The decade-old Zubulake v. UBS case set off a seismic shift in electronic discovery that many lawyers and litigants still don't fully comprehend. One lesson many have learned the hard way is that the electronic discovery rules and practices that have been developed post-Zubulake must be a regular part of every organization's document management plans.
Zubulake was a standard employment discrimination lawsuit in the U.S. District Court for the Southern District of New York that is now seen as a turning point in electronic discovery. This article provides an excellent summary of Zubulake and its impact.
Increasingly, courts are disinclined to tolerate a party's failure to work cooperatively to minimize the cost of eDiscovery, as this plaintiff painfully discovered.
Give just a moment to consider your organization’s electronic document protocols. Processes should be in place long before any subpoena or request for records arrives. When your organization is hit with a lawsuit, what is the plan for preserving, requesting, organizing and producing documents?
The Litigation Technology Team at Ater Wynne manages electronic documents and eDiscovery for clients in litigation of all sizes, from small document collections with just one or two file types to large, complex sets involving terabytes of data, millions of documents, and dozens of file types. We utilize protocols and best practices developed in-house and multiple eDiscovery software platforms, keeping document management practices up-to-date and satisfying the courts' requirements.
In matters of eDiscovery, an ounce of prevention is better than a pound of cure. For more information about Ater Wynne’s Litigation Technology Team, contact Kara Lindsay, Chief Litigation Technology Specialist at firstname.lastname@example.org.
On March 18, 2015, the General Counsel for the NLRB issued a new memo providing guidance on common employer rules and policies that run afoul of Section 7 of the National Labor Relations Act. The memo is divided into two parts. In the first, the NLRB compares rules it found lawful with those that are unlawful, and provides its reasoning for both conclusions. The section includes employer rules that are frequently at issue before the agency, addressing issues such as:
The second section of the memo addresses handbook rules from a recently settled unfair labor practice charge against Wendy's International LLC, which followed an initial determination by the NLRB that several of Wendy's handbook rules were unlawful.
Consistently with prior GC memos, the differences between rules and policies the NLRB found lawful and unlawful were not always obvious, or even consistent with each other or past interpretations. Nevertheless, the memo is worth reviewing as a summary of the NLRB's current thinking and should serve as a reminder to employers that, if they have not updated their handbooks in a while, this is a good time to do it.
Employers that take such advice to heart should also keep in mind the NLRB's recent reversal of the longstanding precedent under which employers were permitted to ban employees from using the company's email system for non-business purposes. In Purple Communications, Inc., decided December 11, 2014, the NLRB held that employers given access to the company's email system must be permitted to use the system for communications protected under Section 7 during non-working time, unless the employer can show that special circumstances exist (most will not be able to make the required showing).
You can review our previous coverage of NLRB actions on rules, policies, and settlement terms here and here and here. You can also find more in depth coverage on our website, here (see part 7, Employer Confidentiality Policies Under Attack by Federal Agencies).
Last week the Oregon Court of Appeals examined the remedies that a trial court may impose to remedy shareholder oppression. In Hickey v. Hickey, ownership of a family ranching business was divided among several siblings. One sibling acquired a majority interest by purchasing shares from others. As controlling shareholder, he engaged in self-dealing and commingling of assets, to the detriment of the remaining minority shareholder. The minority shareholder then filed suit under ORS 60.952 to impose remedies for oppression. The trial court ordered amendment of the bylaws and articles of incorporation to strip the voting rights of the majority shareholder and remove him from management.
The appellate court reviewed the nonexclusive list of remedies provided under ORS 60.952 to rectify oppressive conduct, including: (1) cancellation or alteration of any provision in the corporations articles of incorporation or bylaws, (2) removal from office of any director or officer, (3) appointment of a custodian to manage the business, (4) appointment of a provisional director, (5) retention of jurisdiction by the trial court for protection of the minority shareholder, or (6) dissolution of the corporation. While the trial court has many remedies to choose from, "[t]he remedy must correspond to the wrong--or legally recognized right--for which the remedy is provided under ORS 60.952."
The Court of Appeals reversed the trial court, holding that the effect of the remedy selected was to convert the minority shareholder into the majority shareholder. That constituted a windfall to the plaintiff and was not within the "reasonable expectations" of either party. The appellate court then remanded the case to the trial court with instructions to devise a more appropriate remedy, such as ordering a share purchase for fair value to remove one of the two shareholders from the business.
Last week the Oregon Court of Appeals addressed the liability of directors of a nonprofit corporation, reversing summary judgment for directors of a homeowners association on breach of fiduciary duty claims.
In WSB Investments, LLC v. Pronghorn Development Company, LLC, plaintiff was an owner of a timeshare and a member of the HOA that asserted various claims against the directors, including breach of fiduciary duty. In reviewing the trial court's grant of summary judgment, the court discussed the standards for directors' obligations to a nonprofit. While ORS 65.369(1) imposes liability for gross negligence or intentional conduct, the legislature has not defined gross negligence in this context. The court held that, for directors' liability, gross negligence means negligence characterized by near total disregard or indifference to the rights of others or the probable consequence of a course of conduct. The court further held that, while ORS 65.357 states the standard of care of uncompensated directors of a nonprofit, whether those standards have been violated must be determined with reference to the obligations set out in the governing documents.
Accordingly, the court found triable issues of fact as to,among other things, the use of reserve funds for operating expenses and failing to elect new board members in a timely fashion, all in violation of the HOA's governing documents.
The Ninth Circuit Court of Appeals last week handed a trademark victory to Pom Wonderful, reversing a district court decision denying its request for an injunction against competitor Pur Beverages.
Pom Wonderful, maker of the popular POM pomegranate juice drinks, requested a preliminary injunction to bar the defendant from using the word “pŏm” for its pomegranate flavored energy drinks, as seen below.
The district court denied the request, stating that Pom Wonderful did not establish a likelihood of confusion between the marks.
On review, the Ninth Circuit focused on the Sleekcraft factors for likelihood of confusion. Regarding the physical similarities of the marks, the Ninth Circuit found far more in common between the marks than not. “Balancing the marks’ many visual similarities, perfect aural similarity, and perfect semantic similarity more heavily than the marks’ visual dissimilarities – as we must – the similarity factor weighs heavily in Pom Wonderful’s favor.” Furthermore, when considering this factor, strong marks are given greater weight than weak marks. As such, the district court clearly erred by giving more weight to the marks’ differences than their similarities.
The district court also erred in its “brick-and-mortar” trade channels analysis. “Because Pom Wonderful and Pur sell highly similar products in supermarkets located across the country, the marketing channel convergence factor weighs in Pom Wonderful’s favor. The district court clearly erred in . . . requiring Pom Wonderful to prove that its beverages were sold in the very same brick-and-mortar stores as Pur’s ‘pŏm’ beverage.” Though a perfect overlap of retailer locations increases likelihood of consumer confusion, its absence does not undermine the convergence of the marketing channels.
Finally, the district court mistakenly weighed the remaining factors – actual confusion, defendant’s intent, and product expansion –against Pom Wonderful. The absence of any evidence supporting these factors is to be considered merely neutral in a likelihood of confusion analysis.
In weighing the totality of the factors, the Ninth Circuit review revealed that five of the Sleekcraft factors weighed in favor of Pom Wonderful, none weighed in favor of Pur Beverages, and three factors were neutral. Since the district court’s errors created a ripple effect, influencing its decision regarding the remaining preliminary injunction requirements, the Ninth Circuit reversed and remanded.
The Oregon Constitution and Oregon Rule of Civil Procedure 59G(2) both state that "in civil cases three-fourths of the jury may render a verdict." The "same nine" rule requires that, if the questions presented to a jury are interdependent -- such as questions addressing the elements of a single claim -- the same nine out of 12 jurors must agree on every question. Separate and independent questions are not subject to the same nine rule.
Last week the Oregon Supreme Court elaborated on the rule, holding that the same nine jurors need not agree on the amounts of economic and noneconomic damages from the same injury when rendering a verdict.
In Kennedy v. Wheeler, defendant admitted liability for negligence in a personal injury action, and a 12-person jury set economic and noneconomic damages. A jury poll showed that, while 10 jurors agreed on the amount of economic damages and 9 agreed on the amount of noneconomic damages, only 8 jurors agreed on both sums. Defendant objected to the verdict and moved for a new trial, citing the same nine rule.
On review, the Supreme Court stated that the test for applying the same nine rule is whether verdict is logically consistent despite the differing votes. In Kennedy, the verdict did not violate the requirement of a verdict by three-fourths of the jury because there is no logical inconsistency when the same nine jurors do not agree on the amounts of each type of damages.
Members and managers of a limited liability company are shielded from vicarious liability for the LLC's torts, but can be held personally liable if they either knew of the tortious acts or participated in them. That was the conclusion of the Oregon Supreme Court last week in Cortez v. Nacco Material Handling Group, Inc.
ORS 63.165(1) protects members and managers of an LLC from liability resulting "solely by reason of being or acting as a member or manager." The scope of that statutory immunity was at issue in Cortez. The court held that the immunity is comparable to that available to an officer or director of a corporation. According the to court, "members or managers who participate in or control the business of an LLC will not, as a result of those actions, be vicariously liable" for the LLC's torts. But a member or manager can be liable for its own negligent acts in managing the LLC, or for knowing of or participating in the LLC's torts.
Addressing an issue of first impression, the Oregon Court of Appeals today held that the inconvenient-forum doctrine, or forum non conveniens, is available as a basis to dismiss a lawsuit in state court. In Espinoza v. Evergreen Helicopters, Inc., the trial court dismissed a wrongful death action arising from a helicopter crash in Peru, applying the inconvenient-forum doctrine. On appeal, plaintiffs contended that Oregon courts lack discretion to decline to exercise jurisdiction.
Judge Rex Armstrong, writing for the court, surveyed Oregon case law and determined that courts have inherent power to decline jurisdiction, including based on the inconvenient-forum doctrine. To obtain dismissal on that basis, a defendant bears the burden of demonstrating that an alternative forum is available and adequate, and that considerations of convenience and justice so outweigh the plaintiff's choice of forum that the action should be dismissed. The court remanded the case to the trial court for application of the new test.
Business owners violated the Uniform Fraudulent Transfers Act (ORS 95.200 to 95.310) when they dissolved one business and transferred the assets and operations to a newly-formed entity, according to the Oregon Court of Appeals.
In Norris v. R&T Manufacturing, LLC, the court last week affirmed the trial court's conclusion that the reorganization was an improper effort to avoid a judgment against the original business. The court rejected what the defendant described as good-faith business reasons for forming a new LLC, and found that the new entity didn't pay reasonably equivalent value for the tangible and intangible assets.
California recently became the second state to pass a law acknowledging the problem of workplace bullying. The first state to do so was Tennessee.
Effective January 1, 2015, California’s existing law mandating sexual harassment training for supervisors must include training on the prevention of abusive conduct. For the purpose of the new California law, "abusive conduct" means
conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer's legitimate business interests. Abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person's work performance. A single act shall not constitute abusive conduct, unless especially severe and egregious.
Tennessee’s law, passed earlier this year, requires the Tennessee advisory commission on intergovernmental relations (TACIR) to create by March 15, 2015, a model policy for employers to prevent abusive conduct in the workplace. Employers who adopt the TACIR or an equivalent policy are immune from suit for any employee’s abusive conduct that results in negligent or intentional infliction of mental anguish.
Since 2003, 26 states have introduced some version of the Healthy Workplace Bill (HWB), the anti-bullying legislation being promoted by social psychologist Gary Namie and his wife, who was a victim of workplace bullying and, thereafter, suffered from depression. To date, no states have enacted the HWB. However, recognizing the serious harmful effects of bullying, many schools have already implemented anti-bullying policies. It may just be a matter of time before anti-bullying legislation extends to the workplace.