Displaying 5 category results for November 2010.x

Significant changes to FRCP 26 will protect communications between counsel and testifying expert witnesses

By Steve Kennedy
November 22, 2010

Proposed amendments to Rule 26 of the Federal Rules of Civil Procedure will have a profound impact on the way attorneys and expert witnesses work with each other to prepare for expert testimony at trial.  The rule changes, which will take effect on December 1, 2010 unless Congress acts to prevent implementation, are intended to remove some of the discovery risks that have prevented open and frank discussions between counsel and expert witnesses and to make collaboration with experts more effective and cost-efficient.

In its current form, Rule 26(a)(2)(B) allows discovery of all “data or other information considered by” the expert witness in forming his or her opinions.  Many courts interpret this language to require disclosure of all communications between counsel and testifying experts, including all draft reports prepared by the expert.  Predictably, this led many litigators to actively discourage testifying experts from preparing any draft reports or communicating with counsel in writing.  Moreover, this state of affairs created an incentive –- at least for those litigants who could afford it –- to hire an additional, non-testifying, consulting expert, whose documents and communications are generally protected from disclosure.

The proposed amendment to Rule 26(a)(2)(B) would no longer permit discovery of all data “or other information” considered by the expert; instead, the disclosure requirement extends to “the facts or data considered by the witness” in forming the opinions.  This change should allow attorneys and experts to communicate more openly, without the risk of exposing to discovery written materials that may be adverse to the client’s interests.
And under proposed Rules 26(b)(4)(B) and (C), respectively, work product protection is expressly extended to all drafts of expert reports in any form, and to communications between counsel and testifying experts who are required to submit reports under Rule 26(a)(2)(B).  There are, however, three rather common-sense exceptions to the new “attorney-expert” privilege.  The exceptions are:  (1) communications relating to the expert’s compensation; (2) identification of facts or data that the attorney provided to the expert and that the expert considered in forming the opinions to be expressed; and (3) identification of any assumptions that the attorney provided to the expert and that the expert relied upon in forming the opinions to be expressed.

The proposed amendments should allow counsel on both sides to communicate openly with their experts, and enable experts to take notes and prepare draft reports, without fear of wide open disclosure or the gamesmanship required to prevent disclosure.  For further background, see the excerpts from the Report of the Judicial Conference Committee on Rules of Practice and Procedure.

ISO and ESPP reporting deadline nears

By John Walch
November 21, 2010

We previously reported that for transactions in 2010 or later, the IRS requires employers to file information returns regarding their employees' exercise of Incentive Stock Options (ISOs) or purchases made under an Employee Stock Purchase Plan (ESPP).  The returns are filed using Form 3921 for ISOs and Form 3922 for ESPPs.  The general instructions include the filing deadlines and procedures, how to make corrections, information on distributing the employee statements, penalties, and other helpful information.  In addition to filing the returns with the IRS, companies are required to provide a copy of the return to employees (this requirement previously existed).


The deadlines to file Forms 3921 and 3922 with the IRS are February 28 for paper filers and March 31 for electronic filers.  The deadline for distributing the statements to employees is still January 31.  Even if employers file the returns with the IRS electronically, most will likely still distribute hardcopy statements to employees because the requirements to distribute the statements electronically are very difficult to satisfy. 

Electronic Filing

Employers are required to file Forms 3921 and 3922 electronically if they have at least 250 returns to file.  This is a per-form requirement, so if an employer has 251 Forms 3921 to file and only 249 Forms 3922, then it must file only the Forms 3921 electronically.  Likewise, if it has 249 of each to file, then it is not required to file either of the forms electronically.  However, employers may always file electronically on a voluntary basis since doing so extends the filing deadline.  If employers are eligible to file paper forms, they may complete the forms manually, as handwritten forms are acceptable (provided the writing is very neat and legible).  Additional instructions for electronic filing are available in IRS Publication 1220(a reprint of Rev. Proc. 2010-26).

Employers subject to mandatory electronic filing may eventually be able to request a waiver by filing Form 8508.  Unfortunately, the form does not yet include Forms 3921 and 3922.  The IRS may fix that in the near future.  Until then employers may want to use the assistance of an electronic filing vendor to help them file electronically.  The IRS posted a list of such providers in January of this year. 

Employers should continue planning for Health Care Reform

By John Walch
November 19, 2010
The Health Care Reform Acts adopted earlier this year remain in the news as several members of Congress have announced they intend to seek repeal some or all of the new laws.  However, even if the new Congress manages to pass such a repeal, it is uncertain whether there is enough support to overcome a likely Presidential veto. Employers and their health insurers should, therefore, move ahead with preparations to comply with the new laws' provisions, many of which become effective on January 1, 2011 for calendar year plans.  Ater Wynne's Health Care Reform Timeline lists some of the major provisions of the new laws and when they become effective.
Ater Wynne's December 9 Employment Law Seminar in Portland will include an overview of Health Care Reform provisions that become effective in 2011 and beyond.  Watch your e-mail for an invitation or see our website for details.

Oregon Supreme Court limits State's power to share in punitive damages verdict

By Lori Irish Bauman
November 12, 2010

The Oregon Supreme Court today curtailed Oregon's "split recovery" law, in a case in which Ater Wynne successfully represented the plaintiff

Since 1987, Oregon has had a "split recovery" statute that requires part of any punitive damage award to be paid to the State's crime victim compensation fund.  Currently, ORS 31.735 provides that the State is a "judgment creditor" as to 60 percent of a punitive damages "verdict."  The Oregon Supreme Court concluded that the State can't prevent the plaintiff and defendant from entering into a settlement that reduces or eliminates the State's share, if that settlement occurs after the verdict and before entry of a judgment.

In Patton v. Target Corp., the jury awarded compensatory and punitive damages to plaintiff in an employment discrimination case in federal court.  The plaintiff and defendant then entered into a settlement that did not include payment to the State, and at the parties' request the trial court entered a judgment of dismissal.  The State intervened, seeking to undo the settlement and dismissal.  The trial court refused the State's request, and the case was appealed to the Ninth Circuit, which certified the issue of state law to the Oregon Supreme Court.  The Supreme Court held that the State as a "judgment creditor" has no enforceable interest in a verdict and cannot veto a settlement that occurs before judgment.

Ater Wynne attorney and Northwest Litigation Blog editor Lori Irish Bauman handled the appeal for plaintiff.  See our earlier coverage of Oregon's split recovery statute here.

Ninth Circuit: Employee holding a web site for ransom violated Anti-Cybersquatting Act

By Dan Larsen
November 5, 2010

The Ninth Circuit ruled last week in DSPT International, Inc. v. Nahum that a defendant who lawfully owns and uses a domain name may violate the federal Anti-Cybersquatting Consumer Protection Act (ACCPA), 12 USC sec. 1125(d)(1)(A), by later holding the domain name for ransom.  

Congress intended the ACCPA to impose civil liability on "cyberpirates" who register a well known trademark and either offer to sell the domain name for an exorbitant sum to the trademark owner, or divert business from the trademark owner.   However, in DSPT International v. Nahum, the court found that the ACCPA is written so broadly that it applies beyond these common scenarios.  In DSPT, an employee in good faith registered his employer's web site to himself.  Years later, in a dispute over compensation, the employee took down the web site, refusing to restore it until he was paid.  The Ninth Circuit affirmed a jury verdict for the employer, and an award of damages of $152,000, under the ACCPA.

The ACCPA establishes civil liability for "cyberpiracy" where plaintiff proves: (1) defendant registered or used a domain name; (2) the domain name is identical or confusingly simiar to a protected mark owned by plaintiff; and (3) the defendant acted with a "bad faith intent to profit from that mark."