Business Valuation Reports

FEBRUARY 2010 VOL. 82 | NO. 2 JournalNEW YORK STATE BAR ASSOCIATION

The Importance of Proactive Also in this Issue Lawyering A Primer on the New York By Peter E. Bronstein False Claims Act and David A. Typermass Employment Waivers and Releases “Moot Points” 866-FUNDS- NOW

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February 2010

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BOARD OF EDITORS EDITOR-IN-CHIEF David C. Wilkes Tarrytown e-mail: [email protected] Mary Grace Conneely Monticello Philip H. Dixon Albany Elissa D. Hecker Irvington Jonathan Lippman New York City Eileen D. Millett New York City Gary A. Munneke White Plains Thomas E. Myers Syracuse John B. Nesbitt Lyons Gary D. Spivey Colorado Springs, Colorado Sharon L. Wick Buffalo MANAGING EDITOR Daniel J. McMahon Albany e-mail: [email protected] ASSOCIATE EDITOR Philip C. Weis Oceanside

PUBLISHER Patricia K. Bucklin Executive Director

NYSBA PRODUCTION STAFF Attorneys, judges and law students from 113 countries and all 50 states. ASSISTANT EDITOR Joan Fucillo 76,000 members, creating an incredible, prestigious global network that makes DESIGN a real difference for the practice of law and for the public good. Among the Lori Herzing Erin Corcoran many reasons I’m proud to be a NYSBA member. EDITORIAL OFFICES One Elk Street Claire P. Gutekunst Albany, NY 12207 (518) 463-3200 NYSBA member since 1984 FAX (518) 463-8844 www.nysba.org

ADVERTISING REPRESENTATIVE Network Media Partners Renew today for 2010. Bruce Tackett Executive Plaza 1, Suite 900 11350 McCormick Road www.nysba.org/renew2010 Hunt Valley, MD 21031 (410) 584-1960 e-mail: [email protected] Thank you for your EUGENE C. GERHART membership support. (1912 – 2007) Editor-in-Chief, 1961–1998 CONTENTS FEBRUARY 2010

BUSINESS VALUATION REPORTS – THE IMPORTANCE OF PROACTIVE LAWYERING by Peter E. Bronstein AND David A. Typermass 10 DEPARTMENTS 5 President’s Message 8 CLE Seminar Schedule 18 Burden of Proof by David Paul Horowitz 22 Protecting the Empire: A Practitioner’s 42 The Journal Board of Editors Primer on the New York False Claims Act by MICHAEL A. MORSE, BRYAN S. NEFT 44 Appellate Advocacy and PETER S. WOLFF by Matthew P. Side 47 Legal Research by William H. Manz 32 Navigating the Murky Waters of 50 Presentation Skills for Lawyers Employment Waivers and Releases by Elliott Wilcox by EVE I. KLEIN, JOANNA R. VARON 52 Attorney Professionalism Forum and KEITH GREENBERG 54 Language Tips by Gertrude Block 38 A “Moot Point” Is an Ongoing Concern 56 New Members Welcomed for Everyone 60 Letter to the Editor by JOSEPH F. C ASTIGLIONE 60 Classified Notices 61 Index to Advertisers 63 2009–2010 Officers 64 The Legal Writer by Gerald Lebovits

The Journal welcomes articles from members of the legal profession on subjects of interest to New York State lawyers. Views expressed in articles or letters published are the authors’ only and are not to be attributed to the Journal, its editors or the Association unless expressly so stated. Authors are responsible for the correctness of all citations and quotations. Contact the editor-in-chief or managing editor for submission guidelines. Material accepted by the Association may be published or made available through print, film, electronically and/or other media. Copyright © 2010 by the New York State Bar Association. The Journal ((ISSN 1529-3769 (print), ISSN 1934-2020 (online)), official publication of the New York State Bar Association, One Elk Street, Albany, NY 12207, is issued nine times each year, as follows: January, February, March/April, May, June, July/ August, September, October, November/December. Single copies $20. Periodical postage paid at Albany, NY and additional mailing offices. POSTMASTER: Send address changes per USPS edict to: One Elk Street, Albany, NY 12207.

NYSBA Journal | February 2010 | 3

PRESIDENT’S MESSAGE MICHAEL E. GETNICK

Help Wanted: IOLA in Crisis

“The legal profession owes it to itself that wrongs do not go without remedy because the injured has no advocate.” – Charles Evans Hughes, former Justice of the U.S. Supreme Court and Past President of the State Bar, 1917–1918

s I complete this President’s has forced the Legal Aid Society to turn One of the very highest priorities of Message, we are ushering in away eight of every nine clients who the New York State Bar Association is Aa new year knowing there is seek help. increasing the availability of counsel in more to be done. Although many of And the increased need comes at civil cases for those of limited means. us have gladly said good-bye to a a time when funding is decreasing. Over the past few months, President- grim 2009, not all is merry and bright The state is dealing with a budget cri- elect Stephen Younger and I, working as we face 2010. People are strug- sis, and state appropriations for civil closely with our Steering Committee gling. In New York, unemployment legal services, which were already on Legislative Priorities, wrote letters still hovers around 9%, just below inadequate, suffered an additional to and met with state and federal leg- the national average of 10.2%. One in 12.5% reduction late last year when islators, and testified before the state eight Americans and nearly one in four the Legislature passed the Governor’s Senate on IOLA and the future of civil children are food stamp recipients, Deficit Reduction Plan. The Interest legal services. We continued to advo- including 10% of New Yorkers. And on Lawyer Account Fund, or IOLA, is cate for a permanent Access to Justice 3.9 million homes are in foreclosure a funding source for many civil legal Fund within the state budget that is nationwide, several thousand of them services providers, but it too has fallen administered by a state-level agency. belonging to New York homeowners. victim to the recession. The IOLA fund We applauded the Judiciary for includ- The market may be rebounding, but relies on the interest rate provided ing within the Unified Court System the residual effect of the recession is by banks holding IOLA accounts, and budget an emergency appropriation of being felt in every town and city across those interest rates have dropped from $15 million to help offset the declining our nation. Experts predict that it could nearly 2.25% in 2007 to .31% at the IOLA revenue, and urged state legisla- take five years to recover the more than end of 2009. As a result, the fund has tors to approve that appropriation. seven million lost jobs. Unemployment only $8 million available for its more What can you do to help? In the and homelessness have increased the than 70 grantees this year, as opposed January/February 2010 State Bar News, number of people without access to to $32 million last year. And while we Past President Kate Madigan, now a basic needs, such as food, shelter and were pleased that Congress added $30 trustee of the IOLA fund, asked mem- medical assistance, and legal services million in civil legal services funding bers to take a look at their firm’s IOLA providers cannot meet the needs of through the Legal Services Corporation account, review the interest rate and those seeking legal help. Since the for 2010 and removed the prohibition determine whether the bank charg- recession began, the Legal Aid Society of providers’ ability to accept attor- es any service fees. She noted that reports a 16% rise in the number of ney fees, the restriction on the use of some New York banks currently pay clients seeking domestic violence help, non-federal funding still exists and as much as 1% on IOLA accounts and a 20% increase in housing cases, a hamstrings the ability of legal services 30% increase in employment-related organizations to make the most effi- cases, and a 40% increase in health- cient and effective use of the funding Michael E. Getnick can be reached at related cases. The increased demand they do receive. [email protected].

NYSBA Journal | February 2010 | 5 PRESIDENT’S MESSAGE do not charge service fees either to the Kate noted, if only half of the $3 billion nate and in desperate need of legal account holder or to the IOLA fund in New York’s IOLA accounts were help. As a former legal services attor- upon transfer of the funds. If your deposited in banks paying 1% inter- ney and past president of the Legal bank does not offer competitive rates, est, IOLA would earn an additional Aid Society of Mid-New York, I truly please urge your bank to contact IOLA $15 million. Visit the IOLA Web site at believe in the value and the necessity to renegotiate the interest rate and ser- www.iola.org and click on “Banks” to of adequately funding programs that vice fee on your IOLA account. Point learn which banks provide the highest provide civil legal services to indi- out that this would encourage more yields on IOLA accounts. gent New Yorkers. At the State Bar, firms to do business with the bank as This is a relatively simple step that we pledge to continue to do our part well as have a direct positive impact on you can take in this new year to do to advance the cause of equal access our commitment to access to justice. As something good for those less fortu- to justice. Please join us. ■

There are millions of reasons to do Pro Bono. (Here are some.)

Each year in communities across New York State, indigent people face literally millions of civil legal matters without assistance. Women seek protection from an abusive spouse. Children are denied public benefits. Families lose their homes. All without benefit of legal counsel. They need your help. If every attorney volunteered at least 20 hours a year and made a financial contribution to a legal aid or pro bono program, we could make a difference. Please give your time and share your talent.

Call the New York State Bar Association today at 518-487-5640 or go to www.nysba.org/probono to learn about pro bono opportunities.

6 | February 2010 | NYSBA Journal

NYSBACLE Tentative Schedule of Spring Programs (Subject to Change)

The New York State Bar Association Has Been Certified by the New York State Continuing Legal Education Board as an Accredited Provider of Continuing Legal Education in the State of New York.

Persuasive Writing for Lawyers ✝The Nuts and Bolts of Arbitrating (half-day program) Individual Employment Claims (Webcast) February 9 New York City (6:00–9:00 pm) April 16 Albany February 18 Westchester (9:30 am–12:30 pm) Practicing Matrimonial and Family February 19 Albany (9:30 am–12:30 pm) Law in Chaotic Times – Part Two Gain the Edge – Negotiating Strategy (9:00 am – 1:00 pm) for Lawyers April 16 Long Island February 24 New York City April 23 Westchester February 25 Long Island May 14 New York City February 26 Albany May 21 Rochester February 27 Syracuse June 18 Albany Best Practices of Legal Management ✝14th Annual New York State and February 25 New York City City Tax Institute Auto Litigation April 22 New York City March 5 New York City Practical Skills: Mortgage Foreclosures & Workouts March 12 Buffalo; Long Island April 22 Albany; New York City; Rochester March 19 Albany; Syracuse April 27 Buffalo; Long Island; Syracuse ✝Sixth Annual International Estate April 29 Westchester Planning Institute Women on the Move (two-day program) April 29 Albany March 18–19 New York City ✝Ethics & Professionalism (video replay) Bridging the Gap Spring 2010 April 30 Canton (two-day program) Immigration Law March 24–25 New York City (two-day program) Depositions May 4–5 New York City April 7 New York City Commercial Real Estate Leases April 9 Albany May 5 New York City April 23 Syracuse April 30 Buffalo; Long Island Practical Skills: Basic Torts May 6 Albany; Buffalo; Long Island; Health Law Fundamentals Westchester April 9 New York City May 7 New York City; Syracuse April 16 Albany DWI on Trial Ethics and Civility (one-and-a-half-day program) (9:00 am – 1:00 pm) May 6–7 New York City April 9 Rochester April 16 Buffalo; New York City Long Term Care April 23 Albany; Long Island May 7 Buffalo May 14 New York City Practical Skills: Family Court Practice May 21 Albany April 13 Albany, New York City; Rochester; Westchester 2010 Insurance Coverage Update April 14 Buffalo; Long Island; Syracuse June 18 Albany; Long Island; Syracuse June 25 Buffalo; New York City

To register or for more information call toll free 1-800-582-2452 In Albany and surrounding areas dial (518) 463-3724 • Or fax your request to (518) 487-5618 www.nysba.org/CLE (Note: As a NYSBA member, you’ll receive a substantial discount)

† Does not qualify as a basic level course and, therefore, cannot be used by newly admitted attorneys for New York MCLE credit. NYSBA’s CLE Online ONLINE | iPod | MP3 PLAYER Bringing CLE to you... anywhere, anytime.

All online programs available in MP3 format to download to your iPod or other MP3 player

NYSBA is proud to present the most flexible, “on demand” CLE solutions you could ask for. With CLE Online, you can now get the valuable professional learning you’re after ...at your convenience.

> Get the best NY-specific content from the state’s #1 CLE provider. > Take “Cyber Portable” courses from your laptop, at home or at work, via the Internet. > Download CLE Online programs to your iPod or MP3 player. > Everything you need to obtain full MCLE credit is included online!

Come click for CLE credit at: www.nysbaCLEonline.com

Features Electronic Notetaking allows you to take notes while listening to your course, cut-and-paste from the texts and access notes later – (on any computer with Internet access). Audio Seminars complement the onscreen course texts. You control the pace, and you can “bookmark” the audio at any point. Bookmarking lets you stop your course at any point, then pick up right where you left off – days, even weeks later. MCLE Credit can be obtained easily once you’ve completed the course – the form is part of the program! Just fill it out and mail it in for your MCLE certificate. visit our Web site www.nysbacleonline.com For more information please call 800.582.2452

PETER E. BRONSTEIN ([email protected]) is a managing member in Bronstein Van Veen LLC and a past chair of the Family Law Section of the New York State Bar Association. He is a graduate of Harvard College and the University of Virginia Law School.

DAVID A. TYPERMASS ([email protected]) is the senior associate at Bronstein Van Veen LLC and is also a CFA charterholder.

Business Valuation Reports – The Importance of Proactive Lawyering

By Peter E. Bronstein and David A. Typermass

awyers see business valuation reports in many cate for the proper methodology before the appraisal contexts and situations. Frequently prepared in is finalized. If the process is allowed to take its natural Ldivorce cases, these reports can be used in estate, course, an appraiser will be appointed and after an inves- tax and corporate cases as well. In a divorce, for example, tigation that might take place directly with the principal, such an appraisal can be the linchpin for substantial capi- and without any input from counsel or counsel’s expert, tal awards between spouses. Yet, attorneys and judges a report will be issued. If a preliminary report is submit- often don’t pay enough attention to the appraisal process ted and counsel does not understand that there are issues and how small changes in the assumptions and proce- with the draft report that cut against the client’s position, dures can have a major impact on the bottom line. and counsel does not pose the right questions or offer the Appraisers make judgments based upon parameters correct counter-arguments to the court’s expert, the final that they have chosen, often subjectively. As a result, an report will box both the client and the appraiser into fixed appraiser can come up with substantially different valua- positions. tion results depending on the assumptions he or she uses. The first step, then, is for the attorney to get to know Understanding the key methodologies, concepts, and the business at issue and to make sure the client complete- terms that underlie the typical business valuation report ly understands the valuation process so that, together, the will help the practitioner understand the dangers implicit attorney and client can provide the appraiser with all the in failing to carefully assess and challenge, if necessary, information necessary to produce a report that accurately the assumptions underlying each report. reflects the positions most favorable to the client.

The Neutral Appraiser The Importance of a Preliminary or Draft Report Many judges will accept as presumptively correct the Unfortunately, all too often, once the final report issues the findings made by a “neutral” appraiser who has been appraiser feels compelled to “defend” the decision to use appointed by the court to produce an unbiased valuation a certain process and convincing a court to ignore the neu- report. Therefore it is crucial for the attorney to under- tral’s conclusion is very difficult. When possible, it is advis- stand the process and to proactively find ways to advo- able to have the court and the neutral appraiser agree to

NYSBA Journal | February 2010 | 11 addressed. Failing to address issues early on in the process will inevitably lead to a longer and more complex cross-examination at trial and ultimately to the possibility of greater confusion for a court not schooled in financial analysis. A better course might be for appraisers to sub- provide mit preliminary reports to counsel well in advance of trial both sides so that any errors in fact or judgment can be corrected with a prelimi- and all issues can be openly debated before a final report nary or “draft” is made. appraisal and to solicit comments from each side Avoid the “Neutral Trap” about the findings contained in that Judges are understandably persuaded by court-appoint- draft report. From the neutral’s point of view such a ed neutrals, for two reasons. First, the neutral is doing the debate over preliminary findings can save the expert judge a favor by accepting the assignment – and the court from embarrassment later when he or she could be con- is grateful. Perhaps the court has imposed time deadlines, fronted with a fact or an authority that had been ignored which require the neutral to set aside other work; or or overlooked. perhaps the neutral has been called in because the judge The draft report provides insight into the proposed believes that the parties – or their lawyers – are difficult analytical process. For example, let’s say the preliminary or abusive. Being appreciative of the expert’s willingness report reveals that the appraiser has used a discount rate to accept the assignment, the judge might not particu- that assumes a low risk of disruption to a future income larly want to see the expert battered in cross-examination. stream. Having the opportunity to convince the appraiser Second, unlike the partisan experts appointed by the par- that the discount rate should be substantially higher – to ties, the court’s expert is supposedly unbiased; therefore take into account risks that he or she might not have the court might be inclined to give more weight to the understood or considered in the preliminary analysis – expert’s opinion than to that of a “hired gun.” could greatly influence the bottom line. Yet the appraisal process is not an exact science, and The point is, every appraisal has a methodology or independent or court-appointed appraisers can misun- approach that leads to a final valuation conclusion. Even derstand the relevant facts. Helping the expert correct a small alteration can lead to a major change in the con- the mistakes in a draft report will ultimately save time clusion and a combination of such changes can radically and money, perhaps by shortening the trial or leading to alter the result. The attorney must proactively seek to a settlement in advance of a trial. The need for partisan understand that approach and its underlying concepts experts might also be obviated where the independent and, where possible, make sure that the expert has the appraiser has a chance to address all the relevant issues in advantage of the facts, circumstances, and analysis he a final valuation report. If appraisers’ preliminary reports or she needs. The preliminary or draft report affords the are vetted by the parties before they became final reports, advocate the opportunity to suggest alternative data- the courts would receive better-reasoned and more error- bases, facts or methodologies and perhaps the chance free reports. to open the eyes of an appraiser to flaws or weaknesses Equity would clearly be served if courts encouraged a in his or her analysis. When confronted with persuasive more open and free-flowing discussion between counsel arguments rebutting some of the assumptions and con- and a neutral appraiser ahead of trial. To avoid claims of clusions of a draft, appraisers are more apt to accept sug- undue influence, the courts could simply require that any gestions than after issuing a final report that they might attorney wishing to communicate with an independent feel compelled to defend. If the advocate can convince appraiser about the preliminary report must include his the expert of the existence of an indefensible position in or her adversary in any meetings, telephone calls or cor- the draft, the expert still has the time to change the final respondence. report and can thereby avoid a rough cross-examination on the witness stand and possible damage to the expert’s Methodology Concerns valuable reputation. The first question any evaluator must consider is what While judges may be wary of an “independent” busi- exactly is being valued. That may sound obvious, but it ness appraiser falling prey to the undue influence of is particularly relevant in matrimonial matters where an an aggressive advocate and as a result may be tempted intangible “asset” is more an intellectual construct of the to forbid or limit any communications between attor- courts and the evaluators than a traditionally accepted neys and a neutral appraiser, such restrictions will only “thing of value.” Intangible assets such as enhanced weaken the expert opinion, in that it will not address earning capacity, the increase in value of separate prop- all the alternative approaches that counsel might want erty, the value of a non-marketable license or career or

12 | February 2010 | NYSBA Journal partnership, have particular and precise elements that are approach. Within each of these approaches there are vari- important to understand and define. The appraiser needs ous techniques or methodologies an appraiser can use to to analyze and understand the nature of the interest being calculate value. It is up to the attorney to understand how valued. The definition of the interest being valued should these methodologies work and to be able to evaluate their be clearly communicated to both sides in the report since effectiveness in establishing a fair and reasonable valua- this definition frames all of the subsequent choices made tion of the subject business. by the appraiser, starting with which valuation method- Most appraisers will use two or more valuation meth- ologies will be used. odologies in determining a final value for a business. Once the interest being valued is clearly understood, Sometimes the appraiser considers one particular method one of the first questions to ask is whether the appraiser to be the most reliable but uses additional methods as used an appropriate standard of value to value that a reality check against the favored one. If it is not read- interest. A standard of value is a definition of the kind ily apparent, the attorney should question the appraiser of value the appraiser is seeking to obtain. Fishman, about the weight given to each methodology used. The Pratt, and Morrison write in Standards of Value that there attorney should carefully examine any language in the are two “premises of value” – “value in exchange” and report that credits or discredits the reliability of a particu- “value to the holder” – which underlie every standard lar methodology, especially if a discredited methodology of value.1 Value in exchange is defined as “the value of still appears to have been used in determining the final the business or business interest changing hands, in a result.

The appraisal process is not an exact science, and independent or court-appointed appraisers can misunderstand the relevant facts. real or hypothetical sale,” whereas value to the holder If the appraiser is using a value in exchange standard represents “the value of a property that is not being sold of value, such as fair market value, it is often appropriate but instead is being maintained in its present form by its to apply certain discounts, such as a lack of marketability present owner.”2 The fair market value3 standard, per- discount, in the valuation analysis. Conversely, a value haps the most commonly used standard of value, falls to the holder analysis might not include such discounts under the value in exchange premise and should be used because the holder is, in theory, retaining the business to value businesses that have a likelihood of being sold. interest. Such discounts and premiums are highly subjec- The investment value standard, another commonly used tive and can have a major impact on the final valuation, standard of value, which represents the value of an asset so their presence or absence must be seriously evaluated to its owner, falls under the value to the holder premise by the advocate. For example, if an attorney can persuade of value and is used for companies that will remain in the an appraiser that a 40% discount rate should have been owner’s hands after the case is over. applied to the client’s business interest the attorney can, The standard of value used by an appraiser will with one blow, substantially change the effect of the depend on the unique facts of the business being ana- appraisal and consequently the cost of the divorce or, in a lyzed and the purpose of the appraisal. For example, it tax case, the taxes payable. is appropriate to value an interest in a publicly traded Sometimes an appraiser will factor in a discount or company using the fair market value standard but that premium within his or her cost of capital rate, making standard may not be suitable to value a non-marketable it difficult for the attorney to segregate the appraiser’s interest in a private professional practice such as a law independent assumptions. The attorney must understand firm or a medical practice. A better standard of value for the reasoning underlying any such discounts used by the valuing non-marketable professional practices might be appraiser and, when necessary, vigorously question, chal- the investment value standard of value. lenge or defend their use. Once the attorney understands why a particular standard of value was chosen, the next question is, Did Asset-Based Valuation Methods the appraiser use an appropriate valuation approach An asset-based valuation method focuses on determining and underlying methodology? There are three prima- the value of a business by valuing its underlying assets. ry valuation approaches: (1) the asset-based approach; Asset-based methodologies are useful for businesses that (2) the income-based approach; and (3) the market-based have a significant amount of their value tied up in their

NYSBA Journal | February 2010 | 13 tangible assets and are highly appropriate for businesses with the capitalized income method (discussed in the in which the underlying assets represent the true value of following section), is sometimes used to value companies the company, such as for a real estate holding company. with significant intangible assets or goodwill. Attorneys The most commonly used asset-based methodology is should be aware that the excess earnings method, while the net asset method, also known as the asset accumula- still accepted by the courts, is currently disfavored by tion method. Under this method an appraiser adjusts the the Internal Revenue Service, which created it, and by cost basis values of a company’s assets and liabilities, many appraisers. While the current issues being debated which are found on its balance sheet, to the appropri- among appraisers are beyond the scope of this article, it ate value based on the standard of value used by the behooves the attorney to understand not only how cer- appraiser, such as, for example, fair market value or tain methodologies work but also why they may or may liquidation value.4 not be in vogue within the appraisal community. Once the appraiser determines the appropriate values of the assets and liabilities on the Income-Based Valuation Methods balance sheet, he or she will deduct the total When a company has a history of positive earnings, and liabilities from the total assets to arrive at a its future expected earnings represent a substantial part net asset value for the company. Fair mar- of the company’s estimated value, an income-based valu- ket values are appropriate if the company ation approach is usually a suitable methodology. The is being valued as a going concern. If, two primary types of income-based methodologies are a however, the company is to be liq- discounted future income method and a capitalization of uidated and the assets sold off income method.5 The discounted future income method separately, then the standard should be used when a company’s future income is of value would be a liquidation expected to differ significantly from current income; the value. In such a case, the assets and capitalization of income method should be used when liabilities would be adjusted to liquida- a company’s income in the future is expected to closely tion values. Liquidation values can be either orderly liq- resemble the past. uidation values or distressed liquidation values, depending on the specific circumstances of the company being Discounted Future Income Method liquidated. When using the discounted future income method the The net asset method is appropriate when the project- appraiser forecasts, or uses management’s forecast of, ed income for the company is not a good indicator of the several years of projected future earnings, or cash flows, company’s true value. One of the shortcomings of the net and then discounts these projections back to present value asset method is the difficulty in valuing intangible assets, using an appropriate discount rate. The advocate should such as goodwill, that may be on the balance sheet. The make sure that the appraiser’s forecast of projected future net asset method also does not take into consideration earnings uses a realistic terminal year growth rate. Make intangible assets that were never recorded on the bal- sure that the company projections go far enough into ance sheet. A hybrid valuation methodology, the excess the future to a point where the company can realistically earnings method, which combines the net asset method be forecasted to have reached a steady and sustainable long-term growth rate. Forecasts that show the subject company growing at an above-average growth rate into perpetuity should be a red flag for the advocate. The discount rate is, essentially, the appraiser’s best estimate for the rate of return an investor in the subject company would require, given the risk associated with his or her investment. The attorney should pay special attention to the discount rate used by the appraiser because the discount rate will be a big driver of the business’s overall valuation. The higher the discount rate the lower the net present value of the cash flow will be. All else being equal, a more risky company with less predictable future cash flows will have a higher discount rate and a lower valuation than a company with more predictable cash flows. An appraiser determines a discount rate by combining a risk-free rate, such as the return for U.S. treasury bonds, with one or more risk premium estimates. Discount

14 | February 2010 | NYSBA Journal Keys to Effective rates are highly subjective and can vary widely depend- Valuation Advocacy ing upon the underlying assumptions employed by the appraiser. • Demand a draft or preliminary report Most business appraisals of closely held companies • Make sure the interest being valued is accu- use some variation of the build-up method to arrive at rately defined a discount rate. The build-up method literally “builds • Understand the standard of value – value up” a discount rate by starting with the risk-free rate and to whom? then adding on risk premiums such as the equity risk premium, the small company risk premium, an industry risk • Analyze the valuation approaches used premium and a company-specific risk premium. Equity and understand why other approaches risk, small company and industry risk premiums can be were not used derived using public market data while the company- • Understand how present value discount specific risk premium is based solely on the professional rates were calculated judgment of the appraiser. It is the most subjective of the • Question the appraiser’s basis for the selection risk premiums. of risk rates and premiums The advocate should always question the appraiser’s basis for his or her selection of risk rates and risk premi- • Always respond to any draft or preliminary ums. If an appraiser fails to provide the reports before they are finalized attorneys with any details as to how he or • Use your analysis to advocate for a more she arrived at a particular discount rate it favorable valuation appraisal may be a sign that the appraiser may not be able to justify the risk premium • Persuade the appraiser that adopting your assumptions. Certainly it is incumbent reasoning in a final report will be easier to upon the advocate who is most harmed defend at trial by the chosen discount rate to challenge the appraiser’s underlying assumptions and, if those assumptions are not clear in a pre- Normalized Income liminary draft, to demand a detailed explanation Estimate in the final report. No matter what valuation method is used, an Capitalization of Income Method appraiser’s determination of An appraiser using the capitalization of income method normalized income should be a rea- will take a base year estimate of the company’s normal- sonable estimate of what a company’s ized income and then multiply that single income esti- sustainable level of income will be in the future. This mate by a capitalization rate to arrive at a valuation. A analysis should involve a careful examination of a com- capitalization rate is essentially the discount rate appro- pany’s historical income while taking into consideration priate for that company minus the company’s estimated estimates for growth and margins in the overall industry. long-term growth rate. In some cases the most recent years may be the best By using a single estimate in the capitalization of proxy for future income but in other cases the appraiser income method, the appraiser is assuming a constant may want to take a weighted average of a few years of income stream which will grow at the same rate into per- historical income. The attorney should make sure that petuity. This reliance on a single income estimate places the appraiser’s assumptions regarding past income are a higher premium on accuracy and is a reason why this reasonable in light of future expectations. For example, method should be used only for companies whose future if future income is expected to be more like that of the income is highly predictable and not expected to differ recent past, then using an equally weighted average of from the immediate past. the income from the previous five years may be inap- Built into the capitalization rate is the appraiser’s propriate. The appraiser should also eliminate from estimate for any long-term growth in the business. The historical income any non-recurring income, expenses practitioner should make sure that the long-term constant or one-time events, and smooth out recurring income or growth rate used in the capitalization method is reason- expense items where necessary, thereby “normalizing” able. Most appraisers tend to use long-term growth rates the income. between 0% and 3%; anything higher than 3% should be The attorney should be on the lookout for any ques- questioned by the attorney as being overly optimistic and tionable choices the appraiser made in his or her normal- unsustainable. ized income estimate since even small adjustments made to historical income will be magnified when growth and

NYSBA Journal | February 2010 | 15 capitalization rate assumptions are applied to that esti- size relative to the comparable group. These types of mate. decisions are highly subjective and therefore must be carefully scrutinized by the advocate. Market-Based Valuation Methods The closer the subject company is to the group, in Market-based valuation methods can be very persuasive terms of key financial ratios and other relevant metrics, because they are relatively easy to understand and rely the fewer adjustments will have to be made and the less on actual market transactions. An appraiser using such subjective the valuation will be. The advocate must make a method will apply one or more valuation multiples, sure that the appraiser properly considers all the relevant derived from either public or private market transactions, and unique characteristics of the subject company. If the to the subject company to arrive at a valuation for that appraiser has to make large adjustments to the average or company. median market multiple it is a good indication that either The most important criterion in a market-based valu- the multiple is not very useful or the group is too differ- ation analysis is the extent to which the subject company ent from the subject company on that particular financial can reasonably be compared to other public or private metric. companies for which transaction data exists. The more Market-based methods should always be questioned distinct a subject company is from its comparables the if they produce a broad range of valuations depending less reliable a market-based methodology on the different market multiples being applied. For will be. Sometimes an apprais- example, if an appraiser finds that a price-to-sales mul- er will find enough comparable tiple produces a vastly different valuation than a price-to- companies in the same industry cash multiple, then it would appear that a market-based as the subject company but often valuation needs more fine tuning because the multiples the analysis will also use compara- are not able to adequately capture all of the subject com- ble companies from a similar industry. pany’s unique qualities. Good comparisons can be hard to find for small, privately held companies that may have unique Conclusion characteristics. One of the most commonly used market- Business valuation is often described as part art and part based methods is the guideline company method. science because many of the techniques used by business appraisers require the use of subjective assumptions. Guideline Company Method Understanding when those subjective assumptions are For a business that has good public market comparisons being used and being able to evaluate their reasonable- the guideline company method may be quite useful. An ness is essential to a solid understanding of the business appraiser using this method should provide an exhaus- valuation process. Fortunately for those in the legal pro- tive analysis of how the subject company compares to the fession the underlying math used in most business valu- guideline companies to which it is being compared. The ations is not complex, and a solid understanding of the appraiser should examine and compare all the relevant process can be attained with a modest amount of effort. financial metrics of the group of companies to determine The reward for that effort is the ability to question, and which are the most relevant. Once the most relevant finan- when necessary challenge, the choices made by the busi- cial metrics are determined, these metrics are applied to ness appraiser. ■ the publicly traded prices for the guideline companies to determine a series of relevant market multiples – for 1. Jay E. Fishman, Shannon P. Pratt & William J. Morrison, Standards of example, price-to-sales. An appraiser will typically take Value, 20–21 (2007). an average or median market multiple and apply that 2. Id. at p. 21. multiple against the relevant financial metric of the sub- 3. Fair market value is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a ject company to arrive at a value for that company. willing seller, with neither being required to act, and both having reasonable Sometimes it is not appropriate simply to use the knowledge of the relevant facts. IRS Publication 561, Determining the Value of average or a median market multiple. Multiples might Donated Property, p. 2 (Rev. Apr. 2007). need to be adjusted downward or upward before they are 4. Assets and liabilities are typically, but not always, entered on financial statements at their purchase/acquisition costs under the “cost-based” method applied to the subject company depending on how com- of accounting. An asset-based approach is therefore frequently referred to as a parable the subject company is to the group on the metric “cost-based” approach. being considered. For example, the subject company 5. An appraiser will use either earnings (net income from the income state- may have only $10 million in sales whereas the guideline ment) or cash flows (from the cash flow statement) as the preferred measure of economic income. While an appraiser’s use of either earnings or cash flows group averages $50 million in sales and has an average may be appropriate in certain cases, the practitioner should be aware that cash price to sales ratio of three times. It might be more rea- flows tend to be more reliable and less subject to manipulation than earnings sonable to apply a lower multiple to the subject company from an income statement. than a three times multiple given its significantly smaller

16 | February 2010 | NYSBA Journal NYSBA Journal | February 2010 | 17 BURDEN OF PROOF BY DAVID PAUL HOROWITZ

DAVID PAUL HOROWITZ ([email protected] or [email protected]) practices as a plaintiff’s personal injury lawyer in New York and is the author of New York Civil Disclosure (LexisNexis), the 2008 Supplement to Fisch on New York Evidence (Lond Publications), and the Syracuse Law Review annual surveys on Disclosure and Evidence. Mr. Horowitz teaches New York Practice, Evidence, and Electronic Evidence & Discovery at Brooklyn, New York and St. John’s Law Schools. A member of the Office of Court Administration’s CPLR Advisory Committee, he is a frequent lecturer and writer on these subjects.

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ummary judgment originated resulting in denial of the motion under movant, may be permitted to dem- in England in 1855 and was Brill,6 failing to annex as exhibits the onstrate acceptable excuse for his adopted in New York as Civil pleadings,7 and failing to furnish prop- failure to meet the strict require- S 8 ment of tender in admissible form. Practice Rule 113 in the Civil Practice er proof. We have repeatedly held that one Act (CPA) in 1921.1 Originally quite opposing a motion for summary limited in scope, its application was Proof Required on judgment must produce eviden- expanded in 1932.2 In the relatively Summary Judgment tiary proof in admissible form suf- brief period between its enactment Deposition transcripts are often sub- ficient to require a trial of material and amendment, mitted as proof in support of, or in questions of fact on which he rests both bench and bar came to look opposition to, motions for summary his claim or must demonstrate upon the summary remedy as an judgment. Proof submitted in support acceptable excuse for his failure to integral part of the law. While the of a motion for summary judgment meet the requirement of tender in original enactment was fought by must be in admissible form, as the admissible form; mere conclusions, many who saw in it an encroach- most frequently cited case in New York expressions of hope or unsubstan- ment upon the ancient right of trial civil practice, Zuckerman v. City of New tiated allegations or assertions are by jury, the amendment encoun- York,9 makes clear: insufficient.11 tered practically no opposition.3 To obtain summary judgment it is The CPLR provided for summary necessary that the movant estab- While affidavits are the type of judgment from its inception and a lish his cause of action or defense proof generally contemplated on sum- number of modifications have been “sufficiently to warrant the court mary judgment, other proof may be made over the years, the most recent in as a matter of law in directing judg- utilized: 1997 when CPLR 3212(a) was amendment” in his favor, and he must do The Court of Appeals discussed ed to set a window post-note of issue so by tender of evidentiary proof in the evidence necessary to grant or beyond which summary judgment admissible form.10 defeat a motion for summary judg- motions can only be made “with leave ment pursuant to CPLR 3212(b) in of court on good cause shown.”4 The party opposing the motion may Friends of Animals, Inc. v. Associated For the court considering a motion be permitted some latitude to submit, Fur Manufacturers, Inc. In order to for summary judgment, with explanation, proof that is not in obtain summary judgment, a party must present evidentiary proof in [i]ssue finding, as opposed to admissible form: admissible form sufficient to war- issue determination, is the key On the other hand, to defeat a rant the court to direct judgment as motion for summary judgment to summary judgment, and the a matter of law. The same type of the opposing party must “show court should refrain from resolving proof must be presented to defeat issues of credibility. Furthermore, facts sufficient to require a trial the motion, although reasons may the papers should be scrutinized of any issue of fact.” Normally exist why the opponent cannot carefully in the light most favor- if the opponent is to succeed in present such proof. Affidavits are able to the party opposing the defeating a summary judgment important to establish what the motion.5 motion he, too, must make his facts are and the person who signs showing by producing evidentiary an affidavit but has no knowledge Today, summary judgment is fre- proof in admissible form. The rule of the facts is not advancing the quently sought, and not infrequently with respect to defeating a motion case. Similarly, while other evi- granted. Mistakes in summary judg- for summary judgment, however, dence may be submitted on the ment practice run the gamut, from is more flexible, for the oppos- motion, it must be in an appropri- waiting too long to make the motion, ing party, as contrasted with the ate form or it cannot be considered

18 | February 2010 | NYSBA Journal as evidence. Thus, in Borchardt v. signed.”17 The rule further provides As the Second Department recently New York Life Ins. Co., a medi- that “[n]o changes to the transcript explained: cal record that was not certified may be made by the witness more than was insufficient to grant summary The Supreme Court properly sixty days after submission to the wit- 12 denied the defendants’ motions for judgment. 18 ness for examination.” summary judgment since they failed What happens when the proponent to submit sufficient evidence in The Collision of Summary of summary judgment fails to supply admissible form to establish their Judgment and CPLR 3116(a) required proof? entitlement to judgment as a mat- The party who moves for sum- What happens when an unexecuted ter of law. The defendants failed mary judgment must make a deposition transcript is submitted in to show that the unsigned deposi- prima facie showing of entitlement support of a motion for summary judg- tion transcripts of various witnesses to judgment as a matter of law. ment without proof that the deposi- they submitted in support of their Failure to make the requisite show- tion transcript had been forwarded to motions had previously been for- ing requires denial of the motion, the deponent, more than 60 days had warded to the relevant witnesses regardless of the sufficiency of the elapsed, and the deposition transcript for their review pursuant to CPLR opposing papers.13 had not been returned, thus permitting 3116(a). Hence, contrary to the its use as if signed? defendants’ contention, they were The Court of Appeals has repeated Simply put, it does not consti- not admissible.20 this requirement time and time again: tute admissible evidence in support The proponent of a summary judg- of a motion for summary judgment A worthy overview of this impor- ment motion must make a prima and should not be considered by the tant subject is found in Justice Braun’s facie showing of entitlement to court.19 decision in Palumbo v. Innovative judgment as a matter of law, tender- ing sufficient evidence to eliminate any material issues of fact from the case. Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers.14

CPLR 3116(a) CPLR 3116(a) provides that a deposition transcript must be furnished to the witness “for examination and shall be read to or by him or her, and any changes in form or substance which the witness desires to make shall be entered at the end of the deposition with a statement of the reasons given by the witness for making them.”15 This permits the witness to correct error in the transcript, whether as a result of faulty transcription or incor- rect answer, but requires that the reason(s) for the change be set forth. The witness must then sign the transcript “before any officer authorized to administer an oath,” thus rendering the transcript, as well as any changes and the reasons for the changes, admissible to the extent permitted by law.16 A witness wishing to make changes must both sign and return the transcript within 60 days, or the rule provides “it may be used as fully as though

NYSBA Journal | February 2010 | 19 Communications Concepts,21 cited by be used by the opposing party as admissible form, it cannot provide the the Second Department in Pina. Pina’s an admission in support of a sum- necessary foundation for the admis- holding was re-affirmed by the Second mary judgment motion.24 sion of a record. Department last year in Martinez: Where a party fails to demonstrate Records and Summary Judgment The defendants failed to show that prima facie entitlement to summary the unsigned deposition transcripts Where affidavits and records are judgment, whether as a result of the of the various witnesses, submitted used in support of a summary judg- failure to submit proof in admissi- in support of the defendant Lee’s ment motion, they must be in admis- ble form or some other defect, the motion and relied upon by Liberty sible form. As the First Department, motion must be denied outright within its cross motion, previously were in an opinion affirmed by the Court of out regard to the sufficiency to the 27 forwarded to the relevant witness- Appeals, stated: opposition papers. However, often es for their review pursuant to Special Term correctly observed a party opposing summary judgment CPLR 3116(a). The transcripts did that the rule in respect to summary will be reluctant to rest its opposition not constitute admissible evidence. judgment is that “to obtain sum- solely on the movant’s failure to sup- The translated affidavit that lacked mary judgment it is necessary that ply the necessary prima facie proof in the translator’s attestation also did the movant establish his cause of admissible form and will interpose full not constitute admissible evidence. action or defense ‘sufficiently to opposition on the merits. Accordingly, the defendants failed warrant the court as a matter of Conclusion to establish their entitlement to law in directing judgment’ in his summary judgment.22 favor, and he must do so by tender If submitting an unexecuted transcript of evidentiary proof in admissible in support of a motion for summary There is an exception permitting the form.” Applying this rule, Special judgment, be prepared to submit proof, use of an unexecuted transcript where Term determined that the defen- in admissible form, of the transmittal

Where afﬁ davits and records are used in support of a summary judgment motion, they must be in admissible form.

proper proof of transmission has not dant had failed to meet its burden of the transcript in accordance with been furnished. When a party mov- since the hospital record which CPLR 3116(a) to the witness and the ing for summary judgment utilizes an set forth information concerning failure of the witness to timely return unexecuted transcript of its party wit- the decedent’s prior medical his- the executed transcript. The standard ness, thereby “adopting” the contents tory was not certified25 nor was office transmittal letter utilized when of the transcript, and the transcript is an appropriate foundation laid to a transcript is sent to the witness will then relied upon by a party opposing show that the history of diabetes not, in and of itself, suffice. An affi- the motion, the transcript may be con- reflected therein was necessary to davit should be submitted, referenc- sidered as proof submitted in opposi- treatment at the hospital. Moreover, ing the transmittal letter and averring 23 tion by the opposing party. held Special Term, the statement of that the transcript was forwarded to A further exception permits the use the physician who attended the the deponent, more than 60 days had of an unsigned deposition against a decedent at the hospital, which set elapsed, and the deposition transcript party where the deposition is being forth additional facts concerning had not been returned. used against the party deponent as the medical history of the dece- Otherwise, as the note left by the an admission. The First Department dent, was not in affidavit form. U.P.S. driver when I am not home explained why, under this circum- to receive a package says, “signature Finally, Special Term found defen- ■ stance, the requirements of CPLR dant’s submissions insufficient to required.” 3116(a) did not apply: conclusively demonstrate that the 1. Bernard L. Shientag, J.S.C., Summary Judgment [T]hese requirements are irrelevant misrepresentations allegedly made 3 (1941). to the instant case, because Ogden were “material.”26 2. Id. at pp. 4–5. was merely seeking to use plain- 3. Id. at p. 5. tiff’s deposition as an admission, While the foundation for admis- 4. CPLR 3212(a). which need not be in deposition sion of a record may be established 5. Menzel v. Plotnick. 202 A.D.2d 558. 610 N.Y.S.2d form. An unsigned but certified through deposition testimony, if the 50 (2d Dep’t 1994) (citations omitted). deposition transcript of a party can deposition testimony itself is not in

20 | February 2010 | NYSBA Journal 6. Brill v. City of N.Y., 2 N.Y.3d 648, 781 N.Y.S.2d 15. CPLR 3116(a). 23. Ashif v. Lee, 57 A.D.3d 700, 868 N.Y.S.2d 906 (2d 261 (2004). 16. Id. Dep’t 2008). 7. CPLR 3212(b). 17. Id. 24. Morchik v. Trinity Sch., 257 A.D.2d 534, 684 8. Id. N.Y.S.2d 534 (1st Dep’t 1999) (emphasis in original) 18. Id. (citation omitted) (citing R.M. Newell Co., Inc. v. Rice, 9. 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595 (1980) 19. See, e.g., Martinez v. 123-16 Liberty Ave. Realty 236 A.D.2d 843, 653 N.Y.S.2d 1004 (4th Dep’t), lv. (quoting Friends of Animals, Inc. v. Associated Fur Corp., 47 A.D.3d 901, 850 N.Y.S.2d 201 (2d Dep’t denied, 90 N.Y.2d 807, 664 N.Y.S.2d 268 (1997)). Mfrs., 46 N.Y.2d 1065, 416 N.Y.S.2d 790 (1979)). 2008). 25. This certification provision is only applicable to 10. Id. at 562 (citation omitted). 20. Pina v. Flik Int’l Corp., 25 A.D.3d 772, 808 hospital records. 11. Id. (citations omitted). N.Y.S.2d 752 (2d Dep’t 2006) (emphasis added) 26. Borchardt v. N.Y. Life Ins. Co., 102 A.D.2d 465, (citations omitted). 12. Weinstein, Korn & Miller § 3212.09. 466–67, 477 N.Y.S.2d 167 (1st Dep’t) (citations omit- 21. 175 Misc. 2d 156, 668 N.Y.S.2d 433 (Sup. Ct., N.Y. ted), aff’d, 63 N.Y.2d 1000, 483 N.Y.S.2d 1012 (1984). 13. Id. Co. 1997), aff’d, 251 A.D.2d 246, 675 N.Y.S.2d 37 (1st 27. See Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 14. Winegrad v. N.Y. Univ. Med. Ctr., 64 N.Y.2d 851, Dep’t 1998). 324, 508 N.Y.S.2d 923 (1986); Menzel v. Plotnick, 202 487 N.Y.S.2d 316 (1985) (citations omitted). 22. 47 A.D.3d at 902 (citations omitted). A.D.2d 558, 610 N.Y.S.2d 50 (2d Dep’t 1994).

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NYSBA Journal | February 2010 | 21 MICHAEL A. MORSE ([email protected]) is a partner of Pietragallo Gordon Alfano Bosick & Raspanti, LLP, where he chairs the firm’s Federal and State Whistleblower (Qui Tam) Litigation Practice Group. Mr. Morse received his J.D. from the Emory University School of Law and his B.A. from the University of Michigan.

BRYAN S. NEFT ([email protected]) is a partner of Pietragallo Gordon Alfano Bosick & Raspanti, LLP. Mr. Neft is a member of the firm’s federal and state qui tam litigation, commercial litigation and healthcare litigation practice groups. Mr. Neft received his law degree from Boston University School of Law and his B.S. from the University of Pennsylvania.

PETER S. WOLFF ([email protected]) is an associate of Pietragallo Gordon Alfano Bosick & Raspanti, LLP. Mr. Wolff received his J.D. degree from Duquesne University School of Law. He also studied abroad in Rome, Italy, where he studied Roman Law, Canon Law, and The Process of Canonization. Mr. Wolff earned a B.S. in business administration, cum laude, from Duquesne University, where he was a member of the Golden Key National Honor Society. Protecting the Empire: A Practitioner’s Primer on the New York False Claims Act By Michael A. Morse, Bryan S. Neft and Peter S. Wolff

he federal government and the state governments federal and New York FCAs, and discusses how the NY across the United States spend billions of dollars to FCA may prove to be a powerful tool in combating fraud, Tstimulate the economy and create jobs. How can waste and abuse of New York taxpayer funds. we ensure that these taxpayer dollars are not the target of fraud, waste, and abuse? Although the federal and state “The Model of Success”: The Federal False Claims Act governments employ thousands of law enforcement offi- The federal False Claims Act3 is widely regarded as the cers, and auditors, there are simply not enough govern- most effective tool for combating fraud against the federal ment agents to police the billions in taxpayer funds spent government. The FCA generally prohibits any individual each year. As a result of limited government resources, or business from submitting, or causing someone else to these funds have historically been an easy target for submit, to the government a false or fraudulent claim would-be criminals. for payment. Those found to have violated the FCA are In 2007, the New York State Legislature took bold required to pay the federal government damages total- action to ramp-up the state’s efforts to combat fraud, ing three times the amount of the loss the government waste and abuse in government spending by enacting the sustained, along with civil penalties ranging from $5,500 New York False Claims Act (NY FCA).1 The act became to $11,000 for each false or fraudulent claim. In addition law on April 1, 2007, and applies to claims filed before, to the damages and civil penalties, violations of the FCA on, or after this date. Although patterned after the federal can trigger a number of potential collateral consequences False Claims Act (federal FCA or FCA), the New York for defendants, such as disqualification from all future statute provides both traction for state qui tam2 relators federal and state government contracts. (i.e., whistleblowers) and incentives for state prosecutors Congress enacted the FCA (often referred to as and state entities that fall victim to fraud. This article “Lincoln’s Law”) during the Civil War to combat fraud examines the similarities and differences between the perpetrated against the federal government by suppliers

22 | February 2010 | NYSBA Journal to the Union Army. The FCA was mostly used sparingly sion.5 When this bill was introduced in the Legislature, as an enforcement tool during the century that followed however, two highly influential lobbying groups, the its enactment. It was largely ineffective at combating Healthcare Association of New York State and the State fraud against the federal government until the statute Medical Society, opposed its passage,6 arguing that “the was dramatically revamped in 1986. bill would lead to an epidemic of frivolous allegations.”7 Since the 1986 amendments, the FCA has become Their opposition contributed substantially to the defeat the federal government’s most effective and successful of the bill. tool for combating waste, fraud, and abuse in federal The push toward legislation arose again when, in July spending. The federal government has in fact recovered 2005, the New York Times published a string of articles in excess of $22 billion as a result of cases filed under criticizing state authorities for losing billions to Medicaid the FCA since the amendments. Nearly one-half of all fraud and abuse.8 These articles attributed the losses to recoveries, and the majority of the largest settlements, relaxed regulation and inadequate policing of New York’s have come from health-care related cases. The FCA Medicaid program.9 The Times estimated that fraud and has also been effective in combating fraud and abuse abuse might account for as much as 40% of overall expen- in connection with government contracts for defense, ditures in the state’s $44.5 billion Medicaid program.10 energy, construction, housing, natural disaster recovery, The articles identified various abuses of the Medicaid Iraq War reconstruction, and other forms of government program, including a dentist who billed for nearly 1,000 procurement. patients a day; a school district that in a single day The act’s success is due in large measure to lawsuits referred over 4,000 students for Medicaid-funded speech brought by whistleblowers (“relators”) under the qui therapy; and fraudulent medical transportation compa- tam provisions of the FCA. In general, the qui tam provi- nies, which purportedly provided transportation for the sions authorize any person or entity to file an FCA case injured and sick.11 on behalf of the federal government. As a reward for Accordingly, in 2006, the New York State Assembly reporting the fraud, the whistleblower may be entitled to proposed a state false claims law modeled on the federal receive between 15% and 30% of the government’s recov- FCA.12 This legislation would have imposed civil liability ery in the action. for the submission of any false claims to the state govern- Recognizing the success of the public and private ment.13 Legislation proposed by the state Senate did not partnership in combating fraud, waste, and abuse in gov- contain a similar provision.14 The Senate, in addition to ernment spending, Congress recently amended the FCA the Healthcare Association of New York State, opposed to strengthen the law and broaden the scope of its protec- the proposal,15 arguing that Medicaid fraud enforce- tions. On May 20, 2009, President Barack Obama signed ment should remain a governmental responsibility.16 into law the Fraud Enforcement and Recovery Act of 2009 Additionally, opponents argued that so-called bounty (FERA).4 The FERA amendments to the federal FCA fill hunters, or qui tam relators, would bring frivolous qui some judicially created loopholes and add teeth to the tam actions,17 and that the proposal would conflict with law just as billions of dollars in taxpayer funds are being existing law and protocols, would inhibit provider com- spent to stimulate the economy and rescue the nation’s pliance efforts, and would result in abusive litigation.18 financial institutions. This was enough to, again, defeat false claims legislation in New York. “A Long Time Coming”: History of the NY FCA Despite the success of the federal FCA, many states, “Carrots and Sticks”: including New York, repeatedly failed to enact similar The Perfect Mixture Needed to Pass the NY FCA statutes to protect the billions of dollars in state govern- On January 1, 2007, the New York False Claims Act got ment spending. While there are many reasons why states a huge push from newly elected Governor Eliot Spitzer. have been slow to enact false claims laws, one reason In his first annual address to the Legislature, Governor given is that powerful lobbyists have worked diligently Spitzer stated that “we must aggressively fight Medicaid to defeat such laws. fraud through a state False Claims Act . . . which I will In New York, however, a combination of strong propose this year.”19 The Legislature recognized that the legislative and executive leadership, along with sub- “state is involved in the direct and indirect payment of stantial financial incentives from the federal govern- tens of billions of dollars every year, and the payment ment, came together in 2007 to pass a tough state false of fraudulent claims has a significant adverse effect on claims law. Nevertheless, the road to enacting the NY the fiscal well being of the state,”20 and submitted the FCA was difficult. The idea of a false claims act in New legislation as an amendment to the state’s finance law.21 York had existed as early as 2003, when then-New York Governor Spitzer signed the NY FCA into law as part of State Attorney General Eliot Spitzer recommended the the 2007 New York state budget. adoption of a state false claims act with a qui tam provi-

NYSBA Journal | February 2010 | 23 At the same time, a key piece of the federal Deficit ral person, partnership, corporation, association or any Reduction Act of 2005 (DRA)22 became effective. The other legal entity or individual, other than the state or a local DRA amended the Social Security Act to provide that “if government.”27 While the federal FCA does not contain a State has in effect a law relating to false or fraudulent similar language, the U.S. Supreme Court has held that claims that meets the requirements of subsection (b), the states are not “persons” for purposes of qui tam liability Federal medical assistance percentage with respect to any under the FCA.28 However, local governments can be amounts recovered under a State action brought under sued under the federal FCA for filing false or fraudulent such law, shall be decreased by 10 percentage points.”23 claims, but the NY FCA eliminates this potentially signifi- Thus, states with false claims laws would be entitled to cant source of false claims act recovery. retain a 10% greater share of the proceeds than states without a false claims law. NY FCA’s Broad Definition of False “Claim” The 10% entitlement is not automatic, however. The NY FCA imposes liability for making “a false or To receive this additional return, a state false claims fraudulent claim.”29 The definition of what constitutes law would have to include certain provisions24 and be a “claim” determines the scope of conduct that will trig- approved by the Inspector General of the Department ger the liability provisions of the act. The New York law of Health and Human Services (HHS), in consultation defines the term “claim” broadly to include, as its fed- with the U.S. Attorney General.25 Fortunately, on August eral counterpart does, “any request or demand, whether 7, 2007, the Inspector General of the HHS and the U.S. under a contract or otherwise, for money or property.”30 Attorney General approved the NY FCA.26 In addition, a false “claim” under the NY FCA includes a false request or demand for government money or prop- The Federal and New York FCAs: erty made to “any employee, officer, or agent of the state Similarities and Differences or a local government,”31 as well as to those listed in the In most respects, the NY FCA is substantially similar to federal act (contractors, grantees and other recipients of the federal FCA, but there are certain substantive and government funds). The Legislature has defined “state” procedural differences that are important to review and very broadly to include “the state of New York and any fully understand. The provisions of the NY FCA that dif- state department, board, bureau, division, commission, fer from its federal predecessor can be generally grouped committee, public benefit corporation, public authority, as follows: statutory penalties, initial obligation when council, office or other governmental entity performing fraud is suspected, initiating procedure, and related a governmental or proprietary function for the state.”32 actions. The pertinent provisions of each act are discussed Like the federal FCA, the NY FCA is triggered where the below. state government “provides any portion of the money, [or] property . . . requested or demanded.”33 The NY FCA also Prohibited Conduct and Liable Parties attaches liability if the state “will reimburse . . . for any The NY FCA mimics the federal FCA insofar as they both portion of the . . . services requested or demanded.”34 impose liability upon people who present, or cause to The Legislature’s decision to include claims made be presented, false or fraudulent claims to an employee to local government within the scope of the NY FCA or officer of the government for payment or approval. is important for two reasons. First, this gives the NY The NY FCA, in addition, provides that “presenting” a FCA the ability to protect funds spent by a “county, false claim to an “agent of the State, or to any contractor, city, town, village, school district, board of cooperative grantee or other recipient of State funds” will trigger a educational services, local public benefit corporation or violation of the act. This added provision appears to be other municipal corporation or political subdivision of a significant effort by New York legislators to assist the the state.”35 Second, under the NY FCA, the New York state in identifying fraud that involves all government Attorney General and a local government may bring a civil funds – wherever they may be found – when the false action.36 The addition of local governments to the NY claim for the funds is presented, paid or approved. This FCA provides hundreds of such governments with the language covers contractors, subcontractors, consultants, opportunity to recover money for fraud schemes perpe- and other entities that contract directly or indirectly with trated against them. New York. The 2009 FERA amendments to the federal FCA clarified Congress’s similar intent to impose poten- Requisite State of Mind tial liability, as the New York statute already provides, for Neither the federal FCA nor the NY FCA requires a false claims made to any recipient of federal funds. defendant to have actual knowledge that he or she is sub- In one important respect, however, the NY FCA differs mitting a false claim before liability will attach. Rather, from the federal FCA – it does not permit any action to be liability attaches when a defendant acts “knowing” or filed against a state or local government. The New York “knowingly.” law defines a “person” subject to the statute as “any natu- Continued on Page 26

24 | February 2010 | NYSBA Journal

Continued from Page 24 FCA, the reduced penalties are limited to “not less than [two] times the amount of damages,”45 while under [T]he terms “knowing” and “knowingly” mean that a the NY FCA, “the Court may assess not more than two 46 person, with respect to information – times the amount of damages.” For example, when the government is damaged in the amount of $100,000, (1) has actual knowledge of the information; statutory penalties under both FCAs are $300,000. When (2) acts in deliberate ignorance of the truth or falsity of the circumstances allow for a reduction of damages, the the information; or amount due under the federal FCA is between $200,000 (3) acts in reckless disregard of the truth or falsity of and $300,000, while the amount due under the NY FCA the information, is between $0 and $200,000. Given this illustration, it is and no proof of specific intent to defraud is obviously in the violator’s best interest to voluntarily required.37 come clean to the government and cooperate fully with any investigation. Additionally (which might be of comfort to some), the NY FCA expressly states that “acts occurring by mistake Filing Under the NY FCA or as a result of mere negligence are not covered by this An action under the NY FCA may be filed in a federal or article.”38 state court, with the New York State Supreme Court exer- cising jurisdiction over state court actions. In contrast, a Statutory Penalties federal FCA case can be filed only in the federal district Both the federal and New York FCAs impose penalties court where the defendant may be found, resides, trans- upon persons who violate either statute, although the acts business, or causes the false claims act violations to statutory penalties under the NY FCA are more strin- occur. The federal FCA expressly provides that federal gent. Under the federal FCA, a defendant is liable “to the district courts shall have pendent jurisdiction over state United States government for a civil penalty of not less FCA claims. There is, however, a clear incentive for filing than $5,000 and not more than $10,000, plus three times false claims act actions in federal court, even those a state the amount of damages which the government sustains attorney general initiates. Specifically, pendent jurisdic- because of the act of that person.”39 In 1999, the U.S. tion relieves the state courts of the cost of administration Department of Justice issued a Final Rule increasing these of these claims, while providing litigants with the federal penalty amounts to not less than $5,500 and not more judiciary’s substantial experience with FCA claims and its than $11,000.40 established caselaw on the subject. In contrast, under the NY FCA, a defendant is liable Each of the 62 counties in New York serves as a seat “to the state for a civil penalty of not less than [$6,000] for the state Supreme Court, New York’s civil trial divi- and not more than [$12,000], plus three times the amount sion. Each of the 62 county clerk’s offices that may receive of damages that the state sustains because of the act of filings for the state Supreme Court must become comfort- that person.”41 Additionally, in New York, an actor is lia- able with all the nuances of the seal provisions, which are ble “to any local government for three times the amount an integral part of the NY FCA. False claim litigants and of damages sustained by such local government because their counsel must likewise feel comfortable walking into of the act of that person.”42 any New York state court clerk’s office and meeting with Both the federal and New York FCAs provide for staff members who can assist them in making certain that reduction of civil penalties under certain, prescribed the technical aspects of filing a case under seal are meticu- circumstances. Penalties may be reduced under both stat- lously met. Most but not all federal district court clerks’ utes when: (1) the violator informs the government of the offices are conversant with the NY FCA’s seal provisions. violation within 30 days after the violator first learned of Training 62 state clerk’s offices to handle the delicate fil- the violation; (2) the violator fully cooperates with any ing requirements designed to preserve the seal would government investigation; and (3) at the time the viola- be costly and time consuming. However, the more the tor informed the government of the violation, there was NY FCA is used, the more that frauds perpetrated solely no criminal prosecution, civil action, or administrative against the state and its agencies will be exposed, which action under either FCA, and the violator did not know of will result in state court actions and which, in turn, will any investigation into such violation.43 Essentially, penal- provide state clerk’s offices with greater exposure to the ties may be reduced when the violator comes clean and NY FCA. fully cooperates with the government. Penalties may be Both the federal and New York FCAs contain qui tam reduced under the same circumstances in New York.44 provisions that authorize a private individual, the relator, Although statutory penalties are greater in New York, to bring an action on behalf of either the “government” reduced penalties under the federal FCA are equal to or or “the people of the state of New York or a local govern- greater than those under the NY FCA. Under the federal ment.”47 Because the NY FCA authorizes the local govern-

26 | February 2010 | NYSBA Journal ment to pursue relief in addition to the state of New York, and the material evidence and information. If, however, there are procedural distinctions between the federal and the allegations in the complaint involve damages only NY FCAs regarding the filing of the complaint. to a city with a population of one million or more, then Under the NY FCA, a copy of the complaint and the the Attorney General may not supersede or intervene material evidence must be filed in camera and remain in such action without the consent of the corporation under seal for 60 days.48 If the allegations in the complaint counsel of such city. The Attorney General shall consult allege a violation involving damages to a local government, the state Attorney General may at any time provide The federal and New York a copy of such complaint and written disclosure to the FCAs provide for reduction of attorney general for such local government. However, if the allegations in the complaint involve damages only to civil penalties under certain, a city with a population of one million or more,49 or only prescribed circumstances. to the state and such a city, then the Attorney General shall provide the complaint and written disclosure to the with the office of the Medicaid Inspector General prior corporation counsel of such city within 30 days from the to superseding or intervening in any action related to the date the complaint was filed.50 Medicaid program.54 The federal and state attorneys general, as well as local Investigating Cases Under the NY FCA counsel, may move to extend the period under which Upon receipt of the false claims complaint, both the feder- the complaint remains sealed. Under both acts such a al and New York FCAs require their respective attorneys motion must be for “good cause” and may be supported general to investigate the qui tam relator’s allegations of by affidavits or other submissions in camera.55 Neither act, fraud. In particular, under the federal FCA, the “Attorney however, defines the term “good cause.” General diligently shall investigate a violation under sec- Nevertheless, prior to the expiration of this 60-day tion 3729. If the Attorney General finds that a person has period, or any extension, the New York Attorney General violated or is violating section 3729, the Attorney General may elect to “file a complaint against the defendant on may bring a civil action under this section against the behalf of the people of the state of New York or a local person.”51 government, and thereby be substituted as the plaintiff By contrast, the NY FCA authorizes the Attorney in the action and convert the action in all respects from a General to “have the authority to investigate a violation,” qui tam civil action brought by a private person into a civil and “if the Attorney General believes that a person has enforcement action by the Attorney General.”56 When the violated or is violating such section, then the Attorney Attorney General elects to convert the qui tam civil action General may bring a civil action on behalf of the people into an action it will prosecute, “then the state shall have of the State of New York or on behalf of a local govern- the primary responsibility for prosecuting the action.”57 ment against such person.” In addition, a local govern- The conversion of the action into an Attorney General ment “shall have the authority to investigate violations that enforcement action does not impact the rights of the qui may have resulted in damages to such local government tam relator to a portion of the proceeds.58 under [the NY FCA], and may bring a civil action on its Under the federal FCA, the U.S. Attorney General own behalf to recover damages sustained by such local also has 60 days (or longer if an extension is granted) to government as a result of such violations.”52 The differ- proceed with the action, in which case the action shall ences between the statutory text of the federal and New be conducted by the government.59 The U.S. Attorney York FCAs is that the U.S. Attorney General is required to General’s decision to proceed with the action also does investigate a violation under the federal FCA, while the not impact the rights of a qui tam relator to a portion of New York State Attorney General and local government the proceeds.60 Thus, when the U.S. government elects are authorized, but not required, to investigate a viola- to proceed with the action, the government bears the tion under the NY FCA. Additionally, the U.S. Attorney responsibility for prosecuting the action, while the relator General, the New York State Attorney General, and New retains a right to a portion of the proceeds. York local government are all authorized, but are not required, to pursue a civil action. Furthermore, in New Pending State Action May Bar the Qui Tam York, the Attorney General “shall consult with the office Plaintiff’s Case of medicaid inspector general prior to filing any action The federal and New York FCAs also differ with respect related to the medicaid program.”53 to whether a second party may bring a related action. The state may elect to supersede or intervene and pro- Under the federal FCA, when a qui tam action is brought, ceed with the action, or to authorize a local government “no person other than the Government may intervene or that may have sustained damages to supersede or inter- bring a related action based on the facts underlying the vene, within 60 days after it receives both the complaint pending action.”61 Under the NY FCA, however, a person

NYSBA Journal | February 2010 | 27 “may intervene or bring a related civil action based upon Of course, the opportunity for the New York Attorney the facts underlying the pending action,” if that person General or local counsel to recover attorney fees and costs “has first obtained the permission of the attorney general is completely contingent upon their initiating the false to intervene or to bring such related action.”62 This is a claims action or assuming control of an action brought meaningful distinction between the two statutes. In fact, by a qui tam relator under the NY FCA. The New York if the New York State Attorney General’s Office uses its Legislature wisely both enacted this legislation requiring authority effectively to permit second parties to com- the enforcement of the NY FCA and provided the neces- mence their own action or intervene, a second party’s sary funding. The office charged with enforcing the NY participation may help to shape the scope and course of FCA, namely, the Attorney General’s office or local gov- a litigation. ernment’s counsel, has a compelling incentive to become In 2008 alone, New York, acting through the Attorney General, Medicaid Inspector General and other agencies, recovered $551 million that would otherwise have been lost due to Medicaid fraud.

The Qui Tam Plaintiff’s Share actively engaged with a qui tam plaintiff’s case early of the Recovered Proceeds on – the promise of receiving their counsel fees and costs Under both the NY FCA and the federal FCA, a qui tam upon the resolution of the action. This provision empow- plaintiff receives 15% to 25% of the proceeds of an action ers the New York Attorney General or the local govern- or settlement in cases where the government intervenes ment’s counsel to make their intervention decisions with and 25% to 30% in cases where the government does the knowledge that they will directly benefit from active not intervene, leaving the relator to prosecute the claim prosecution of a NY FCA case. without any government resources or assistance. In addition, the qui tam relator is entitled to receive reasonable Employee Protection Under the Act attorney fees, expenses, and costs. The defendant pays An employee who knows that his or her employer is these attorney fees, expenses, and costs, all of which will submitting false claims is placed in a precarious situation. not reduce the relator’s share of the recovery by the state The employee may refrain from reporting this conduct if and/or local government. he or she feels this will invite retaliation. Both the federal In developing these recovery provisions, the and New York FCAs provide protection that discour- Legislature recognized the integral role of qui tam rela- ages employers from retaliating against an employee for tors in efforts to prosecute fraud, waste, and abuse. The either initiating or participating in a false claims action. message to potential relators and the qui tam bar is clear: The FCAs prohibit discrimination and authorize all relief private citizens who report false claim violations are inte- necessary to make the employee whole, providing that gral to the effort to fight fraud – even where the recovery any employee who is discharged, demoted, suspended, is ultimately based predominantly on the government’s threatened, harassed, or in any other manner discrimi- own information. nated against in the terms and conditions of employment by his or her employer because of the lawful acts done Fees and Costs Available for Initiating and by the employee on behalf of the employee or others, in Assuming Control of an Action furtherance of an action filed or to be filed under this sec- Under the NY FCA, when the state Attorney General tion, shall be entitled to all relief necessary to make the or local counsel becomes involved in a false claims act employee whole. Such relief shall include reinstatement action, either by initiating the action or by assuming con- with the same seniority status such employee would have trol of an action previously brought by a qui tam plaintiff, had but for the discrimination, two times the amount of the Attorney General and/or the local counsel shall be back pay, interest on the back pay, and compensation for entitled to receive their reasonable attorney fees, expens- any special damages sustained as a result of the discrimi- es, and costs. A number of state false claims acts contain nation, including litigation costs and reasonable attorney similar provisions. Surprisingly, the federal FCA has fees.63 never contained such a potent funding tool. As a result, Under the federal FCA, a retaliatory action may be the federal government lacks similar incentives since the brought in “the appropriate district court of the United U.S. Attorney General does not have the ability to recoup States,” while, under the NY FCA, such an action may be the considerable resources it dedicates to fighting fraud. brought “in the appropriate supreme court.”64 Claims for

28 | February 2010 | NYSBA Journal retaliation under these provisions are governed by a six- or improper acts, or unacceptable practices, perpetuated year statute of limitations.65 within the medical assistance program.”71

Statutes of Limitations and Burdens of Proof Conclusion With respect to the time allotted for initiating a false New York, through the NY FCA and the OMIG, fights claims action, both FCAs require a civil action to be com- fraud through both the private and the public sectors. menced either six years after the date of the violation These statutes, working together, cover all possible ave- or three years after the date when the material facts are nues for detecting, reporting, and prosecuting Medicaid known or reasonably should have been known, which- fraud. While both provisions are relatively new, there can ever occurs later, but in no event more than 10 years be no doubt that numerous civil actions and recoveries for after the date of the violation.66 Additionally, a plaintiff the state are forthcoming. In 2008 alone, New York, acting in either a federal or New York action has the burden of through the Attorney General, Medicaid Inspector General proving all essential elements of the cause of action by a and other agencies, recovered $551 million that would oth- preponderance of the evidence.67 erwise have been lost due to Medicaid fraud. These results should only increase as greater knowledge and resources Office of the Medicaid Inspector General are committed to the public and private partnership for In addition to the NY FCA, New York has a second meth- combating fraud embodied in the NY FCA. od for combating Medicaid fraud. On July 26, 2006, New New York has a potent statute, which, if properly York established the Office of the Medicaid Inspector cultivated, utilized and protected, will reap significant General (OMIG) as an independent, formal state agency rewards for the taxpayers of the state. Other states with in the New York State Department of Health.68 The cur- similar laws have experienced a sizeable increase in their rent Medicaid Inspector General, James G. Sheehan,69 fraud recoveries. The next few years will be crucial to reports directly to the Governor.70 Under New York law, watch how the state, the Attorney General’s Office and the Inspector General is directed “to pursue civil and local government counsel, and qui tam relators, as well administrative enforcement actions against any indi- as the Medicaid Inspector General, will all utilize these vidual or entity that engages in fraud, abuse, or illegal fraud enforcement tools on behalf of New York taxpayers.

NYSBA Journal | February 2010 | 29 Only time will reveal the benefits to the taxpayers of the 29. State Fin. Law § 189. state Legislature’s ambitious efforts to combat fraud. ■ 30. State Fin. Law § 188(1). 31. Id. 1. N.Y. State Finance Law §§ 187–194. (“State Fin. Law”). 32. Id. 2. “Qui tam” is the abbreviated form of a Latin phrase “qui tam pro domino 33. Id. rege quam pro se ipso in hac parte sequitur,” which means “who as well as for the king as for himself sues in this matter.” Black’s Law Dictionary 1282 (8th ed. 34. Id. 2004). 35. State Fin. Law § 188(4). 3. 31 U.S.C. §§ 3729–3733. 36. State Fin. Law § 190(1). 4. Pub. L. No. 111-21, 123 Stat. 1617. 37. 31 U.S.C. § 3729(b); see also State Fin. Law § 188(3). 5. Christina Broderick, Note, Qui Tam Provisions and the Public Interest: 38. State Fin. Law § 188(3). An Empirical Analysis, 107 Colum. L. Rev. 949, n.78 (May 2007) (citing Press 39. 31 U.S.C. § 3729. Release, Office of N.Y. Attorney Gen., Spitzer Calls for Passage of State False Claims Act (June 12, 2003), available at http://www.oag.state.ny.us/media_ 40. 28 C.F.R § 85.3(a)(9). center/2003/jun/jun12a_03.html. 41. State Fin. Law § 189(g)(i). 6. Id. (citing Michael Luo & Clifford Levy, As Medicaid Balloons, Watchdog 42. State Fin. Law § 189(g)(ii). Force Shrinks, N.Y. Times, July 19, 2005, at A1). 43. 31 U.S.C. § 3729. 7. Id. (citing Richard Perez-Pena & Danny Hakim, Lawmakers Hit Deadlock on 44. State Fin. Law § 189(2). Medicaid, N.Y. Times, Mar. 28, 2006, at B1). 45. 31 U.S.C. § 3729. 8. A. Bateman, Jr., The Coming Wave of Health Care Fraud and Abuse Prosecutions, 46. State Fin. Law § 189(2). N.Y.L.J., July 23, 2007, p. 10, col. 1 (citing Clifford Levy & Michael Luo, New York Medicaid Fraud May Reach Into Billions, N.Y. Times, July 18, 2005, at A1). 47. 31 U.S.C. § 3730; State Fin. Law § 190(2)(a). 9. Id. 48. 31 U.S.C. § 3730(b); State Fin. Law § 190(2)(b). 10. Id. 49. Only one city in the state of New York, New York City, has a population of one million or more. 11. Id. 50. State Fin. Law § 190(2)(b). 12. James Lytle, Meet the State’s Brand New Medicaid Fraud Legislation, N.Y.L.J., 51. 31 U.S.C. § 3730(a) (emphasis added). July 10, 2006, p. 9, col. 1. 52. State Fin. Law § 190(1) (emphasis added). 13. Id. 53. Id. 14. Id. 54. State Fin. Law § 190(2)(b). 15. Id. 55. 31 U.S.C. § 3730(b)(3); State Fin. Law § 190(2)(b). 16. Id. 56. State Fin. Law § 190(2)(c) (emphasis added). 17. Id. 57. State Fin. Law § 190(5)(a). 18. Id. 58. State Fin. Law § 190(6). 19. Eliot Spitzer, First Annual Message to the Legislature, available at http:// 59. 31 U.S.C. § 3730(b)(4). www.ny.gov/governor/keydocs/NYS-SoS-2007.pdf. 60. 31 U.S.C. § 3730(c). 20. Carl Loewenson & Ruti Smithline, New York’s New False Claims Act, N.Y.L.J., Apr. 23, 2007, col. 4 (citing 2007 NY S.B. 2064). 61. 31 U.S.C. § 3730(b)(5). 21. Id. (citing Senate Bill 2064, 2007 Bill Text NY S.B. 2064 (Jan. 30, 2007); 62. State Fin. Law § 190(4). Assembly Bill 4308, 2007 Bill Text NY A.B. 4308 (Jan. 20, 2007)). 63. See 31 U.S.C. § 3730(h); see also State Fin. Law § 191(1) (providing for the 22. Pub. Law 109-171, 120 Stat. 4. same relief). 23. 42 U.S.C. § 1396h. 64. Id. 65. United States ex rel. Mishra v. NYSARC, 03-cv-7250 (S.D.N.Y. March 20, 24. These requirements are as follows: 2009). (1) The law establishes liability to the State for false or fraudulent 66. 31 U.S.C. § 3731(b); State Fin. Law § 192(1). claims described in [the federal FCA] with respect to any expendi- ture described in section 1396b(a); (2) The law contains provisions 67. 31 U.S.C. § 3731(c); State Fin. Law § 192(2). that are at least as effective in rewarding and facilitating qui tam 68. N.Y. Public Health Law § 30 (“Pub. Health Law”). actions for false or fraudulent claims as those described in [the 69. James G. Sheehan, New York’s Medicaid Inspector General, spent 27 years federal FCA]; (3) The law contains a requirement for filing an action as an Assistant U.S. Attorney, and spent the last five years as Associate U.S. under seal for 60 days with review by the State Attorney General; Attorney for Civil Programs, where he was responsible for major cases and [and] (4) The law contains a civil penalty that is not less than the program initiatives. Mr. Sheehan has handled major cases in environmental amount of the civil penalty authorized under section 3729 of [the enforcement, savings and loan fraud, and consumer frauds early in his career. federal FCA]. Since the late 1980s, Mr. Sheehan has been primarily involved in health care, 25. 42 U.S.C. § 1396h(b). where he handled or supervised over 500 cases. These cases resulted in recoveries of over $700 million for the federal government. Mr. Sheehan worked 26. Approval letter from Daniel Levinson, Inspector General, to The Honorable with whistleblowers and their counsel in virtually every major health care Andrew Cuomo, New York State Attorney General, can be found at http:// case, including cases against SmithKline Beecham Clinical Laboratories ($325 www.oig.hhs.gov/fraud/docs/falseclaimsact/NewYork.pdf. million settlement) and Medco Health Systems ($155 million settlement). F. 27. State Fin. Law § 188(6) (emphasis added). Sheeder, Meet James G. Sheehan, HCCA Compliance Today, vol. 10, number two, February 2008, pg. 14. 28. Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 70. Pub. Health Law § 31(2). (2000). 71. Pub. Health Law § 32(6).

30 | February 2010 | NYSBA Journal

EVE I. KLEIN ([email protected]) is a partner with Duane Morris LLP and practices in the areas of employment law, labor relations and employment litigation. For over 20 years, she has strategically advised clients about their rights and obligations regarding laws and regulations affecting the workplace.

JOANNA R. VARON ([email protected]) is an associate with Duane Morris LLP and practices in the areas of employment law, labor relations and employment litigation.

KEITH GREENBERG is a third-year law student at the University of Michigan Law School, who did research and assisted in the preparation of this article.

Navigating the Murky Waters of Employment Waivers and Releases By Eve I. Klein, Joanna R. Varon and Keith Greenberg

awsuits. Clients cannot bear to live with them the major federal employment statutes, as well as those and hope to live without them. In the context of under New York state employment laws, to achieve a Lemployment disputes, an employer often seeks valid waiver and release of claims without litigation. to prevent litigation by a former employee through the use of a waiver and release. In return for sufficient General Waiver and Release consideration, an employee agrees to waive any and all If an employee who signs a waiver later files a lawsuit, claims against his or her soon-to-be former employer and the employer would argue that the court should dismiss to release the employer from any liability arising from the case because the employee waived the right to sue. the employment or termination. Within the confines of The employee would typically respond, however, that traditional contract law issues, this arrangement appears the waiver is not enforceable because it is legally invalid. relatively straightforward. However, the myriad state and Before addressing the employee’s substantive claim, a federal statutes regulating the workplace have produced court would initially determine whether the waiver is an array of varying limitations on an employer’s ability to valid. As a general rule, “[t]he validity of waivers of dis- obtain an enforceable waiver of employment law claims. crimination claims are evaluated according to ordinary This article surveys the standards that must be met under contract law principles.”1 Ordinary contract law prin-

32 | February 2010 | NYSBA Journal ciples require that a release be knowing and voluntary meaningful opportunity to negotiate the terms of the and supported by consideration in order to be enforce- release.”15 able.2 Similarly, “the severability of a [waiver provision] Certain circumstances and practices in the procure- should also be determined according to contract law ment of waivers and releases of Title VII claims may principles.”3 As a federal district court has noted, raise red flags. Where evidence of fraud or undue influ- a knowing and voluntary waiver of the right to sue is ence may exist or where enforcement of the agreement not void solely because it also references a[n invalid might be against the public interest, the courts will take provision]. . . . “You don’t cut down the trunk of a tree a closer look behind the scenes of the waiver and release because some of its branches are sickly.” Put simply, agreement. The standard for challenging a completed the presence of a sickly [provision] does not render [a] waiver and release of a Title VII claim is substantial. If [r]elease involuntary, unknowing, or otherwise void.4 a party to the agreement seeks to challenge the terms of the release, the party “must come forward with specific In addition to ordinary contract law principles, evidence sufficient to raise a question as to the validity of employers should be aware of the various federal and the release.”16 state employment law statutes that limit or otherwise Notably, a release of a Title VII claim may not require impose additional conditions on an employer’s ability to an employee to waive his or her right to bring an EEOC validly release employment-related claims. charge or limit the employee’s right to testify, assist or participate in an investigation, hearing or proceeding Title VII, ADA, EPA and Section 1981 conducted by the EEOC.17 An employee may waive or release an employer from liability for any past claim under Title VII of the Civil FLSA Rights Act of 1964,5 the Americans with Disabilities Act Generally, whether retrospective or prospective, an (ADA),6 the Equal Pay Act (EPA),7 and 42 U.S.C. § 1981 employee’s rights under the Fair Labor Standards Act (“Section 1981”).8 The analysis required to determine (FLSA) “cannot be abridged by contract or otherwise whether a waiver and release of a Section 1981, EPA or waived because this would ‘nullify the purposes’ of the ADA claim is valid and enforceable is the same used to statute and thwart the legislative policies it was designed determine the validity of a Title VII waiver and release.9 to effectuate.”18 However, the waiver provision of the A prospective waiver of an employee’s rights is void as a FLSA, found in § 216(c) of the act, provides an exception matter of public policy.10 to this general rule.19 The section states in relevant part: A waiver of an employee’s Title VII rights must be The Secretary is authorized to supervise the payment 11 knowing and voluntary, though a release form “need of the unpaid minimum wages or the unpaid overtime not enumerate the specific claims [that] an employee compensation owing to any employee or employees is waiving” in order to waive rights under Title VII.12 under section 206 or section 207 of this title, and the In determining whether an employee entered a release agreement of any employee to accept such payment knowingly and voluntarily, a number of circuit courts shall upon payment in full constitute a waiver by such use a totality-of-circumstances test, which varies slightly employee of any right he may have under subsection among jurisdictions.13 One iteration of the test considers: (b) of this section to such unpaid minimum wages or unpaid overtime compensation and an additional (1) the employee’s education and business experience; equal amount as liquidated damages.20 (2) the employee’s input in negotiating the terms of the settlement; (3) the clarity of the agreement; (4) the The waiver provision is presented as an alternative to amount of time the employee had for deliberation litigation in addressing the employer’s liability to an before signing the release; (5) whether the employee employee who is owed compensation as a result of a vio- actually read the release and considered its terms lation of § 206 (minimum wage) or § 207 (overtime) of the 21 before signing it; (6) whether the employee was rep- FLSA. As a federal district court has explained: resented by counsel or consulted with an attorney; The waiver provision found in section 216(c) was (7) whether the consideration given in exchange for added to the Act in 1949. Prior to that time employers the waiver exceeded the benefits to which the employ- had been reluctant to reach voluntary settlements with ee was already entitled by contract or law; and employees over claims for back wages because courts had held that any purported waiver or release of rights (8) whether the employee’s release was induced by to unpaid compensation was null and void as against improper conduct on the defendant’s part.14 public policy and lacking in consideration. Thus an Courts have found waivers invalid, for example, where employer who settled a claim for back wages could the plaintiff “was not clearly advised of his right to seek never be sure that the employee with whom he settled would not later sue to collect liquidated damages and counsel[,] . . . was not given a sufficient amount of time attorneys’ fees. The addition of the waiver provision to review the release . . . [, and] was also deprived of a

NYSBA Journal | February 2010 | 33 was intended to change this situation and create an ADEA incentive for employers voluntarily to accept settle- With the passage of the Older Workers Benefit Protection 22 ments supervised by the Wage and Hour Division. Act (OWBPA) of 1990,28 the Age Discrimination in Employment Act (ADEA) underwent substantial revi- The statute speaks specifically to the supervision of sions to its waiver provisions relative to the other feder- payment, that is, only once an agreement has been given al antidiscrimination statutes. The OWBPA outlines with and payment has been made, does it appear that waiver specificity the conditions for a waiver of ADEA rights can occur.23 In other words, until the employee accepts and the manner in which the waiver process should the settlement and the payment of back wages is ten- proceed. It is important to note that a release of ADEA dered, no waiver of FLSA claims has been effectuated.24 claims is not effective unless the release “conforms to As the U.S. District Court for the Northern District of the statute.”29 Illinois recently noted, an employee can waive his or her The OWBPA requires an employee waiver to be right to participate in an FLSA collective action, as sepa- knowing and voluntary30 in order to be valid, and it rate and apart from the individual right.25 establishes safe-harbor levels of compliance with that requirement.31 The OWBPA “explicitly places the burden on the party asserting the validity of a waiver to demonstrate that the waiver was ‘knowing and volun- An employee cannot waive his or tary.’”32 The waiver must be written so that it may be her right to ﬁ le an unfair labor understood by the employee involved33 or, if multiple employees are signatory to the waiver, so that it may be practice charge under the NLRA. understood “by the average individual eligible to participate.”34 Furthermore, the waiver must specifically refer to rights or claims arising under the ADEA;35 it cannot waive prospective rights.36 Additionally, the employee, Should an employer choose to pursue an approved in exchange for the waiver, must receive additional con- settlement, the employer should contact the local district sideration beyond that to which the employee is already office of the Wage and Hour Division of the Employment entitled37 and must be advised, in writing, to consult Standards Administration of the U.S. Department of with an attorney prior to executing the agreement.38 Labor (the “Department”) and speak with an assistant The OWBPA’s knowing and voluntary standard also director, who can guide the employer through that requires an employee to be given the option to revoke office’s process for overseeing settlement. Generally, the the agreement within seven days after the execution of process will involve a short investigation by the office in the waiver. order to ensure that the settlement agreement does not The knowing and voluntary standard for the waiver deprive the employee of his or her rights under the FLSA. of an ADEA claim varies, depending on the number of A prudent employer should consider the possibility employees that the employer is discharging. When an that, in pursuing approval of an FLSA settlement by the employer discharges a single employee, the employee Department, the employer may invite more scrutiny of its must be “given a period of at least 21 days to consider wage-and-hour practices than it might otherwise receive the agreement.”39 However, when “a waiver is requested or desire. Another option is that a waiver of FLSA rights in connection with an exit incentive or other employ- may be approved by a court in the course of litigation.26 ment termination program offered to a group or class of employees, the [employee] is given a period of at least 45 NLRA days within which to consider the agreement.”40 Federal The National Labor Relations Board (NLRB) has long regulations explicitly state that a standardized formula held that an employee cannot waive his or her right to file or package of benefits that is available to two or more an unfair labor practice charge under the National Labor employees can constitute a termination program and trig- Relations Act (NLRA).27 As a general matter, the NLRA ger the group-layoff provisions of the ADEA.41 permits employees to file an unfair labor practice charge Where a waiver of an employee’s rights is requested in if an employer interferes with their rights to organize; to a group-layoff situation, the ADEA requires employers to form, join or assist a labor organization; to bargain col- provide to employees what is sometimes known as “the lectively through representatives of their choosing; or birthday list.”42 The birthday list provides employees to engage in other concerted activities for the purpose with comparative information relative to those selected of collective bargaining or other mutual aid or protec- and not selected for termination, so that the employee can tion. Provisions of severance agreements that limit an make an informed decision about the waiver of a claim employee’s ability to file an unfair labor practice charge of age discrimination. Specifically, the statute requires an to enforce such rights will be deemed unlawful. employer to inform

34 | February 2010 | NYSBA Journal the individual in writing in a manner calculated to 1. the employee has given advance written or verbal be understood by the average individual eligible to notice to the employer; participate, as to – 2. the cumulative length of absence from employment (i) any class, unit, or group of individuals covered by with that employer does not exceed five years; such program, any eligibility factors for such program, 3. the employee returns to work or applies for reem- and any time limits applicable to such program; and ployment in a timely manner after the conclusion of (ii) the job titles and ages of all individuals eligible or his or her service; and selected for the program, and the ages of all individu- 4. the employee has not been separated from service als in the same job classification or organizational unit with a disqualifying discharge or under other-than- who are not eligible or selected for the program.43 honorable conditions. USERRA also requires employers to credit an employee’s In a new set of administrative guidelines dated July period of uniformed service as active employment for 15, 2009, the EEOC addressed, among other things, the purposes of calculating the employee’s “seniority and substantial variations in the way courts have interpreted other rights and benefits determined by seniority” and the statute’s “eligibility factors.” For example, some requires employers to provide employees with the same courts have defined eligibility factors simply as “[a]ll per- non-seniority benefits it would provide to non-service sons in the Construction Division,”44 while other courts members on a furlough or leave of absence. have interpreted the term to require an explanation of the Under USERRA, employees are prohibited from waiv- particular selection “criteria, such as job performance, ing their right to reemployment, even if they provide experience, or seniority, [that] an employer relied on in notice that they will not return to work. Employees may, deciding who to terminate.”45 however, waive their right to non-seniority benefits (e.g., Finally, the absence of even one of the OWBPA’s know- vacation leave), if they provide the employer written ing and voluntary factors may be sufficient to invalidate a notice of their intent not to return to employment follow- release of ADEA claims.46 Courts have invalidated ADEA ing their uniformed service.53 Despite these limitations waivers, for example, where the employee’s waiver of placed on the waiver of employees’ USERRA rights, at ADEA claims fails to make any reference to rights aris- least one federal court, albeit in a nonprecedential opin- ing under the ADEA,47 fails to provide job titles of others ion, has held that employees may waive all of their rights selected for a group layoff,48 and fails to directly advise the under USERRA.54 employee to consult a lawyer before signing a waiver.49 If an employee’s waiver of ADEA claims does not New York State Law Claims comply with the requirements of the OWBPA, the Waiver and release of workers’ compensation claims waiver will not bar a subsequent ADEA action by that in New York is governed by § 32 of the Workers’ employee.50 Compensation Law.55 Under that section, a waiver is available only once an employee has filed a claim.56 FMLA In order to ensure a waiver is valid, a waiver agree- An employee’s ability to waive rights under the Family ment between “the claimant or the deceased claimant’s and Medical Leave Act (FMLA) has recently been expand- dependents and the employer, its carrier, the special ed by a revision of the federal regulations that interpret disability fund . . . or the aggregate trust fund” must be the FMLA. Circuits have split over whether or not prior approved by the Workers’ Compensation Board57 or its regulations should be interpreted to prohibit any waiver designee.58 of FMLA rights51 without, presumably, a Department of The board will approve the agreement, unless: Labor process similar to the process required to obtain (1) the board finds the proposed agreement unfair, FLSA waivers. However, the revised regulation, effective unconscionable, or improper as a matter of law; January 16, 2009, prohibits only the waiver of prospec- (2) the board finds that the proposed agreement is the tive rights under the FMLA.52 As a result, employees result of an intentional misrepresentation of material may waive retrospective rights under the FMLA without fact; or, Department of Labor or court approval. (3) within ten days of submitting the agreement one USERRA of the interested parties requests that the board disapprove the agreement.59 The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the job rights of employees If the board disapproves of an agreement, “it shall who voluntarily or involuntarily leave employment to duly file and serve a notice of decision setting aside undertake military service. Under USERRA, an employee the proposed agreement.”60 Finally, “[a]ny agreement who is activated for military duty is entitled to reemploy- submitted to the board for approval shall be on a form ment if prescribed by the chair,”61 which includes the Section 32

NYSBA Journal | February 2010 | 35 Agreement (Form C-32) and the accompanying Claimant 18. Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1352 (11th Cir. 1982) Release (Form C-32.1) “or, alternatively, contain the infor- (internal citations omitted)). mation prescribed by the chair.”62 19. 29 U.S.C. § 216(c). The waiver of many New York state employment 20. Id.; see, e.g., Niland v. Delta Recycling Corp., 377 F.3d 1244, 1247 (11th Cir. 2004). law claims is subject to evaluation in accordance with 21. 29 U.S.C. § 216(b). traditional contract principles.63 These laws include the New York State Minimum Wage Act,64 the New York 22. Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d 537, 539 (5th Cir. 1977) (emphasis added) (internal citations omitted). State Human Rights Law,65 and the New York City 23. 29 U.S.C. § 216(c). Human Rights Law.66 A worker’s right to New York state 24. See, e.g., Sneed, 545 F.2d at 539 (“For there to be a valid waiver section 216(c) unemployment insurance may not be waived under any simply requires (a) that the employee agree to accept the payment which the 67 circumstances. Secretary determines to be due and (b) that there be ‘payment in full.’”); but compare Lynn’s Food Stores, 679 F.2d at 1353 (“An employee who accepts such Conclusion a payment supervised by the Secretary thereby waives his right to bring suit for both the unpaid wages and for liquidated damages, provided the employer The statutes, regulations, guidelines and caselaw dis- pays in full the back wages.”), with Walton v. United Consumers Club, Inc., 786 cussed in this article demonstrate a complex maze of F.2d 303, 306 (7th Cir. 1986) (“When private disputes are compromised, the compliance that must be successfully traversed to achieve people memorialize their compromise in an agreement. This agreement (the accord), followed by the payment (the satisfaction), bars further litigation. a valid waiver that courts and administrative agencies Payment of money is not enough to prevent litigation. If a potential defendant will respect and uphold. Underlying the various require- in a tort suit pays $1,000 to the plaintiff, who cashes the check, this does not ments to ensure a valid waiver and release is a simple and alone extinguish the plaintiff’s right to sue. The $1,000 might be a part pay- consistent theme: a fair waiver and release is likely to be ment. There must also be a release.”). a lasting and valid agreement. Despite the degree of com- 25. See Brown v. Sears Holdings Mgmt. Corp., No. 09-C-2203, 2009 WL 2514173 (N.D. Ill. Aug. 17, 2009). plexity involved in their use, the waivers and releases – if drafted properly and fairly – can be an effective and rela- 26. Lynn’s Food Stores, Inc., 679 F.2d at 1353 (“The only other route for compromise of FLSA claims is provided in the context of suits brought directly by tively inexpensive way for employers to ensure against employees against their employer under section 216(b) to recover back wages potentially expensive litigation. ■ for FLSA violations. When employees bring a private action for back wages under the FLSA, and present to the district court a proposed settlement, the 1. E.E.O.C. v. SunDance Rehab. Corp., 328 F. Supp. 2d 826, 838 (N.D. Ohio district court may enter a stipulated judgment after scrutinizing the settlement 2004), rev’d on other grounds, 466 F.2d 490 (6th Cir. 2006) (citing Adams v. Philip for fairness.”). Morris, Inc., 67 F.3d 580, 583 (6th Cir. 1995)). 27. See U-Haul Co., 347 NLRB No. 34, at *13, 347 NLRB 375 (2006). 2. Lancaster v. Buerkle Buick Honda Co., 809 F.2d 539, 540–41 (8th Cir. 1987). 28. 29 U.S.C. § 626(f). 3. SunDance Rehab. Corp., 328 F. Supp. 2d at 838. 29. Oubre v. Entergy Operations, Inc., 522 U.S. 422, 428 (1998). 4. Wastak v. Lehigh Valley Health Network, 342 F.3d 281, 292 (3d Cir. 2003) (cita- 30. See, e.g., Long v. Sears Roebuck & Co., 105 F.3d 1529, 1534 (3d Cir. 1987). tions omitted). See, e.g., McCall v. U.S. Postal Serv., 839 F.2d 664, 666 n* (Fed. Cir. 1988) (“Even if an [employee’s] attempted waiver of his right to file EEOC 31. 29 U.S.C. § 626(f)(1). charges is void, that would not affect the validity of the other portions of the 32. Am. Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d 111, 117 (1st Cir. 1998) agreement.”). (citing 29 U.S.C. § 626(f)(3)). 5. Hampton v. Ford Motor Co., 561 F.3d 709, 716 (7th Cir. 2009). 33. 29 U.S.C. § 626(f)(1)(A). 6. Rivera-Flores v. Bristol-Myers Squibb Caribbean, 112 F.3d 9, 12 (1st Cir. 1997). 34. Id. 7. E.E.O.C. v. SunDance Rehab. Corp., 466 F.3d 490, 499 (6th Cir. 2006). 35. 29 U.S.C. § 626(f)(1)(B). 8. Torrez v. Pub. Serv. Co. of New Mexico, Inc., 908 F.2d 687, 689 (10th Cir. 1990); 36. 29 U.S.C. § 626(f)(1)(C). see also Freeman v. Motor Convoy, Inc., 700 F.2d 1339, 1352–53 (11th Cir. 1983). 37. 29 U.S.C. § 626(f)(1)(D). 9. Rivera-Flores, 112 F.3d at 11–12. 38. 29 U.S.C. § 626(f)(1)(E). 10. Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974). 39. 29 U.S.C. § 626(f)(1)(F). 11. Id. at 52 n.15. 40. Id. 12. Hampton, 561 F.3d at 716; see also Smith v. Amedisys Inc., 298 F.3d 434, 443 41. 29 C.F.R. § 1625.22(f)(iii)(B). (5th Cir. 2002) (“There is no obligation, however, under Title VII or federal common law, that a release must specify Title VII or federal causes of action to 42. Interview by Susan Wornick with Robert Sanders, Regional Director – constitute a valid release of a Title VII claim.”). Boston Office, Equal Opportunity Employment Commission, in Boston, Mass. (Nov. 28, 2008). 13. Craig Robert Senn, Knowing and Voluntary Waivers of Federal Employment Claims: Replacing the Totality of Circumstances Test with a “Waiver Certainty” Test, 43. 29 U.S.C. § 626(f)(1)(H); see, e.g., Currier v. United Techs. Corp., 393 F.3d 246, 58 Fla. L. Rev. 305, 307–308 (2006). 251 n. 4 (1st Cir. 2004). 14. Hampton, 561 F.3d at 716–17 (citations omitted). 44. Understanding Waivers of Discrimination Claims in Employee Severance Agreements, http://www.eeoc.gov/policy/docs/qanda_severance-agreements. 15. Cole v. Gaming Entm’t, L.L.C., 199 F. Supp. 2d 208, 213 (D. Del. 2002). html (citations omitted). 16. Hampton, 561 F.3d at 716. 45. Id. 17. EEOC v. Cosmair, Inc., L’Oreal Hair Care Div., 821 F.2d 1085, 1089–90 (5th Cir. 1987); see EEOC v. Frank’s Nursery & Crafts, Inc., 177 F.3d 448, 456 (6th Cir. 1999); 46. See, e.g., Tung v. Texaco Inc., 150 F.3d 206, 209 (2d Cir. 1998). EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1542–43 (9th Cir. 1987). 47. Hodge v. N.Y. Coll. of Podiatric Med., 157 F.3d 164, 167 (2d Cir. 1998).

36 | February 2010 | NYSBA Journal 48. Adams v. Ameritech Servs., Inc., 231 F.3d 414, 431 (7th Cir. 2000). 63. Bachiller v. Turn On Prods., Inc., No. 00 Civ. 8701 (JSM), 2003 WL 1878416 (S.D.N.Y. Apr. 14, 2003). 49. Am. Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d 111, 118 (1st Cir. 1998) (“Because American failed to directly advise their employees to consult a law- 64. Simel v. JP Morgan Chase, 05 CV 9750, 2007 WL 809689 (S.D.N.Y. Mar. 19, yer before making the election, we rule, as a matter of law, that American failed 2007). to meet its burden under the OWBPA.”). 65. Bachiller, 2003 WL 1878416, *4 (“The ‘totality of the circumstances’ stan- 50. Oubre, 522 U.S. at 428 (“[T]he release cannot bar the ADEA claim because dard ‘is somewhat more stringent than the analysis called for under ordinary it does not conform to the statute.”). [New York State] contract law, for determining whether a release of discrimination claims was executed knowingly and voluntarily.’ Nicholas v. NYNEX, Inc., 51. See, e.g., Taylor v. Progress Energy Inc., 493 F.3d 454 (4th Cir. 2007); Faris v. 929 F. Supp. 727, 730 (S.D.N.Y. 1996). Accordingly, since Plaintiff has waived Williams WPC-I, Inc., 332 F.3d 316 (5th Cir. 2003). her federal claims, she has also waived her claims under New York State and 52. 29 C.F.R. § 825.220. New York City Human Rights Law. See Laramee v. Jewish Guild for the Blind, 72 53. 29 C.F.R. § 1002.152. F. Supp. 2d 357, 360 (S.D.N.Y. 1999).”). 54. Jolley v. Dep’t of Hous. & Urban Dev., 299 Fed. Appx. 966, 969 (Fed. Cir. 66. Id. By contrast, for example, the waivers of claims under the New Jersey 2008). Law Against Discrimination (LAD) are evaluated through a “totality of the circumstances” analysis. See Blum v. Lucent Techs., Inc., 2005 WL 4044579, at 55. N.Y. Workers’ Compensation Law § 32 (“Workers’ Comp. Law”). *6 (N.J. Super. App. Div. May 30, 2006) (“[t]he proper standard upon which 56. Workers’ Comp. Law § 32(a). to evaluate a waiver of a claim under LAD [(Law Against Discrimination)] is 57. Id. the ‘totality of the circumstances.’. . . Under the ‘totality of the circumstances’ standard, [the court] must consider the following factors: (1) the plaintiff’s 58. N.Y. Comp. Codes. R. & Regs. tit. 12, § 300.36 (N.Y.C.R.R.) (“The agreement education and business experience, (2) the amount of the time the plaintiff had shall be reviewed by the chair, a designee of the chair, a member of the board, possession of or access to the agreement before signing it, (3) the role of the or a Workers’ Compensation Law Judge, who will make a determination plaintiff in deciding the terms of the agreement, (4) the clarity of the agreement, whether to approve or disapprove the agreement.”). (5) whether the plaintiff was represented by or consulted with an attorney, 59. Workers’ Comp. Law § 32(b). and (6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or 60. Workers’ Comp. Law § 32(c). law.”). 61. 12 N.Y.C.R.R. § 300.36(b). 67. N.Y. Labor Law § 595 (2008) (“No agreement by an employee to waive his 62. Id. rights under this article shall be valid.”).

NYSBA Journal | February 2010 | 37 JOSEPH F. CASTIGLIONE ([email protected]) is a senior litigation associate with Young, Sommer, Ward, Ritzenberg, Baker & Moore LLC, in Albany, New York. The author primarily practices in commercial, land-use, environmental and municipal litigation, and appellate practice.

A “Moot Point” Is an Ongoing Concern for Everyone By Joseph F. Castiglione

he New York State Unified Court System’s latest methods for lawyers to comply with their obligation to Annual Report reveals that in 2007 more than 4.5 inform a court that a controversy is potentially moot. million cases were filed statewide in New York T 1 trial courts. In that year about 10,000 records on appeal Actual Controversies were filed with the respective Appellate Divisions, and The legal authority of a New York state court “extends 221 records on appeal were filed with the Court of only to live controversies.”3 A “live” or “actual contro- Appeals.2 These are extraordinary filing numbers for versy” contemplates a situation in which “the rights of a one-year period and should serve as a reminder that the parties will be directly affected by the determination practitioners need to be constantly aware that a client’s of the [court] and the interest of the parties is an immedi- case could be lost in this sea of litigation by becoming ate consequence of the judgment.”4 However, an actual or what courts consider “moot.” The numbers should simul- live controversy can become moot by either the “passage taneously remind practitioners to continually question of time or change in circumstances.”5 As explained by the whether opposing litigation should be dismissed for hav- Court of Appeals, “the doctrine of mootness is invoked ing become moot. As mootness can occur unexpectedly where a change in circumstances prevents a court from in litigation if not properly addressed, and concomitantly rendering a decision that would effectively determine an could be pursued as a legitimate means to oppose contin- actual controversy.”6 ued litigation, practitioners must be concerned with the Mootness could arguably affect any type of litigation potential for a moot point occurring in litigation. because every court’s subject matter jurisdiction depends This article discusses the concept of mootness in New on the continued existence of an actual controversy. New York civil litigation, including a court’s lack of jurisdic- York jurisprudence recognizes as a “fundamental prin- tion over moot controversies, the application of mootness ciple that a court’s power to declare the law is limited to primarily in construction-project related litigation, and determining actual controversies in pending cases.”7 If a

38 | February 2010 | NYSBA Journal case lacks the necessary “actual controversy” the matter apply this “chief” mootness consideration in litigation. is considered not “justiciable,” and therefore implicates Appellate courts routinely dismiss proceedings where the court’s subject matter jurisdiction.8 The question of the complaining party fails to try to preserve the status subject matter jurisdiction is raised because mootness quo or prevent the other party from moving forward triggers the jurisprudential prohibition against courts with the contested action, by seeking both preliminary issuing what are deemed “advisory opinions.”9 injunctive relief before the lower court and an injunction Advisory opinions are considered judicial opinions on appeal; seeking only preliminary injunctive relief is that would not “have an immediate, practical effect on not enough.20 the conduct of the parties.”10 New York courts have his- The “chief” mootness consideration is also routinely torically recognized that “[t]he courts of New York do not applied by courts in litigation involving an agency’s State issue advisory opinions for the fundamental reason that Environmental Quality Review Act (SEQRA)21 review in this State ‘the giving of such opinions is not the exercise when the action is considered moot.22 The Court of of the judicial function.’”11 This limitation on function “is Appeals directly noted that parties contesting an agency not merely a question of judicial prudence or restraint; action “on SEQRA grounds may safeguard their chal- it is a constitutional command defining the proper role lenge against mootness by promptly requesting injunc- of the courts under a common-law system.”12 Therefore, tive relief.”23 mootness does not deprive a court of valid subject matter Relative to construction-project litigation, the Court of jurisdiction over the underlying asserted actual contro- Appeals’s decision in Citineighbors highlights the consid- versy but, rather, effectively precludes a court from issu- eration of financial means in the context of a request for ing an advisory opinion when the asserted controversy is injunctive relief. There can be a very substantial financial no longer deemed a live dispute by the court. disparity between parties in large-scale construction- Mootness seemingly applies to any controversy that project litigation. A party contesting any decision or can be effectively concluded without a formal court action relating to a large-scale construction project may decision; and any determination about whether moot- intentionally omit pursuing injunctive relief based upon ness may apply is generally going to be “fact-driven.”13 its asserted inability, or simple unwillingness, to provide However, the Court of Appeals has provided more the appropriate financial undertaking for the injunction.24 direct guidance when determining mootness in litigation These decisions can have significant adverse consequenc- involving construction projects. es, as made clear by the Court in Citineighbors. In Citineighbors, the Court determined that both the Mootness in Construction Litigation petitioners’ failure to seek appropriate injunctive relief to The Court of Appeals extensively addressed mootness in enjoin construction based upon the petitioners’ alleged litigation involving construction projects in Dreikausen v. “’monetary constraints’” and their perceived “unlikeli- Zoning Board of Appeals of the City of Long Beach, and short- hood of success” on the merits constituted “nonfea- ly thereafter in Citineighbors Coalition of Historic Carnegie sance.”25 The Court sternly rebuked the petitioners’ Hill v. New York City Landmarks Preservation Commission.14 failure to take the appropriate actions to preserve the In Dreikausen, the Court identified and discussed “several status quo: 15 factors significant in evaluating claims of mootness.” In In short, petitioners simply assumed that Supreme Citineighbors, the Court quoted Dreikausen’s explanation, Court would not grant them injunctive relief or, in “[t]ypically the doctrine of mootness is invoked where a the alternative, would require an undertaking in an change in circumstances prevents a court from rendering amount more than they could or wanted to give. a decision that would effectively determine an actual con- Under Dreikausen, however, petitioners were required, troversy,” noting that when “the change in circumstances at a minimum, to seek an injunction in the circum- involves a construction project, we must first consider stances presented here. Having pursued a strategy that how far the work has progressed towards completion.”16 foisted all financial risks (other than their own legal However, even though there may be “substantial comple- fees and related expenses) onto the property owner and the developer, petitioners may not expect us to tion” of the underlying project, the Court of Appeals has overlook the substantial completion of this construc- explained that “[b]ecause a race to completion cannot be tion project.26 determinative,”17 “other factors bear on mootness in this context as well.”18 As such, a party’s unwillingness to provide the appro- The Court expounded in Dreikausen that “[c]hief priate financial undertaking, and even a party’s alleged among [the mootness factors to consider] has been a chal- financial inability, are seemingly unacceptable reasons for lenger’s failure to seek preliminary injunctive relief or not trying to preserve the status quo by seeking appropri- otherwise preserve the status quo to prevent construction ate injunctive relief. Thus, practitioners should be vigilant from commencing or continuing during the pendency of to avoid any “half-hearted request for injunctive relief,” the litigation.”19 New York appellate courts stringently as it may be strongly construed against their client if an

NYSBA Journal | February 2010 | 39 adversary asserts that the controversy has subsequently es” that may render what started as an actual controversy become moot.27 A basic good faith effort to try to preserve potentially moot. But how do practitioners properly raise the status quo seems to be the predicate standard in litiga- the facts that constitute the “change in circumstances”? tion relating to construction projects. The issue of mootness implicates a court’s subject mat- Additional mootness factors in construction-project ter jurisdiction, and the “‘lack of subject matter jurisdic- related litigation include “whether work was under- tion is not waivable, but may be [raised] at any stage of taken without authority or in bad faith, and whether the action, and the court may, ex mero motu [on its own substantially completed work is ‘readily undone, without motion], at any time, when its attention is called to the undue hardship.’”28 The work and hardship consider- facts, refuse to proceed further and dismiss the action.’”37 ations should include identifying and weighing financial As such, in any lower court proceeding or on appeal, expenditures made by a party in moving forward with if facts constituting the “change in circumstances” are a construction project or approval.29 When considering already in the record before the court, a party should these work/bad-faith/undue hardship factors, the courts have the opportunity to raise the issue of mootness in a are also cognizant that builders have “every business merits brief. This method is consistent with the principle incentive to complete the building as quickly as possible that a court can refuse to proceed with any case on its so as to profit from their investment and avoid paying own volition, when existing record facts show that the interest on construction loans.”30 However, any finding court lacks subject matter jurisdiction. However, when that work was in bad faith or without authority weighs facts constituting the “change in circumstances” are against mootness.31 outside of the record, how does a practitioner best raise The substantial completion and additional mootness mootness? factors ultimately provide greater clarity for practitioners During any lower court proceeding or even on appeal, endeavoring to avoid, or conversely to raise, the issue an appropriate avenue to raise mootness appears to be of mootness in construction-project related litigation. through a motion to dismiss for lack of subject matter These factors, while limited here to construction-project jurisdiction under CPLR 3211(a)(2).38 A motion to dismiss related litigation, may help to provide some guidance based upon lack of subject matter jurisdiction can be when considering whether an actual controversy in non- made before service of a responsive pleading or “at any construction related litigation is potentially moot. subsequent time” – i.e., any time before the lower court or even when on appeal.39 Through a motion to dismiss, Mootness Exception for Discretionary Review parties have the opportunity to introduce new facts or There is an exception that allows courts to consider a other matters – by the motion’s supporting affidavits – moot controversy. New York jurisprudence affords courts that are not already in the record.40 Practically speaking, a “discretion to review a case if the controversy or issue motion to dismiss may generally be the preferred method involved is likely to recur, typically evades review, and to raise mootness: the motion can obviate the court and raises a substantial and novel question.”32 The Court parties addressing the merits of the underlying case and of Appeals noted in Dreikausen that “[c]ourts also have be limited to the specific facts showing that a change in retained jurisdiction notwithstanding substantial comple- circumstances has rendered the controversy moot.41 tion [of a project in construction related litigation] in The consequences of an actual controversy becoming instances where novel issues or public interests such as moot are comprehensive and final: a court will gener- environmental concerns warrant continuing review.”33 If ally dismiss a proceeding or appeal if the court deter- a court determines that all elements exist and the moot- mines that the underlying controversy is moot; however, ness exception applies to any particular case, the “court “vacatur of an order or judgment on appeal may also may reach the moot issue even though its decision has be an appropriate exercise of discretion when necessary no practical effect on the parties.”34 If, however, “there ‘in order to prevent a judgment which is unreviewable is a realistic likelihood that the issues presented [in the for mootness from spawning any legal consequences or case] will recur with an adequately developed record precedent.’”42 and with a timely opportunity for review,” the judicially recognized “exception to the mootness doctrine does not Conclusion apply.”35 New York’s staggering volume of cases underscores the sentiment that courts cannot and should not expend Attorney’s Obligation already strained judicial resources on potentially moot Practitioners have an affirmative and ongoing obligation controversies in litigation. Lawyers generally have an to raise the issue of mootness in litigation “when a change affirmative obligation to inform a court when a controver- in circumstances renders the controversy between the sy is potentially moot, so practitioners in litigation need parties potentially moot.”36 This continuing obligation to be vigilant and take the necessary actions to ensure the extends to facts that constitute a “change in circumstanc- continued viability of their client’s case; however, vigi-

40 | February 2010 | NYSBA Journal 12. N.Y. Pub. Interest Research Group, Inc. v. Carey, 42 N.Y.2d 527, 529, 399 lance is a two-way street, and practitioners should also N.Y.S.2d 621 (1977). continually be aware that, when the appropriate change 13. See Dreikausen, 98 N.Y.2d at 172–73. in circumstances exists, mootness is a practical option to 14. 2 N.Y.3d at 729–30. oppose continued litigation. 15. Dreikausen, 98 N.Y.2d at 172–73; see also Citineighbors, 2 N.Y.3d at 729. A “moot point” is an ongoing concern for everyone in 16. Citineighbors, 2 N.Y.3d at 728–29 (quoting Dreikausen, 98 N.Y.2d at 172). litigation. If a practitioner fails to appreciate the signifi- 17. Citineighbors, 2 N.Y.3d at 729 (internal quotes omitted); see also Dreikausen, cance of a potentially moot point in litigation, the point 98 N.Y.2d at 172. ■ of this article may be moot. 18. Citineighbors, 2 N.Y.3d at 729; see also Dreikausen, 98 N.Y.2d at 173.

1. New York State Unified Court System, Report of the Chief Administrator 19. Id. at 173; Citineighbors, 2 N.Y.3d at 729. of the Courts, Annual Report 2007, at p. 21 (released April 2009), available at 20. See Imperial Improvements, LLC v. Town of Wappinger Zoning Bd. of Appeals, http://www.courts.state.ny.us/reports/annual/pdfs/2007AnnualReport.pdf. 290 A.D.2d 507, 507–508, 736 N.Y.S.2d 409 (2d Dep’t 2002); see also Save the Pine 2. Id. at pp. 20–21, p. 19. Bush Inc., v. City of Albany, 281 A.D.2d 832, 832–33, 722 N.Y.S.2d 310 (3d Dep’t 2001); see also Gorman v. Town Bd. of the Town of E. Hampton, 273 A.D.2d 235, 236, 3. See Saratoga Co. Chamber of Commerce, Inc. v. Pataki, 100 N.Y.2d 801, 810–11, 709 N.Y.S.2d 433 (2d Dep’t 2000); see also Schaffer v. Zoning Bd. of Appeals of Town/ 766 N.Y.S.2d 654 (2003); see also Gonzalez v. Gonzalez, 57 A.D.3d 896, 897, 870 Vill. of Harrison, 22 A.D.3d 501, 501, 803 N.Y.S.2d 644 (2d Dep’t 2005). N.Y.S.2d 410 (2d Dep’t 2008) (stating that “the power of a court to declare the law only arises out of, and is limited to, determining the rights of persons 21. See generally N.Y. Environmental Conservation Law §§ 8-0101–8-0117. which are actually controverted”). 22. See Many v. Vill. of Sharon Springs Bd. of Trustees, 234 A.D.2d 643, 645, 650 4. Hearst Corp., v. Clyne, 50 N.Y.2d 707, 714, 431 N.Y.S.2d 400 (1980); see also N.Y.S.2d 486 (3d Dep’t 1996); see also Sutherland v. N.Y. City Hous. Dev. Corp., 20 Gonzalez, 57 A.D.3d at 897. Misc. 3d 1115(A), *4, 2008 WL 2663599 (Sup. Ct., N.Y. Co. 2008), aff’d, 61 A.D.3d 479, 877 N.Y.S.2d 43 (1st Dep’t 2009); see also Save the Pine Bush Inc., 281 A.D.2d 5. See Hearst Corp., 50 N.Y.2d at 714. at 832–33. 6. Dreikausen v. Zoning Bd. of Appeals of the City of Long Beach, 98 N.Y.2d 165, 23. See Citineighbors, 2 N.Y.3d at 730; see also Vill. of Sharon Springs Bd. of 172, 746 N.Y.S.2d 429 (2002); Citineighbors Coalition of Historic Carnegie Hill v. Trustees, 234 A.D.2d at 645. N.Y. City Landmarks Pres. Comm’n, 2 N.Y.3d 727, 728–29, 778 N.Y.S.2d 740 (2004); see also Saratoga County Chamber of Commerce, Inc., 100 N.Y.2d at 811. 24. See also CPLR 6312(b) (requiring as a prerequisite for an injunction that the requesting party “shall” provide an undertaking to compensate for “all 7. See In re David C., 69 N.Y.2d 796, 798, 513 N.Y.S.2d 377 (1987); see also damages and costs which may be sustained by reason of the injunction”). Workmen’s Comp. Fund Self-Insurers’ Ass’n v. State Indus. Comm., 224 N.Y. 13, 16, 119 N.E. 1027 (1918) (stating “[t]he function of the courts is to determine controversies between litigants”). 8. See Cuomo v. Long Island Lighting Co., 71 N.Y.2d 349, 354–58, 525 N.Y.S.2d 828 (1988) (holding that the “nonjusticiable dispute” was “outside the subject matter jurisdiction of this court”); see also Police Benevolent Ass’n of the N.Y. State Troopers v. N.Y. State Div. of State Police, 40 A.D.3d 1350, 1353 n.2, 838 N.Y.S.2d 199 (3d Dep’t 2007) (stating “[t]he lack of a justiciable issue implicates the subject matter jurisdiction of a court”); see also Morrison v. Budget Rent A Car Sys., Inc., 230 A.D.2d 253, 258–59, 657 N.Y.S.2d 721 (2d Dep’t 1997). 9. See Saratoga County Chamber of Commerce, Inc., 100 N.Y.2d at 810–11 (identifying the plaintiffs’ chal- lenges, which the court deemed to be moot, were “requests for advisory opinions.” Further holding that a court’s “jurisdiction . . . extends only to live controversies,” and courts “are prohibited from giving advisory opinions or ruling on ‘academic, hypothetical, moot, or otherwise abstract questions.’”); see also Gonzalez, 57 A.D.3d at 897 (holding that “[c]ourts are prohibited from rendering advisory opinions and ‘an appeal will be considered moot unless the rights of the parties will be directly affected”); Becher v. Becher, 245 A.D.2d 408, 409, 667 N.Y.S.2d 50 (2d Dep’t 1997) (holding that the “underlying controversy had been rendered moot and [] the judicial determination sought would constitute the rendering of an advisory opinion”). 10. See King v. Glass, 223 A.D.2d 708, 708, 637 N.Y.S.2d 187 (2d Dep’t 1996); see also Employers’ Fire Ins. Co. v. Klemons, 229 A.D.2d 513, 514, 645 N.Y.S.2d 849 (2d Dep’t 1996). 11. See Cuomo, 71 N.Y.2d at 354 (internal brackets omitted); County of Monroe v. City of Rochester, 39 A.D.3d 1272, 1273, 834 N.Y.S.2d 817 (4th Dep’t 2007).

NYSBA Journal | February 2010 | 41 25. 2 N.Y.3d at 729. ness, but will generally obviate subsequent potential mootness claims. See endnote 27 supra. 26. Id. at 729–30; see also Dreikausen, 98 N.Y.2d at 174. 33. 98 N.Y.2d at 173. 27. See Dreikausen, 98 N.Y.2d at 174. The consequences of a party’s failure to seek the appropriate injunctive relief may seem, at times, unduly severe. 34. See Saratoga County Chamber of Commerce, Inc., 100 N.Y.2d at 811; see also However, the potential consequences to any party moving forward with a Schermerhorn v. Becker, 64 A.D.3d 843, 845, 883 N.Y.S.2d 325 (3d Dep’t 2009) construction project when their opponent actually endeavors to maintain the (reiterating all elements must be met for exception to apply). status quo through seeking proper injunctive relief, but the requested injunc- 35. See Citineighbors, 2 N.Y.3d at 730; but see also Schermerhorn, 64 A.D.3d at 845 tive relief is denied, can be equally severe. As long as a party seeks to properly (applying the mootness exception). maintain the status quo, even though they are denied the requested injunctive relief, it is irrelevant if the opposing party subsequently completes construc- 36. See Spano v. Wing, 285 A.D.2d 809, 811, 728 N.Y.S.2d 809 (3d Dep’t 2004); see also Wellman v. Surles, 185 A.D.2d 464, 466, 586 N.Y.S.2d 341(3d Dep’t 1992). tion of the underlying project and then raises mootness. The courts have The obligation to raise mootness is seemingly intended in part to prevent the determined that, in those circumstances, “relief remains available ‘even after “dissipation of judicial resources” and “prevents devaluation of the force of completion of the project’ because ‘structures . . . most often can be destroyed.’” judicial decrees.” See Cuomo, 71 N.Y.2d at 354. Schupak v. Zoning Bd. of Appeals of the Town of Marbletown, 31 A.D.3d 1018, 1020, 819 N.Y.S.2d 335 (3d Dep’t 2006) (quoting Dreikausen, 98 N.Y.2d at 172). 37. Fin. Industry Regulatory Auth., Inc. v. Fiero, 10 N.Y.3d 12, 17, 853 N.Y.S.2d 267 (2008) (quoting Fry v. Vill. of Tarrytown, 89 N.Y.2d 714, 718, 658 N.Y.S.2d 205 28. Citineighbors, 2 N.Y.3d at 729 (quoting Dreikausen, 98 N.Y.2d at 173). (1997)). 29. See Citineighbors, 2 N.Y.3d at 729 (noting “property owner and developer 38. See also generally e.g., Imperial Improvements, LLC v. Town of Wappinger had already spent roughly $25.7 million”); see also Save the Pine Bush Inc., v. Zoning Bd. of Appeals, 290 A.D.2d 507, 736 N.Y.S.2d 409 (2d Dep’t 2002) (raising City of Albany, 281 A.D.2d 832, 832–33, 722 N.Y.S.2d 310 (3d Dep’t 2001) (iden- mootness by motion during appeal). tifying that “[d]uring the pendency of this appeal, the current owner of the parcel expended over $1 million” in moving forward under contested SEQRA 39. See CPLR 3211(e). review); Save the Pine Bush Inc. v. Cuomo, 200 A.D.2d 859, 860, 606 N.Y.S.2d 818 40. See CPLR 2214(b). (3d Dep’t 1994) (finding “[p]etitioners failed to seek a stay pending appeal and 41. Practitioners should consult their court clerk about preferred procedure to the City has expended millions of dollars on the project”). determine if a motion to dismiss versus a merits brief would be the preferred 30. Citineighbors, 2 N.Y.3d at 730; see also Dreikausen, 98 N.Y.2d at 174. procedure for raising mootness. If the motion to dismiss method is used, a practitioner should always remember to consult the lower court’s local rules 31. Id. at 173. and/or the appellate court’s appellate rules of practice for motions to the 32. See Saratoga Co. Chamber of Commerce, Inc. v. Pataki, 100 N.Y.2d 801, 811, 766 court. N.Y.S.2d 1654 (2003); Hearst Corp., v. Clyne, 50 N.Y.2d 707, 714–15, 731 N.Y.S.2d 42. Gonzalez, 57 A.D.3d at 897 (quoting Hearst Corp., v. Clyne, 50 N.Y.2d 707, 400 (1980). A party’s efforts to maintain the status quo in construction-project 718, 731 N.Y.S.2d 400 (1980)); see also Saratoga County Chamber of Commerce, Inc., litigation by seeking appropriate injunctive relief is not an exception to moot- 100 N.Y.2d at 811.

NEW YORK STATE BAR ASSOCIATION

Bar Journal Seeks Candidates for Editorial Board Position

Members of the New York State Bar Association who have an interest in serving on the Board of Editors of the New York State Bar Journal may email Daniel J. McMahon, Managing Editor, at [email protected] or write to him at One Elk Street, Albany NY 12207. Applications should be submitted no later than April 1, 2010.

Interested members should include a statement of their qualifications such as writing ability, knowledge and skill in editorial areas, or articles which they have authored, and a list of area(s) of practice concen- tration. In addition, candidates should include a statement of the contributions they would make to the Journal. Board members serve on a voluntary basis.

The duties of members of the Board of Editors include soliciting articles and recruiting authors, reading and appraising articles submitted for publication, and periodic meetings and conference calls with members of the Board and others regarding the Journal.

A review committee appointed by the Association’s Executive Committee will assess candidates’ qualifications. The Executive Committee will make the final selection of qualified members for the Board of Editors. The initial term of a member appointed to the Board of Editors is three years, with the term commencing on June 1, and the possibility of two additional three-year terms.

The New York State Bar Association is committed to diversity, encompassing gender, race, ethnic origin, national origin, religion, sexual orientation, age and disability, in its membership and committees.

42 | February 2010 | NYSBA Journal NEW YORK STATE BAR ASSOCIATION

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NYSBA Journal | February 2010 | 43 APPELLATE ADVOCACY BY MATTHEW P. SIDE

MATTHEW P. S IDE of Monticello is employed by the New York State Supreme Court, Appellate Division, Third Department. He received his BA from Binghamton University, cum laude, and his law degree from Albany Law School, summa cum laude. The views expressed in this article are the author’s, and may not be attributed to his employer.

Preserving Issues for Appeal, Without Exception

he has not already indicated it, hen an objection was over- For purposes of appeal, a ques- his objection to the action of the ruled during the trial in the tion of law with respect to a ruling court.2 movie A Few Good Men, neo- or instruction of a criminal court W during a trial or proceeding is pre- phyte trial attorney Lt. Cdr. JoAnne Similarly, in criminal cases, a “pro- Galloway, played by Demi Moore, test need not be in the form of an sented when a protest thereto was continued her protestation by saying ‘exception.’”3 Counsel can preserve an registered, by the party claiming “I strenuously object.” Most lawyers issue in various ways, such as object- error, at the time of such ruling or probably chuckled at this maneuver, ing, moving to strike testimony or instruction or at any subsequent agreeing with the chiding appraisal evidence, moving for a mistrial, or time when the court had an oppor- later given by her co-counsel Lt. Sam requesting specific action like limiting tunity of effectively changing the Weinberg, played by Kevin Pollak: or curative instructions.4 same.7 “’I strenuously object?’ Is that how it To be sure, preservation is an impor- The purpose of the preservation rule works? Hm? ‘Objection.’ ‘Overruled.’ tant concept in the arena of appellate is to require parties to raise issues with ‘Oh, no, no, no. No, I STRENUOUSLY review. Lack of preservation can fore- the trial court at a point where oppos- object.’ ‘Oh. Well, if you strenuously close review of an issue on appeal. ing parties can be heard and the court object then I should take some time to “Failure to so make known objections, has an opportunity to address the issue reconsider.’”1 as prescribed in [CPLR 4017] or in sec- and take corrective action to remedy Despite our amusement at Gal- tion 4110-b, may restrict review upon any problems.8 “If the court omits any loway’s gaffe, many lawyers today appeal in accordance with paragraphs issue of fact raised by the pleadings or make a similar, procedurally unneces- three and four of subdivision (a) of evidence, each party waives his right sary move. After a court overrules an section 5501.”5 Those subdivisions, to a trial by jury of the issue so omit- objection, rejects a requested charge or included in CPLR 5501, titled “Scope ted unless before the jury retires he denies a motion, the lawyer asks the of review,” state that demands its submission to the jury.”9 court for an exception. In most instanc- [a]n appeal from the final judgment It would be unfair to permit parties to es, the court plays along and responds brings up for review . . . (3) any rul- sit idly by while a perceived error is that counsel has an exception. Yet the ing to which the appellant objected committed in their presence and then Civil Practice Law & Rules and the or had no opportunity to object or complain about that error when it is Criminal Procedure Law neither pro- which was a refusal or failure to act too late to address it through a simple vide for nor require an “exception” to as requested by the appellant, and correction, such as a jury instruction, preserve an issue. CPLR 4017, titled any charge to the jury, or failure or and the only available remedy is a new Objections, provides that refusal to charge as requested by trial. Courts will not countenance such the appellant, to which he object- gamesmanship. [f]ormal exceptions to rulings of ed; [and] (4) any remark made by If a party was rewarded with a the court are unnecessary. At the the judge to which the appellant time a ruling or order of the court objected.6 second chance to prevail at trial due is requested or made a party shall to the party’s own inaction, the other make known the action which he The rule is similar in criminal party would be prejudiced and judi- requests the court to take or, if courts: cial resources would be wasted. Out

44 | February 2010 | NYSBA Journal of fairness, however, a party is not justice jurisdiction to address unpre- again after the jury is charged may not required to object until the first avail- served issues. be absolutely essential as long as a able opportunity after he or she is Preservation is specifically ad- charge was clearly requested during aware of the objectionable action.10 dressed by statute in the area of jury the charge conference,20 an objection at The degree to which preservation of charges. To preserve a challenge to a the conclusion of the charge is advis- an issue will affect the outcome of an jury charge, a party must object to the able. Otherwise, counsel risks appear- appeal depends on the court in which charge as given or request additional ing to have abandoned or withdrawn the appeal is pending. The Appellate charges in response to the court’s in- the request.21 While the Appellate Di- Division may consider any question of quiry.18 “No party may assign as error vision may review an unpreserved law or fact, but unpreserved issues are the giving or the failure to give an in- challenge to jury charges that are fun- considered only “as a matter of discre- struction unless he objects thereto be- damentally flawed,22 counsel should tion in the interest of justice.”11 The fore the jury retires to consider its not rely on this permissive review but court has considerable discretion and verdict stating the matter to which he should object to ensure that the issue is need not consider arguments concern- objects and the grounds of his objec- preserved. ing issues that were not properly raised tion.”19 Under CPLR 4110-b, any party Objections and trial motions ensure in the trial court. Unlike the Appellate “may” request specific charges. This is that only admissible evidence is Division, the Court of Appeals has a permissive, not mandatory. A party received and proper procedures are narrower scope of review and can only may still object to charges even if no followed during trials. If the objection decide questions of law that were prop- request was made, although a better or motion is unsuccessful, however, erly preserved.12 The Court of Appeals practice would be to provide the court counsel’s action in bringing the per- does not have general factual review with the party’s own request at or prior ceived error to the trial court’s atten- power or the authority to review mat- to the charge conference, rather than tion preserves the issue for future ters in the interest of justice. Thus, merely objecting to the opponent’s re- review. Because failure to preserve an failure to preserve an issue at trial will quests. Although a formal objection argument can be dispositive and for- entirely prevent review of that issue by the Court of Appeals.13 Trial counsel should take great care to preserve all possible issues for future review. Appellate counsel is limited by the record on appeal, including the requests and objections made by trial counsel. To preserve an error in the admission of evidence or a charge to the jury, a party must make his or her position known to the trial court. The argument must be specifically directed at the alleged error in order to fulfill the preservation requirement; a general objection will not suffice to attack a specific aspect of the trial.14 An objection or motion preserves the argument only as to the ground or basis stated.15 Even a challenge to the constitutionali- ty of a statute must be raised in the trial court, or the issue may be precluded as unpreserved for appeal.16 Limited exceptions to the preservation doctrine exist for errors relating to the jurisdiction of the court or where there was a fundamental, non-waivable defect in the mode of procedure.17 The preservation rule does not deprive criminal defendants of the right of review because they can still request that the Appellate Division apply its interest of

NYSBA Journal | February 2010 | 45 ever bar correction through the appel- 3. CPL § 470.05(2). 14. People v. Finger, 95 N.Y.2d 894, 716 N.Y.S.2d 34 late process, especially at the Court 4. People v. Brooks, 26 A.D.3d 596, 811 N.Y.S.2d 131 (2000); People v. Gray, 86 N.Y.2d 10, 629 N.Y.S.2d 173 (3d Dep’t 2006). (1995); see also People v. Parker, 29 A.D.3d 1161, 1162 n.1, of Appeals, trial counsel must strive 814 N.Y.S.2d 818 (3d Dep’t), aff’d, 7 N.Y.3d 907 (2006). to preserve all potential issues for 5. CPLR 4017. 15. Bloodgood v. Lynch, 293 N.Y. 308, 313 (1944); appellate review. On appeal, coun- 6. CPLR 5501(a)(3), (4). Curanovic v. N.Y. Cent. Mut. Fire Ins. Co., 22 A.D.3d sel for appellants would be wise to 7. CPL § 470.05(2). 975, 803 N.Y.S.2d 234 (2005); People v. Rogers, 15 address preservation by noting that 8. People v. Gray, 86 N.Y.2d 10, 20–21, 629 N.Y.S.2d A.D.3d 682, 788 N.Y.S.2d 716 (2005). each argument was properly pre- 173 (1995); People v. Baker, 24 A.D.3d 810, 804 16. Baumann & Sons Buses, Inc., 6 N.Y.3d at 408; N.Y.S.2d 492 (3d Dep’t 2005); People v. Richard, 30 People v. Riddick, 34 A.D.3d 923, 823 N.Y.S.2d 594 (3d served, by arguing that preservation A.D.3d 750, 817 N.Y.S.2d 698 (3d Dep’t 2006), lv. Dep’t 2006), lv. denied, 9 N.Y.3d 868, 840 N.Y.S.2d 898 was unnecessary due to the jurisdic- denied, 7 N.Y.3d 869, 824 N.Y.S.2d 614 (2006) (issue (2007). raised in a CPL § 330.30 motion did not preserve tional or non-waivable fundamental 17. People v. Gray, 86 N.Y.2d 10, 629 N.Y.S.2d 173 argument, as that was too late to correct the prob- (1995); cf. In re Michael FF., 210 A.D.2d 758, 621 nature of the error, or by requesting lem); People v. Perry, 27 A.D.3d 952, 811 N.Y.S.2d 223 that the Appellate Division invoke its (3d Dep’t 2006), lv. denied, 8 N.Y.3d 883, 832 N.Y.S.2d N.Y.S.2d 112 (3d Dep’t 1994) (failure to object 496 (2007); see also CPL § 470.05(2). to competency of deposition supporting juvenile interest of justice jurisdiction to review delinquency petition, a nonjurisdictional latent the issue despite the lack of preserva- 9. CPLR 4111(b). defect, renders argument unpreserved). tion. Counsel for respondents may 10. People v. Yanas, 36 A.D.3d 1149, 828 N.Y.S.2d 18. People v. Woodridge, 30 A.D.3d 898, 817 N.Y.S.2d 663 (3d Dep’t 2007) (objection at sentencing prop- 748 (3d Dep’t 2006), lv. denied, 7 N.Y.3d 852, 823 be able to avoid review of the merits erly preserved issue as to post-release supervision, N.Y.S.2d 782 (2006); Pyptiuk v. Kramer, 295 A.D.2d by informing the court that issues are where that component of sentence was not men- 768, 744 N.Y.S.2d 519 (3d Dep’t 2002). unpreserved. As a rule, while no attor- tioned at plea allocution); People v. Russ, 19 A.D.3d 19. CPLR 4110-b. ney needs to “strenuously object,” 746, 796 N.Y.S.2d 444 (3d Dep’t 2005) (People did not fail to preserve argument where court raised 20. Arbegast v. Bd. of Educ. of S. New Berlin Cent. Sch., counsel at all levels should be aware and decided matter sua sponte in a written decision, 65 N.Y.2d 161, 164 n.1, 490 N.Y.S.2d 751 (1985). of the importance of preserving issues as People had no opportunity to object). 21. Id. for appeal. No exceptions. ■ 11. CPL § 470.15(3), (6). 22. Wagner Trading Co. v. Tony Walker Retail Mgmt. 12. N.Y. Const. art. VI, § 3(a); CPL § 470.35(2). Co., 307 A.D.2d 701, 764 N.Y.S.2d 156 (4th Dep’t 1. A Few Good Men, Castle Rock Entertainment, 13. People v. Baumann & Sons Buses, Inc., 6 N.Y.3d 404, 2003); Redmond v. Schultz, 152 A.D.2d 823, 544 1992. 813 N.Y.S.2d 27 (2006); Davis v. St. Joseph’s Children’s N.Y.S.2d 33 (3d Dep’t 1989). 2. CPLR 4017. Servs., 64 N.Y.2d 794, 795, 486 N.Y.S.2d 914 (1985). Are You feeling overwhelmed? The New York State Bar Association’s Lawyer Assistance Program can help.

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46 | February 2010 | NYSBA Journal LEGAL RESEARCH BY WILLIAM H. MANZ

WILLIAM H. MANZ ([email protected]) is Senior Research Librarian, St. John’s University School of Law. The author received his law degree from St. John’s and his undergraduate degree from the College of the Holy Cross. Mr. Manz is the author of Gibson’s New York Legal Research Guide (William S. Hein & Co., Inc. 2004) and The Palsgraf Case: Courts, Law, and Society in 1920s New York (LexisNexis Matthew Bender 2005). He wishes to thank Ralph Monaco of the New York Law Institute Library, Richard Tuske of the Bar Association Library, and Jerry Dupont of LLMC for providing information for this article.

Recent Developments: Records and Briefs

ppellate records and briefs can deteriorating bindings, photocopying researchers at only a few locations. In be invaluable research tools. their contents can be difficult, if not addition to the Bar Association, New AThey contain facts, legal argu- impossible. The books are usually bur- York County Lawyers’ Association, ments, primary and secondary author- ied deep in closed library stacks or and the New York Law Institute librar- ities, and other information not includ- housed in off-site storage. Thus, if a ies in Manhattan, records and briefs ed in the case reporters.1 While these particular volume is not located on- collections can be found at the Fourth materials have always been accessible, site, the researcher may have to make Department Library in Rochester, the the ease of availability has varied by an appointment to use the materials. Buffalo and Brooklyn Supreme Court court and date. Briefs from the New Because only a small number of libraries, and the New York State York Court of Appeals are available records and briefs can be bound in Library and Archives.5 Adding to the on microfilm or microfiche begin- a single volume, the storage space difficulties, the different collections are ning with cases from the early 1930s, requirements are enormous. For exam- not identical, which can mean trips to while such coverage for the Appellate ple, the State Archives collection of various locations to examine all the Division dates from the early 1970s.2 Court of Appeals briefs (1847–1993) requisite briefs.6 More recently, selected records and consists of 16,856 volumes, and its This situation will change in the briefs for newer New York Court of Third Department collection (1896– near future because of a major proj- Appeals and Appellate Division deci- 1983) contains 7,413. At one time, the ect now underway to scan and make sions have been made available online Bar Association housed much of its available in free online format all the by Westlaw, LexisNexis, HeinOnline, collection at a storage site in Long older Court of Appeals and Appellate and the Unified Court System Web Island City, while some volumes were Division briefs. The project is a partner- site.3 shelved on the upper level of its main ship between the Internet search giant The availability of older records reading room, accessible by climbing Google and the Law Library Microform and briefs has been more restricted, an open circular metal stairway and Consortium (LLMC), a non-profit con- however. When researching his book then navigating a narrow, railed walk- sortium based in Hawaii, long known Cardozo: A Study in Reputation, Seventh way. At the New York County Law- in the law library community as a Circuit Judge Richard A. Posner noted yers’ Association Library some more major supplier of microfiched and dig- how difficult and time consuming it recent Appellate Division materials are itized legal materials.7 LLMC’s role was to obtain the 20 briefs from the located in a main floor stacks area; its has been to work with the donor librar- Cardozo cases that he wanted to exam- earlier Court of Appeals and Appellate ies in collecting the materials and to ine.4 This is because virtually all of the Division records and briefs are on one supply the needed metadata;8 Google records and briefs from older cases, level in the library’s basement stacks; has handled shipping the materials to such as those needed by Judge Posner, and its extensive collection of First its headquarters in California, and is are still available only in thick, hard- Department records and briefs (1906 to doing all the scanning. copy volumes, many of which have not the early 1930s) is shelved on 10-foot- The material donated by New York been touched in decades. Therefore, high wooden stacks, which take up Law Institute and the Bar Association depending on storage conditions, they most of a large, high-ceilinged base- libraries in New York City totals may be dirty, dusty, and unpleasant to ment storeroom. approximately 48,000 volumes. The handle. Because the volumes are heavy Because of their size, significant Bar Association library shipped records and cumbersome, with sometimes collections have been available to and briefs of the Court of Appeals

NYSBA Journal | February 2010 | 47 (ca. 1850–1920), the Appellate Division and each storage bay is the size of a addition to the quality of the images, (1896–1940), the New York Superior football field. Described by the com- the level of expense involved in scan- Court (1871–1892), the Appellate pany as the “most secure and elusive ning film and fiche will determine Term (1874–1931), and the Appellate underground storage facilities in the whether Google expands the project to Division’s predecessor, the General world,”10 the old salt mine “pro- include film- and fiche-based materi- Term. The New York Law Institute vides a clean, cool, and dry environ- als. Whether the project is expanded sent records and briefs of the Court of ment”;11 it is also used by Hollywood even further to include new briefs as Appeals from 1941–1959 and those of and a variety of other businesses to they become available probably will be the Appellate Division from 1941–1970. store materials determined by privacy issues, includ- Shipping the volumes was a major Although the briefs now being ing concerns about making freely project. It took the staff of the Bar scanned are from older cases, which, available to the public documents that

A major project is now underway to scan and make available in free online format all the older Court of Appeals and Appellate Division briefs.

Association Library from January until except for some landmark opinions, are might possibly contain sensitive infor- August 2009 to remove the volumes often of little interest to the practicing mation, and which are now only eas- from basement stacks. The removal of bar, this material should prove invalu- ily accessible to members of the legal more than 15,000 volumes (occupying able to historians. As previously noted, community. 4,400 feet of linear shelf space) from Judge Posner relied on them when The target date for the completion the New York Law Institute Library preparing his book on Cardozo. This of the initial installment of New York began in February 2009; the task was author has researched this material for hardcopy materials is February or not completed until June. Journal articles on the Lemmon slavery March 2010. The scanned records and Google is performing the scanning case from the 1850s (General Term and briefs will be available to LLMC sub- at its headquarters, Googleplex, in Court of Appeals briefs), and the Bat scribers in pdf format at its Web site. Mountain View, California, using its Masterson-Benjamin Cardozo face-off They will also be freely available on own proprietary equipment. The vol- at a 1913 libel trial (briefs and the court Google although whether the format umes are guillotined and then fast fed record).12 Also, because memorandum will be pdf or html has not yet been through a high-speed scanner capable opinions in the case reporters often determined. On Google, the contents of producing 6,000 images an hour. omit the facts, legal arguments, and of the briefs will be searchable by key- One major problem in the process the names of attorneys, this writer word, meaning that this vast body of involves the large fold-out exhibits found trial records invaluable when previously almost impenetrable mate- (photos, maps, diagrams, etc.) that are writing a short history of the Palsgraf rial will be accessible to both attorneys sometimes included as part of the court case,13 particularly when researching and historians.14 ■ record. These were found in approxi- the Long Island Railroad’s other neg- mately 8,000 of the first scanned vol- ligence cases and the law practice of 1. For example, approximately three-quarters of the cases cited in briefs for cases decided by the umes, and metadata needed to be Mrs. Palsgraf’s attorney, Matthew W. Supreme Court during the 1996 October Term were devised for each of them. According Wood. not cited in the Court’s majority opinions. William to LLMC, the large-sized exhibits had Realizing that attorneys are most H. Manz, Citations in Supreme Court Records and Briefs: A Comparative Study, 94 Law Libr. J. 267, 272 to be detached and “diverted into a likely to be interested in records and tbl. 6 (2002). separate scanning flow, with the result- briefs from more recent cases, LLMC 2. The William S. Hein Co. coverage of records ing images being melded back into the is hopeful of including in the scanning and briefs on microform begins with 1934. The 9 company had been steadily extending retrospective main digital stream at a later stage.” project materials now available on coverage, but finally stopped because of a declining After being scanned, the paper cop- microfilm and microfiche. Accordingly, number of subscribers to its retrospective collec- ies are sent to Underground Vaults Google is now currently investigat- tion. More recently, West Court Record Services completed microfiche for the period 1928–1934. and Storage, Inc., which places them in ing the feasibility of such an expan- For a more detailed description of availability of permanent storage in unused areas of a sion by using samples lent by the Bar New York records and briefs, see William H. Manz, Researching New York Records and Briefs, N.Y. St. B.J. working salt mine beneath Hutchinson, Association Library. It is testing to (Feb. 2007), p. 30. Kansas. The facility is 650 feet below ascertain the quality of the images 3. LexisNexis, Westlaw, and the Court System ground and has 1.7 million acres of derived from scanning them, which, briefs are in html format. Only Hein makes the storage space; ceilings are 16 feet high as of this writing, have been good. In records and briefs available in pdf format.

48 | February 2010 | NYSBA Journal 4. Richard A. Posner, Cardozo: A Study in 8. Metadata for a document include such informa- The Hutchinson mine is the largest storage facility Reputation 132 (1990). tion as size, author and publication date. TechTerms. for the movies and television industry in the world, com, Metadata, http://www.techterms.com/defini- and one-quarter of the storage area is devoted to the 5. Retrieval methods used by library staffs vary. tion/metadata (last visited Sept. 28, 2009). films. Id. At the New York County Lawyers’ Association Progress on NY Records & Briefs Project Library, most of the volumes are designated by year 9. , LLMC- 11. Id. Digital Newsletter, Aug. 18, 2009, at 3, available and volume number. Individual records and briefs 12. See William H. Manz, “A Just Cause for War”: at http://www.llmc.com/Newsletter/Issue36_ can then be located by consulting the entries in old, New York’s Dred Scott Decision, N.Y. St. B.J., Nov./ August_2009.pdf. hand-written ledgers. Dec. 2007, at 10; William H. Manz, Benjamin Cardozo 10. Hutchinson Facility – The Salt Mine, Meets Gunslinger Bat Masterson, N.Y. St. B.J., July/ 6. For example, when researching the history of Underground Vaults & Storage, http://www. Aug. 2004, at 10. the Palsgraf case, this author used the records and undergroundvaults.com/aboutus/hutchinson.cfm. briefs collections at New York County Lawyers’ With regard to security, the company states that 13. See William H. Manz, The Palsgraf Case: Courts, Association Library, the Bar Association Library, the protections include “biometric scans, video cam- Law and Society in 1920s New York (2005). Brooklyn Supreme Court Library, and the New York eras, redundant authorizations, steel vault doors, 14. A somewhat similar breakthrough in accessibil- State Library in Albany. blind passwords, anonymous storage, restricted ity occurred when the 178-volume English Reports, personnel access, infrared monitors, and more containing over 100,000 cases from 1220 to 1865 was 7. For further information on LLMC, see LLMC: that we cannot reveal.” Id. Perhaps the most first published on a searchable DVD and then later Law Library Microform Consortium, http://www. notable materials stored here have been sensitive online. llmc.com. Cold War era documents, and Hollywood films.

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NYSBA Journal | February 2010 | 49 PRESENTATION SKILLS FOR LAWYERS BY ELLIOTT WILCOX

ELLIOTT WILCOX is a professional speaker and a member of the National Speakers Association. He has served as the lead trial attorney in over 140 jury trials, and teaches trial advocacy skills to hundreds of trial lawyers each year. He also publishes Trial Tips, the weekly trial advocacy tips newsletter .

It’s Not About You!

e’s only been speaking for 10 listen to your every word? Would you about? Find out what your audience minutes, but already you’re sorry like your audience to think, act, or feel wants, and give it to them. Hyou re-scheduled that root canal differently when you’re done speaking? Provide more than they expected. If appointment. So far he’s discussed what You need to begin by understanding you are speaking to advertise your firm his plans are for the board, who he wants one simple fact: It’s not about you. or your legal expertise, don’t spend to partner with, how he prepared for this Tune into W.I.I.F.M. Don’t start time talking about how great you are position, and how he wants you to help your speech by saying, “I would like or how wonderful your firm is. They him during his term as chairman. You sit in . . .” or “I want . . .” Instead, start your don’t care. the audience, trapped, thinking to yourself, speech by turning the dial to W.I.I.F.M. Instead, talk about the benefits you “So what? Who cares? I’ve got a billing That is the radio station every audi- can provide. Can you help their busi- quota to make, a brief due next Tuesday, ence member is tuned into: “What’s ness save money? Can you protect and the temperature in here is freezing. In It For Me?” Remember, you’re com- them from potential lawsuits? Can you Who cares about what you want?” peting with all of the other ideas and help them plan for retirement or to Sound familiar? We’ve all listened to concerns spinning through your audi- avoid a messy probate situation? That speakers drone on about what they’ve ence’s minds. They’re thinking about is what the audience cares about. done, what they want to do, how they their jobs, their families, what they This approach even applies to jury want to do it, and who they want to do have to do tomorrow, who they need to trials. Do you want them to find the it with (or to). talk to, bills they need to pay, whether defendant liable? To tell the plaintiff he Worse yet, some of us have done or not they turned off the iron before has no case? To find someone guilty? the exact same thing. Whether arguing they left the house this morning, and a I bet you’re already ahead of me by a summation, presenting a community dozen other concerns. If you can’t give now: they don’t care about what you program, or speaking with our kids, your audience something of value, want. we talked about what we want, rather they tune you out and switch to one Think to yourself, “If I was sitting than what our audience wants. those competing thoughts. in the jurors’ seats, why would I care Let’s be blunt: audiences don’t care Sit in your audience. Want them about this case? What’s in it for me?” what you want. to pay attention? Start by thinking When you can answer that question It’s not about you. Audiences are about your speech from your audi- and tie it in to the outcome your cli- composed of people who care about ence’s point of view. What do they ent desires, you have a successful trial what they want. They want to be want to learn? What do they want to presentation on your hands. healthier, happier, smarter, safer, and do differently? How can you help them So what do they care about? They richer. They want to be better parents, improve? Tune into your audience’s want to walk out of that courtroom investors, communicators, leaders, or wants, needs, and desires. Ask your- and feel they’ve done their civic duty. lovers. They want to be more produc- self, if I was sitting in the audience, They want to think they’ve been fair. tive, more efficient, have more pleasure would I be interested? If I didn’t know They want to know they’ve been just. in their careers, and avoid the pitfalls this speaker, would I care about what Talk about what they want. Show them and perils of public and private life. they have to say? Is this a worthwhile how their verdict prevents an injus- Audiences listen to speakers because use of my time? If you answer, “No,” tice. they want us to enhance their lives. ask yourself, “Why not?” Are you talk- Remember: it’s not about you. To Do you want to be a successful ing about what you care about, or present successfully, talk about what speaker? Do you want the audience to are you talking about what they care your audience cares about. ■

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Mention code: PUB0681 when ordering. ATTORNEY PROFESSIONALISM FORUM

To the Forum: ed by the American Bar Association), case task of determining when As I write this the hour is late and it it did in this case. The Committee lawyers should be able to read, has been a long day. Just before shut- proposed to the Presiding Justices of retain, or use the information con- ting down my computer I took one last the four Appellate Divisions the exact tained in inadvertently sent docu- look at my e-mails and I saw an odd wording of Model Rule 4.4, and the ments. A more detailed rule on one from an adversary’s law firm. The Justices adopted it as one of the rules inadvertently transmitted docu- message was “fyi” and below was an governing the conduct of attorneys ments would likely be difficult to attachment symbol. The message was in the State of New York. Specifically, apply and enforce, and could not “from” a paralegal in my adversary’s Rules of Professional Conduct, Rule 4.4 possibly anticipate all of the situ- office whom I had met and remem- states as follows: ations that will arise as technology bered. I double-clicked to check the (b) A lawyer who receives a docu- evolves. “to” list and it was composed entirely ment relating to the representation of members of my adversary’s law of the lawyer’s client and knows or Again, then, the answer to the ques- firm, individuals, including experts reasonably should know that the tion, according to the recently adopted associated with my adversary’s case document was inadvertently sent Rules of Professional Conduct, is a and my adversary’s client. I was on shall promptly notify the sender. simple yes. However, to many law- the list but I just did not seem to The official comment of the American yers who vigorously argue against the belong on it. Nevertheless I clicked Bar Association states “[f]or purpos- receiving lawyer’s ability to read (much on the attachment and saw the title of es of this Rule, ‘document’ includes less use) the information obtained, the the attached “Confidential-Case Plan e-mail or other electronic modes of answer is anything but simple. Report Analysis of Case Including transmission subject to being read or This is not the first time the issue Problems and Recommendations.” At put into readable form.” The official has been addressed in this column; this point it became obvious that this comments to the New York Rule do not it was the subject of the Forum in was an internal memo sent to the law contain this sentence, but the report- the Journal of July/August 2003. As firm, associated support individuals er’s notes for COSAC clearly indicate noted, there was no comparable rule and the client. It was not meant for me. that this Rule is intended to apply to at the time. The conclusion reached My cursor is now at the bottom of the e-mails and other electronic transmis- by the Forum was “by returning or e-mail on the box with an arrow point- sions. The Rule is new – the former ing down and the question is “Do I Code of Professional Responsibility press down?” And further if I do press contained no such provision and did The Attorney Professionalism Committee down and read, what do I do then? As not address this issue. However, the invites our readers to send in comments I say it has been a long day, it is late at reporter’s notes appear to explain the or alternate views to the responses night, and I sure as hell could use some thinking of COSAC in adopting Rule printed below, as well as additional cheering up. 4.4, and illustrate some of the issues. hypothetical fact patterns or scenarios to Sincerely, The notes state as follows: be considered for future columns. Send Poised on the Edge your comments or questions to: NYSBA, This formulation places a mod- One Elk Street, Albany, NY 12207, Attn: est burden on the innocent receiv- Dear Poised: Attorney Professionalism Forum, or by ing lawyer, but enables the sender, e-mail to [email protected]. The answer to your question is, at least upon receipt of notice, to take what- This column is made possible through facially, simple. The answer is yes. You ever steps the sender considers the efforts of the NYSBA’s Committee on may click on the box, scroll down and advisable. The current Disciplinary Attorney Professionalism. Fact patterns, read the communication. In fact, you Rules do not contain a comparable names, characters and locations presented may use the information obtained. But rule, but the provision is needed in this column are fictitious, and any resem- background is important to an under- to guard against breaches of con- blance to actual events or to actual persons, standing of the relevant rule. fidentiality and other harms to living or dead, is entirely coincidental. These As you may be aware, the New York clients that inevitably arise, even columns are intended to stimulate thought State Bar Association appointed a com- among careful and conscientious and discussion on the subject of attorney mittee – the Committee on Standards lawyers, with the proliferation of professionalism. The views expressed are of Attorney Conduct (COSAC) – which e-mail, faxes and other electronic those of the authors, and not those of the spent several years reviewing the New means of communication. York Lawyer’s Disciplinary Code. It Attorney Professionalism Committee or adopted the Model Rule approach and, Rule 4.4(b) is deliberately simple the NYSBA. They are not official opinions while it did not adopt the substance in form and simple to implement, on ethical or professional matters, nor of every one of the Model Rules of leaving to the courts and ethics should they be cited as such. Professional Conduct (as promulgat- committees the complex, case-by-

52 | February 2010 | NYSBA Journal destroying the errant fax, you would ment, but also achieves a level the hands of a criminal defense lawyer. be merely preserving the clear right of of professionalism that can only A plaintiff’s attorney receives material your adversary to keep communica- redound to the lawyer’s benefit. inadvertently sent by defense counsel tions with his/her client confidential, The Forum came to the same result to the effect that the defendant chemi- and by so doing would be promoting and conclusion, as indicated by the cal company has deposited danger- the integrity of the legal system as passage quoted above regarding the ous chemicals into the environment, a whole.” In support of its view, the confidential fax inadvertently sent to which are slowly poisoning school Forum cited American Bar Association an adversary. children. Information is received that Committee on Ethics and Professional The purpose in setting forth the the physician defendant did in fact Responsibility Formal Opinion 92-368. reasoning of these two opinions is commit the negligent act that crippled That Opinion stated: “[a] satisfactory that they express the position of a the plaintiff. Or documentary proof answer to the question posed cannot substantial number of attorneys on accidentally arrives that the defendant be drawn from a narrow, literalistic this subject, about which they are quite drug company has tests proving that reading of the black letter of the Model passionate. Many feel that the answer its latest pain medication caused the Rules.” It spoke of confidentiality and to this question involves a fundamen- death of some patients. If we speak stated further that “if the Committee tal perception of what the practice of of the integrity of the judicial process, were to countenance, or indeed encour- law is all about. one can reasonably ask how that integ- age, conduct on the part of the receiv- However, as was stated in the rity is maintained by keeping secret ing lawyer which was in derogation Forum, “unfortunately no clear guid- evidence that should be seen by the of the strong policy in favor of confi- ance is furnished by the Code, as trier of the facts, be it a court or jury, to dentiality, the Committee would have there is no Disciplinary Rule or Ethical ensure that is reaches a just result. All to identify a more important principle Consideration which directly addresses this being said, you should check out which supports an alternative result. the inadvertent discovery of confidential Rule 26(b)(5)(B) of the Federal Rules . . .We conclude that their importance materials.” That is no longer true. With of Civil Procedure. This rule imposes pales in comparison to the importance Rule 4.4(b) as proposed by COSAC, and much stricter regulations. of maintaining confidentiality.” The as adopted by the Presiding Justices, there In conclusion, there are passionately Opinion concludes: is guidance, and the guidance requires held opinions on both sides of this The preamble to the Model Rules no more than that the receiving attorney issue. That being said, the Rules of correctly notes that “virtually all simply notify the sending attorney of Professional Conduct as established by difficult ethical problems arise from the receipt of the materials. the four Presiding Justices of the State of the conflict between a lawyer’s Furthermore, Ethics Opinion 94-382 New York impose no obligation on the responsibility to clients, to the legal has been withdrawn by the American receiving lawyer to refrain from read- system and to the lawyer’s interest Bar Association Standing Committee on ing the material, keeping the material, in remaining an upright person Ethics and Professional Responsibility, and using the information discovered. while earning a satisfactory liv- by way of Formal Opinion 05-437. The Forum, by ing.” Similarly, the same introduc- It did so because in February 2002 Peter V. Coffey tion observes that “a lawyer is also the ABA Model Rules of Professional Englert, Coffey, McHugh & guided by personal conscience and Conduct were amended, and narrowed Fantauzzi, LLP the approbation of professional the obligation of the receiving lawyer. Schenectady, NY peers.” In this instance, those prin- The ABA Model Rules established the ciples . . . all come together to sup- Rule as it is set forth in the rules appli- Find us on the Web! cable to New York attorneys under Just a click away: port our conclusion that receiving The NYSBA Journal is available to you anytime at all. counsel’s obligations under those Rule 4.4(b). Formal Opinion 05-437 states: “The Rule does not require the Log in as a member: circumstances are to avoid review- Membership gives you access to current issues and the ing the materials, notify sending receiving lawyer either to refrain from Journal archive on HeinOnline. The archive offers the examining the materials or to abide by Journal in a word-searchable format, beginning with the counsel if sending counsel remains first issue in 1928. the instructions of the sending lawyer.” ignorant of the problem and abide Find an article: by sending counsel’s direction as It should also be noted that on close Our word-searchable index lists all Journal articles from 2000 through present. to how to treat the disposition of examination a rule requiring a lawyer to not read the material, or not to use it, Let us know: the confidential materials. This Comment on any article you’ve read, topics you’d like result not only fosters the impor- has limited practical application. addressed or the issues facing today’s practitioners through the editor’s blog. tant principles of confidentiality, Certainly, one can come up with The Journal at www.nysba.org/barjournal. avoids punishing innocent clients examples of accidental disclosure that few would hesitate to use. One might The Editor’s blog at http://nysbar.com/blogs/ and conforms to the law of bail- barjournal/. Click on “comments.” be confidential material coming into

NYSBA Journal | February 2010 | 53 LANGUAGE TIPS BY GERTRUDE BLOCK

uestion: Is it correct to refer added, “I believe that this practice is profit/profited. (All the verbs in that to an individual as “The not only inappropriate, but improper, list (benefit, differ, catalog, and profit) QHonorable Judge Smith . . .”? conveying precisely the image that the are accented on the first syllable.) But I think that identification is redundant, bar is currently attempting to negate: when the accent falls on the second but I have seen the title written that that lawyers are officious, self-serving syllable of the root verb, as in regret/ way in some publications. practitioners.” regretted; permit/ permitted; refer/referred, Answer: You are correct; that title is Another correspondent wrote that the consonant of the second is usually redundant. Properly, write either “The he opposes all titles that identify an doubled. Honorable John Smith” or “Judge John attorney except “Lawyer.” He wrote: Potpourri Smith.” The honorific must include the Except in relation to specific capitalized definite article “The”; the employments, where I function Have you noticed that when two t’s or word “Honorable” by itself is insuffi- as such, please do not address two d’s appear in the middle of a pair cient. But the use of both titles, “Judge” or refer to me as “Attorney” of words, both members of the pair and “The Honorable” is redundant, as (agent), “Counselor” (advisor), or sound the same? There is no difference is the double identification“ Attorney “Advocate” (pleader, hired gun). in the sound of traitor and trader, latter Jack Jones, Esq.” or the title “Dr. Mary As titles, or as general descrip- and ladder, hearty and hardy, Plato and Jones, M.D,” although they too are tions of persons, those terms are Playdoh. How do you tell whether a often seen. degrading because they are limit- person is saying, for example, latter Allen Morris, retired Clerk of the ing. Like the expression “Mistress” or ladder? Of course, you can usually Florida House of Representatives and and “Decent Burial,” they carry the tell by the context, but there’s another expert on this subject, writes in his implication of “only” or the lack way most people don’t think about: manual Practical Protocol for Floridians, of something. The term “Lawyer” As a native speaker, you shorten the that, in Florida, everyone who has ever refers to my training and presumed vowel in the word that has two t’s in received a commission over the Great competence. the middle and lengthen the vowel Seal of the State is awarded the title sound in the word with the two d’s. So “The Honorable.” And once awarded, Question: How do you know in Play-doh, for example, the a sound is the title remains with the individual for whether or not to double the final con- held longer than the a sound in Plato, life, just as everyone who has received sonant of a verb to indicate past tense? distinguishing the two words. Try it the title “Judge” retains that honorific For example, should the past tense of yourself, with all the words listed. for life. fit be spelled fited or fitted? You might also add the question: He adds that the title is not “gender- Answer: The correct spelling is fitted. “Why are words pronounced the same oriented.” (He also pointed out that When a single-syllable word ends in a whether they have either two t’s or two the sign on the door of the men’s single consonant that follows a vowel, d’s? The answer is that when words room in the Supreme Court building, double the consonant before a suffix with consonants in the middle are sur- which reads “Justices” is inappropri- that begins with a vowel. Examples rounded by vowels the consonants are ate because it indicates that the room are rub/rubbed, sip/sipped, and rig/rigged. affected by the voiced vowels, so they is “unisex.”) (So when the New York Times reported become voiced as well. The title “The Honorable . . .” that Sarah Palin had commented that A good illustration of that effect is a should not be abbreviated. The abbre- a Democratic candidate for President popular 1944 song whose lyrics seem viations “The Hon.” or “Hon.” are “palled around” with undesirable indi- nonsensical. If you are old enough, inappropriate. Remember, also, that viduals, the doubled consonant was you may recall the opening lines. since the honorific is a title of esteem, correct.) Mairzydoatsndozyoatsnlittlelamzedi- one should never use it to refer to In verbs of two or more syllables, vy; a kiddelydivytoo, wouldn’t you?” oneself. Nor should one ever address double the final consonant before the (Readers may sing along with me.) The oneself as “Esquire,” although others suffix when the suffix begins with a may properly use either “Esquire” or vowel. Examples are refer/referred; infer/

“Esq.” to refer to other lawyers. inferred; control/controlled. But when GERTRUDE BLOCK is lecturer emerita at the But some lawyers strongly object verbs having more than one syllable University of Florida College of Law. She is the to being addressed as either “Esq.” or end with a consonant preceded by a author of Effective Legal Writing (Foundation “Esquire.” One lawyer, who heads a single vowel, do not double the final Press) and co-author of Judicial Opinion Writing law firm, wrote that either honorific consonant before a suffix when the (American Bar Association). Her most recent irritates him so much that he does not accent falls on the first syllable of the book is Legal Writing Advice: Questions and consider hiring a lawyer who has used root word. Examples are benefit/ben- Answers (W. S. Hein & Co., 2004). it when applying for a position. He efited; differ/differed; catalog/cataloged;

54 | February 2010 | NYSBA Journal Foundation Memorials lyrics may be misspelled, but the point fitting and lasting tribute to a deceased lawyer can be made is valid: The way we pronounce words through a memor ial contribution to The New York Bar and the deletion of pauses between A them strongly affects our pronuncia- Foundation. This highly appropriate and meaningful gesture on the tion of all the language. For readers part of friends and associates will be felt and appreciated by the family too young to recall the song, the nor- of the deceased. mal pronunciation of those lyrics is, “Mares eat oats, and does eat oats, and Contributions may be made to The New York Bar Foundation, little lambs eat ivy. A kid’ll eat ivy too, One Elk Street, Albany, New York 12207, stating in whose memory ■ wouldn’t you?” it is made. An officer of the Foundation will notify the family that a contribution has been made and by whom, although the amount of the contribution will not be specified. MEMBERSHIP TOTALS All lawyers in whose name contri butions are made will be listed in a Foundation Memorial Book maintained at the New York State NEW REGULAR MEMBERS 1/1/10 - 1/8/10 ______10 Bar Center in Albany. In addition, the names of deceased members in whose memory NEW LAW STUDENT MEMBERS 1/1/10 - 1/8/10 ______27 bequests or contributions in the sum of $1,000 or more are made will be permanent- TOTAL REGULAR MEMBERS ly inscribed on a bronze plaque mounted AS OF 1/8/10 ______74,073 in the Memorial Hall facing the handsome TOTAL LAW STUDENT MEMBERS courtyard at the Bar Center. AS OF 1/8/10 ______3,272

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NYSBA Journal | February 2010 | 55 NEW MEMBERS WELCOMED

FIRST DISTRICT James Stephen Puhala NINTH DISTRICT THIRTEENTH Natanella Brakha Antonio Marcello Rebecca Nicole Kristin Larson Doyle DISTRICT Har-sinay Antonucci Quatinetz Jean Averill Young Du Allison Lisa File Farid Hekmat Andrew Ross Arbeit Jaclyn Lisa Rabin Pont Catherine Hines OUT OF STATE Jason Aylesworth Mary Eleanor Michael Paul Hess Jiri Hornik Abbas Ali Khan Amanda Jean Bagatta Rasenberger Kevin Hopkins Laura Amme Maestas Wilson David Antoine W. Edward Bailey Ian Paul Rasmussen Michael Kedem Lauren August Mayne Judah Diodotus Justin Laszlo Bakota Nicholas Ernesto Kedosheem Vinita Bahri Mehra Aristrios V Antonin Amber Alexia Baylor Rodriguez Roda A. Marsafawy Charles William Brian A. Aquart Jake William Bedor Sarah Brooke Rogers Evangelos Pantelis Mondora Heather Lyn Aquino Barry Berkman Daniel N. Sang Julia M. Santiago Maricar Soyangco Brian Anthony Barbour Scott James Bogucki Matthew Stephen Deborah S. Sommers Montano Lisa Bloom Alice M. Bray Schneider Rachael Renee Whalen Richard Sean Martin Boeckli Alan H. Brente Nicholas Schretzman Alan James Williams Mulrooney Jason Thomas Bowne Jungmin Brian Cho Gerald Shapiro Kristin Nadasdy David Judah Palace Robert M. Catello Robin L. Cohen Marilyn Simon Wuerffel Mark David Reeves Dennis Michael Clare H. Joseph Colette Jonathan Levin Socolow Jennifer Alice Sanfilippo TENTH DISTRICT Eric Felix Costa Keith Charles Cozier Adam Albert Sofen Ines Scacchi Marisa Lauren Axelrad Michelle Ann Curtis Patrick Alexander Craig Joel W. Sternman Brian K. Sebaaly Andrea Michelle Brodie Grace Davies Catherine Crane Heather Fels Stone Sigalle Shpayher Shamita Carriman James Thomas Brian D. Crosby Devin M. Swaney Adam Michael John Ciurcina Dougherty John Patrick Curley Patricia Tang Tuckman Vanessa Orat Domdom Andrew P. Gaillard Casey Jackson Davison Eri Budo Uerkwitz Deepti Vithal David Brian Fuchs Mary Beth Gallagher James Edward Devlin Dorianne Van Dyke Dana Rose Gremaux Yipeng Zhang Jessica R. Dubensky Alla Vigdorchik David Staurt Herscovici Sarah Rose Dubman Jason Eli Vives Michael Theodore James Philip English Daniel Alan Weiner Krupen Adam Justin Feit Keren Wheeler Yevgeny Levin Michelle V. Francis Peter J. Woo Patricia V.B. Madsen In Memoriam Romaine L. Gardner Ron Yosef Yudilovich Caroline Anne Joshua Gold Michael Alexander Mayrhofer Israel Joshua Goodman Yurasov-Lichtenberg John L. Molloy Darryll A. Buford Ella Govshtein Temitope Kafilat Yusuf Adam Brett Moser New York, NY Steven Alfred Homan Fauzia Zia Zaman- Jacqueline Marie Frank J. Connors Arthur I. Indursky Malik Nichols Cambridge, MA Dennis W. Jung SECOND DISTRICT James J. O’Rourke Magdalena M. Kadziolka Patrick J. Foley Brian Michael Albrecht Dana Nicole Riccoboni Munenori Kaku Atlantis, FL Carina Irena Andreika Seth Michael Rosenfeld Jacobe Kastiel Sofia Connie Aranda Karen Elizabeth Seidler Charles E. Inman Michael David Kestan Huwaida Arraf Jessica Anne Toleno Valatie, NY Stewart J. Kong Leo David Beitner Stephen John Vargas Sanford H. Levine Alan David Lawn Ayako Naomi Niskayuna, NY Isabelle Rose Liberman ELEVENTH DISTRICT Christopher Nicole Lonsway Jessica A. Almeida David Nadler Steven Friedman Annelies Lottman Cheryl Cherian New York, NY Jonathan Goldin Anna L. MacCormack Angelika C. Ioannou Henry Raymond Guindi Ralph C. Prisco Angel S.C. Marshall Natalie Markfeld Karolina Krasnyanskaya Hauppauge, NY Eric John Matheson Alicia Ann McFarlane Aline Leila Lemoine Steven B. Sheppard Leah V. McDoom Francisco Egbert Alexandria Maldonado Woodbury, NY Stephanie McGraw Mundaca Jacqueline Rae Mancino Amdie Mahittem Aisha Riaz David A. Sloss Meredith Frances Mengistu Erasmia Fragkiadaki New York, NY McBride John W. Moscow Sbirakis Allison Elma McKenzie Robert W. Van Kirk Matthew Amir Joseph Edward Gerard Seiter Leon Miniovich San Juan, PR Movafaghi Milana Sinaniyeva Peter Constantine Pihos Morton Werbel Lewis Crary Myers Michael Son Brooklyn, NY Thomas John O’Reilly SEVENTH DISTRICT TWELFTH DISTRICT Annyrose Pahl Rachel J. Sherman Dori Alexis Milner John A. Wolf Pleasant Valley, NY Vanessa Lynn Pellettier EIGHTH DISTRICT Danit Leenor Sibovits Luisa Nogueira Peredo Sara Lee Anthis Debra R. Wolin Valerie A. Price Catherine Billanti New York, NY Noble M. Prince David P. Swanson

56 | February 2010 | NYSBA Journal The latest NYSBA Monograph Series © 2009 Business/Corporate Mortgages Law and Practice Authors: Philip C. Kilian, Esq.; Christopher P. Daly, Esq. Authors: Michele A. Santucci, Esq.; Professor Leona Beane; 2009-2010 • 246 pp. • PN: 41389 Richard V. D’Alessandro, Esq.; Non-Mmbr Price: $80 / Mmbr Price: $72 Professor Ronald David Greenberg 2009-2010 • 860 pp. • PN: 40519 Non-Mmbr Price: $80 / Mmbr Price: $72 New York Residential Criminal Law and Practice Landlord-Tenant Law Authors: Lawrence N. Gray, Esq.; and Procedure Honorable Leslie Crocker Snyder; Authors: Honorable Gerald Lebovits; Damon Honorable Alex M. Calabrese P. Howard, Esq.; Victor S. Faleck, Esq. 2009-2010 • 160 pp. • PN: 406499 2009-2010 • 366 pp. • PN: 41699 Non-Mmbr Price: $80 / Mmbr Price: $72 Non-Mmbr Price: $80 / Mmbr Price: $72 Debt Collection and Probate and Administration Judgment Enforcement of Decedents' Estates Author: Paul A. Peters, Esq. Authors: Jessica R. Amelar, Esq.; 2009-2010 • 222 pp. • PN: 42389 Arlene Harris, Esq. Non-Mmbr Price: $80 / Mmbr Price: $72 2009-2010 • 188 pp. • PN: 419699 Non-Mmbr Price: $80 / Mmbr Price: $72 Elder Law Real Estate Transactions— and Will Drafting Commercial Property Authors: Jessica R. Amelar, Esq.; Author: Christina Kallas, Esq. Bernard A. Krooks, Esq. 2009-2010 • 344 pp. • PN: 40379 2009-2010 • 318 pp. • PN: 40829 Non-Mmbr Price: $80 / Mmbr Price: $72 Non-Mmbr Price: $80 / Mmbr Price: $72

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Free shipping and handling within the continental U.S. The cost for shipping and handling outside the continental U.S. will be added to your order. Prices do not include applicable sales tax. To purchase the complete set of 16 Monographs, or for more information Call 1-800-582-2452 or visit us online at nysba.org/pubs Mention Code: PUB0682 Continued from Page 64 deposition, hearing, or trial transcripts. fortable resolving the case in your cli- you seek, clearly and without gaps in You need to present your client’s ver- ent’s favor if they can step into your logic. sion of the facts convincingly. Use the client’s shoes. Humanize clients by Create a table of contents. The table facts section to win the court over. Tell naming them throughout your brief. of contents presents the point headings the judge what really happened. When you organize your argument and subheadings. For most judges it’s Engage the judge by telling a com- section, be prepared to acknowledge the first page, after the questions pre- pelling story. Set the scene by describ- and accurately state the applicable sented, they’ll read. An effective table ing the background. Bring the char- legal standard. Show the court that it of contents signals an approachable acters to life with forceful verbs and can rule in your favor because your document. concrete nouns, not conclusory and client’s case satisfies the standard. At exaggerating adjectives and adverbs. the trial-court level, the standard is Select only your Introduce the conflict and guide the the burden of proof with the correct reader to the remedies that should presumptions. On appeal, the standard strongest, best-supported result. Don’t be conclusory. Show; do review depends on the type of lower- arguments. not opine. Tell a story; don’t quote wit- court or administrative decision, order, ness after witness. judgment, or decree you’re appealing. The table of contents with point Your story needs a logical narra- If several standards apply, mention headings sets out your brief’s road- tive that leads directly to your desired and apply them all. map. It lets you maintain focus and outcome. The narrative need not be Once you’ve identified the stan- keep your goals in sight throughout chronological, although a chronologi- dard, organize to explain why the stan- the drafting process. cal narrative often works best. The dard works to your client’s advantage. events, the characters, and the theory Then tie the standard to the substan- Be Organized must come together in a credible plot. tive sections of the brief by explaining Your reader must understand your Maintain the judge’s focus by starting, how the standard has been satisfied. If brief. An organized brief is easy to read. developing, and ending your narrative the standard is a de novo review on the It’s methodical. It cuts to the chase. If on a high note. law, for example, emphasize that the you prepare before you start writing, Your fact statement must meet two trial court’s adverse legal conclusions the organization flows naturally. tests. First, it should stand alone. Any- don’t bind the appellate or reviewing Start your brief with an introduc- one reading your facts must under- court. Offer citations to show how the tory statement or summary of argu- stand your case without reading any highest court in your jurisdiction has ment. Identify the nature of the case, other document. Assume that the judge applied the standard in similar cases. your claim, your theory of the case, knows nothing about your case. Men- Include the specifics of your case that and the remedy you seek. This state- tion only those facts relevant to your make the standard apply and how the ment should be concise, but it should sought-after relief. Cull the meaningful court should enforce it. serve as an overview of your position from the mundane. You’ll know which Introduce the questions presented and the outcome you intend. Judges facts are worth mentioning in your facts or issue statements by exploring your want to understand the big picture section by whether you’ll argue them deep issue persuasively and in no before they read the details. Persuasive later in your argument section. Second, more than 75 words. The questions writing in this sense is an inverted your facts section should be persuasive you pose foretell what the judge must pyramid. Judges want the conclusion without being argumentative. Save the decide. The judge will filter your brief first so that they know whether they argument for the argument section. through the issues you present. That have the jurisdiction to grant your pro- Beyond those two tests, you must forces you to argue issues, not caselaw. posed remedy. Giving the conclusion write the facts in a way that impresses You’ve already developed your issues first also gives judges context for what the court that how you present the and listed them as point headings in they read later. facts is the only way the facts should be your table of contents. You’ve framed Then state the facts of the case. This viewed. Through perspective and orga- them to allow one possible answer: the is the most important part of the brief; nization, don’t let two sentences go by one you want. Now develop the argu- judges interpret facts to determine without making it obvious, without ments to get that answer. what relief they can and will grant. argument, which side you represent. Outline and organize each issue Judges won’t know the facts other than Make the focus of your facts statement in your argument section using the through the briefs and the admissible support your client’s theme. CRARC method, the Legal Writer’s evidence. It’s up to you and opposing Take the opportunity from the start patent-pending improvement over counsel to present the facts — facts you of your fact section to paint your client the IRAC method. CRARC stands for and your adversary will glean from the favorably. Make the judge empathize Conclusion, Rule, Analysis, Rebuttal affidavits, affirmations, exhibits, and with your client. Judges will feel com- and Refutation, and Conclusion.

58 | February 2010 | NYSBA Journal In the first Conclusion section, state your brief, makes it seem reliable, and opponent’s theory of the case is inval- the issue persuasively. Begin with a helps readers find information when id. Do so in an order that works for strong topic sentence to introduce the they search the record. your client. You don’t need to follow issue. Summarize your argument first Include the language of the legal test your opponent’s order. Just as you and then explain. This initial section when you apply the facts. This engages should order your lead arguments in must capture the judge’s interest by the reader in your case theory. Your your Rule section from your strongest announcing a logical syllogism that goal is to get your readers to arrive at to your weakest, you should order ends with your conclusion. your conclusion on their own. the arguments in your Rebuttal and In the Rule section, present the rules If your rule is well established, your Refutation section from your strongest of law that support your conclusion. statement of the law will be brief and to your weakest, not from your oppo- After each rule, support it with your condensed. Extensive legal analysis nent’s strongest to weakest. best authority. Move from the specific will be necessary only when the law Point out inaccuracies in your oppo- to the general and from the binding to is unclear or when it turns on novel or nent’s description of the facts or inter- the merely persuasive. pretation of those facts. Punch holes Discuss in detail particularly favor- Deal with issues, into your opponent’s case, but exclude able or unfavorable cases, pointing defensive or wordy references to oppos- out the similarities and differences of not your adversaries’ ing briefs — and especially don’t sug- the decision with the facts in your motives and personalities. gest that your opponent or the judge case. Explicitly stating the reasons you below is lying or stupid. Deal with reference a particular authority will uncommon grounds. Don’t give more issues, not your adversaries’ motives emphasize its importance. Otherwise, rules than the court needs to decide the and personalities. Always address be brief with your citations; explain case. You’re not in law school any more. the court and your opponent respect- their relevance only in parentheticals. Mention consistency between the fully, although not obsequiously, even It’s the novice who devotes paragraph policy of the applicable rules and your if they’re unworthy of your respect. after paragraph to discussing cases, as facts. Judges want to know that they’re Judges love civility and professionalism if cases were more important than the deciding justly, not simply deciding because they can reach a decision with- rules for which the cases are cited. logically. Judges want to decide cor- out being distracted by hostility. Save quotations for those times rectly and for the right reasons. In the final Conclusion section, state when paraphrasing will fade the In the Rebuttal and Refutation sec- the relief you seek. You provided the nuance or when you can’t explain the tion, state the other side’s arguments legal issue in the first Conclusion sec- law in your own words more concisely fairly by setting up a straw man without tion. Now press the entire argument or more convincingly than the author- repeating the rules you laid out in your forward by tying the legal issue and ity you’re quoting. Rule section. One goal in persuasion is your arguments to the relief you seek. Block quotations are distracting and to show that you’re right because you Be specific when describing how the often go unread. In those rare cases are right more than that you’re right judge should decide your case. Most when you need block quotations — if because the other side is wrong. But times judges are forbidden to give you you’re asking the court to interpret a the Rebuttal and Refutation section more than you ask for. You can’t be statute or contract or if you need to is your opportunity to weaken the too direct in stating what you want for lay out a multi-part test from a semi- other side. Failing to address unfavor- your client. nal case — introduce them before the able arguments in advance is strategi- The Legal Writer continues in the quoted text. That’ll force your reader cally wrong and sometimes unethical. next issue of the Journal with three to understand their import. Not mentioning unfavorable law or more way to persuade: honesty, brev- For all other references to the law, contrary arguments won’t make them ity, and revision. ■ paraphrase. Each time you explain the go away. The judge might find them, law you have a new opportunity to and your opponent might bring them GERALD LEBOVITS is a judge at the New York City advance your theory. up and use them against you. Don’t Civil Court, Housing Part, in Manhattan and an In the Analysis section, apply the law assume that your reader or opponent is adjunct professor at Columbia Law School and to the facts — facts mentioned in your stupid. Distinguishing the facts of your St. John’s University School of Law. This two-part facts section. This is the CRARC’s most case and explaining why a statute or column is based on an unpublished article by important part. Show the reader how case doesn’t apply will advance your the same title he wrote with Lucero Ramirez the rules apply to your facts. Describe position. Hidalgo for a Continuing Legal Education pro- factual details by creating images with Distinguish the law on which your gram he gave for the Practising Law Institute in which the reader can identify. Be spe- opponent relies. Explain why your November 2009. Judge Lebovits’s e-mail address cific. Also, cite the record when you opponent’s arguments are flawed is [email protected]. refer to the facts. Doing so strengthens or unsubstantiated. Show that your

NYSBA Journal | February 2010 | 59 CLASSIFIED NOTICES

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60 | February 2010 | NYSBA Journal NEW YORK STATE BAR ASSOCIATION

Director, Law Practice Management Assistance Program

The New York State Bar Association, the largest voluntary state bar association in the nation, is seeking a highly motivated individual to plan and implement its statewide law practice management assistance program. The successful candidate will have: • A thorough knowledge of all aspects of law practice management including: advanced business practices; office/project management; financial/trust account management; risk management/professional responsibility; client relations/marketing; the use of evolving technologies in the practice of law; and strategic planning for law practice in a globalized marketplace. • Excellent written and verbal communication skills. • Understanding of computer and Internet technology applications in the practice of law. • The ability to promote Program initiatives using varied media formats, such as CLE programs, publications and Internet webcasts. • Excellent people skills and an ability and willingness to work in interdepartmental teams. • A J.D. degree is required with significant experience in private sector law firm management or consulting.

This position offers a competitive salary and exceptional benefits. For consideration, send a resume and salary history to:

New York State Bar Association Human Resource Department One Elk Street Albany, New York 12207 E-mail address: [email protected]

INDEX TO NEW YORK STATE BAR ASSOCIATION ADVERTISERS ABA/State Street Lawyer Referral and Information Service Bank & Trust 25 AdNet Advertising 60 Interested in expanding your client base? Aequitis Compliance Solutions 19 Join the Lawyer Referral & Information Service Attorneys Dell & Schaefer Chartered 60 Why Join? Benesch, Attorneys at Law 29 > Expand your client base > Benefit from our marketing strategies Center for International > Increase your bottom line Legal Studies 60 International Genealogical Overview of the Program Search, Inc. 45 The New York State Bar Association Lawyer Referral and Information Service (LRIS) LAWSUITES.net 60 has been in existence since 1981. Our service provides referrals to attorneys like you LexisNexis 7, 31 in 43 counties (check our Web site for a list of the eligible counties). Lawyers who are members of LRIS pay an annual fee of $75 ($125 for non-NYSBA members). Ohel/Bais Ezra Lifetime Proof of malpractice insurance in the minimum amount of $100,000 is required of Care Foundation 17 all participants. If you are retained by a referred client, you are required to pay LRIS PS Finance cover 2 a referral fee of 10% for any case fee of $500 or more. For additional information, Ruffo Tabora Mainello visit www.nysba.org/joinlr. & McKay 60 SpeakWrite 37 Sign me up The Company Corporation 60 Download the LRIS application at www.nysba.org/joinlr or call 1.800.342.3661 or e-mail [email protected] to have an application sent to you. The Leukemia & Lymphoma Society 41 USI Affinity 4 GGiveive uuss a ccall!all! Want Publishing Co. 60 8800.342.366100.342.3661 West, a Thomson Reuters Business cover 4

NYSBA Journal | February 2010 | 61 HEADQUARTERS STAFF EMAIL ADDRESSES THE NEW YORK BAR FOUNDATION

EXECUTIVE Pro Bono Affairs 2009-2010 OFFICERS M. Catherine Richardson, President Patricia K. Bucklin Gloria Herron Arthur, Director One Lincoln Center, Syracuse, NY 13203 Executive Director [email protected] John J. Kenney, Vice President [email protected] MARKETING AND 10 East 40th Street, 35th Fl., New York, NY 10016 Keith J. Soressi INFORMATION SERVICES Patricia K. Bucklin, Secretary Associate Executive Director One Elk Street, Albany, NY 12207 Richard J. Martin, Senior Director [email protected] [email protected] Paul Michael Hassett, Treasurer Bar Services 1500 Liberty Building, Buffalo, NY 14202 Desktop Publishing Mark Wilson, Manager Cristine Cioffi, Assistant Secretary [email protected] Marketing 2310 Nott Street East, Niskayuna, NY 12309 Meetings MIS DIRECTORS James B. Ayers, Albany Kathleen M. Heider, Director John M. Nicoletta, Director Vice Chair of The Fellows [email protected] [email protected] Jeffrey Ordon, Network Support Specialist Lawrence R. Bailey, Jr., New York CONTINUING LEGAL EDUCATION [email protected] Jonathan G. Blattmachr, New York H. Douglas Guevara, Senior Director Charles E. Dorkey, III, New York Sonja Tompkins, Records Supervisor [email protected] Emily F. Franchina, Garden City [email protected] Debra York, Registrar Sharon Stern Gerstman, Buffalo Lucian Uveges, Database Administrator [email protected] John H. Gross, Hauppauge [email protected] CLE Programs Gregory J. Guercio, Farmingdale Paul Wos, Data Systems and Robert L. Haig, New York Jean E. Nelson II, Associate Director Telecommunications Manager Frank M. Headley, Jr., Scarsdale [email protected] [email protected] Stephen D. Hoffman, New York Kimberly Hojohn, CLE Program Coordinator Web Site John R. Horan, New York [email protected] Barbara Beauchamp, Editor Hon. Barry Kamins, Brooklyn Katherine Suchocki, Staff Attorney [email protected] Henry L. King, New York [email protected] Glenn Lau-Kee, New York Cindy O’Brien, Program Manager MEMBERSHIP SERVICES Kathryn Grant Madigan, Binghamton [email protected] Patricia K. Wood, Senior Director Kay Crawford Murray, New York [email protected] CLE Publications Carla M. Palumbo, Rochester Daniel J. McMahon, Director Megan O’Toole, Membership Services Manager Sharon M. Porcellio, Rochester [email protected] [email protected] Richard Raysman, New York Kirsten Downer, Research Attorney Chief Section Liaison Lesley Friedman Rosenthal, New York [email protected] Lisa J. Bataille Sanford J. Schlesinger, New York Justin L. Vigdor, Rochester Patricia B. Stockli, Research Attorney [email protected] Lucia B. Whisenand, Syracuse [email protected] PRINT AND FACILITIES OPERATIONS Joan Fucillo, Publication Manager Roger E. Buchanan, Senior Director EX OFFICIO Susan B. Lindenauer, New York [email protected] [email protected] Chair of The Fellows Law Practice Management Building Maintenance Pamela McDevitt, Director Graphics [email protected] Print Shop JOURNAL BOARD FINANCE AND HUMAN RESOURCES Matthew Burkhard, Production Manager Paula M. Doyle, Senior Director [email protected] MEMBERS EMERITI [email protected] PUBLIC AFFAIRS AND HOWARD ANGIONE ADMINISTRATIVE SERVICES Finance Immediate Past Editor-in-Chief Kristin M. O’Brien, Director Sebrina Barrett, Senior Director [email protected] [email protected] Rose Mary Bailly Richard J. Bartlett Cynthia Gaynor, Controller Law, Youth and Citizenship Program Coleman Burke Eileen Gerrish, Director [email protected] John C. Clark, III [email protected] Angelo T. Cometa LEGAL AND GOVERNMENTAL AFFAIRS Media Services and Public Affairs Roger C. Cramton Kathleen R. Mulligan-Baxter, Senior Director Nicholas Parrella, Media Services Manager Willard DaSilva [email protected] [email protected] Louis P. DiLorenzo Maryann Saccomando Freedman Counsel’s Office Patricia Sears Doherty, Editor, State Bar News Governmental Relations Emlyn I. Griffith [email protected] H. Glen Hall Ronald F. Kennedy, Director Brandon Vogel, Media Writer Paul S. Hoffman [email protected] [email protected] Judith S. Kaye Kevin M. Kerwin, Assistant Director Charles F. Krause [email protected] Philip H. Magner, Jr. Wallace J. McDonald Lawyer Assistance Program THE NEW YORK BAR FOUNDATION Rosanne M. Van Heertum J. Edward Meyer, III Patricia F. Spataro, Director Kenneth P. Nolan Director of Development [email protected] Eugene E. Peckham [email protected] Lawyer Referral and Albert M. Rosenblatt Information Service Lesley Friedman Rosenthal Sanford J. Schlesinger Eva Valentin-Espinal, Coordinator Robert J. Smith [email protected] Lawrence E. Walsh Richard N. Winfield

62 | February 2010 | NYSBA Journal 2009-2010 OFFICERS MEMBERS OF THE HOUSE OF DELEGATES

MICHAEL E. GETNICK FIRST DISTRICT Golinski, Paul A. Smith, Thomas G. Aaron, Stewart D. Hall, Thomas J. Tilton, Samuel O. President Abernethy, Samuel F. Hernandez, David J. * Vigdor, Justin L. Utica Abramowitz, Alton L. Kamins, Hon. Barry * Witmer, G. Robert, Jr. † * Alcott, Mark H. Longo, Mark A. EIGHTH DISTRICT STEPHEN P. Y OUNGER Alden, Steven M. Lonuzzi, John A. Bonarigo, Benjamin J. Anello, Robert J. McKay, Hon. Joseph Kevin Chapman, Richard N. President-Elect Badner, Lisa Ray Park, Maria Y. Convissar, Robert N. New York Badway, Ernest Edward Romero, Manuel A. Effman, Norman P. Bailey, Lawrence R., Jr. Shaikh, Heena Fisher, Cheryl Smith Baum, Simeon H. Sunshine, Hon. Jeffrey S. * Freedman, Maryann Saccomando C. BRUCE LAWRENCE Berke-Weiss, Laurie Szochet, Diana J. Gerstman, Sharon Stern Blanchard, Kimberly S. Secretary THIRD DISTRICT † * Hassett, Paul Michael Bohorquez, Fernando A., Jr. Ayers, James B. Manias, Giles P. Rochester Bransten, Hon. Eileen Barnes, James R. O’Donnell, Thomas M. Brown, Earamichia Nake Baynes, Brendan F. Schwartz, Scott M. SEYMOUR W. JAMES, JR. Brown, Peter Casserly, Timothy E. Sconiers, Hon. Rose H. Treasurer Burns, Howard W., Jr. Costello, Bartley J., III Seitz, Raymond H. Chang, Vincent Ted Davidoff, Michael Shaw, James M. New York Chin, Sylvia Fung DeFio Kean, Elena NINTH DISTRICT Cohen, Carrie H. Doherty, Glen P. Collazo, Ernest J. Amoruso, Michael J. BERNICE K. LEBER Dumas, Elizabeth M. Burke, Patrick T. * Cometa, Angelo T. Farley, Susan E. Immediate Past President Di Pietro, Sylvia E. Burns, Stephanie L. Fernandez, Hermes Byrne, Robert Lantry New York Draper, Thomas G., Jr. Glasheen, Kevin P. Drayton, Joseph Michael Cohen, Mitchell Y. Greenthal, John L. Cusano, Gary A. Finerty, Hon. Margaret J. Hanna, John, Jr. VICE-PRESIDENTS * Forger, Alexander D.† Dohn, Robert P. Higgins, Patrick J. Fedorchak, James M. Fox, Michael L. Hurteau, Daniel Joseph FIRST DISTRICT Gallagher, Patrick C. Fontana, Lucille A. Kahler, Prof. Annette I. Goldenberg, Ira S. Gesinsky, Loren Liebman, Bennett M. Claire P. Gutekunst, New York * Gillespie, S. Hazard Marwell, John S. Meislahn, Harry P. Miklitsch, Catherine M. Glanstein, Joel C. Miranda, David P. Susan B. Lindenauer, New York Goldberg, Evan M. * Miller, Henry G. Pechenik, Stephen A. Nachimson, Steven G. Gredd, Helen A. Privitera, John J. SECOND DISTRICT Green, Prof. Bruce A. * Ostertag, Robert L. Roberts-Ryba, Christina L. Rauer, Brian Daniel Gutekunst, Claire P. Ryan, Rachel Barry Kamins, Brooklyn Gutheil, Karen Fisher Sanchala, Tejash V. Salkin, Prof. Patricia E. Sandford, Donald K. Haig, Robert L. Schneider, Eric THIRD DISTRICT Hawkins, Dennis R. Selinger, John Schofield, Robert T., IV † * Standard, Kenneth G. Hayden, Hon. Douglas J. * Yanas, John J. Harry P. Meislahn, Albany Ho, John Si Starkman, Mark T. Hoffman, Stephen D. FOURTH DISTRICT Stone, Robert S. FOURTH DISTRICT Hollyer, A. Rene Coffey, Peter V. Strauss, Barbara J. James, Hon. Debra A. Fernandez, Henry A. Strauss, Hon. Forrest Patricia L. R. Rodriguez, Schenectady Kahn, Michele Ferradino, Stephanie W. Van Scoyoc, Carol L. Kanter, Gregg Herbert Haelen, Joanne B. Weis, Robert A. Herrmann, Diane M. FIFTH DISTRICT Kennedy, Henry J. TENTH DISTRICT Kera, Martin S. Lais, Kara I. Asarch, Hon. Joel K. David M. Hayes, Syracuse * King, Henry L. Martin, Trinidad Block, Justin M. † * Krane, Steven C. Onderdonk, Marne L. * Bracken, John P. Pelagalli, Paul SIXTH DISTRICT Larson, Wallace L., Jr. Chase, Dennis R. Lau-Kee, Glenn Rodriguez, Patricia L. R. Cooper, Ilene S. David A. Tyler, Ithaca † * Leber, Bernice K. Stanclift, Tucker C. Fishberg, Gerard Leo, Robert J. Sterrett, Grace Franchina, Emily F. Vanier, Stephen A. SEVENTH DISTRICT Lesk, Ann B. Gann, Marc Levy, M. Barry Watkins, Patricia E. Good, Douglas J. David M. Schraver, Rochester Lieberman, Ellen Wood, Jeremiah Gross, John H. Lindenauer, Susan B. FIFTH DISTRICT Gruer, Sharon Kovacs Fennell, Timothy J. Hendry, Melanie Dyani IGHTH ISTRICT * MacCrate, Robert E D Martin, Edwina Frances Fish, Marion Hancock Karabatos, Elena Sharon Stern Gerstman, Buffalo McEnroe, Diane Crosson Gall, Erin P.† † * Levin, A. Thomas Miller, David S. Getnick, Michael E. Levy, Peter H. Miller, Michael Gigliotti, Hon. Louis P. Luskin, Andrew J. NINTH DISTRICT Millett, Eileen D. Gingold, Neil M. Makofsky, Ellen G. John S. Marwell, Mount Kisco Minkowitz, Martin Greeley, Kristin B. McInerney, Christine Marie Morgan, Hadaryah Tebach Hartnett, Elizabeth A. Mejias, Linda Kelly Morril, Mark C. Hayes, David M. * Pruzansky, Joshua M. TENTH DISTRICT Morton, Margaret S. Howe, David S. Purcell, A. Craig John H. Gross, Hauppauge Nathanson, Malvina Larose, Stuart J. * Rice, Thomas O. Nelson, Lester Ludington, Hon. Spencer J. Robinson, Derrick J. O’Neill, Paul J., Jr. Mitchell, Richard C. Winkler, James R. LEVENTH ISTRICT E D * Patterson, Hon. Robert P., Jr. Peterson, Margaret Murphy ELEVENTH DISTRICT David Louis Cohen, Kew Gardens Plevan, Bettina B. * Richardson, M. Catherine Cohen, David Louis Prowda, Judith B. Stanislaus-Fung, Karen Gutierrez, Richard M. Reed, Thomas A. Tsan, Clifford Gee-Tong James, Seymour W., Jr. TWELFTH DISTRICT Rosenthal, Lesley Friedman Virkler, Timothy L. Lee, Chan Woo Lawrence R. Bailey, Jr., Bronx Rosiny, Frank R. SIXTH DISTRICT Lomuscio, Catherine Rosner, Seth Barreiro, Alyssa M. Nizin, Leslie S. Rothstein, Alan Denton, Christopher Terranova, Arthur N. THIRTEENTH DISTRICT Russell, William T., Jr. Fortino, Philip G. Vitacco, Guy R., Jr. Safer, Jay G. Grayson, Gary J. Walsh, Jean T. Jonathan Bruce Behrins, Staten Island Schindel, Ronnie Gutenberger, Kristin E. Wimpfheimer, Steven Sen, Diana Sagorika Lewis, Richard C. TWELFTH DISTRICT * Seymour, Whitney North, Jr. † * Madigan, Kathryn Grant Masley, Hon. Andrea MEMBERS-AT-LARGE OF THE Sherwin, Peter J.W. Mayer, Rosanne * Pfeifer, Maxwell S. Sigmond, Carol Ann EXECUTIVE COMMITTEE Pogson, Christopher A. Price, Hon. Richard Lee Silkenat, James R. Tyler, David A. Quaranta, Kevin J. Timothy J. Fennell Smith, Hon. George Bundy SEVENTH DISTRICT Sands, Jonathan D. Sonberg, Hon. Michael R. Hermes Fernandez Brown, T. Andrew Schwartz, Roy J. Spiro, Edward M. Burke, Philip L. Summer, Robert S. Syracuse, Vincent J. Glenn Lau-Kee † * Buzard, A. Vincent Weinberger, Richard Tesser, Lewis Gould, Wendy L. Ellen G. Makofsky Wachtler, Lauren J. THIRTEENTH DISTRICT Harren, Michael T. Wolff, Adam John Behrins, Jonathan B. Jackson, La Marr J. Eileen D. Millett Yates, Hon. James A. Mattei, Grace Virginia Kingsley, Linda S. Yavinsky, Hon. Michael J.† Sieghardt, George A. David P. Miranda Kurland, Harold A. Younger, Stephen P. Sipp, Thomas A. Laluk, Susan Schultz Zulack, John F. UT OF TATE Peter J.W. Sherwin Lanzafame, Ross P. O - -S Bartlett, Linda G. Lauren J. Wachtler SECOND DISTRICT Lawrence, C. Bruce Adler, Roger B. Lightsey, Mary W. Elder-Howell, Andrea M. Bonina, Andrea E. McKeon, Hon. Michael F. * Fales, Haliburton, II Cohn, Steven D. * Moore, James C. Kurs, Michael A. Dollard, James A. * Palermo, Anthony R. Ravin, Richard L. Doyaga, David J., Sr. Schraver, David M. Torrey, Claudia O. * Walsh, Lawrence E.

† Delegate to American Bar Association House of Delegates * Past President

NYSBA Journal | February 2010 | 63 THE LEGAL WRITER BY GERALD LEBOVITS

Persuasive Writing for Lawyers — Part I

inning writing is persua- Don’t stop until you understand the municated in a simple, understated, sive writing. For you to per- key details. Avoid surprises. unemotional way. The theory should Wsuade, readers, especially Then consult your local rules and all summarize your case. The theory judges, must believe that you, as a applicable rules of procedure. They’ll should, if accepted, secure your rem- lawyer, seek the correct result and that determine your page limit, deadlines, edy. Weave your theory into every part you have the arguments, fact, and law format, and content. Knowing the rules of your brief. to support it. Your job is to help them. from the start will save headaches later. Work your case theory into your Judges are busy, skeptical profes- Then frame the facts into legal issues statement of facts by phrasing your sionals. They can spare but limited and narrow your legal research. You case theory persuasively. You’re not time to consider your case. Judges must don’t need to know everything about writing a law-review article or histori- be able to extract the gist of your case the law before you start. It’s enough cal treatise with a neutral view of the quickly. You must write effectively by to know everything by the time you’re facts. You’re writing to make sure that transmitting only necessary informa- done. Trying to know everything leads the reader agrees with the facts as you tion favoring your position. The way to procrastinating. Like the vice of tell them. Include your theory in every to persuade is to assert your position scapegoating, procrastinating is the opening paragraph after each heading with accurate, confident, credible, sim- enemy of doing it right and getting it and subheading. Weave it into your ple, short, and strong arguments sup- done. presentation of the law and your facts. ported by good storytelling and cita- Once you’re confident that the Outline your brief before you start tions to authority, all written in clear, court has the jurisdiction to address writing. To do so, come up with point concise, precise, and plain English. To your client’s claim or defense, identify headings. Well-written point head- persuade, you must make it easy for the arguments that’ll give your client ings provide a quick summary of your the court to rule for your client and to the remedy it seeks. Select only your argument and answer each question want to rule for your client. strongest, best-supported arguments. presented. There should be one point This column offers some sugges- Discard weak issues. What you include for each ground on which relief can be tions on how to persuade through is as important as what you exclude. granted; if the court agrees with that preparation, organization, honesty, Focus on a few strong arguments, not point it can grant relief, even if it dis- brevity, and editing. many weak ones. agrees with all else. Arrange your issues in order of A point heading comprises a con- Be Prepared strength; lead with your best points clusion or an action that the writ- To tell a persuasive story, you need to first. If two issues are equally strong, er wants the court to take, together know the background, the characters, lead with the argument that’ll give with the reasoning that justifies that the conflict, and the issues. Spending your client the greatest relief. Two outcome. An effective point heading, the time to learn the facts, research exceptions: First, consider the logic of when combined with subheadings that the law, outline your arguments, and your issues. Trace the elements of a break up complex issues, will concisely structure your brief is time well spent. statute or the factors of a test. If a stat- cite the applicable law, describe how So is starting early and setting time ute or the leading case established an the law applies to the facts at issue, aside to write without distractions. order in which you should articulate and arrive at a conclusion. It’ll avoid Use good time-management tech- the factors, follow that order. Second, hypotheticals and abstractions. It’ll be niques. begin with a threshold issue, such as argumentative. Before all else, learn the facts. service of process, jurisdiction, or the Reading the headings in order Gather information from your client, statute of limitations, if you have one. shows your theory of the case with read the relevant documents, and talk Develop a case theory, or theme. It logical reasoning, and the remedy to necessary witnesses. Ask questions. should be an emotional message, com- Continued on Page 58

64 | February 2010 | NYSBA Journal Turn to NYSBA for Practice Management Build a Better Resources that Make a Difference • Downloadable materials including engagement letters, infor- Practice with mation on starting a practice, a technology checklist for practitioners, and help with basic computer software productivity Law Practice programs • Practice-oriented CLE programming in a variety of formats to Management accommodate busy solo practitioners and managing partners

• Blogs covering management tips, technology reviews and rec- Tools, Information ommendations

and Online “NYSBA’s practice management tools offer something that every lawyer can use to build a better practice, by putting a variety of resources at the Resources click of your mouse.” – Gary Munneke, Esq. www.nysba.org/LPM Chair, Committee on Law Practice Management Professor, Pace University Law School

ADDRESS CHANGE – Send To: Records Department NYS Bar Association One Elk Street Albany, NY 12207 (800) 582-2452 e-mail: [email protected]