So Much for Early Retirement

September 26, 2006

Courts. Judge Jack B. Weinstein is a legend in the federal judicial system. A district court judge from 1967 to 1993, he has been on “senior status” (but with a full case load) for the last 13 years. Yesterday, this 85 year old judge issued one of the longest decisions ever published: the 540 page decision certifying a class action in Schwab v. Philip Morris USA, a case alleging that smokers were defrauded into believing that “light” cigarettes were less dangerous than regular cigarettes. A link to this exhaustive and carefully reasoned decision, which may be the most significant by Judge Weinstein in his forty years on the bench, is here. Proponents of “early retirement” should take a look.

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Judge Gants Issues Decision on Waiver of Attorney-Client Privilege When Client Uses Password-Protected, Web-Based Email on a Company Computer

September 18, 2006

Litigation. Lawyers love to argue about attorney-client privilege. What could be juicier than to find out what your adversary in litigation said to his or her attorney, believing it to be covered by this privilege, a privilege that is so sacrosanct that the Supreme Court has ruled that it extends beyond the grave? Nevertheless, the attorney-client privilege can easily be lost or waived. For example, if the communication is revealed to a non-attorney third party, it risks waiver. The world of computer technology and email has given rise to new grist for the waiver doctrine. Most companies inform their employees (in employee manuals, for example) that communications utilizing the company’s internal email system are open to review and examination by the employer. According, it is established law that an employee who uses her employer’s email system to communicate with an attorney has waived the privilege. Most lawyers, aware of this, instruct their clients who wish to communicate from work to use an Internet-based email system, such as Google’s Gmail or Yahoo Mail. The theory is that since the employer doesn’t have access to these emails and the emails are protected by a user name and password, they retain their privilege. This assumption was challenged in a recent case before Judge Gants, sitting in the Massachusetts Business Litigation Session. In this case, NERA v. Evans, the former employer argued that since,…

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Lying About Your Education Can Get You Into Trouble In More Ways Than One

September 15, 2006

Litigation. In Pease v. Tyco Electronics Corp., decided on September 7, 2006, Massachusetts Federal District Court Judge Ponsor dismissed wrongful termination claims by a former employee of Tyco, based on evidence that the employee had lied to Tyco regarding his education (an MBA), and then modified and destroyed files on his computer to cover up his actions during the litigation. Among other things, this case shows how effective forensic examination of a computer can be in litigation, as well as the fact that federal judges simply won’t tolerate this kind of conduct. Of course, the case also shows that when an employee brings a suit like this he had better make sure that he has no skeletons in the closet.

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Do We Have a Deal, or Not?

September 11, 2006

Litigation. “Of course, this letter is not intended to create, nor do you or we presently have any binding legal obligation whatever in any way . . ..” In 1991 those words played a major role in the Massachusetts Appeal Court’s reversal of a $32 million trial judgment against Federal-Mogul Corp. in the case (infamous to Massachusetts business lawyers of the time) of Schwanbeck v. Federal-Mogul. The plaintiff in that case claimed he had a deal to buy a division of Federal-Mogul, and FM had breached that agreement. While the trial court agreed (resulting in the $32 million judgment), the Appeals Court reversed, in part on the language quoted above. That case was an object lesson to attorneys in our firm involved in M&A transactions that it was essential to include “no legal obligation” language in every transaction, unless and until our client was prepared to be legally bound. An article that I wrote in 1991 discussing this case in more detail is linked here. However, this problem is not limited to contracts – it arises surprisingly often in settlement discussions in litigation. Not too long ago our firm had a case in which the attorneys for the other side insisted that a verbal conversation with an attorney in our firm, followed by a confirmatory letter that outlined a settlement at a high level of generality, was enough to result…

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