COMPLEX TECH: LegalTech trade show is coming to Los Angeles

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Legaltech According to the executive director of LegalTech, LegalTech is "the MOST IMPORTANT technology event for the legal professional. . . ."  I suppose I'll take his word for it, since I can't think of a similar event that clearly tops LegalTech.  Slight ribbing aside, I have attended LegalTech in past years and find it to be the best way to effectively compare competing solutions for law technology issues.  Every website tells you that their software has the latest and greatest features, best usability, and so on.  That's all marketing jibberish.  You need to examine a software package and decide for yourself if it looks intuitive and appears to solve (at a price you can afford) issues your firm faces in a way that is better than the solution you may already have in place.

The Complex Litigator will be attending LegalTech this year.  I'll be looking for interesting developments in technology that could make complex litigation and class action practice smoother to navigate.  LegalTech will provide seminars on issues that include:

Best Practices and Issues in Information Management for CIOs and IT Directors • Electronic Discovery Issues in Litigation • Knowledge Management • Leveraging Legal Technology for Practice Management and Transactional Support • E-Discovery Jeopardy! • Corporate Perspectives on EDD • Legal Outsourcing: Trends, Best Practices, and Emerging Markets • “Tomorrowland”- What is on the Legal and Technology Horizon? • Data Privacy Issues for Multinational Corporations

In other words, something for everyone.

A few rising names in legal technology arena are involved in LegalTech.  For example J. Craig Williams, the blogger responsible for May It Please The Court, is on the faculty.  If you handle technology decisions at your firm, or if you offer input in that regard, try to stop by LegalTech and check out what's new.  You'll at least get some free pens with corporate logos on them, and maybe a flashlight for your kid.  I'm hoping for coasters and frisbees.  And a squooshy ball.

Where:  Los Angeles Convention Center
When:  June 26 - June 27

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TJX Companies, Inc. v. Superior Court sets "limits" on class actions under Song-Beverly Credit Card Act of 1971

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Greatsealcal100The Song-Beverly Credit Card Act of 1971 (Civ. Code, § 1747 et seq.), in simplistic terms, protects credit card holders in a variety of ways, including limiting liability for billing errors or unauthorized usage.  In addition, the Act regulates conduct of merchants accepting credit card payments for transactions.  The California Legislature has declared that the Act is intended to mirror provisions in the federal Truth in Lending Act.  (Civ. Code, § 1747.01.)

Some of the protections available under the Song-Beverly Credit Card Act have just been limited or clarified, depending upon your point of view.  In TJX Companies, Inc. v. Superior Court (May 22, 2008) ___ Cal.Rptr.3d ___, the Court of Appeal (Fourth Appellate District, Division Three) construed portions of Civil Code section 1747.08, which provides, in part:

Except as provided in subdivision (c), no person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business shall do any of the following:

(1) Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to write any personal identification information upon the credit card transaction form or otherwise.

(2) Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information, which the person, firm, partnership, association, or corporation accepting the credit card writes, causes to be written, or otherwise records upon the credit card transaction form or otherwise.

(3) Utilize, in any credit card transaction, a credit card form which contains preprinted spaces specifically designated for filling in any personal identification information of the cardholder.

The Court of Appeal, hearing Petitions for Writs of Mandate, was asked to (1) determine whether a one-year statute of limitation applied to the penalty provisions in section 1747.08, and (2) determine whether section 1747.08 applied to return transactions.

First, the Court of Appeal held that the mandatory language in section 1747.08 rendered the penalties under that section mandatory.  As a consequence the one-year statute of limitation set forth in Code of Civil Procedure section 340 governed the matter, rather than the three-year statute of limitation set forth in Code of Civil Procedure section 338.

Second, the Court of Appeal, construing the language of section 1747.08, determined that the statute was clearly intended to govern initial credit card transactions, not returns that might follow after such transactions.  The Court specifically noted the merchant's need to protect against fraudulent returns as a policy basis supportive of its construction of the Legislative intent.

I routinely see decision like TJX described as "limiting" or "expanding" a particular statutory or regulatory system.  For example Privacy Law Blog said:

“On May 22, 2008, the California Court of Appeal narrowed the scope of claims available under California’s Song-Beverly Credit Card Act of 1971, California Civil Code § 1747.08, ruling that the statute is subject to the one-year statute of limitations of Code of Civil Procedure section 340 and does not apply to merchandise returns.

(Tanya Forsheit, No Shopping Spree for Plaintiffs Under California's Song-Beverly Credit Card Act (May 26, 2008) privacylaw.proskauer.com.)  But is this really accurate?  The TJX decision was a question of first impression.  Did the Court of Appeal "narrow" anything?  I don't think anybody had a definitive answer as to which was the applicable statute of limitation.  You wouldn't need a Writ to find out if it was so clear, would you?  Textual descriptions of this sort seem more useful as a barometer of the author's bias, rather than as an analysis of the outcome.  Editorial characterizations of this ilk are more likely to have some significance if, for example, a number of Courts of Appeal construe a law in one way over many years, after which the Supreme Court weighs in and reverses those decisions.  Then it seems fair to say the the Supreme Court "limited" or "expanded" a particular understanding of the law.

As for questions of first impression about the reach of a particular statute, use commentaries about the decision to guage whether the commenter is "reporting" or just writing an op-ed piece for their constituency.  It's not my intention to single out Proskauer on this issue.  Commentary like this is pandemic to the blawgosphere (there I go, using that horrific term).  I'm sure I'm guilty.  But it's no secret that the consuming audience for Proskauer's perspective isn't your average plaintiff's attorney.

So long as you know where an author is coming from, bias can be useful.  It is a good thing to have a variety of perspectives expanding the public dialog.  Just be careful that bias in analysis doesn't unintentionally create an impression of change where none actually occurred.

UPDATE:  Class Action Defense Blog has a very thorough post analyzing TJX.

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COMPLEX TECH: If your firm doesn't understand technology, digital redaction disasters are inevitable

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With electronic court filings becoming a thing of the present, not the future, adequate electronic redaction is now essential. For example, General Order 08-02, issued by the United States District Court, Central District of California, requires redaction to protect "sensitive and private information."  The Order provides, at Part IV.E:

“The parties shall refrain from including, and/or shall redact where inclusion is necessary, the following personal data identifiers from all documents filed with the Clerk.

  1. Social Security Numbers: If an individual’s Social Security Number must be included in a document, only the last four digits of that number should be used.
  2. Taxpayer Identification Numbers: If a taxpayer identification number must be included in a document, only the last four digits of that number should be used.
  3. Names of Minor Children: If the involvement of a minor child must be mentioned, only the initials of that child should be used.
  4. Dates of Birth: If an individual’s date of birth must be included in a document, only the year should be used.
  5. Financial Account Numbers: If financial account numbers are relevant, identify the name or type of account and the financial institution where maintained, and only indicate the last four digits of the account number.
  6. Home Address: If a home address must be included, only the city and state should be used.
  7. Additional Information: For good cause, the assigned judge may require redaction of additional information.

Before the digital world was fully upon us, redactions were accomplished with a black marker.  Now, attorneys and support staff are preparing documents for filing electronically, and redactions are applied with electronic tools.  Unfortunately, some people believe that a redaction is sufficient if the private text is visibly obscured.  But with digital information, merely obscuring text may not (or will not) actually remove it from the electronic document.  The results of incomplete redaction can be devastating.

In a sex discrimination case against General Electric, Sanford, Wittels & Heisler (based in Washington, D.C.) electronically filed documents for the plaintiffs with large passages redacted.   (Douglas Malan, GE Suffers a Redaction Disaster (May 28, 2008) www.law.com.)   The redactions were insufficient:

“But as of late last week, you could download several documents through PACER's federal court filing system, copy the black bars that cover the text on the screen and paste them into a Word document.

Voilà. Information about the inner-workings of GE's white, male-dominated management and their alleged discriminatory practices against women, which is supposed to be sealed by court order, appears with little technical savvy required.

(Ibid.)  The fallout is that a potential settlement may unravel because of the disclosure of information about General Electric that both sides agreed to keep secret.

A PACER account representative was unaware of the problem until she was guided through the process of downloading, copying and pasting the "redacted" information into new document, where, like magic, it appeared in an unredacted form.  It is important to note that PACER employees do not check filings for redaction adequacy.  That obligation rests on the lawyers.  As noted in Malan's law.om article, "Where once a black marker strike on a piece of paper was sufficient, redaction in the digital world requires special software and the know-how to delete the words behind the shield."  In the GE case, "Plaintiff's attorney Sanford couldn't say what process or software his law firm used to redact the information in the Schaefer case. 'Quite frankly, I'm not involved in the mechanics,' he said."  (Ibid.)  One would venture a guess that this unfortunate attorney knows now.

In a subsequent post I plan on reviewing Adobe Acrobat v.8, which provides secure redaction tools sufficient for all filings and at a price point that should be affordable to even the smallest firms.

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Supreme Court declines to consider whether state laws limiting class actions ban clauses are preempted by federal law

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According to the Associated Press, the United States Supreme Court rejected T-Mobile's appeal in three related cases.  The issue in the three cases is identical: whether state laws limiting class action ban clauses in consumer contracts are preempted by federal law.  As of this posting, the Supreme Court docket does not yet reflect the denial of the Petition in case 07-976.

T-Mobile sought review of a Ninth Circuit decision that precluded enforcement of a class action ban on the ground that a recent "Third Circuit decision (Gay v. Creditinform) created a conflict among the lower courts."  (Gupta, Supreme Court Refuses to Hear Class-Action Ban Issue (May 27, 2008) pubcit.typepad.com.)  [Note: Public Citizen participated in the opposition to T-Mobile's petition.]

State and federal courts have been holding of late that class-action bans in arbitration clauses are unconscionable under state contract law, a result seen in the Discover Bank decision (Discover Bank v. Superior Court (2005) 36 Cal.3d. 148) in California.  Defendants routinely argue that the Federal Arbitration Act preempts state law on this issue.  However, that argument has not met with success; the Federal Arbitration Act expressly saves generally-applicable state contract law of unconscionability from preemption.

UPDATE:  The May 28, 2008 Order List from the Supreme Court includes the Laster v. T-Mobile determination.

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ClassActionBlawg.com provides yet another quality roundup of class-related blog posts

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Paul KarlsgodtOn most weeks, ClassActionBlawg.com surveys the blogosphere for posts topical to class actions.  Paul's latest roundup is probably the most extensive (and most useful) yet.  (Karlsgodt, Class Action Blogosphere Weekly Review (May 20, 2008) ClassActionBlawg.com.)  You'll find links to such blogs as Carlton Fields’ class action blog Classified, Drug and Device Law Blog, and Federal Civil Practice Bulletin.

Of particular note, ClassActionBlawg.com mentioned a guest blogging submission by Elizabeth Cabraser on ACSBlog.  As someone worthy of a WHO'S WHO post in her own right, any comments by Ms. Cabraser are worth a read.

Finally, thanks to ClassActionBlawg.com for including in the weekly roundup an earlier post by The Complex Litigator on developments affecting punitive damage claims in class actions.

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In Korn v. Polo Ralph Lauren Corp., a dash of plaintiff's allegations and a pinch of defendant's evidence beats remand under CAFA

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In Korn v. Polo Ralph Lauren Corp., the defendant found the right recipe for resisting the plaintiff's efforts to remand the matter back to state court.  (Korn v. Polo Ralph Lauren Corp. (E.D. Cal. 2008) 536 F.Supp.2d 1199.)  First, defendant successfully opposed plaintiff's argument that defendant had not established diverse citizenship.  The Court accepted as true the plaintiff's allegation that Polo Ralph Lauren Corp. was incorporated in Delaware, with a principle place of business in New Jersey.  (Korn, at p. 1203.)  Second, the Court coupled plaintiff's demand for $1,000 in statutory penalties per unlawful transaction with defendant's declaration that it had processed more than 5,000 credit transactions to conclude that the amount in controversy exceeded $5 million.  (Korn, at p. 1205-6.)  The moral of the story is that you can plead around CAFA removal, but not if you insist on alleging facts that will undermine any possibility for a successful remand motion.

[Via Class Action Defense Blog]

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LLRX.com includes The Complex Litigator as one of the "Blogs of Note" in the class action realm

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LLRX.com is self-described as "the premier free, independent, one person produced Web journal dedicated to providing legal, library, IT/IS, marketing and administrative professionals with the most up-to-date information on a wide range of Internet research and technology-related issues, applications, resources and tools."  (About LLRX.)  In a recent article, LLRX.com offers a list of online resources for keeping up to speed on developments in the field of class action litigation.  (Scott Russell, Keeping Up with Class Actions: Reports, Legal Sites and Blogs of Note (May 19, 2008) www.llrx.com.)  Along with a few of the usual suspects (e.g., The UCL Practitioner), The Complex Litigator received a mention, for which I am very grateful; LLRX.com reportedly receives over 130,000 unique visitors each month.

Take a look at the article for a list of other resources (some of which are blogs included right here on The Complex Litigator's blogroll).

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How is this a "tough year for class action attorneys?"

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Yesterday Law.com published an article entitled Tough Year for Class Action Attorneys Continues, authored by Lynne Marek.  What I want to know is, how does Lynne Marek know what kind of year I'm having?  The article is ostensibly about three Lexington, Kentucky attorneys, William J. Gallion, Shirley A. Cunningham Jr., and Melbourne Mills Jr., that are facing charges for allegedly stealing $46 million in settlement funds obtained for their clients in Fen-Phen diet drug litigation.

I say "ostensibly" because this column strikes me as a gratuitous shot at all attorneys that litigate class actions.  For example, the column digresses from the factual discussion about the Kentucky attorneys to offer this:

“With criminal prosecutions of class action attorneys who have made millions of dollars off their cases unfolding through indictments from New York to Mississippi to Kentucky, government officials are starting to call for more scrutiny of such litigation.

(Lynne Marek, Tough Year for Class Action Attorneys Continues (May 21, 2008) www.law.com.)  "From New York to Mississippi to Kentucky..."  From the sound of it, we have a pandemic of class action practitioners under indictment by prosecutors.  In reality, the only other examples of such prosecutions include Mississippi lawyer Richard "Dickie" Scruggs and Melvyn Weiss and William Lerach, securities class action lawyers at the New York firm formerly known as Milberg Weiss.

Nevermind the facts; this crisis gives the author a chance to work in a quote from American Tort Reform Association President Sherman Joyce: "Maybe these are isolated incidents, but we have no way of knowing that right now."  Actually, Sherman, you do know the answer.  Most lawyers in most states are conducting their business in lawful manner, without stealing any client funds or paying clients or bribing judges.  Some are rotten apples, and the various state bars catch a fair number of those, even if it takes a while.  The chickens eventually came home to roost for Mr. Lerach.

But Lynne Marek's article isn't about evenhanded journalism.  It's about pushing an angle, an agenda.  As a modest proposal, I suggest honesty for future columns.  Instead of a whole page full of life-stealing prose, just say, "I hate class action and class action lawyers and I hope the government regulates them out of existence."  Look at how much time I just saved everyone.  Now we'll all have about 5 minutes of our lives back when the next column comes out.

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A challenge to the conventional wisdom that "mass actions" are a superior method for plaintiffs litigating tort claims

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It is the conventional wisdom that multi-plaintiff litigation (mass actions) provides a superior vehicle for litigating tort claims.  University of Pavia Ph.D. student Margherita Saraceno offers an alternative analysis.  In her thesis, Group Litigation, Access to Justice and Deterrence, Saraceno utilizes economic analysis to propose that mass actions may reduce the overall deterrence effect of tort law.  The working paper is available through the Social Science Research Network website.  The abstract for the paper is as follows:

“Policy makers are currently evaluating group litigation as a device to guarantee effective access to justice and to improve deterrence in torts with multiple victims. This paper focuses on how group litigation affects: 1) access to justice, 2) the choice between settlement and litigation, 3) the settlement amount, and finally, 4) deterrence. The main finding is that group litigation does not always improve access to justice and deterrence. On the one hand, group litigation makes it easier for victims to sue, by creating scale economies and improving their confidence in the outcome of a trial. On the other hand, the group is costly for victims to organize and reduces the injurer‘s liability costs by facilitating settlement and creating scale economies at trial. The combined effect might be a reduction, rather than an increase, in the deterrent effect of tort law.

(Margherita Saraceno, Group Litigation, Access to Justice and Deterrence (2008) Amsterdam Center for Law & Economics Working Paper No. 2008-04 Available at SSRN: http://ssrn.com/abstract=1128058.)

As a economics major in my salad days, I find the premise underlying the research interesting, if a bit scanty on sufficiently broad econometric data to convince me that she's on to something.  After reading the article, its seems like it should have been obvious that a mass litigation does create different economic incentives for a defendant.  There are two key variables that jeopardize any overarching conclusion.  First, it is difficult to say that any particular mass action will incorporate more or less litigants than single plaintiff litigation over the same issue againt the same defendant.  If the mass action accumulates more plaintiffs (perhaps because the fear factor is lessened), then the mass tort may improve deterrence.  It is difficult to find viable data to construct an econometric model that would generate valid results.

Second, it is difficult to determine whether a mass action will generate, on average, a higher or lower recovery for the relevant group than would have been recovered in individual suits.  Certainly, the defendant faces higher litigation costs if numerous litigants sue individually.  On the other hand, the extent of this effect may be de minimis, in light of the many procedural tools for consolidating or coordinating actions in a single court.  A defendant can often avoid costs imposes by multiple, concurrent litigation.

In any event, it is good food for thought.

[Via Mass Tort Litigation Blog]

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Legalwriting.net continues dialog about poor writing by attorneys

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Over at Wayne Schiess's legal writing blog, Legalwriting.net (which isn't exactly found at Legalwriting.net), Wayne continues the discussion about nominalizations and how they are slowly killing the English language.  The most recent post (which provides an opportunity for me to give myself a gratuitous pat on the back), Wayne highlights a prior comment left by yours truly on the thesis that fear is responsible for poor writing:

“I think much of the problem (to the extent it is one) with legal writing is that it is based upon fear.

Young lawyers fear being wrong. They fear error as though to err is fatal (maybe fatal to your career, but not life-threatening). To limit the chance that they are wrong, young lawyers turn to qualifiers and equivocations. An outgrowth of writing in this way is the difficulty with writing in a strong and direct manner. It is very hard to use powerful action verbs when every sentence contains multiple escape clauses. Lawyers seem to believe, especially in litigation, that they can always salvage the argument or position, so long as there is a way to change their position with mushy language.

How often do lawyers write junk like, "Having evaluated your contentions and considered the applicable authority, it is evident that your client's position is unsustainable," when they could just say, "Your client's interpretation is wrong"? Fear.

The really good writers in the legal field have embraced their fear and just state their position with the confidence that, win or lose, clarity and certainty are better than weakness.

I don't actually know how I cite to Wayne Schiess's blog where he quotes my comment left to a prior post on his blog.  I guess that will do.

If you haven't already noticed, there is a link to Wayne's blog in the blogroll contained in the right column.  Again, class actions and complex cases in general are bad enough without sinking under the weight of bad written advocacy.

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