC Shareholder and CFO Heather L.Rosing to serve as Vice President of the organiza-tion in 2014-2015.

Michael D. McEvoy, Jr. and Mary C. Trinh, partnerand senior associate, respectively at Murchison &Cumming, LLP, participated in the 11th AnnualLaw Day held on May 10, 2014, in Arcadia, Calif.The annual event included a panel of attorney vol-unteers who provided free one-on-one legal con-sultations to local San Gabriel residents on a widerange of legal matters, including landlord-tenantissues, insurance problems, workers’ compensa-tion, business disputes, real estate litigation, con-sumer rights, personal injury and medicalmalpractice. Murchison & Cumming, LLP attor-neys have participated in Law Day since 2009.

Wendell Large of Richardson, Whitman, Largeand Badger in Maine has been elected to serve athree-year term on the Board of Governors for theAmerican Bar Association. The American BarAssociation is one of the world’s largest voluntary pro-fessional organizations, with nearly 400,000 members.

Roger W. Stone and Robert S. Hatala of SimmonsPerrine Moyer Bergman PLC have been ap-pointed to serve on the Iowa State Bar Association’sConstruction Law Section Council. The section ap-pointments are for a three-year term appointed bythe President-Elect of the State Bar Association.

Matt Horn, attorney at SmithAmundsen, hasbeen appointed by the Associated GeneralContractors of America (AGC) to their NationalCommittees on Highway Work Zone Safety andMAASTO Reg AASHTO-AGC-ARTBA Jt. DennisCotter, Chair of the Construction Practice Groupat SmithAmundsen, has been reappointed to serveanother term on the Committee.

SmithAmundsen’s Labor & EmploymentPractice Group and the Illinois Chamber ofCommerce partnered to author and edit theIllinois Employment Forms 2014 Ed.

R. Burke McLemore, Thomas, Thomas & HaferLLP partner, was named Chairman of theDisciplinary Board of the Supreme Court ofPennsylvania, elected to the Board of Directors ofthe Pennsylvania Bar Institute and named a “LifeFellow” of the Pennsylvania Bar Foundation.

Traub Lieberman Straus & Shrewsberry LLPannounces the creation of the TLSS Cyber LawBlog. This Blog provides coverage and analysis ofthe emerging legal issues in the cyber-risk context.The blog provides those in the cyber-risk world aforum to gain additional insight into the many is-sues of cyber law including data breach and privacyissues, regulatory issues, first and third party cyberclaim analysis and cyber insurance coverage is-sues. The blog is accessible via www.traublieber-man.com/blog/cyber-law.

RWLB




USLAW showcasesNetwork with a HeartSupporting championsin communitiesand in sport2014 USA GAMES • USLAW NETWORK • SPECIAL OLYMPICSAdler Pollock & Sheehan P.C.

Ahmuty, Demers & McManus

Baird Holm LLP

Carr Allison

Connell Foley LLP

Copeland, Cook, Taylor & Bush, P.A.

Fee, Smith, Sharp & Vitullo, L.LP.

Gallagher, Callahan & Gartrell

Goldberg Segalla LLP

Huddleston Bolen LLP

Johnson, Trent, West & Taylor, L.L.P.

Jones, Skelton & Hochuli, P.L.C.

Klinedinst PC

Larson • King, LLP

Lashly & Baer, P.C.

LeClairRyan

Lewis Roca Rothgerber LLP

Life Time Fitness, Inc.

Magna Legal Services LLC

Marshall Investigative Group

Martin, Tate, Morrow & Marston, P.C.

McCranie, Sistrunk, Anzelmo, Hardy, McDaniel & Welch LLC

Modrall Sperling

Murchison & Cumming, LLP

Picadio Sneath Miller & Norton, P.C.

Pierce Couch Hendrickson Baysinger & Green, L.L.P.

Pion, Nerone, Girman, Winslow & Smith, P.C.

Poyner Spruill LLP

Quality Distribution

Richmond & Quinn

Roetzel & Andress, LPA

S-E-A, LTD.

SmithAmundsen LLC

Sweeney & Sheehan, P.C.

Sweeny, Wingate & Barrow, P.A.

Thorndal Armstrong Delk Balkenbush & Eisinger

Traub Lieberman Straus & Shrewsberry LLP

U.S. Legal Support, Inc.

Wicker Smith O’Hara McCoy & Ford P.A.

Williams Kastner

With the 2014 Special Olympics USAGames recently completed, it is perhaps amost fitting time to pause and reflect on oneof the most inspirational events that tookplace during this past summer. For the nearly four years leading up tothe 2014 USA Games, promises were madeto reveal America’s Champions. In June2014, America’s Champions were not onlyrevealed but revered and celebrated in a waythat was unparalleled for a Special Olympicsevent in the United States. The success of the2014 USA Games, a progression of whatEunice Kennedy Shriver originally started inthe early 1960s as a summer camp for indi-viduals with intellectual disabilities at herMaryland home, will provide an even greaterfoundation for the 2018 USA Games, theSpecial Olympics organization and beyond. The true impact of the 2014 USAGames remains to be seen. Over the courseof the week, nearly 4,600 gold, silver andbronze medals were awarded to the morethan 3,500 athletes who trained and com-peted in front of a national audience. Butperhaps even more significant is that mil-lions upon millions of people learned ofSpecial Olympics’ life-changing effects, theimportance of respecting the athletes’ abili-ties and highlighting all that these remark-able individuals can do as a result of theseGames. Since 2011, USLAW has actively part-nered with Special Olympics and the 2014USA Games, USLAW’s national benefitingcharity, in support of its athletes and theirfamilies. In that time, USLAW NETWORK,its members, their clients, families andfriends as well as several USLAW corporatepartners showed their support of the 2014USA Games and the athletes by making fi-nancial contributions, volunteering theirtime as well as creating fundraising events in-office and in the communities in which theylive. USLAW demonstrated boldly what somany of us already know: USLAW is aNetwork with a Heart.

In total, USLAW’s collective supportraised more than $200,000 for the Games.We also served as presenting sponsor of thetriathlon and supported the golf competi-tion during the Games. “As I look back on our partnership withthe 2014 Special Olympics USA Games, I amimmensely proud of the commitment, volun-teer time and financial support USLAWmembers, their clients, family, friends andour corporate partners have given to theGames, USA athletes and their families,” saidBradley A. Wright, Chair of USLAW Board ofDirectors, and partner of USLAW memberfirm Roetzel & Andress, LPA in Ohio. “Asthe athletes and everyone involved with theGames reflect on that special week back inJune, I certainly hope they will recall a mem-orable week of competition and camaraderiethat had the support of all of us behindthem.” The 2014 USA Games featured the mostinclusive sport offerings in the history of theSpecial Olympics movement, with SpecialOlympics Unified Sports (athletes with andwithout intellectual disabilities competing asteammates) competition offered in 10 of the16 sports. These 2014 Special Olympics USANew Jersey Games in New Jersey were thegames of welcome and acceptance – andeach person who took part, in any form orfashion, is now asked to carry home this mes-sage of acceptance, friendship, and excel-lence that permeated this competition. USLAW – a Network with a Heart –stands together in support of SpecialOlympics and its athletes around the worldand we eagerly look forward to future oppor-tunities to support and cheer them on inUSLAW communities from coast to coastand around the world. For more informa-tion about how you can support SpecialOlympics, visit www.specialolympics.org.

John Beisser, 2014 Special Olympics USAGames contributed to the article.

If we could implement a virtual high-five rightnow, we would. Nearly 50 USLAW memberfirms and affiliated companies as well as hundreds and hundreds of individuals donatedand volunteered in support of USLAW's national beneficiary.



USLAW KEYACHIEVEMENTS

• Collectively, USLAW NETWORK through the multi-year initiative raised more than$200,000 for the 2014 SpecialOlympics USA Games.

• USLAW Corporate PartnersU.S. Legal Support and S-E-A,Ltd. made donations of $28,200and $20,900, respectively, a di-rect result of their work withinthe NETWORK.

• USLAW member firms WickerSmith O’Hara McCoy & FordP.A. (Florida) donated $22,943and Larson • King, LLP(Minnesota) donated $15,000.

• USLAW was represented amongthe 2014 USA Games leader-ship. Jeff O’Hara of USLAWmember firm LeClairRyanserved as the first vice chairmanof the 2014 USA Games Boardof Directors and USLAW CEORoger Yaffe also served on theBoard.

NETWORKWITH AHEART:MEMBERSMAKING ADIFFERENCEHow were member firms involvedwith and supportive of SpecialOlympics and the 2014 USAGames? Here’s what a few of themhad to say and images of some oftheir tremendous efforts. This isjust a sample of how USLAWmember firms supported SpecialOlympics, the 2014 SpecialOlympics USA Games and stateprograms.

Martin Tatepartnered with

the local SpecialOlympics chapter in

Memphis, Tennessee.On Saturday, May 3, 2014,

Special Olympics GreaterMemphis hosted its annual Track

& Field Event, which provided Mid-South adult and child athletes the chance

to compete against one another in a variety ofOlympic-type sports. Several of the athletes at this local

event advanced on to compete in the New Jersey Games this summer. These Memphis Games aimed to create a party-like atmosphere by settingup food stations and carnival games for athletes, families and friends alongwith a DJ playing music all afternoon. Our Martin Tate volunteers buddied-up with athletes for their races, helped cheer on athletes during the sportingevents, and ran the carnival games for families and supporters. Martin Tatefurther displayed our support by proudly wearing our custom SpecialOlympics “Volunteer” t-shirts. We most enjoyed getting to visit with the local Special Olympics athletesone-on-one and hearing their stories of how they arrived at the MemphisGames. The determination of these athletes – young and old – inspired usall. Martin Tate thanks USLAW for sponsoring the 2014 Special Olympics USAGames because this encouraged our firm not only to accept the $2014 CHAL-LENGE but to donate our time and energy by volunteering at the SpecialOlympics Greater Memphis’ Track & Field Event.

Through its charitable foundation, USLAW memberfirm Larson • King, LLP in Minnesota raised $15,000 in

support of Special Olympics and the 2014 USA Games.

Wicker Smith O’Hara McCoy & Ford P.A. inFlorida activated several in-office programs that raised

in excess of $12,000 for Special Olympics. From desig-nated “jeans days” during which employees made a $5

contribution that was matched by the firm to individualdonations throughout the year, Wicker Smith staff em-

braced and supported the firm’s and USLAW’s commitmentto help Special Olympics. In total, the firm raised nearly

$23,000 for the cause.



Lashly & Baer is proud to be apart of USLAW and their partner-ship with the 2014 SpecialOlympics USA Games and we’vereally enjoyed taking part in thisinitiative over the last few years.Two of our members already serveon the board of Special Olympics– Missouri but the USLAW initia-tive allowed us to expand our in-volvement with Special Olympicsto a national level, and it inspirednew opportunities to involvefriends and family members in ourfundraising efforts. In addition toLashly & Baer’s monetary contri-bution to the USLAW Challenge,L&B supported the fundraising ef-forts of attorneys and staff throughcasual days, gift basket raffles, anda Dodgeball Tournament. The Dodgeball Tournamentwas a big success and it gave us anopportunity to showcase one ofour local athletes, LindseyHawkins, who is competing in the2014 Games. Lindsey and hermom, Pat, joined us for the tour-nament and shared with us whatcompeting in the Special OlympicGames has meant to them.Hearing Lindsey’s story inspiredseveral of the dodgeball tourna-ment participants to join the effortand the son of one of our staffmembers even signed up for theOver the Edge campaign to sup-port our local Special Olympicschapter. We are also thrilled to re-port that Lindsey brought homethe bronze in Bowling at the 2014Games!

TraubLiebermanStraus &Shrewsberry,Hawthorne, N.Y.,participatedthrough variousfundraising effortsand raised $9,427. In addition topersonal fundraising,six firm employees – alongwith several other USLAWmembers – participated in the“Battle of the Beach” 5k obstaclerun in Wildwood, N.J. The USLAWteam led all event participants by raisingmore than $7,500 for Special Olympics New Jerseythrough that event. It was a great time for an excellent cause!

GoldbergSegalla,

Buffalo, N.Y.,is a proud sup-

porter of theSpecial Olympics,

and we were honoredto cheer on the more than

3,500 athletes from around thecountry who competed in the 2014Special Olympics USA Games. Werecognize the importance of sup-porting the communities in whichwe serve, and we take great pridein these endeavors. For the 2014games, we made a donation on be-half of the firm and several of ourcolleagues also made personal do-nations. We also will once again beparticipating in the Battle theBeach 5k in New Jersey (Sept. 20,2014) that benefits SpecialOlympics.

In Ottawa, Canada, USLAW mem-ber Kelly Santini LLP has beensupporting Special Olympics since2005. Each year the firm organizesand hosts a Festival of ChampionsBreakfast to honor the accom-plishments of local athletes,coaches and volunteers and theirlove of sport, competition and ac-ceptance. To date, the breakfastshave raised more than $250,000.The event continues to draws hun-dreds of attendees from the localbusiness community andParliament Hill. The parade ofchampions, presentation ofawards and keynote speech makethe breakfast an inspiration foreveryone in attendance. This yearthe breakfast celebrates its 10thanniversary on October 16th.Former Olympic gold medalist,author and humanitarian MarkTewksbury will deliver the keynoteaddress. Business partner DonBurke and ligation partner LisaLangevin have been co-chairingthe event for the firm since its in-ception. In 2013, Burke wasnamed the Special OlympicsFestival Volunteer of the Year forCanada.


®

2001. The Startof Something Better...

Mega-firms...big, impersonal bastions of

legal tradition, encumbered by bureaucracy

and often slow to react. The need for an al-

ternative was obvious. A vision of a network

of smaller, regionally based, independent

firms with the capability to respond quickly,

efficiently and economically to client needs

from Atlantic City to Pacific Grove was born.

In its infancy, it was little more than a possi-

bility, discussed around a small table and

dreamed about by a handful of visionaries.

But the idea proved too good to leave on the

drawing board. Instead, with the support of

some of the country's brightest legal minds,

USLAW NETWORK became a reality.

Fast-forward to today.The commitment remains the same as origi-nally envisioned. To provide the highest qual-ity legal representation and seamlesscross-jurisdictional service to major corpora-tions, insurance carriers, and to both large andsmall businesses alike, through a network ofprofessional, innovative law firms dedicated totheir client's legal success. Now as a networkwith more than 7,000 attorneys from morethan 100 defense-based law firms, spanningthe United States, Canada, Latin America,Europe, Asia and Africa, USLAW NETWORKremains a responsive, agile legal alternative tothe mega-firms.

Homefield Advantage.USLAW NETWORK offers what it calls TheHomefield Advantage which comes fromknowing and understanding the venue in away that allows a competitive advantage – a tru-ism in both sports and business.

Jurisdictional awareness is a key ingredient tosuccessfully operating throughout the UnitedStates and abroad. Knowing the local rules, thejudge, and the local business and legal envi-ronment provides our firms’ clients this advan-tage. The strength and power of aninternational presence combined with the un-derstanding of a respected local firm makesfor a winning line-up.

A Legal Network Not for Its MemberLawyers. Instead a Legal Networkfor Purchasers of Legal Services.USLAW NETWORK firms go way beyond pro-viding quality legal services to their clients.Unlike other legal networks, USLAW is organ-ized around client expectations, not aroundthe member law firms. Clients receive ongoingeducational opportunities, online resourcesincluding webinars, jurisdictional updates, andresource libraries. We also provide a semi-an-nual USLAW Magazine, webinars, compendi-ums of law, as well as annual membershipdirectories and practice group directories. Toensure our goals are the same as the clientsour member firms serve, our 45-memberClient Leadership Council is directly involvedin the development of our programs and serv-ices. This communication pipeline is vital toour success and allows us to better monitorand meet client needs and expectations.

USLAW Abroad.Just as legal issues seldom follow state borders,they often extend beyond U.S. boundaries aswell. In 2007, USLAW established a relation-ship with the Trans-European Law FirmsAlliance (TELFA), a network of 25 independ-ent law firms representing more than 700lawyers through Europe. Subsequently, in2010 we entered a similar affiliation with theALN (formerly the Africa Legal Network) tofurther our service and reach. Additional,USLAW member firms are located throughoutCanada, Latin America, and Asia.

How is USLAW NETWORKMembership Determined.Firms are admitted to the Network by invita-tion only and only after they are fully vettedthrough a rigorous review process. Many firmshave been reviewed over the years, but only asmall percentage were eventually invited tojoin. The search for quality member firms is acontinuous and ongoing effort. Firms admit-ted must possess broad commercial legal capa-bilities and have substantial litigation and trialexperience. In addition, USLAW NETWORKmembers must subscribe to a high level of serv-ice standards and are continuously evaluatedto ensure these standards of quality and ex-pertise are met.

USLAW in Review.• All vetted firms with demonstrated, robust

practices and specialties• Efficient use of legal budgets, providing

maximum return on legal services invest-ments

• Seamless, cross-jurisdictional service• Responsive and flexible• Multitude of educational opportunities and

online resources• Team approach to legal services

The USLAW Success Story.The reality of our success is simple: we succeedbecause our firms' clients succeed. Our mem-ber firms provide high-quality legal resultsthrough the efficient use of legal budgets. Weprovide cross-jurisdictional services eliminat-ing the time and expense of securing adequaterepresentation in different regions. We pro-vide trusted and experienced specialistsquickly.

When a difficult legal matter emerges –whether it’s in a single jurisdiction, nationwideor internationally – USLAW is there. Success.

For more information, please contact RogerM. Yaffe, USLAW CEO, at (800) 231-9110 [email protected]

ABOUT USLAW NETWORK



USLAW NETWORK: YOUR HOMEFIELD ADVANTAGE

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Ottawa, ON

Brossard, QC

Vancouver, BC

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Edmonton, AB

Calgary, AB

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. ...CHINA

Shanghai

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Beijing

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ALABAMA | BIRMINGHAMCarr Allison Charles F. Carr........................................(251) 626-9340 [email protected] | ANCHORAGERichmond & Quinn Robert L. Richmond ..............................(907) 276-5727 [email protected] | PHOENIXJones, Skelton & Hochuli, P.L.C. Phillip H. Stanfield ................................(602) 263-1745 [email protected] | LITTLE ROCKQuattlebaum, Grooms, Tull & Burrow PLLC John E. Tull, III .......................................(501) 379-1705 [email protected] | LOS ANGELESMurchison & Cumming, LLP Friedrich W. Seitz ..................................(213) 630-1000 [email protected] | SAN DIEGOKlinedinst PC John D. Klinedinst.................................(619) 239-8131 [email protected] | SAN FRANCISCODillingham & Murphy, LLP Patrick J. Hagan ....................................(415) 397-2700 [email protected] | SAN JOSERobinson & Wood, Inc. Arthur J. Casey ......................................(408) 792-5912 [email protected] | SANTA BARBARASnyder Law, LLP Barry Clifford Snyder ............................(805) 683-7750 [email protected] | DENVERLewis Roca Rothgerber LLP Ben M. Ochoa........................................(303) 628-9574 [email protected] | HARTFORDHinckley, Allen & Snyder LLP Noble F. Allen ........................................(860) 725-6237 [email protected] | MIAMIWicker Smith O’Hara McCoy & Ford P.A. Nicholas E. Christin ...............................(305) 448-3939 [email protected] | TALLAHASSEECarr Allison Christopher Barkas................................(850) 222-2107 [email protected] | ATLANTAHall Booth Smith, P.C. John E. Hall, Jr. ......................................(404) 954-5000 [email protected] | HONOLULUGoodsill Anderson Quinn & Stifel LLP Thomas Benedict...................................(808) 547-5716 [email protected] | BOISEDuke Scanlan & Hall, PLLC Richard E. Hall .......................................(208) 342-3310 [email protected] | CHICAGOSmithAmundsen LLC Lew R.C. Bricker ....................................(312) 894-3224 [email protected] | INDIANAPOLISBingham Greenebaum Doll LLP James M. Hinshaw ................................(317) 968-5385 [email protected] | CEDAR RAPIDSSimmons Perrine Moyer Bergman PLC Kevin J. Visser........................................(319) 366-7641 [email protected]/WESTERN MISSOURI | KANSAS CITYDysart Taylor Cotter McMonigle & Montemore, PC Patrick K. McMonigle..............................816-714-3039 [email protected] | LOUISVILLEBingham Greenebaum Doll LLP Mark S. Riddle .......................................(502) 587-3623 [email protected] | NEW ORLEANSMcCranie, Sistrunk, Anzelmo, Hardy, McDaniel & Welch LLC Michael R. Sistrunk ...............................(504) 846-8338 [email protected]

MAINE | PORTLANDRichardson, Whitman, Large & Badger Wendell G. Large .................................(207) 774-7474 [email protected] | BALTIMOREFranklin & Prokopik, PC Albert B. Randall, Jr. .............................(410) 230-3622 [email protected] | BOSTONAdler Pollock & Sheehan P.C. Michael D. Riseberg..............................(617) 603-0519 [email protected] | ST. PAULLarson • King, LLP Mark A. Solheim ...................................(651) 312-6503 [email protected] MISSISSIPPI | GULFPORTCarr Allison Douglas Bagwell ...................................(228) 864-1060 [email protected] | RIDGELANDCopeland, Cook, Taylor & Bush, P.A. Greg Copeland......................................(601) 427-1313 [email protected] | ST. LOUISLashly & Baer, P.C. Stephen L. Beimdiek.............................(314) 436-8303 [email protected] | GREAT FALLSDavis, Hatley, Haffeman & Tighe, P.C. Maxon R. Davis......................................(406) 761-5243 [email protected] | OMAHABaird Holm LLP Jill Robb Ackerman...............................(402) 636-8263 [email protected] | LAS VEGASThorndal Armstrong Delk Balkenbush & Eisinger Brian K. Terry.........................................(702) 366-0622 [email protected] HAMPSHIRE | CONCORDGallagher, Callahan & Gartrell R. Matthew Cairns ................................(603) 545-3622 [email protected] JERSEY | ROSELANDConnell Foley LLP Kevin R. Gardner...................................(973) 533-4222 [email protected] NEW MEXICO | ALBUQUERQUEModrall Sperling Timothy C. Holm ...................................(505) 848-1817 [email protected] YORK | ALBERTSONAhmuty, Demers & McManus Michael Rabus .......................................(646) 536-5748 [email protected] YORK | BUFFALOGoldberg Segalla LLP Neil A. Goldberg ...................................(716) 566-5475 [email protected] YORK | HAWTHORNETraub Lieberman Straus & Shrewsberry LLP Stephen D. Straus..................................(914) 347-2600 [email protected] CAROLINA | RALEIGHPoyner Spruill LLP Thomas K. Lindgren..............................(919) 783-2827 [email protected] DAKOTA | DICKINSONEbeltoft . Sickler . Lawyers PLLC Randall N. Sickler ..................................(701) 225-5297 [email protected] | CLEVELANDRoetzel & Andress Bradley A. Wright .................................(330) 849-6629 [email protected] | OKLAHOMA CITYPierce Couch Hendrickson Baysinger & Green, L.L.P. Gerald P. Green .....................................(405) 552-5271 [email protected] | PORTLANDWilliams Kastner Eric J. Neiman .......................................(503) 944-6943 [email protected] PENNSYLVANIA | HARRISBURGThomas, Thomas & Hafer LLP Todd B. Narvol.......................................(717) 237-7133 [email protected] | PHILADELPHIA Sweeney & Sheehan, P.C. Warren E. Voter ....................................(215) 963-2439 [email protected]

PENNSYLVANIA | PITTSBURGH Picadio Sneath Miller & Norton, P.C. Henry M. Sneath ...................................(412) 288-4013 [email protected] | PITTSBURGH Pion, Nerone, Girman, Winslow & Smith, P.C. John T. Pion ...........................................(412) 667-6200 [email protected] ISLAND | PROVIDENCEAdler Pollock & Sheehan P.C. Richard R. Beretta, Jr. ...........................(401) 427-6228 [email protected] CAROLINA | COLUMBIASweeny, Wingate & Barrow, P.A. Mark S. Barrow .....................................(803) 256-2233 [email protected] DAKOTA | PIERRERiter, Rogers, Wattier & Northrup, LLP Robert C. Riter.......................................(605) 224-5825 [email protected] | MEMPHISMartin, Tate, Morrow & Marston, P.C. Lee L. Piovarcy.......................................(901) 522-9000 [email protected] | DALLASFee, Smith, Sharp & Vitullo, L.L.P. Michael P. Sharp....................................(972) 980-3255 [email protected] | HOUSTONJohnson, Trent, West & Taylor, L.L.P. Brian P. Johnson ....................................(713) 860-0509 [email protected] | SAN ANTONIOCox Smith Matthews Incorporated Brett W. Schouest..................................(210) 554-5269 [email protected] | SALT LAKE CITYStrong & Hanni, PC Stephen J. Trayner ................................(801) 323-2011 [email protected] | RICHMONDLeClairRyan Charles G. Meyer, III ..............................(804) 783-7535 [email protected] | SEATTLEWilliams Kastner Sheryl J. Willert .....................................(206) 628-2408 [email protected] VIRGINIA | HUNTINGTONHuddleston Bolen LLP Richard J. Bolen.....................................(304) 691-8420 rbolen@huddleston bolen.comWISCONSIN | MADISONAxley Brynelson, LLP Paul D. Curtis.........................................(608) 283-6768 [email protected] WYOMING | CASPERWilliams, Porter, Day and Neville PC Scott E. Ortiz .........................................(307) 265-0700 [email protected]

USLAW INTERNATIONALARGENTINA | BUENOS AIRESRattagan, Macchiavello, Arocena & Peña RobirosaAbogados SC Juan Martin Arocena......................+(5411) 4010-5007 [email protected] | SÃO PAULOMundie e Advogados Rodolpho de Oliveira Franco Protasio.............................................(55 11) 3040-2923 [email protected] | ALBERTA | CALGARY & EDMONTONParlee Mclaws LLP Jerri L. Cairns .........................................(780) 423-8500 [email protected] | BRITISH COLUMBIA | VANCOUVERClark Wilson LLP Samantha Ip ..........................................(604) 643-3172 [email protected] | ONTARIO | OTTAWAKelly Santini Robert Ford.............................(613) 238-6321, ext 295 [email protected] | QUEBEC | BROSSARDTherrien Couture L.L.P. Jean-Luc Couture ..................................(450) 462-8555 [email protected] | SHANGHAIDuan&Duan George Wang ......................................8621 6219 1103 [email protected]

2014 MEMBERSHIP ROSTER




USLAW NETWORK CLIENT SERVICES AND PRODUCTS

USLAW NETWORK offers our members'

clients countless products free of charge to as-

sist with their day-to-day operations and man-

agement of legal issues. Many of these products

are the direct result of concepts and initiatives

developed by our USLAW Client Leadership

Council.

The following listings detail each product

which runs the gamut from USLAW Solutions

to USLAW Resources and finally to USLAW

People. We encourage you to review these and

take advantage of those that are applicable to

you and your company.

USLAW is continually seeking ways to en-

sure that your legal outcomes are seamless

and, most importantly, successful and we hope

that these resources can assist in this regard.

Please don't hesitate to send us input on your

experience with any of the items listed in the

Sourcebook as well as ideas for the future that

would benefit you and your fellow colleagues.

TEAM USLAWCorporations and insurers alike need consis-tent, quality legal services over a broad spec-trum of legal and geographical areas. The cost,time, and expertise required in securing legalrepresentation and negotiating fee schedulesthroughout the region, country and around theworld can be overwhelming, requiring constanteffort, oversight, frustration and missed oppor-tunity. Team USLAW is the solution to meetthese challenges. Team USLAW, a whollyowned subsidiary of USLAW NETWORK, Inc.,manages a client’s legal needs, providing onepoint of contact to clients ensuring they re-ceive consistent and quality legal firm choicesand services no matter where in the worldyour needs may arise. Team USLAW eliminatesthe need to negotiate different fee schedulesfor each and every legal need. And clients al-ways have the option to reject any candidatefirm presented. In summary, Team USLAW is acomprehensive service designed to eliminatemuch of the hassle and uncertainty of movingfrom in-house to outside counsel.

EDUCATIONIt’s no secret – USLAW can host a great event.We are very proud of the industry-leading educational components of our semi-annualclient conferences, seminars, and regional meetings. Reaching from national to more localized offerings, USLAW member attorneysand the clients they serve meet throughout theyear not only at USLAW hosted events butalso at many legal industry conferences. CLEaccreditation is provided for most USLAW ed-ucational offerings.

A TEAM OF EXPERTSUSLAW NETWORK undoubtedly has themost knowledgeable attorneys in the world,but did you know that we also have the mostvaluable corporate partners in the legal profession? Don’t miss out on an opportunityto better your legal game plan by taking advantage of our corporate partners’

expertise. Areas of expertise include forensic engineering, legal project management, out-sourcing and medical legal advisory services;court reporting, jury consultation, e-discovery,medical record analysis, forensic accounting,structured settlements, investigation and legalanimation services.

USLAW ON CALLWhat is the value in having individual access to4-8 highly experienced USLAW member attorneys from around the country and aroundthe world (if necessary) roundtable specific is-sues you may be facing including actual cases orhypotheticals? USLAW is pleased to providethis free consultation which will give you asense of comfort that you are managing a specific issue/case in an appropriate mannerand make you aware of unforeseen roadblocksand variables that may pop up. It never hurts tophone a friend! Call Roger Yaffe at (800) 231-9110, ext 1 to schedule a call.

USLAW CLAIMS CHALLENGEThe Challenge is a one-day, experiential claimsprogram that USLAW brings to you and yourcompany. Directed to claims personnel, a detailed, hypothetical, multi-jurisdictional sce-nario is played out with USLAW member attorneys and corporate partner expertsworking side-by-side with your staff in smallerteams to manage all of the issues and curve-balls that are sure to come. Do we go to trial,mediate, or settle? This is just one of the manyquestions at hand as USLAW stages this highlyinteractive program customizable for your specific company and legal staff.

LAWSUIT MONITORINGLet USLAW help you be the first to knowwhen your company is facing litigation. WithUSLAW’s Lawsuit Monitoring program, we cansearch for your company on a daily basis andalert you of any activity we find. If you are inter-ested in this service, please contact Roger Yaffeat (800) 231-9110, ext. 1.

USLAW SOLUTIONS




USLAW RESOURCES USLAW PEOPLE

USLAW NETWORK CLIENT SERVICES AND PRODUCTS

COMPENDIUMS OF LAWUSLAW regularly produces new and updatesexisting Compendiums providing a multi-stateresource that permits users to easily accessstate common and statutory law. Compendiumsare easily sourced on a state-by-state basis andare developed by the member firms of USLAW.Just some of the current Compendiums include:Transportation, Construction Law, Surveillance,Retail, Spoliation, Nullum Tempus, Offers ofJudgment, and a National Compendium ad-dressing issues that arise prior to the com-mencement of litigation through trial and on toappeal.

STATE JUDICIAL PROFILES BY COUNTYJurisdictional awareness of the court and jurieson a county-by-county basis is a key ingredientto successfully operating legal challengesthroughout the United States. Knowing thelocal rules, the judge, and the local business andlegal environment provides a unique competi-tive advantage. In order to best serve clients,USLAW NETWORK offers a judicial profilethat identifies counties as Conservative,Moderate or Liberal and thus provides you animportant Homefield Advantage.

USLAW DIGIKNOWUSLAW DigiKnow is USLAW’s digital knowl-edge e-newsletter featuring highlights fromaround the NETWORK. Through USLAWDigiKnow, we share legal, legislative and jurisdic-tional news as well promote upcoming USLAWevents, webinars and podcasts that might be ofinterest to you and your colleagues. It is an is anexcellent resource to keep abreast of new caselaw, important verdicts and other pending legis-lation and events throughout the NETWORK.

USLAW MOBILE APPSWe pack light. Take USLAW with you whereveryou go. Get USLAW information fast includingseveral practice area Rapid Response teams atUSLAW 24/7. We also offer specific ClientConference apps twice a year. USLAW appsare available on iPhone/iPad, Android and mostBlackberry devices (24/7 only) by typing in key-word “USLAW.”

USLAW MAGAZINEUSLAW Magazine is an in-depth publicationproduced twice annually and designed to address legal and business issues facing commercial and corporate clients. Released inSpring and Fall, recent topics have coveredmanaging litigation in a tighter economy,changes in M&A strategies, sidestepping legalchallenges during a workforce reduction, bestpractices in e-discovery policies, and weighingthe pros and cons of litigation versus media-tion, social media and the law, patent troll taxesand much more.

USLAW EDUNETA wealth of knowledge offered on demand,USLAW EduNet is a regular series of interactive webinars produced by severalUSLAW practice groups. The one-hour programs are available live to you right on yourdesktop and are also archived on USLAW.orgfor viewing at a later date. Topics range fromMedicare to Employment & Labor Law toProduct Liability Law and beyond.

USLAW CONNECTIVITYIn today’s digital world there are many ways toconnect, share, communicate, engage, interactand collaborate. Through any one of our variouscommunications channels, sign on, ask a question, offer insight, share comments, seek advice and collaborate with others connectedto USLAW. Please check out USLAW onTwitter @uslawnetwork and our LinkedIn group page.

USLAW MEMBER ANDATTORNEY DIRECTORIESSeveral USLAW NETWORK practice groups havecompiled detailed directories of the active attor-neys within their group. These directories showcasethe attorneys’ specific areas of experience, educa-tion, industry memberships, published articles, andin some cases representative clients. These directo-ries are available as downloadable PDFs.

RAPID RESPONSEThe USLAW NETWORK Rapid ResponseOnline Searches secure USLAW attorneysquickly when timeliness is critical for you andyour company. Offered for Transportation,Construction Law and Product Liability, this re-source provides client’s cell and home tele-phone numbers along with assurance thatUSLAW will be available 24/7 with the rightperson and the right expertise. Please see thesticky bar at the top of the USLAW web siteto use the USLAW Rapid Response feature.

PRACTICE GROUPSUSLAW prides itself on variety. Its 7,000+ attorneys study all areas of legal practice andparticipate in USLAW’s 18 active groups andcommunities including Banking & FinancialServices, Business & Advisory Services, BusinessLitigation, Construction Law, E-Discovery,Employment & Labor Law, Healthcare Law,Insurance and Risk Management Services,International Business & Trade, Internet, Privacy& Media, IP and Technology, Product Liability,Professional Liability, Retail, Transportation,White Collar Defense, Women’s Connection,and Workers’ Compensation. Don’t see a specific practice area listed? No worries asUSLAW firms cover the gamut of the legalprofession and we are sure to find a firm thathas significant experience in the area of need.

CLIENT LEADERSHIP COUNCILTake advantage of the knowledge of your peers.USLAW NETWORK’s Client LeadershipCouncil is a hand-selected, diverse group ofprestigious USLAW firm clients that providesexpertise and advice to ensure the organizationand its law firms meet the expectations of theclient community. In addition to the valuable in-sights they provide, CLC members also serve asUSLAW Ambassadors, utilizing their staturewithin their various industries to promote themany benefits of USLAW NETWORK.




SEAOFFICIAL TECHNICALFORENSIC EXPERT PARTNER OF USLAW NETWORKwww.SEAlimited.com7349 Worthington-Galena RoadColumbus, OH 43085Phone:(614) 888-4160Fax: (614) 885-8014J. Kenneth CorwinNational Account Executive7349 Worthington-Galena RoadColumbus, OH 43085Phone:(800) 782-6851Email: [email protected] TorrensVice President1110 Benfield Boulevard, Suite BMillersville, MD 21108Phone:(800) 635-9507Email: [email protected] HenthornManager7349 Worthington-Galena RoadColumbus, OH 43085Phone:(800) 782-6851Email: [email protected]

S-E-A is a multi-disciplined engineering and fire in-vestigation company specializing in failure analysis.S-E-A also conducts environmental and industrial hy-giene analysis. S-E-A offers complete investigativeservices including: mechanical engineering, electri-cal engineering, metallurgical engineering, civil en-gineering, fire investigation, environmental andworkplace analysis. These disciplines interact to pro-vide thorough and independent analysis that willsupport any subsequent litigation. In addition, S-E-Ahas a fully equipped chemical testing laboratory.

S-E-A's full-time staff of investigators, engineers andchemists are licensed/registered professionals whoare court-qualified experts in their respective fields.With ten offices located throughout the UnitedStates, S-E-A has provided professional services tomanufacturers, attorneys and the insurance indus-try – nationally and internationally – for over 40years. S-E-A also has developed specialized practicegroups in construction, marine, trucking, vehicledynamics and quality control laboratory testing.

U.S. Legal Support, Inc OFFICIAL COURT REPORTING PARTNER OF USLAW NETWORKwww.uslegalsupport.com363 N. Sam Houston Pkwy. E., Suite 1200Houston, TX 77060Phone:(800) 567-8757 Fax: (713) 653-7172Charles F. SchugartPresident & CEO363 N. Sam Houston Pkwy. E., Suite 1200Houston, TX 77060Phone:(832) 201-3834Email: [email protected] CunninghamDirector of Record RetrievalDivision President, Midwest200 West Jackson Boulevard, Suite 600Chicago, IL 60606Phone:(312) 236-8352Email: [email protected] GiammancoDirector of Court ReportingDivision President, Western15250 Ventura Boulevard, Suite 410Sherman Oaks, CA 91403Phone:(818) 995-0600Email: [email protected] Ann WatsonSenior VP Sales & MarketingDivision President, Southwest363 N. Sam Houston Pkwy. E., Suite 1200Houston, TX 77060Phone:(832) 201-3872Email: [email protected]

U.S. Legal Support has been serving the legal serv-ices community for nearly two decades. The U.S.Legal Support philosophy brings together special-ists located across the country who understand eachlocal market. This philosophy has created local serv-ices tailored to each market bound together by acompany who holds a national presence.

With over 40 offices located across the country U.S.Legal Support has a diversified service offering in-cluding Court Reporting, Record Retrieval,Litigation & ESI Services and Trial Services.

U.S. Legal Support is the proud official CourtReporter Partner of The USLAW NETWORK provid-ing access to over 1200 superior court reporters. U.S.Legal Support court reporters are equipped withstate-of-the-art technology creating a system thatmakes it easy for clients to access information. Clientservices include a complete online office with 24/7access which includes online scheduling, calendar ac-cess, document repository with access to transcriptsand exhibits, invoice review and much more.

U.S. Legal Support prides itself on the ability tocreate personal relationships and partnerships withfirms by creating custom solutions tailored to indi-vidual legal needs. For a full service offering visitwww.uslegalsupport.com. U.S Legal Support looksforward to showing you their Power ofCommitment.

★★★★★USLAW

PREMIERPA R T N E R

★★★★★USLAW

PREMIERPA R T N E R

2014 USLAW Partners

Demonstratives, Inc.OFFICIAL LEGAL ANIMATION SERVICES PARTNER OF USLAW NETWORKwww.demonstratives.com2321 N Loop Dr., Ste 201Ames, IA 50010Phone:(515) 296-6930Daniel Kruger, Ph.D.,PresidentPhone:(515) 296-7175Email: [email protected] Fox, Ph.D.Vice PresidentPhone:(515) 296-6737Email: [email protected] McGrory, Esq.Vice President / General CounselPhone:(913) 226-5205Email: [email protected]

Complex ideas and intricate fact patterns are moreeasily understood when taught using visual tools.Demonstratives, Inc. (DI) has a rich history of cre-ating effective, science-based 2D and 3D computeranimations and graphic presentations for attorneysand their clients in over 1500 litigation matters.

DI’s staff includes doctorate-level experts, engi-neers, scientists, animators, illustrators, modelers,and graphic artists who apply sound, scientific prin-ciples to every presentation, bringing decades ofexperience to intellectual property, environmental,construction defects, and product liability cases.This unique blend of scientific and artistic talent al-lows DI to create the most visually compelling,technically accurate, and persuasive images.Attorneys in law firms and corporate legal depart-ments rely on DI to create powerful courtroomtools and effective catalysts for settlement.



2014 USLAW Partners

Elevate Services, Inc.OFFICIAL MEDICAL LEGAL CONSULTING, LEGALPROJECT MANAGEMENT, AND OUTSOURCINGPARTNER OF USLAW NETWORKwww.elevateservices.com201 South Santa Fe Ave. Suite 100Los Angeles, CA 90012Phone:(310) 853-8448Fax: (213) 347-0209Nancy Fraser Michalski, RNVice President and Founder, Med Legal ServicesPhone:(310) 993-1363 Email: [email protected] ShermanBusiness Development AssociatePhone:(310) 699-3073Email: [email protected] RedmayneVP Business DevelopmentPhone:(310) 792-0833Email: [email protected]

Elevate provides corporate law departments andlaw firms with practical ways to improve efficiency,quality, and outcomes through consulting, man-aged services and technology.

Our specialized medical records and bill analysisimproves outcomes, expedites settlements, andlowers costs on bodily injury liability claims and liti-gation. Using a patent-pending quality control sys-tem, Elevate’s Med Legal team leads the industry inmedical bill audits, life care plans, comprehensiveclaim evaluations, and vocational rehabilitation as-sessments. We also provide expert witness testi-mony as needed.

Bridging the medical and legal worlds, our expertanalysis of medical records help litigation andclaims teams build stronger cases and ensure themost effective use of time and money from the startof each case, for example: • understanding how pre-existing conditions

relate to an injury sustained during the incident; • verifying the reasonableness of treatment ren-

dered and the past medicals; and • evaluating claims for future care cost damages.

Elevate’s other services include: • Legal project management• Document review• Contract management• Back office support for law firms

Headquartered in the United States, Elevate servesclients worldwide.

Galaher SettlementsOFFICIAL STRUCTURED SETTLEMENT PARTNER OF USLAW NETWORKwww.galahersettlements.com39674 North 104th StreetScottsdale, Az 85262Phone:(630) 718-1213Fax: (630) 339-4413Jim Ebel, CPCU, ARMPresidentCell: (630) 327-7213Email: [email protected] Latz413 Reserve Court, Joliet, Il 60431Phone:(815) 744-7077Email: [email protected] WebergP.O. Box 660, Alton, NH 03809Phone:(603) 875-7930Email: [email protected]

As one of the largest providers of structured settle-ments, Galaher Settlements offers clients inte-grated claims solutions from a team of industryexperts supported by leading-edge technology. Wehave a staff of more than 50 seasoned professionalslocated coast-to-coast with more than 600 years ofcombined experience. Our team has successfullyclosed more than 50,000 structured settlementsover the past 30 years.

We offer a full range of settlement solutions, including:• Convenient, cost-effective single-source inte-

grated claims solutions• A full suite of powerful claim settlement tools • Unique expertise in consultative approaches to

resolving claims• Local jurisdictional insights and knowledge

through our national presence • Multiple settlement options• Structured Medicare set-aside allocations• Integrated claims strategies to lower costs and

enhance administrative efficiencies

Additionally, our team is available to attend media-tions and pre-trial settlement conferences and toassist in post-settlement services. We review all set-tlement agreements and work with counsel to en-sure the appropriate structured settlementlanguage is included to guarantee tax-free status.

There’s more than just one product, service or areathat sets us apart, including our depth of knowl-edge, experienced team and overall strategic ap-proach. Our technology – notably the SettlementProcessing Information Network (SPIN) structuredsettlement diary-based file management system –offers integrated modules to facilitate documentcreation, review and storage, reports, accountingfunctions, quoting, license administration andmore for comprehensive management and track-ing of our clients’ cases.

Learn more. Contact Galaher Settlements today. 800-774-4705 | www.galahersettlements.com

Granite Legal SystemsOFFICIAL E-DISCOVERY PARTNEROF USLAW NETWORKwww.granitelegal.com1201 Louisiana Street, Suite 350Houston, TX 77002Phone:(713) 652-0881Jeffrey R. Hewett, JDChief Executive OfficerPhone:(713) 652-0881Email: [email protected] MackConsultantPhone:(713) 240-0634Email: [email protected] Kiker, JDConsultantPhone:(804) 350-8444Email: [email protected]

Granite Legal Systems proudly supports USLAWNETWORK firms and their clients throughout thediscovery process from legal hold planningthrough trial support, ensuring that they have theinformation required for timely and cost effectiveclient representation. Granite professionals workwith law firms and corporations to define discoveryobligations and plan defensible responses. To theseengagements, Granite offers seasoned industry vet-erans with versatile skill sets who understand andimplement technology resource requirements, ad-dress team structure & responsibilities, and assureeffective quality control processes for all phases ofthe project. Our consultants and project managersare attorneys, legal assistants, and experiencedtechnologists with extensive litigation and technicalexpertise.

Our ability to provide comprehensive discoverysupport services to our clients, including investiga-tion, documentation, as well as solution design andimplementation capabilities distinguishes GraniteLegal Systems from other eDiscovery companies.Granite’s broad technical skills enable our team toidentify and implement cost-effective, repeatableand supportable solutions to recurring discovery is-sues. We are uniquely qualified to handle discoveryassessment, collection, and production projects in-volving complex data sources, outdated or legacysystems, and other challenging discovery issues.

Granite Legal Systems was founded by industry vet-eran Jeffrey Hewett in 2004 to develop an innova-tive eDiscovery solution (eCollector) and has sincegrown to provide complete eDiscovery services,specializing in solving complex, technically chal-lenging discovery problems.

Online at www.granitelegal.comOn LinkedIn at www.linkedIn.com/company/granitelegal



Marshall Investigative GroupOFFICIAL INVESTIGATIVE PARTNER OF USLAW NETWORKwww.mi-pi.com416 W Talcott RoadPark Ridge, IL 60068Phone:(855) 350-6474 (MIPI)Fax: (847) 993-2039 Doug MarshallPresidentEmail: [email protected] M. KabarecVice PresidentEmail: [email protected]

Doug Marshall, the founder of MarshallInvestigative Group, has been investigating claimsfor over 25 years. Our nationwide firm specializesin insurance fraud investigations, providing cover-age throughout the United States. Our private in-vestigators provide the knowledge and skillsnecessary to extract the information you need tosuccessfully evaluate your claim. We use investiga-tors from diverse backgrounds like criminal justice,information technology and business, who sharetheir knowledge with others in the firm. Our goal isto exceed your expectations by providing prompt,thorough and accurate information whether that isto establish proper reserves or to documentclaimant activities. We have a wide variety of serv-ices for Cargo, Disability, Liability and Workmans’Compensation claims such as activity/backgroundchecks, employment, health history, internet re-search, public records, skip tracing, statements,subrogation and surveillance. We conduct our in-vestigative business with the highest degree of in-tegrity, confidentiality and productivity.

At Marshall Investigative Group, we value each andevery customer. We are confident that our extraor-dinary investigative work, provided on a timelybasis, will make a difference in your bottom line.We will be happy to discuss your case and respondto any questions you may have.

Please contact Doug Marshall to discuss your caseat (855) 350-6474 or email him at [email protected].

MDD Forensic AccountantsOFFICIAL FORENSIC ACCOUNTANT PARTNER OF USLAW NETWORKwww.mdd.com750 Hammond Drive NE, Building 14Atlanta, GA 30328Phone:(404) 252-0085Fax: (404) 255-0673Kevin Flaherty10 High Street, Suite 1000Boston, MA 02110Phone:(617) 426-1551Fax: (617) 426-6023Email: [email protected] Damico750 Hammond Drive, Building 14Atlanta, GA 30328Phone:(404) 252-0085Fax: (770) 255-0673Email: [email protected]

Matson, Driscoll & Damico is a leading forensic ac-counting firm that specializes in providing eco-nomic damage quantification assessments for ourclients. Our professionals regularly deliver expert,consulting and fact witness testimony in courts, ar-bitrations and mediations around the world.

We have been honored to provide our expertise oncases of every size and scope, and we would bepleased to discuss our involvement on these fileswhile still maintaining our commitment to clientconfidentiality. Briefly, some of these engagementshave involved: lost profit calculations; business dis-putes or valuations; commercial lending; fraud;product liability and construction damages.However, we have also worked across many otherpractice areas and, as a result, in virtually every in-dustry.

Founded in Chicago in 1933, MDD is now a globalentity with 20 U.S. and 19 international locations.

In the United States, MDD’s partners and seniorstaff are Certified Public Accountants; many arealso Certified Valuation Analysts and CertifiedFraud Examiners. Our international partners andprofessionals possess the appropriate designationsand are similarly qualified for their respectivecountries. In addition to these designations, ourforensic accountants speak 30 languages.

Regardless of where our work may take us aroundthe world, our exceptional dedication, singularlyqualified experts and demonstrated results will al-ways be the hallmark of our firm. To learn moreabout MDD and the services we provide, we inviteyou to visit us at www.mdd.com. You are also wel-come to contact John A. Damico, one of MDD’sfounding partners, at [email protected] or404.252.0085.

2014 USLAW Partners

Magna Legal Services, LLC OFFICIAL JURY CONSULTANT PARTNER OF USLAW NETWORKwww.magnals.com1635 Market Street, 8th FloorPhiladelphia, PA 19103Phone:(866) 624-6221Fax: (866) 579-0819Peter HechtExecutive Vice President of SalesPhone:(732) 331-2410Email: [email protected] CalzarettaDirector of Litigation ConsultingPhone:(866) 624-6221Email: [email protected] GimbelBusiness Development ManagerPhone:(267) 815-1602Email: [email protected]

Who are the worst and best jurors for your case? Isyour trial story believable? What are the strengthsof your case you can emphasize, and the weak-nesses that you can eliminate? These are only someof the questions that Magna Legal Services canhelp you answer.

Our consultants can assist in:• Focus Group Research (Online and Traditional

Live Sessions)• Mock Trial Research• Thematic Development Research• Perception Studies• Case Risk Assessment• Change of Venue Studies• Social Media Surveillance• Jury Selection Assistance• Witness Communication Training• Shadow Jury Studies

By conducting Jury Research, Magna assists youand your clients in identifying the best pathway to afavorable verdict. Let Magna Legal Services helpyou see your case through the jurors' eyes. Our newenhanced Platform, JuryConfirm 2.0 has many ofthe key features found in our traditional live ses-sions, while providing an economical and effectiveway to test your themes in an online environment.

Key features of the new system include:• Virtual Simulation of Court Room Environment• Live Attorney Presentations• Live Jury Deliberations• Up to Four Deliberation Groups• Up to 40 Total Jurors Per Session• Juror Impulse Monitoring System• Instant Questionnaire Feedback from Jurors• Detailed Reports


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Your USLAW eDiscovery Team:Jeffrey Hewett [email protected] • Steve Mack [email protected] • Dennis Kiker [email protected]

Granite Legal Systems • 713.652.0881 • www.granitelegal.com

Official eDiscovery Provider

Discover all we can do for youand your clients. To learn morecontact any of the USLAWeDiscovery Team Memberslisted below or visit us online atgranitelegal.com


NationwideSpecialists inInsuranceFraudInvestigations

NationwideSpecialists inInsuranceFraudInvestigations

Doug Marshall and the Marshall Investigative Group, Inc. provide na-

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Investigate us at www.mi-pi.com. Then give us a call at

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Services provided byMarshall Investigative Group

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